Open sesame: appeal court upholds decision to publish “commercially sensitive” information in public inquiry

United Kingdom

The Inner House of the Court of Session in Scotland (the principal court of appeal for civil claims in Scotland) has upheld the decision at first instance to refuse to grant an interdict (the Scottish equivalent of injunction) to prevent a public inquiry from publishing “commercially sensitive” information. The information was said to carry with it a “very real risk of significant harm and damage”. The Inner House reach their decision unanimously, with Lord Menzies and Lord Malcolm agreeing with the opinion of the Lord President (Lord Carloway), who delivers the opinion of the Court.

Background

On 25 April 2018, the Court of Session heard an application from Bilfinger Construction UK Limited (“Bilfinger”), a core participant in the Edinburgh Tram Inquiry (the “Inquiry”), which sought to prevent documents being published on the Inquiry’s website. Bilfinger’s application for interdict was refused on the grounds that Bilfinger failed to show that the Chairman of the Inquiry had acted improperly in deciding to allow the disclosure of the information.

The Edinburgh Tram Inquiry was commissioned by Scottish Ministers in 2014 and aims to establish why the Edinburgh Trams project incurred delays and cost more than originally budgeted. Bilfinger had been appointed to undertake the civil engineering works and electrical works for the Edinburgh Trams Scheme in 2008. In the course of the Inquiry, Bilfinger was issued with a notice under section 21(2) of the Inquiries Act 2005 (the “Act”) requiring it to produce certain documents to the Inquiry.

Although Bilfinger obliged, it followed this with an application under section 19 of the Act, which permits restrictions to be imposed on the disclosure or publication of any evidence or documents given, produced or provided to an inquiry. The matter came before the Chairman for determination, as prescribed under the Act. It was decided that the documents would be published – unredacted – on the Inquiry’s website. Bilfinger subsequently applied to the Court for judicial review, seeking an order suspending that decision and prohibiting the Inquiry from publishing or disclosing the allegedly confidential information.

Confidentiality and commercial sensitivity

The documents in question comprised monthly reports drafted by Bilfinger during the tram project for the purpose of informing its Group Management, headquartered in Germany. The reports consisted of charts and tables, and included headings such as “Performance sheets”, “Cost reconciliation and forecast”, and “Commentary”. It was argued by Bilfinger that not only was the information contained in those reports commercially sensitive, but that the very format and structure of the reports was a proprietary tool developed by the Bilfinger Group, which itself constituted a trade secret. On that basis, Bilfinger contended there was a very real risk of significant harm and damage to the Bilfinger Group if the information was disclosed; it would weaken their commercial advantage.

The Chairman disagreed. He considered whether restrictions on the information were necessary in the public interest. He was tasked with a balancing exercise between, on the one hand, public interest in publication of documents provided to the Inquiry (such as might aid the understanding of the reasons for the conclusions that the Inquiry may ultimately reach) and, on the other hand, the public interest in avoiding risk of harm or damage caused by disclosure of commercially sensitive information. Ultimately, the Chairman was not convinced that the information was genuinely commercially sensitive, nor that it would risk harm or damage. He observed that there was a high level of generality in Bilfinger’s explanations on why the information was commercially sensitive and there was a lack of detail about the type of harm and damage that might occur.

The Court’s decision at first instance

The Court at first instance had to decide whether the Chairman’s decision was either: (1) irrational and unreasonable; (2) had no proper evidential basis; (3) failed to take into account relevant material; and/or (4) was procedurally unfair. Bilfinger also claimed it should be entitled to the order sought on the basis of equivalent treatment, pointing to the fact that another core participant in the Inquiry had benefitted from a restriction order in respect of their commercially sensitive documents. The Court found against Bilfinger on all grounds. The Court found itself “at just as much of a loss as [the Chairman] as to why either the substance or the methodology of the report has a continuing commercial sensitivity whose publication would cause damage to….the Bilfinger Group”. The assertions of potential harm and damage fared no better. For example, it was said that descriptions of ways in which competitors would have benefited were “without any explanation of how publication of either the information or the methodology could have that consequence. Such a lack of explanation [was] compounded by internal inconsistencies in the assertions”. The Court at first instance refused to strike down the Chairman’s decision and imposed no restrictions on the disclosure of the monthly reports.

The appeal

The decision at first instance was then appealed, on an expedited and urgent basis to the Inner House. Bilfinger argued that the decision:

(i) was contrary to the statutory duty of fairness under section 17(3) of the 2005 Act;

(ii) was a violation of their Article 1 Protocol 1 ECHR rights; and

(iii) was irrational, failed to take proper account of relevant material and took account of considerations for which there was no evidential basis.

On fairness, the Inner House held that the Court was bound to determine the legality of the decision of the Chairman, not its merits. It held that the arguments regarding the similarity of the other application were “extremely coy”. To succeed, the Court found that these arguments had to be sufficiently specific and weighty to engage a prima facie case; that was not the case with this application, with the Court deeming their position “vague”. Accordingly, a breach of the duty of fairness had not been established.

Addressing the appellant’s Article 1 Protocol 1 ECHR rights, the Court found this argument could not succeed, where the prime facie case – that the information was confidential in the first place – had already failed.

On the third and final ground – rationality – the Inner House again found no cause for concern, noting that the Chairman’s decision was primarily because of the material before him, which he deemed insufficient and unpersuasive.

The appeal accordingly failed and the disputed material remains in the public domain.

Comment: the devil is (still) in the detail

It is clear from this judgment, as well as the first instance decision and that of the Chairman that preceded it, that any party seeking to contend that information is “commercially sensitive” must back this up with specific examples, linking that sensitivity to tangible instances of potential harm and damage upon disclosure.

A high risk is borne by applicants when seeking to prevent disclosure of commercially sensitive information. In bringing this appeal, as well as the original application, and in failing to succeed in both, the applicant has arguably brought yet more attention to the documents themselves, through publicly highlighting what aspects they deemed commercially sensitive, which are now reflected in two public court judgments of the Scottish courts.

Letting genies out of bottles can be a risky business. Ultimately, it is clear that to protect confidential information, applicants must demonstrate how harm and damage might occur, what that harm and damage would look like, and precisely who would suffer it. The devil is in the detail. As the circumstances of this case demonstrate, once the genie is out of the bottle, it is very hard to get it back in again.