European Union: Section 237(6) Of The Enterprise Act And FOI law — An English And Scottish Dichotomy

Last Updated: 27 June 2008
Article by Simon Holmes and Dr. Gordon Christian

Originally published in the Freedom of Information Journal,  September / October 2007

Third party access to documents held by competition authorities is becoming increasingly important now that the burden of enforcing competition law is progressively shifting from the public to the private arena.

No competition authority can realistically expect that private enforcement of competition law will become the norm overnight. However, there is a clear trend by competition authorities, in Europe in particular, to facilitate private enforcement of competition law.

European Commission's Green Paper

In an introductory note to the European Commission's 2005 Green Paper on Actions for Damages ('Green Paper'), the reasons to encourage private enforcement are as follows:

"Facilitating damages claims for breaches of the antitrust rules will not only strengthen the enforcement of competition law, but will also make it easier for consumers and firms who have suffered damage from an infringement of competition law rules to recover their losses from the infringer& In the majority of Member States, actions for damages for the infringement of EC and national competition law have been extremely limited&[and] awards for damages by national courts at the initiative of private parties are much less common."

However, the European Commission notes that actions for damages are often based on factually complex scenarios, and victims of anticompetitive conduct often have difficulty providing evidence of such conduct. This evidence is usually only available to, or access to it is controlled by, the alleged perpetrator of anticompetitive conduct.

The Green Paper goes on to say that, "consideration could be given to placing an obligation on the defendant to disclose documents submitted to a competition authority. In cases in which the Commission or an NCA [national competition authority] has undertaken an investigation, it is likely to hold relevant evidence which could be important for a claimant in follow-on cases. Use of those materials in subsequent civil actions could be helpful in proving the damages claim."

The European Commission has scheduled the publication for a White Paper for early 2008, which should provide a better indication of whether, to what extent and in what manner, the European Commission is going to facilitate access to documents in competition cases. Yet, before this White Paper is published, parties seeking to rely on documents in the possession of public authorities to bolster their damages action or similar cases, will have to continue to rely on available mechanisms, such as the Freedom of Information Act 2000 ('FOIA').

General Background

The Office of Fair Trading ('OFT') and the Competition Commission are amongst the 100,000 public authorities to whom the FOIA applies. Both authorities have a publication scheme in place, and it is under this scheme that they deal with FOIA requests for information in their possession.

In a competition law context, there is a tension between the obligation to disclose information and the restrictions on disclosure of "specified information" in Part 9 of the Enterprise Act 2002 ('Part 9').

Part 9 places a restriction on the OFT's disclosure of certain information (information the OFT has received under the statutory functions of the Competition Act 1998). The OFT has taken an assertive line on this restriction, and since the FOIA's entry into force in 2005, OFT officials have repeatedly stated that the restrictions on disclosure in Part 9 would override the general obligation to disclose information under the FOIA. There were some who doubted whether this was the correct legal analysis, and before long the position held by the OFT was tested in a dispute (Pernod v OFT, 6th June 2006) before the Information Commissioner.

Pernod v OFT

A previous article published by the authors ["Pernod v OFT — FOIA is trumped by the Enterprise Act," Freedom of Information, Volume 3 Issue 1, pp. 3—5], dealt with the Information Commissioner's Decision Notice in detail. In this case, the Information Commissioner clarified the legal position with a brief yet powerful confirmation that the OFT was essentially correct, and that restrictions on disclosure contained in Part 9 overrode the FOIA general disclosure obligations.

The Decision Notice was criticised primarily for providing the UK competition authorities with a strong shield regarding information held by the authorities — leaving victims of anticompetitive behaviour who wish to seek redress with only a weak sword.

This decision by the Information Commissioner appears to contradict the "expansive" approach that the Information Commissioner (and the Information Tribunal) have taken in their decision-making to date.

In the National Maritime Museum case, the Information Tribunal set the bar relatively high when considering the threshold of how much commercial prejudice needed to be shown in order to justify the requested information being exempt from disclosure. This overruled the Information Commissioner's decision in the process, and required public authorities to identify a "real and significant" risk of prejudice rather than a hypothetical or remote risk.

Against this background of a culture of openness and the "if in doubt, disclose" mantra, it is all the more surprising that the Information Commissioner was willing, in the Pernod case, to enable the UK competition authorities to justify a wide-ranging exemption from this culture. It is surprising particularly as the European Commission is still some way off deciding whether to encourage national actions to facilitate access to documents and evidence for private enforcement purposes.

There must be a balance between the appropriate disclosure of information and the justified restrictions on disclosure. With the correct balance between public interest in disclosure and public interest in keeping the information confidential and non-accessible, companies and individuals will continue to provide information to UK competition authorities.

It is important for the Information Commissioner to scale back the Part 9 decisional practice and give precedence to the disclosure of documents. This would facilitate the private enforcement damages actions that both the European Commission and national competition authorities claim they wish to encourage.

The English And Scottish Dichotomy — Dey v OFT

The case Dey v OFT (16th April 2007) exemplifies the Information Commissioner's current stance on the Part 9 issue, and confirmed the decisional practice established by the Pernod case.

Mr Dey complained to his local Trading Standards Office about a company and followed up his complaint with an FOIA request to disclose the number of similar complaints against the relevant company. The Department of Trade and Industry ('DTI'), the addressee of the FOIA request at the beginning of the process, refused to release the information, and cited the section 43 exemption on commercial prejudice.

On 1st April 2006 the OFT took over the DTI's responsibility for trading standards issues, and the management of the FOIA request transferred to the OFT. The OFT changed its position on Mr Dey's FOIA request, and, instead of relying on the section 43 exemption, it simply argued that since the information requested was "specified information" within the meaning of Part 9, section 44(a) of the FOIA prohibited the disclosure of the requested information.

The interplay between Part 9 and the general disclosure regime under the FOIA is provided for in section 237(6) of the Enterprise Act 2002 ('section 237(6)'). The section states that Part 9 "does not affect any power or duty to disclose information which exists apart from [Part 9]."

The Information Commissioner's reasoning in Dey v OFT is straightforward:

  1. section 237(6) of the Enterprise Act refers to a power or duty to disclose information other than in Part 9;

  2. there is no duty to disclose information under the FOIA;

  3. therefore, in the words of section 44 of the FOIA, disclosure of the information requested was "prohibited under another enactment," namely Part 9; and

  4. as section 44 is an absolute exemption, no public interest considerations were relevant and the OFT's refusal to disclose the information requested was upheld.

ICO's Decision Notice — Dey v OFT

The authors (and, as will become clear below, the Scottish Information Commissioner) take issue with this interpretation of section 237 (6), and crucially the words "power or duty."

Whilst it is acknowledged that neither section 1 nor any other section of the FOIA impose a duty to disclose information, there is most certainly a power for public authorities to whom the FOIA applies to disclose information requested. The Information Commissioner has previously pointed out (in a guidance booklet advising public authorities how to comply with their FOIA obligations) that even if a FOIA exemption applies, information does not necessarily have to be withheld.

Essentially, if exemptions apply to information whose disclosure is sought, it gives the relevant public authority the right, but not the obligation, not to disclose such information. Public authorities have the power to disclose information exempted under the FOIA, even if such disclosure of exempted information may lead to corresponding consequences for the public authority disclosing the information.

Taking this line of argument to its logical conclusion, section 237(6), which in its own words does not affect any power to disclose information which exists apart from [Part 9], should not enable Part 9 to override the provisions of the FOIA in the way the UK Information Commissioner confirmed that it does.

Scottish ICO's Decision Notice

The Scottish Information Commissioner's finding in the Reid v Dumfries and Galloway Councils (5th December 2006) case takes a diametrically opposed view to the Information Commissioner in Dey, even though the facts were similar.

Although there is separate Scottish FOI legislation, it is materially identical for the purposes of this analysis. On the section 237(6) point, the Scottish Information Commissioner states that: "the effect of this subsection is (intended or otherwise) to be to subordinate the restrictions on disclosure of specified information contained within Part 9 of the EA to any duty or power that exists through rules found somewhere other than in Part 9 of the EA.&Thus, if [Scottish FOI legislation] creates either a duty or a power to disclose information, it will override the provisions of Part 9 of the EA, and no prohibition on disclosure will exist where a request for information is made."

Taking this argument a step further, even if an exemption were to apply, the Information Commissioner's own guidance states that this does not deprive public authorities of the power to disclose the information requested, therefore section 237(6) applies, and the FOIA is not to be subordinated to Part 9.

A public authority in Scotland has a discretion concerning whether or not to disclose information falling within Part 9, depending on whether, as pointed out above, the disclosure of such information would be suitable on public interest grounds.

Information Tribunal's Judgment — Dey v OFT

The saga continued as Mr Dey, clearly heartened by a very helpful decision on similar facts in his favour, appealed the Information Commissioner's decision to the Information Tribunal. In the Information Tribunal's judgment, it disagreed with the reasoning of the Scottish Information Commissioner, and agreed with the OFT that the wording in section 2 of the FOIA, which makes the information disclosure requirement in section 1 of the FOIA expressly subject to absolute exemptions, negated the effect of section 237(6) and therefore Mr Dey was unsuccessful in his appeal.

Case Law Analysis

Regardless of whether or not one agrees with the Information Tribunal's judgment in the Dey case, it is undeniable that on an issue of considerable practical importance, not only to competition practitioners and their clients, but to anyone requesting information from public authorities which may fall within the scope of Part 9, there is a fundamental disagreement between the Information Commissioner and the Scottish Information Commissioner as to the correct interpretation of section 237(6). This appears to be a suitable matter for a higher court to decide, despite the fact that, due to the two separate FOI regimes in Scotland and the rest of the UK, a continuing divergence cannot be ruled out.

However, it is to be hoped that a higher court judgment will settle the issue, or it will not be long before a creative applicant approaches the OFT's Scottish Representative Office (which has been open since March 2007) seeking to exploit the more favourable regime in Scotland.

Another option would be for the Secretary of State to make use of his powers under section 75 of the FOIA to repeal or amend the enactment capable of preventing the disclosure of information for the purpose of removing or relaxing the prohibition in section 44 of the FOIA.

Opening Part 9 Gateways

In this regard, it should also be noted that The Enterprise Act 2002 (Disclosure of Information for Civil Proceedings etc.) Order 2007 is due to come into force on 1st October 2007, and has created a number of new gateways through which information can be disclosed than is currently the case. One of the new gateways allows information to be disclosed for "proceedings relating to or arising out of a legal right or obligation of a consumer." An interesting question arises as to whether "claims brought on behalf of consumers" under section 47B of the Competition Act could in future benefit from this new gateway. It seems unlikely to be a long time before this potential avenue is explored and the question will be raised in practice.

Conclusion

Private enforcement of competition law is, in Europe at least, currently underdeveloped and in need of reform. One of the most pressing reforms is to devise a way of providing claimants with access to relevant evidence, as this is crucial for the effectiveness of the private enforcement process.

Whilst possible reforms are being considered both at EU level (2005 Green Paper, 2008 White Paper) and at UK level (2007 consultation on private enforcement in the UK), it is paramount that claimants are able to use other mechanisms at their disposal, such as the FOIA, to their best possible advantage.

The narrow interpretation of section 237(6) by the OFT, the Information Commissioner and the Information Tribunal goes against both the spirit of the FOIA and is certainly doing nothing to promote private enforcement.

Should the position on section 237(6) not change, potential damages claimants will need to wait for private enforcement reform at EU and/or national level to enable private enforcement to become fully effective. Either that or they will seek to bring their claims in Scotland!

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.