UK: FoI decision clarifies commercial interests exemption

In the first decision by the Information Commissioner regarding exemption 43(2) (prejudice to commercial interests), the Information Commissioner clarified the scope of the exemption. It was decided that disclosure of the price paid by a public authority for a work of art would prejudice both the commercial interests of the authority and the artist. The decision also emphasises the importance of the timing of the request to the applicability of this exemption and the public interest test. The decision also stated that prejudice to the artist alone would not have justified the non- disclosure, and so is a stark reminder to companies contracting with public authorities of the level of disclosure they should now expect.

On 15 July the Information Commissioner released high level "top tips" to help public authorities comply with the Act.

At the end of June the Information Commissioner made its first decision under the FoI Act in relation to the Section 43(2) exemption, which exempts disclosure under the Act if the disclosure would prejudice the commercial interests of a public authority or a third party.

On 12 January 2005 a request was submitted to a public authority, the National Maritime Museum ("NMM"), for disclosure under the Act for documents and correspondence relating to payments made by NMM to an artist, Conrad Shawcross. The artist was going to contribute his work to an exhibition that the NMM was staging. The NMM refused to disclose the requested information and a complaint was made to the Information Commissioner.

The Commissioner reviewed the information, which was requested (which constituted financial arrangements between NMM and the artist) and decided that the commercial interests exemption would apply to this information.

The Commissioner then applied the public interest test, which applies to the commercial interests exemption, as it is a qualified exemption. The Commissioner did recognise that there will be a public interest in the financial transparency and accountability of public authorities, particularly where they commission new works of art where commissioning is not their core activity. He also considered that disclosure would also contribute to public debate about Museum funding, choices regarding freedom to access public institutions, and issues surrounding publicly subsidised Museums (for example attracting greater visitor numbers and generating revenue in competition with other attractions).

The key, however, to the Commissioner’s finding related to the timing of the request. At the time the request was made, NMM was involved in negotiations with another artist. As a result premature release of the financial arrangements with Conrad Shawcross would be likely to prejudice NMM’s bargaining position in relation to those other negotiations, and would also prejudice NMM’s ability to ensure value for public money. These considerations outweighed the public interest in releasing the requested information.

However the Commissioner was aware that the likelihood of prejudice would diminish over time, particularly after the conclusion of active negotiations.

The Commissioner went on to consider the prejudice to the individual artist, Conrad Shawcross. The Commissioner did acknowledge that there was a public interest in encouraging new artists and entrepreneurs to flourish, and the NMM would be playing a crucial role by exhibiting Mr Shawcross’ work. The Commissioner also recognised there would be prejudice to Mr Shawcross in relation to his next sale or commission had the information been disclosed under the Act.

However the Commissioner, when analysing the public interest test in relation to prejudice to Mr Shawcross, decided that the prejudice to Mr Shawcross’ commercial interests was not in itself a sufficient reason to maintain the exemption in his individual case. The Commissioner’s view was that:

The complainant is appealing the decision.

The decision is a reminder to companies who engage with public authorities that in certain circumstances prejudice to their commercial interests alone may not pass the public interest test where there is not also a risk of prejudice to the public authority’s interests as well.

The Information Commissioner recently released high level "top tips" to assist public authorities when responding to requests under the Act. This coincides with the Information Commissioner issuing its first annual report since the Act was implemented.

To view the top ten tips please click here.

To view the Annual Report please click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

The original publication date for this article was 18/07/2005.