The Information Tribunal recently clarified the scope of the "prejudice to commercial interests" exemption to public authorities’ duty to disclose information to the public under the Freedom of Information Act 2000 ("FoIA"). The decision offers little comfort for private sector contractors concerned that their public sector customers could be obliged by FoIA to release sensitive information provided by contractors.
The National Maritime Museum, one of the many hundreds of public sector bodies obliged by FoIA to disclose information on receipt of a request, received a request for disclosure of information about financial arrangements for exhibiting works of art produced by a particular artist. The Museum released details of contractual terms with the artist, including the structure of payments made, but it redacted figures shown in the papers on the basis that the "commercial interests" exemption in FoIA applied.
The "commercial interests" exemption allows a public authority to refuse to release information if disclosure "would, or would be likely to, prejudice the commercial interest of any person" including the authority itself. The exemption is "qualified" meaning that if the public interest in protecting the commercial interests concerned is outweighed by the public interest in disclosure of the information requested, then the authority must still disclose the information, despite the risk of prejudice to commercial interests.
The Museum argued that releasing the information would hamper its ability effectively to negotiate with other artists whose work it wished to exhibit. At the time of the request it was actually engaged in negotiations with another artist. The Information Commissioner’s decision that the Museum’s approach had been justified at the time of the request was overruled on appeal to the Information Tribunal.
The Tribunal held that "a real and significant risk" of prejudice was required, as opposed to just a "hypothetical or theoretical risk". No sufficient risk was demonstrated here, partly because (i) the artists concerned were insufficiently similar and (ii) information already disclosed in response to the request had in any event provided much useful information to any artist seeking to negotiate with the Museum, such as the basis of payments made (although not their amount). Perhaps surprisingly, the second argument seems to suggest that, to some extent, the more information is initially disclosed, the more difficult it may become to support the view that disclosure of further information will damage commercial interests.
The decision confirms the Information Commissioner’s published guidance which states that the risk of prejudice required is "a real and significant risk". The decision is based very much on the specific facts of the case concerned. However, those consulted by public sector customers about disclosure of commercially sensitive information would be well advised to ensure that the arguments they make to support application of the exemption are as specific as possible, so as to support the view that the risk faced is "real and significant". In addition, public sector suppliers should try to ensure that information they do not want to see disclosed is covered by express confidentiality obligations. This will allow authorities to argue that the separate exemption covering confidential information also applies.
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