Part V

Waiver of Rights

5.1                                      The standard express condition in a local authority’s liability insurance contract prohibits any “waiver of rights” without the permission of the insurer. The rights considered by counsel in the Clwyd case were to confidence, legal professional privilege and public interest immunity.[1] In the following paragraphs we discuss confidentiality in general terms, because it has significant implications for legal professional privilege and for public interest immunity. However, we conclude that an action against a local authority for breach of confidence does not have the same importance in terms of the effect on its insurance contract as does a waiver of a right to confidentiality.

·         Confidentiality

5.2                                      Confidentiality can be described as the corollary of the public’s right of access to information held by the local authority. Thus against the framework of the public’s rights of inspection of and access to material held by the authority,[2] there is a corresponding framework which imposes duties on the council as to how it treats material in its possession. The matrix of public rights has undergone significant change since the Jillings report; the enactment of the Data Protection Act 1998 and the Freedom of Information Act 2000 are of particular importance.

5.3                                      A distinction can be drawn between two situations where confidentiality might arise, which we now describe briefly. Only the second of these is pertinent to the term of the insurance contract under consideration.

5.4                                      First, an authority may owe a duty of confidentiality to another party. This might arise, for example, where it holds personal information about recipients of its services,[3] or the local authority may be in a special relationship with the communicator of the material.[4] Similarly, the information may have been imparted to the authority on the understanding that it was being provided subject to confidentiality.[5] In this instance no question of a waiver of a right will arise: in the case law, where confidentiality has been lost in a document this is referred to as a “breach”, not a “waiver”.[6]

5.5                                      It is clear that unauthorised use of this material can be classed as a breach of a duty, in the same way as, for instance, a breach of the duty of care in negligence. Breach of confidence is defined as unjustified disclosure or use, or the unjustified putting at risk thereof, of confidential information.[7] Disclosure may also occur if there is partial unauthorised use of the material, subject to such use being significant and substantial.[8] Breach can also occur where subsidiary or ancillary material is disclosed to the public.[9]

5.6                                      An authority will wish to avoid exposing itself to an action for breach of confidence, just as it will wish to avoid committing any tort or breach of statutory duty.

5.7                                      One way of doing this may be for the authority to release material to an inquiry, but on the express understanding that it is not to be further disclosed. Material that has been shared with other professionals or agencies[10] but is still restricted from public access will still benefit from the quality of confidence, as material can be confidential between some persons and not others.[11]

A right to confidentiality

5.8                                      Secondly, confidentiality might attach to documents created specifically for the authority. For example, communications between the director of social services and the legal department will be confidential. This confidentiality is not owed to a third person, but owed internally within the authority. A right to confidentiality means that the local authority has a right to decide whether this information should be made public. Therefore placing material of this nature in the public domain may amount to a waiver of a right within the term of the insurance contract. But the right in this case will not be a right to confidentiality. It will be a legal right of some other nature, such as legal professional privilege, of which confidentiality is a necessary element.

5.9                                      This distinction between a waiver of a right based on the principle of confidentiality and a breach of confidence owed may not be clear-cut in all cases. The distinction might pose problems where, for instance, the authority discloses personal information relating to officers or staff of the authority. Although the information is internal to the authority, disclosure of this information by the employer may breach duties of confidentiality imposed upon the authority by, for example, employment or data protection law.

5.10                                      Confidentiality underpins the legal issues we discuss next because claims of legal professional privilege and public interest immunity are precluded if the information in question is not confidential.

5.11                                      Privilege entitles a litigant or his or her successor in title[12] to withhold documents from production during the course of legal proceedings. Privilege is fundamentally a rule of evidence,[13] but may also be claimed in certain investigative non-adversarial proceedings.[14] Once privilege is established, the right to withhold the document is absolute.[15] This means that if a document from the local authority is privileged then it is protected from being produced. But the fact that a document may be privileged does not mean it is not admissible, because privilege may be waived.[16]

5.12                                      The type of privilege that will arise most often in local authority reports is a claim of legal professional privilege. This can arise where communications are made between the legal adviser and the client, the client being the authority, or between the authority’s solicitor and the insurer. Legal professional privilege covers communications between the client and the adviser whether or not proceedings are in existence or contemplated (legal advice privilege) and communications between the adviser and the client, or between either and a third party, where litigation is pending or in prospect, if the dominant purpose of the communication is getting evidence or advice for the litigation (litigation privilege).[17] Litigation privilege is, in our opinion, not central to the question upon which we are asked to report. The concern raised in the Waterhouse Report is the issue of waiving privilege by publication, thus potentially prejudicing the authority (and its insurer) in subsequent trials and negotiations for favourable settlement. We are not presently concerned with the communications made by the council and its legal advisers once litigation is anticipated or pending after the publication because these communications will not be directly affected by the publication of the report.

5.13                                      Communications between the legal advisers to the authority and the council will benefit from legal advice privilege if that communication is reasonably necessary to the giving or receiving of legal advice.[18] This privilege will extend to communications passing between the authority’s departments and local authority lawyers, statements from the officers involved and other witnesses in the pre-inquiry stage.

5.14                                      As we mentioned above, a communication can only be privileged if it is also confidential. If an otherwise privileged document has lost its confidentiality, there can be no claim for privilege. In Goldstone v Williams[19] depositions had been read into a compromise settlement in a previous trial. The defendant sought disclosure of the depositions. Disclosure was granted because the depositions were freely available to be inspected by anyone who had proper grounds for doing so. Thus privilege could no longer attach to the documents as they were no longer confidential.[20]

5.15                                      Therefore if a privileged document, or statement, is communicated during the course of the inquiry, the local authority cannot claim privilege in any legal proceedings following from the report’s publication if publication is to the world at large. Confidentiality might be preserved if the report is circulated in a limited fashion but if the distribution is not tightly controlled confidentiality will be lost.[21] Confidentiality might also be preserved if the documents are supplied to an inquiry conducted in private on the understanding that they will be kept confidential. This limits the use the inquiry can make of them.

5.16                                      Communications will be protected from disclosure to the inquiry if the inquiry acts in a quasi-judicial manner or is set up under the Tribunals of Inquiry (Evidence) Act 1921.[22] However, this is unlikely to be the case in most local authority inquiries. If the inquiry does not act in a quasi-judicial capacity or under the 1921 Act, the authority may simply refuse to disclose the document on the ground that it is confidential:

Whereas legal professional privilege is normally an answer to compulsory disclosure to a court of law or, in most cases, to a body having statutory powers to require disclosure, confidentiality alone affords protection only against voluntary disclosure without the consent of the person to whom the duty of confidentiality is owed.[23]

5.17                                      The report of the inquiry itself will not be privileged unless it was produced for the dominant purpose of aiding the legal adviser to advise the council on legal issues.

5.18                                      Partial disclosure of a privileged document to the inquiry will expressly waive privilege in the rest of the document, and disclosure of one privileged document to the inquiry may compel the authority to disclose related relevant communications dealing with the same subject matter.

5.19                                      Thus, the local authority, by participating in the inquiry and publishing the report, will waive privileges attaching to communications released to the inquiry and associated material, either in the same document or associated documents, unless they are disclosed on the express understanding that confidentiality is preserved beyond the inquiry panel.

5.20                                      Obviously the risk of waiving privilege may hamper the effectiveness of the inquiry. If the legal department of the authority is unwilling to divulge documents to the panel for fear that those documents may be used by claimants in trials,[24] then the findings of the report might be incomplete. The material protected by privilege may be crucial to explaining the authority’s action or inaction in a particular case.

Public interest immunity

5.21                                      There are a number of assertions reported in the Waterhouse Report that evidence presented to panels and panel reports fell within the scope of public interest immunity. For example, Waterhouse states, in relation to the Cartrefle report,[25] at paragraph 32.57: “A major concern of the insurers at that stage was that the Council should not be seen to waive public interest immunity that would otherwise attach to the report, or to important parts of it, and to many background documents.” Counsel’s opinion on the Jillings report refers to waiver of public interest immunity, but it is not given any separate treatment.

5.22                                      Information held by public bodies, including central and local government is, in general, information which may, if necessary, be disclosed to others. There have been many moves in recent years to extend the principle of openness. There are specific statutory regimes covering, for example, local government and the national health service.[26] Practice in central government has moved in the same direction,[27] and will move further with the enactment of the Freedom of Information Act, which will grant, subject to specific exemptions, a general right of access to information held by public authorities.[28]

5.23                                      Nevertheless there are circumstances in which information should remain confidential to the government department or other public agency[29] that holds the information. Public interest immunity is the doctrine that permits certain information to be withheld from public disclosure. It is a general rule of law founded on public policy and recognised by Parliament[30] that any document may be withheld or an answer to any question may be refused on the ground that the disclosure of the document or the answering of the question would be injurious to the public interest.[31]

5.24                                      Public interest immunity is normally claimed by the body in possession of the confidential information. Here, we are concerned with whether, by the act of publication, the local authority is placing into the public domain documents which might be subject to a claim of public interest immunity.

5.25                                      There have been a number of situations where the courts have held that public agencies may assert the doctrine of public interest immunity to protect the confidentiality of sources of information held by them. For example, in Re G (A Minor) (Social Worker: Disclosure) Butler-Sloss P confirmed that “information obtained by social workers in the course of their duties is … confidential and covered by the umbrella of public interest immunity.”[32]

5.26                                      Similarly, in D v NSPCC[33] the House of Lords held that the NSPCC – which received and investigated complaints from members of the public about cases of ill-treatment or neglect of children under an express pledge of confidentiality – were entitled to public interest immunity, so that they were not bound to disclose in civil proceedings the identity of informants who had given information about the neglect or ill-treatment of children to them. Indeed the House of Lords stated that the same principle would apply to those providing information to local authorities. There was a public interest in preserving the identity of informants, analogous to the public interest in preserving the identity of informants in criminal cases. However the House of Lords stressed that it was not confidentiality itself that lay at the heart of the doctrine; it was a judgment about the public interest.[34]

The public interest

5.27                                      When deciding whether or not disclosure should be ordered, the court has to balance the interests of the litigant against the public interest.[35] As stated by Lord Hailsham of Marylebone in D v NSPCC, “The categories of public interest are not closed, and must alter from time to time whether by restriction or extension as social conditions and social legislation develop.”[36]

5.28                                      More recent authority has confirmed the trend for the judge to reach a balance between the competing interests as they arise in the individual case. In McNally v Chief Constable of Greater Manchester Police Lord Justice Auld, giving the judgment of the court, held that the trial judge had been “entitled to balance the conflicting public interests in protection of an informer and in doing justice in the instant case rather than consider herself tied to an exhaustive list of possible exceptions.”[37] This trend was described as “part of a wider jurisprudential move away from near absolute protection of various categories of public interest in non-disclosure.”[38] In that case, the Court of Appeal upheld an order to disclose whether “X” was a police informant in a civil action for wrongful imprisonment. The judge had taken into account the following factors: in favour of withholding the identity of the informer as argued by the police, Article 2, the right to life,[39] and Article 8, the right to respect for private and family life;[40] and on the claimant’s side, Article 5(5), which provides an enforceable right to compensation to everyone who has been a victim of unlawful arrest or detention,[41] and Article 6(1), the right to a fair trial.[42]

5.29                                      Thus a court will assess where the public interest lies, and uphold public interest immunity or not, on a case by case basis. It is clear that information held by a local authority may be protected from disclosure to proceedings where it is in a greater public interest that that material is suppressed.[43] For example in Gaskin v Liverpool CC[44] the Court of Appeal refused to order disclosure of confidential records relating to a child who had been in their care. There was a greater interest in upholding the proper functioning of the child care system. Similarly the anonymity of informers has been recognised by the courts as a valid ground for claiming public interest immunity.[45]

5.30                                      Public interest immunity may be claimed by any party or witness in proceedings.[46] The court may even raise the immunity of its own motion.[47]

Relationship to confidentiality

5.31                                      Information will not be protected by the courts from disclosure merely because it is confidential.[48] Hence the fact that records of a local education authority are confidential is insufficient ground for protection from disclosure.[49] Similarly, just because material is “exempt information” within Schedule 12A to the Local Government Act 1972,[50] which prevents public and media access to the material or its discussion in council, it is not necessarily immune from being produced in court.[51]

5.32                                      Therefore confidentiality in the sensitive material is crucial in a similar manner to confidentiality as a precursor for claiming legal professional privilege. It is unlikely that a claim for public interest immunity will succeed where the material has been widely circulated, for instance to an internal or independent panel which receives evidence in public. This is because once in the public domain, the necessary quality of confidentiality will have been lost.

5.33                                      Where the inquiry receives evidence in private, it will be easier to argue a case for public interest immunity in those documents. This is because material may be confidential between some persons but not others.[52] Thus where the material has been narrowly circulated, public interest immunity issues may be relevant in deciding whether or not to publish the report.

Is there a duty to assert public interest immunity?

5.34                                      If there is a duty to assert public interest immunity then the insurers should not, we believe, be able to influence the exercise of the immunity by reference to the insurance contract. However, if public interest immunity is more akin to a privilege which may be waived then this may impact adversely upon the validity of the insurance cover.

5.35                                      Because of the nature of the public interest objection, it has been doubted whether public interest immunity can ever be waived. In Rogers v Home Secretary[53] Lord Simon said:

It is not a privilege which may be waived by the Crown … or by anyone else.[54]

5.36                                      However, in Alfred Crompton Amusement Machines Ltd v Customs and Excise Commissioners (No 2)[55] Lord Cross stated:

His [the Chairman of the Gaming Board] objections to disclosure were taken in the interests of the third parties concerned as much as in the interests of the commissioners and if any of them is in fact willing to give evidence, privilege in respect of any documents or information obtained from him will be waived.[56]

5.37                                      Faced with this apparent conflict of authority, Brightman LJ in Hehir v Commissioner of Police of the Metropolis[57] left open for future decision the question whether public interest immunity might not be waived in certain circumstances. He stated:

It seems to me at least arguable that the public interest would not in all circumstances continue to attach to a statement given for the purposes of section 49 of the Police Act 1964[58] if the maker of the statement wished disclosure to be made. Perhaps this is not strictly a question of waiver, but of public interest immunity ceasing to attach to a statement if particular circumstances exist. In this sense only I respectfully question the view that there cannot be waiver of public interest immunity.

5.38                                      In Multi Guarantee Co v Cavalier Insurance Co Ltd[59] it was accepted that although public interest immunity could not be waived, it could evaporate. In this case, the claimants were seeking relief against the defendant, who was in liquidation. The defendant had participated in meetings with officials from the Department of Trade and Industry. The notes of these meetings had been passed to the liquidator of the defendant by the DTI, with certain passages blacked out. The claimants were seeking disclosure of those documents from the liquidator. It was common ground that the defendant consented to the disclosure of the documents.

5.39                                      Knox J held that the basis of public interest immunity was not the proprietary right of the person giving or receiving the information but the protection of the public administration. The fact that immunity had been severely eroded by partial disclosure would be a relevant consideration when deciding where the balance of public interest lay. Those who would be giving and receiving the confidential information were persons who would realise that in exceptional circumstances a court might order disclosure.

5.40                                      In the later case of Makanjuola v Commissioner of Police of the Metropolis[60] Bingham LJ stated:

Public interest immunity is not a trump card vouchsafed to certain privileged players to play when and as they wish. It is an exclusionary rule, imposed on parties in certain circumstances, even where it is to their disadvantage in the litigation. This does not mean that in any case where a party holds a document in a class prima facie immune he is bound to persist in an assertion of immunity even where it is held that, on any weighing of the public interest, in withholding the document against the public interest in disclosure for the purpose of furthering the administration of justice, there is a clear balance in favour of the latter. But it does, I think, mean: (1) that public interest immunity cannot in any ordinary sense be waived, since, although one can waive rights, one cannot waive duties; (2) that where a litigant holds documents in a class prima facie immune, he should (save perhaps in a very exceptional case) assert that the documents are immune and decline to disclose them, since the ultimate judge of where the balance of public interest lies is not him but the court …[61]

5.41                                      The cases above do not give a clear answer as to the circumstances in which public interest immunity is waived, ceases to attach to a particular statement or is otherwise “eroded”. Public interest immunity differs from other types of privilege in that it is a public, not a private law right.[62] What all the authorities agree on is that public interest immunity is not in the same category as a claim of legal professional privilege. It is not designed to protect the litigant’s private interests but a greater public interest.

Conclusion

5.42                                      A local authority, as a public body, is under a duty to assert public interest immunity when it considers it necessary to do so. Public interest immunity, once asserted, cannot be waived. It is not a privilege from disclosure available to be used by a local authority as a private litigant, akin to legal professional privilege, but a public law duty. We do not consider that it can, therefore, be described as a right to be waived, and an express term forbidding waiver of any right will not bite on it. We also do not consider that it would be proper for an insurance company to seek to influence an authority’s conduct in relation to the assertion or otherwise of public interest immunity. Our preliminary consultations with local authorities and their insurers suggest that, in fact, it is not the practice of insurance companies to seek to do so. Accordingly, our provisional view is that public interest immunity does not contribute to the potential problems for local authorities identified in the Waterhouse Report and our terms of reference.

5.43                                      A local authority will have in its possession much information that is confidential. Concomitant with its duties to grant public access to information,[63] it is subject to obligations which regulate how sensitive information may be used. This is a matter of a duty of confidentiality owed to others. It is not a matter of a right to confidentiality which may be claimed by the local authority.

5.44                                      Waiver of the right of confidence in a document or communication may entitle the insurer to refuse a particular claim because waiver without the insurer’s consent would be a breach of an express term of the contract. Therefore, an authority must not waive a right which it has to confidentiality in a communication without the permission of the insurer. This will most frequently arise in the context of legal professional privilege. The possibility of claiming legal professional privilege will itself be lost if confidentiality is waived.

5.45                                      If privileged material is referred to in a public document, privilege in that document will have been waived. Privilege might also have been waived in collateral documents and other parts of the same document if disclosure was partial but misleading. A local authority must be alert to the danger of waiving privilege inadvertently.

5.46                                      The inquiry report itself will not be the subject of legal professional privilege, as its dominant purpose will not be the giving of legal advice.

5.47                                      The protection afforded to communications by legal professional privilege is significantly different from the protection afforded by public interest immunity in one regard: it will almost certainly not be overridden in the public interest by a court.[64]

5.48                                      Waiver of legal professional privilege in a document or communication may entitle the insurer to refuse a particular claim because waiver without the insurer’s consent would be a breach of an express term of the contract.

5.49                                      Public interest immunity is not a privilege from disclosure to be used by a local authority as a private litigant, but a public law duty. It is not a right to be waived.

5.50                                      We think the duty to claim public interest immunity is not a matter on which insurers can instruct local authorities. We think that the only circumstances in which it can contribute to the potential problems for local authorities identified in the Waterhouse Report and our terms of reference would be in the very unlikely situation that information for which public interest immunity ought to be claimed is made public contrary to the legal advice given to the authority.