Decision
Mr X and Sligo County Council
From Office of the Information Commissioner (OIC)
Case number: OIC-128254-V7D0D7
Published on
From Office of the Information Commissioner (OIC)
Case number: OIC-128254-V7D0D7
Published on
Whether the Council was justified in refusing access to records concerning a tender for legal services in relation to debt collection under section 36 of the FOI Act
24 January 2023
On 14 March 2022, the applicant submitted an FOI request to the Council for “documents and records relating to legal fees and commission paid by the Council for Debt Management Services.” In a decision dated 6 April 2022, the Council provided certain information in relation to the total sums referred to and recovered by third party debt collectors in 2021 and the total sum paid to third party debt collectors for recovery services in 2021. On 7 April 2022, the applicant sought an internal review of that decision. On 29 April 2022, the Council informed the applicant that it had retrieved records relating to contracts for debt collection services and it stated that it was obliged to consult with the relevant service provider prior to releasing any such information, having regard to the possible commercial sensitivity of the records. On 29 July 2022, the Council issued its decision. It informed the applicant that following third party consultation with the service provider, it had decided to refuse the request under section 36(1) of the FOI Act on the basis that the information is commercially sensitive. On 29 July 2022, the applicant sought a review by this Office of the Council’s decision.
I have now completed my review in accordance with section 22(2) of the FOI Act. In conducting the review, I have had regard to correspondence between the applicant and the Council as outlined above and to communications between this Office and both parties on the matter. In light of the nature and contents of the records at issue, this Office notified the service provider of the review and invited it to make a submission on the matter. I have had regard to the service provider’s submission that the records are commercially sensitive. I have also had regard to the Public Procurement Guidelines for Goods and Services published by the Office of Government Procurement, and to the contents of the records at issue. I have decided to conclude this review by way of a formal, binding decision.
During the course of the review, the applicant stated that he is only interested in information in relation to the charges that the Council agreed to pay the contractor for debt collection services. This information is contained on page 25 of the Debt Management Services Agreement. Following communications between the applicant and this Office, the applicant agreed to limit the scope of this review to page 25 of the Debt Management Services Agreement. This review is concerned solely with whether the Council was justified in refusing access to page 25 of the Debt Management Services Agreement under section 36(1) of the FOI Act.
Section 13(4) of the FOI Act provides that the actual or perceived reasons for a request must generally be disregarded by the decision maker, including the Information Commissioner. This means that an applicant’s motivation cannot be considered except insofar as such reasons are relevant to consideration of the public interest or other provisions of the FOI Act.
Although I am obliged to give reasons for my decision, section 25(3) of the FOI Act requires me to take all reasonable precautions in the course of a review to prevent disclosure of information contained in an exempt record. This means that the extent to which I can describe the contents of the records is limited.
It is also important to note that when a record is released under the FOI Act, it effectively amounts to disclosure to the world at large, as the Act places no restrictions on the type or extent of the subsequent use to which a record may be put.
The Record
Page 25 of the Debt Management Services Agreement contains a pricing schedule with a comprehensive list of the legal debt management services provided by the service provider. The pricing schedule lists the mark available for each of the legal services and the price for each legal service. The pricing schedule also contains details of the commission on the amount collected, which is listed as a percentage, and the hourly rate for legal executives, solicitors and partners.
Section 36(1) Commercially Sensitive Information
In its submissions to this Office, the Council contends that the information at issue is exempt under sections 36(1)(b) of the FOI Act. Section 36(1) provides that an FOI body shall refuse to grant a request if the record concerned contains: (b) financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation. There are certain situations where, although section 36(1) applies, the request shall still be granted. These situations are specified in section 36(2). Section 36(3) provides that section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than by refusing the request.
In his application to this Office, the applicant states that the information he sought in this request is similar to information he sought in a previous request to Westmeath County Council. The decision in that case is available on this Offices website at ( [external-link https://www.oic. ie/decisions/d160388-Mr-H-and-Westmeath-County-C/ | https://www.oic. ie/decisions/d160388-Mr-H-and-Westmeath-County-C/ ]). He contends that the 'fixed percentage fee per case to be charged' in that case is the same as the 'commission % on amount collected' that the Council pays its service provider in this case. He states that the Senior Investigator in case 160388 stated that the fee rate at issue should not be regarded as a trade secret in circumstances where the tender process had concluded and section 36(1)(a) did not apply. The applicant states that he would also question why the fee rates relating to other items such as legal fees should not be released when other public bodies such as the Courts Services have no difficulty in publishing their rates.
In its submissions to this Office, the Council states that in 2022, it awarded a contract to its current service provider for debt management services via a multi-supplier framework established by the Office of Government Procurement. It states that it administered a mini-competition amongst framework members and subsequently awarded a contract to the service provider who submitted the most economically advantageous tender. The Council contends that the itemised schedule of prices per service contains commercially sensitive information. It contends that the competitive position of the contractor could be prejudiced by the disclosure of the relevant information, should their pricing strategy become known to other parties that are in competition with them for similar contracts. The Council states that in case 160388, the Senior Investigator found that section 36(1)(a) did not apply to the fixed percentage fee rates; however, he did find that this information was exempt under section 36(1)(b) of the Act and he also found that a detailed breakdown of the fees to be paid by the Council to the successful tenderers was exempt under section 36(1)(b) of the FOI Act.
In its submissions to this Office, the service provider says it objects to the release of the commercial terms under which services are provided to the Council under the agreement in question. It states that the terms in this agreement are the result of a competitive tender process conducted by the Council. It states that this tender was held under a supplier framework established by the Office of Government Procurement for the procurement of legal debt collection services. It states that less than 10 suppliers are entitled to bid under this framework and they include all of its main competitors in the market for legal debt recovery services. It states that disclosure of the commercial terms under which it won this contract would place this information in the public domain where it would be accessible by its competitors who would then be aware of its most competitive commercial terms. It states that they could factor that information into future bids for tenders conducted by other public sector bodies within the framework placing it at a serious competitive disadvantage.
The essence of the test in section 36(1)(b) is not the nature of the information, but the nature of the harm which might be occasioned by its release. The standard of proof in relation to the second limb of section 36(1)(b) is very low. All that is required is the possibility of prejudice with the only requirement being that disclosure "could prejudice the competitive position" of the person concerned.
The Supreme Court in University College Cork v The Information Commissioner [2020] IESC 58 confirmed that the standard of proof in relation to the second limb of section 36(1)(b) is “very low”. Nevertheless, it is not sufficient for a party relying on section 36(1)(b) to merely restate the provisions of the section, list the documents and say that they are commercially sensitive. A party opposing release should explain why disclosure of the particular records could prejudice its competitive position.
The information at issue here is not historic pricing information as it relates to a contract awarded in 2022. I accept that the details of the percentage fee per case to be paid by the Council to the service provider would be of interest to parties that may be interested in competing for future tender competitions and that release of those details could prejudice the competitive position of the service provider. I also accept that release of a detailed breakdown of fees could give competitors an insight into the pricing strategy of the service provider and could prejudice their competitive position in future tender competitions.
I am satisfied, therefore, that section 36(1)(b) applies to the information at issue.
Section 36(2)
Section 36(2) provides for the release of information to which section 36(1) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arise in this case.
Section 36(3) The Public Interest
The public interest balancing test in section 36(3) expressly acknowledges the potential for harm arising from the release of a record. Therefore, while release of a record might give rise to one or more of the harms identified in section 36(1) of the FOI Act, this alone does not provide a sufficient basis for concluding that the public interest would be better served by refusing the request. The public interest test involves a balancing exercise between the public interest served by granting the request and the public interest served by refusing it. The FOI body must carry out that balancing exercise, by weighing the competing interests at play in the particular circumstances of a request, and then explain the basis on which it has decided where the balance of the public interest lies.
The Council states that the public interest in openness and accountability in relation to the expenditure of public funds would be better served by the release of information in relation to the total expenditure under the contract on a periodic basis rather than release of an itemised pricing schedule. It contends that detailed pricing information would really only be of interest to parties competing for similar contracts.
The service provider states that the public interest would be significantly prejudiced by disclosure of the information at issue. It states that disclosure would undermine the efficacy and fairness of the tendering process by making information available to some bidders to the disadvantage of another thereby distorting the principle of a level playing field.
In carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. To summarise, section 11(3) recognises the need to enhance public scrutiny and accountability of government and public affairs, with particular regard to the activities and decision making of FOI bodies. However, it is important to note that in The Minister for Communications, Energy and Natural Resources and the Information Commissioner & Ors [2020] IESC 57 (the Enet judgment), the Supreme Court found that a general principle of openness does not suffice to direct release of records in the public interest and “there must be a sufficiently specific, cogent and fact-based reason to tip the balance in favour of disclosure”. It also found that section 36(1) recognises that there is a public interest in the protection of commercial sensitivity and this may be normally served by the operation of the exemption itself, which provides for the refusal of an FOI request. It stated that “… the scheme of the Act is to make the refusal of certain records mandatory, unless the public interest could, following an analysis of the contents, rationally be said to lead to the conclusion that disclosure of the records is in the public interest by reason of their contents.”
The Supreme Court went on to state that the public interest test involves a “weighing of the respective private and public interests in the analysis of the records at issue”. In this regard, it did not disturb the guidance the Court had previously given in The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v. the Information Commissioner [2011] IESC 26, in which it noted that a public interest ("a true public interest recognised by means of a well-known and established policy, adopted by the Oireachtas, or by law") should be distinguished from a private interest.
In the context of determining whether to grant a request in the public interest, it is important, to consider established public policy in relation to public procurement. The Government’s National Public Procurement Policy Framework, available on the website of the Office of Government Procurement (OGP) at https://ogp.gov.ie/national-public-procurement-policy-framework/, sets out the overarching policy framework for public procurement in Ireland, including the procurement procedures to be followed by Government Departments and State Bodies under national and EU rules. The OGP has published “Public Procurement Guidelines for Goods and Services”. The Guidelines provide as follows:
“Bodies subject to Freedom of Information Legislation are required to provide the following details in relation to public procurement under the Model Publication Scheme, published by the Department of Public Expenditure and Reform in July 2016:
It seems to me that the Scheme reflects a Government policy of transparency in relation to the value of contracts awarded. While no tender related records are subject to release or exemption on a class basis, it is my view that the Scheme highlights a recognised public interest in certain elements of a successful tender, after such time as a contract has been awarded.
The tender process in this case was completed after the publication of the Model Publication Scheme and the agreement at issue takes effect for the period 22 February 2022 to 21 February 2024. In considering whether the public interest favours protecting or releasing the requested information, I have outlined above the need for FOI bodies to achieve greater openness in their activities, to promote adherence by them to the principles of transparency in government and public affairs. In my view, the need to strengthen their accountability carries even greater weight where the use of public funds is involved. In this case, the Council has stated in communications to this Office that it “would be agreeable to releasing the total expenditure under the contract periodically” it seems to me that the release of the total expenditure under the contract to date would act as a step in the promotion of openness and accountability. However, the information at issue in this request is significantly more detailed than the overall cost. The applicant seeks the detailed pricing schedule, which underpins that overall cost. In my view, the release of such detailed and particular information could reasonably be expected to provide a significant advantage to competitors in future similar competitions, while providing little additional insight into the overall cost to the taxpayer. I find, therefore, that the public interest would, on balance, be better served by refusing the information sought relating to legal services.
While not relied upon by the Council, the successful tenderer argued that section 35 of the FOI Act serves to protect as confidential the pricing information provided by it in its tender submission. As I have found that the information at issue is commercially sensitive, it is not necessary to also consider whether it is also exempt under section 35 of the FOI Act.
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the Council’s decision. I find that the Council was justified in refusing access to the information at issue under section 36(1)(b) of the FOI Act.
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Jim Stokes, Investigator