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Lord Falconer of Thoroton: Public authorities should not be placed in the position of having to choose between failure in relation to the statutory duties under the Bill and giving rise to an action in common law breach of confidence. The speeches of the noble Lords, Lord Norton and Lord Williamson, revealed to some extent something of an over-suspicious misunderstanding of what the effect of the clause means. Simply to put at the top of a document "Confidential" does not make the disclosure of that

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document by anyone actionable in breach of confidence. "Actionable" means that one can go to court and vindicate a right in confidence in relation to that document or information. It means being able to go to court and win.

On the question of confidence, one could be given a document or information in confidence. As time went by, it could cease to be confidential; for example, because the information was published elsewhere. The issue has to be tested at the point the application is made under the Freedom of Information Act. There is a two-pronged test in Clause 39; first, the information has to be obtained in confidence by the public authority; and, secondly, its disclosure would give rise to an actionable breach of confidence by the public authority. So the information must be confidential from the start and it must still be an actionable breach of confidence to disclose it at the time the application is made under the terms of the Bill.

The scope of the exemption is necessary because the Bill covers a wide range of public sector bodies, from primary schools to government departments. There are many reasons why information may be passed in confidence from one authority to another. It may even be that the duty of confidence arose when information was passed from a private sector body to an authority covered by the Bill. Any subsequent communication of the information between public authorities should maintain this duty of confidence.

The application of the exemption is restricted. Clause 79 prevents a government department from claiming for the purposes of Clause 39(1)(b) that disclosure of any information by it would constitute a breach of confidence actionable by any other government department. This means that information passed between government departments does not fall within the exemption unless the duty of confidence is owed to another person or body.

Clause 39 applies only to information the disclosure of which would give rise to an action for a breach of the common law of confidence. Amending subsection (1)(b), as the noble Lord proposes in Amendment No. 210 would effectively give greater protection to information passed from, say, a commercial firm to a public authority than would be accorded to information passed from one public authority to another. This seems to be an unjust differentiation which we could not support. Private persons, commercial firms and indeed public authorities are entitled to expect that information that they pass to a public authority in confidence will be treated as such.

Amendments Nos. 209 and 211 impose various limitations on the duty of confidence on the recipient public authority. I assume that the noble Lord's intention is to prevent public authorities from using the term "confidential" as a blanket to prevent the release of information. I believe these amendments to be unworkable, but also unnecessary. While this exemption does not come within the public interest test, it is subject to other legal safeguards. As I have mentioned, information would come within the remit of this exemption only if its disclosure would mean a breach of the common law.

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Third parties can and do freely and proactively pass to public authorities information the disclosure of which would constitute a breach of confidence. Where such information is passed to the public authority without the authority's prior knowledge, the authority could not give such notice as would be required under the noble Lord's amendment. This would leave the authority in the untenable position that, if it received a request for this information, it would have to choose between failing in its statutory duties and being held liable at common law for a breach of confidence.

Amendment No. 230 is inappropriate. In those exemptions which contain elements of confidentiality--that is, Clauses 25(2) and (3), Clause 39 and Clause 40--the amendment sets out an unnecessarily bureaucratic procedure for determining whether or not confidentiality applies. In many cases the circumstances surrounding the communication of information will already make it perfectly plain that it is to be held in confidence, without the need for further instruction in writing.

The noble Lord's amendment also misunderstands Clause 40, which covers communications to a public authority by its lawyers and by other persons for the purposes of litigation. In such an instance, the public authority will often not be the originator of the information. However, the legal professional privilege in question is that belonging to the public authority. To limit the authority's ability to rely on its privilege to circumstances where a third party beyond its control has marked information as "confidential", misses the point of legal professional privilege; it would in effect undermine the rights which the doctrine accords to public authorities, while leaving intact those rights for all other legal persons.

This amendment inappropriately applies to Clause 41. This exemption is intended to exempt information which has not been passed in confidence but whose disclosure would be prejudicial to the commercial interests of any person, including those of the public authority itself. The amendment would exclude this sort of information from the scope of Clause 41--and thus force public authorities to disclose trade secrets, unless the provisions of the proposed new clause had been complied with.

Amendment No. 232 is not needed. Nothing in the Bill disturbs the obligations of public authorities under the common law duty of confidentiality and it is this which authorities will have to consider, rather than the Secretary of State's code of practice, in determining whether or not the authority is under an obligation of confidentiality.

The noble Lord, Lord Lucas, says that the effect of Clause 39 is that the applicant must go to court in order to establish his reliance on the clause. That is not right. The commissioner can assess whether Clause 39 applies. She can assess whether the information is in fact held in confidence.

The noble Lord referred en passant to the fact that this is a weaker public interest test under the law of confidence than the Clause 2 test. I do not know what he meant by that. He will need to explain his argument before I can deal with it.

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The noble Lord, Lord Goodhart, referred to the code of practice. The code is a draft document. It is work in progress. I very much welcome comments from the noble Lord and others on how it could be strengthened or changed. It will be discussed with the commissioner in due course. However, we remain of the opinion that the question of confidence is best dealt with in a code where flexibility of approach can be maintained, rather than on the face of the Bill. I invite the noble Lord to withdraw his amendment.

Lord Goodhart: I draw a little comfort, but not very much, from the Minister's remarks about the code. I was hoping for something stronger. I hoped he would say at least that the Government would look favourably on extending the guidance given in relation to confidentiality. However, I shall have to make do as best I can with what he said.

I found some difficulty in following the noble and learned Lord's argument on the effect of Clause 39. It seems to me that if a third party supplies information to a public authority and stamps it "confidential", that cannot in itself impose a duty of confidentiality on the public authority. Confidentiality involves a certain degree of consensus between the two parties. We are concerned with the case where a public authority indicates its willingness to accept information that is treated as confidential where the circumstances do not justify that. Nothing in the Minister's response dealt with that problem. Therefore, we may want to re-examine the matter.

Lord Lucas: Before the noble Lord ends this discussion, perhaps I may take the chance to come back to the noble and learned Lord, Lord Falconer, on the point about relative levels of confidentiality. I am relying, as so often, on a briefing from the Campaign for Freedom of Information. It states that the test under Clause 39,

    "is likely to be more restrictive than the bill's public interest test. The courts have held that an obligation of confidentiality may be set aside (or in some cases may not have arisen at all) where the information reveals the existence of crime, fraud, serious misconduct, danger to the public or other matters of such importance that 'it may fairly be regarded as vital in the public interest that a person possessing such information should be free to disclose it to an appropriate third party'".

This is a narrower public interest test than that contained in the Bill, which seems likely to give more weight to including information to which the public's right of access would apply. I am always willing to accept the noble and learned Lord's view on the law. However, it seems to me that, on that interpretation, we are looking at a rather narrower right of public interest under this clause.

I should also be grateful if the noble and learned Lord would translate from the wording of Clause 39(1)(b) to the question that the official who will decide this question will actually have to ask himself. Will he have to ask himself: "Looking at all the circumstances, do I believe we should lose a case if one were brought?"; or will he have to ask: "If I disclose this information, is there a likelihood that I shall be sued, or a possibility that I shall lose?". How will he

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phrase the test? How will the information commissioner judge whether he has taken the right decision? Presumably, the information commissioner cannot put herself in the place of the court and decide the question. The question must be phrased from the point of view of the public authority. Am I likely to lose? Am I certain to lose? What will the question be?

9 p.m.

Lord Falconer of Thoroton: First, the question will be: do we hold this information in confidence? It will not be, "Is this marked in confidence?", because that is not the test. The test is: "Would I genuinely be breaking someone's confidence by disclosing this information not at the time that the information was received but now?" If it is something which is held in confidence from someone else, is there nevertheless a public interest in disclosing it because the public interest requires that the public know it? That is the question that the official or the public authority asks.

If under the Freedom of Information Act the applicant complains that there has been no disclosure under Clause 39, that is the question which the information commissioner asks. We should not be distracted by the fact that the test being applied is a common law test. That does not mean that the information commissioner is not capable of balancing those two interests.

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