Freesteel Blog » Does the Veolia judgment bootstrap FOI?

Does the Veolia judgment bootstrap FOI?

Saturday, October 3rd, 2009 at 10:00 pm Written by:

I had a lovely read last night of the newly published Veolia vs Nottinghamshire County Council judgment. It’s a good piece of drama, which held me in suspense all the way to the last sentence.

Here’s my relation to this.

Back in December 2007 Francis needed an FOI request to test out his new system, and I recommended going after the Veolia waste contract in Liverpool. It took until March 2009 to come to a conclusion that the pricing information was “commercially confidential” because “disclosure would adversely affect the interests of the supplier of the information.”

In balancing this decision, the FOI officer took account of the public interest by making up some thoroughly specious argument for secrecy at variance with the real reason, which is to protect the rights of large corporations to loot the public finances behind closed doors and not give a damn about the consequences.

Later on I learnt about the Audit Commission Act which says that for one month every year, prior to the audit of a local council’s accounts…

any persons interested may inspect the accounts to be audited and all books, deeds, contracts, bills, vouchers and receipts relating to them, and make copies of all or any part of the accounts and those other documents.

In theory this provides another right of access to information where “commercial confidentiality” cannot be used as an excuse to prevent the public from finding out what they are paying for through taxation.

However, when Mr Shlamo Dowen of Nottinghamshire attempted to inspect the 26-year £850million waste burning contract his council had signed with Veolia, Veolia obtained a court injunction against the council preventing them from disclosing it.

I recommend reading the judgment word for word, because it’s entertaining and is an instance of the timely unperverted course of justice.

But here is the key evidence in the judgment:

13. The Council’s statement of accounts for 2008/09 was approved by the full Council in the ordinary way on 25 June 2009. Eventually the Council’s statement of accounts is made available on the Council’s website.

The statement of accounts includes what is described as the Council’s accounts and certain Pension Fund Accounts. In the Council’s statement of accounts there is an Explanatory Foreword, an overview of the year, including a reference under Capital Expenditure and Financing to “waste recycling and energy recovery facilities”.

Further details of all PFI contracts, it is said, are set out in Note 29 to the Accounts.

This is an open and shut case.

Mr Dowen is a taxpayer in Nottinghamshire, and so therefore is undeniably a “person interested”. He has produced a document that is known to all as “the statement of accounts”. In it is a reference to what is identifiable as the gigantic Veolia waste contract. Therefore the Veolia contract “relates to them [the accounts]”. So he has a right to inspect and make copies of said contract.

All that stands in his way is Mr Coppel QC, representing Veolia “with his characteristic intellectual rigour” [para 57].

The judge writes:

47. The dispute in this case is whether the disputed documents constitute information relating to the accounts of the Council which are to be audited. In particular, what is in issue is first, what is meant by the accounts of the Council to be audited and, secondly, the character of the connection between the disputed information and the accounts required in order for it to be “relating to” those accounts.

48. There is no definition of “accounts”… At least two meanings of the phrase emerged during the course of the hearing. The first was the narrow definition contended for by Mr Coppel QC for Veolia. That would include, for example, the lines of the account in the Income and Expenditure Account, and possibly in the Summary Revenue Accounts of Trading Undertakings therein contained… Mr Coppel QC submitted further that the Notes to the Statement of Accounts are precisely that, they are notes, not part of the accounts.

49. The second meaning of accounts, as advanced by the Audit Commission, lies at the other end of the spectrum. Accounts under this approach are the general ledger and any account feeding into it. Thus the accounts show all the financial movements or items of account in the Council’s funds. The Council and Mr Dowen agree with this approach.

Mr Coppel (for Veolia) was arguing that the “Accounts” only meant a small portion of the document known as “Statement of accounts”. In particular, he was trying to exclude the bit where the waste contract was directly mentioned, so as to argue that — in what he considered were the accounts — there was no direct mention of the waste contract, and therefore it was not something which “related to them [the accounts]”.

To deal with the inconvenient two lines in the in the part of the document he could not dispute were of the accounts where the waste contract was indirectly mentioned, he argued that:

65… In neither line is there any mention of or reference to the Contract by name, by date, by amount or by any other attribute. Underlying those two lines of the accounts is more than just the Contract and the payments under it. Whilst the Contract and the payments under it may be referred to in the Council’s accounting records, the accounting records are not the accounts. Nor is the statement of accounts the accounts. There are entries in the statement of accounts which might be said to allude to the Contract or the invoices. But Note 29 is not part of the accounts. As to Note 36, under the heading “revenue reserves”, this refers back to the balance sheet. Even if they were part of the accounts neither entry causes the Contract or the invoices under it to constitute a document relating to the accounts.

The judge explained at length why this argument was absurd, since it would effectively negate the whole point of the right of inspection. The judge went on to add:

77. The obligation to pay local taxation through the rates was matched by the right given to rate-payers to an involvement in the process of ensuring the money was well spent. It was a mechanism of democratic accountability through involvement in the public process of audit. Assisting the audit process included an opportunity for local government electors and other persons interested to inspect and copy the accounts and related documents. In my judgment it is entirely unsurprising that given its history the law should permit a local elector such as Mr. Dowen sight of the disputed documents in this case. The historic role of interested persons such as local government electors in participating in the audit process would be severely diminished without such disclosure.

So much for that argument.

But what about the harm that will be caused if people can simply obtain access to these commercially confidential documents using this law? People might be able to find out all kinds of personal secrets, and other things that could cause a lot of damage if the facts got out. You have to think about that before you ruthlessly go on ordering the disclosure stuff like this.

The judge wrote:

78. Veolia suggested that the consequence of a wide interpretation of section 15(1) would be to produce unreasonable results.

One was that legally privileged documents could be required to be disclosed.

In my view this suggestion is misconceived… Moreover, the category of documents to which section 15(1) gives access also provides the answer to the point — books, deeds, contracts, bills, vouchers and receipts are unlikely to raise issues of legal professional privilege.

There was also the argument that a police authority would be required to disclose in unredacted form a contract with a surveillance company which might identify a person under surveillance.

I am somewhat puzzled as to how the conclusion follows from the premise. In any event, it may be that such information would be prevented from being disclosed by the personal information exception in section 15(3).

Other examples of adverse effects were, in my view, similarly without foundation. The very wide exemptions for personal information in section 15 would catch most of the documents to which Veolia referred, even if they did, unusually, fall within the type of documents set out in that section.

Mr Coppel QC was unable to point to any example in case law supporting his floodgates argument in relation to a legislative provision which, after all, dates back to the first part of the 19th century.

But… But… But this is crazy. You can’t have commercially confidential information coming out like this. What if Parliament meant put in a nice tidy modern commercial confidentiality limitation into this ancient creaky law, but simply hasn’t got round to it? There’s so much other stuff to do.

The judge explained:

80. In my view the express provision for confidentiality in section 15(3) in the case of personal information suggests that commercial confidentiality is to be ignored in the interpretive exercise.

The reality is that in recent times Parliament has addressed the issue of confidentiality in relation to section 15 and has not considered it necessary to extend it to commercial cases such as the present.

First, there was the introduction of the original confidentiality provisions after the Oliver decision in the 1989 Act. More recently Parliament amended the confidentiality provisions in section 15 through the Local Government and Public Involvement in Health Act 2007…

These suggest that Parliament would have said so if it has intended there to be other duties of confidentiality. Indeed section 49(2A) is an amendment expressly referring to the Freedom of Information Act 2000.

All this suggests that Parliament’s intention is that a confidentiality qualification, as found in other information rights legislation, is presently unnecessary. Parliament cannot be taken to have been blind to the question of commercial confidentiality.

And so, in conclusion:

82. Section 15(1) of the 1998 Act enables an interested party to inspect and copy certain documents related to the accounts of the Council.

It does not create the type of general free-standing right of access to information as conferred by modern information rights legislation.

Its history lies in democratic accountability, rather than the policy of transparency and openness behind the modern legislation.

But in my view, as a matter of legal analysis, section 15(1) applies in this case, notwithstanding Veolia’s contention that this will lead to a breach of commercial confidentiality.

Accounts are not defined but the 1998 Act indicates that they are the record of the Council’s financial activity over a period and of the financial position at a particular time.

The statement of accounts is a summary of the accounts.

In my view it is plain that each of the disputed documents relate to the Council’s accounts as that phrase is to be construed in its statutory context.

In the result Mr Dowen is entitled to inspect and copy these documents.

And so ends that story.

But back to the title of this blogpost:

The Freedom of Information Act 2000 contains problematic exemptions to disclosure of documents considered to be “commercially confidential”.

It seems to me that if the document requested is either a book, deed, contract, bill, voucher or receipt relating to the accounts of a local authority, then for one month every year they can be inspected and copied by all persons interested.

This means that logically they cannot bear the property of being “commercially confidential” — since they are subject to unlimited inspection and copying by un-vetted members of the public.

Therefore the exemption cannot apply.

This would be known as bootstrapping the FOI Act, and it’s only going to happen when someone has the time to take a case to court. Which is difficult because only the Information Commissioner has the powers of enforcement.

Unlike this particular Audit Commission Act law, where anyone can bring a case they believe has merit and argue it before a judge, the government merely has to under-resource the Information Commissioners Office until there is a five year back-log, and then everyone can ignore the law to their heart’s content without fear of retribution.

Also, because in practice (as in the case of Francis’ request for Liverpool’s Veolia contract) things can drag on more than a year, a suitably motivated activist is likely to cease pursuit of an FOI case once the time comes round to access the documents via the Audit Commission Act.

But never mind.

I believe I once tried citing the above Audit Commission argument in an FOI request, only to be hit with a Section 21 exemption, quoting:

Information which is reasonably accessible to the applicant otherwise than under [the FOI Act] is exempt information.

In other words: “well, piss off and get your information that way then, sunshine.”

However, this is wrong, because the remainder of that section adds:

information is to be taken to be reasonably accessible to the applicant if it is information which the public authority or any other person is obliged by or under any enactment to communicate (otherwise than by making the information available for inspection) to members of the public on request, whether free of charge or on payment.

The Audit Commission Act grants a right of inspection.

I hope that next year a suitably motivated community of activists in one area obtains all the so-called “commercially confidential” contracts signed with the usual corporate suspects, and publishes them.

This would set an example and establish a precedent, because it would have consequences we would no longer have to speculate about.

Those consequences are likely to either be (a) nothing of any commercial note (ie reduction in excessive profits for poor service allowed by the letter of the contract), or (b) commercial harm for the companies involved that is in the public interest because of the exposure of being ripped off royally.

I believe that disclosure of all financial activities by the public authorities is in the public interest, because it allows us to judge if what they are paying for is reasonable, and encourages other businesses to find out the winning prices and bid more competitively.

But don’t take my word for it. In America, Barack Obama passed the Federal Funding Accountability and Transparency Act of 2006 when he was in the Senate, before all this malarky, because it was a lot more important.

This trivial later stuff is what the UK government is going to go on getting all excited about over the coming months, with a pointless shower of data sets of very little value.

We need to know where the money is going, and what it’s paying for. This judgment, Veolia vs Nottinghamshire County Council, should remove the legal barriers towards disclosing this data.

All that remains are the cultural civil service issues.

As well as some motivation and organization on part of some activists.


  • 1. Richard Taylor replies at 6th October 2009, 1:51 am :

    During the open period for Cambridge City Council’s accounts I asked to see a copy of the council’s contract with “SLM” which relates primarily to swimming pool management. My request was rejected on the grounds of commercial confidentiality and the fact that a redacted version of the document (without the contract value) had been made available to someone else under FOI.

    I have written an article about my visit to the council:

    Richard Taylor

  • 2. Richard Taylor replies at 7th March 2010, 10:35 pm :

    Cambridge City Council has also been secretive about its waste management contract:

    The opportunity to try and inspect it under the audit commission act will arise later this year.

  • 3. Photon replies at 16th June 2011, 8:54 am :

    A lovely post!

    But – hang on! The latest fad is the application of copyright to – wait for it – “the information contained” in a FoIA response. So, if you find something incriminating and the orghanisation prefers it kept quiet, it can refuse the permission it allows you, graciously, to ask for to promulgate said information.

    In other words, they’ve found an effective means to undermine FoIA 2000. The ICO in Scotland and E/W haven’t come to terms with this at all, and it would appear to need an amendment to FoIA 2000.

  • 4. Richard Taylor replies at 31st July 2011, 8:27 pm :

    Veolia appealed the original 2009 judgement and an appeal judgement was issued on the 29th October 2010.

    Paragraph 161 is the section of the judgement containing the core of the decision.

    It appears to me that the appeal judgement means that access to material marked confidential within a public sector contract which someone seeks to access during the open period will only be released if the public body considers it is in the public interest to make it available. The presumption will be against disclosure and there will need to be a public interest argument to override that presumption.

    The Veolia case only applies as far as I can see to material identified as confidential by the contractor.

    Two of the three Law Lords opted not to express a view on what one can do with material obtained when inspecting the accounts under the Audit Commission Act.

    I have commented further on the judgement at:

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