The Commissioner varied the decision of the HSE by affirming it in part and annulling it in part. She accepted that a confidential legal opinion, an unredacted version of the Indecon report entitled "Review of Pharmacy Wholesale Margins", and three other records at issue containing information of a confidential and sensitive nature were exempt, primarily under section 23(1)(a)(ii) of the FOI Act. Having regard to section 34(12)(b) of the FOI Act, she found that the claims for exemption made by the HSE in relation to the remaining record at issue, record number 2 of File 2, were not justified in this case and directed its release accordingly.

Case Summary

Whether the HSE's decision to refuse access to certain records of communication with the Competition Authority relating to pharmacists, the IPU and the supply of medicines, including methadone, is justified under the FOI Act.

Date of Decision: 13.01.2011

Review Application under the Freedom of Information Acts 1997 & 2003 ("FOI Act") to the Information Commissioner.

Background:

In a request to the HSE dated 19 February 2008, the Applicant sought access to records of communications between the HSE and the Competition Authority relating to pharmacists, the IPU and the supply of medicines, including methadone. The request was made in the context of an investigation by the Competition Authority into alleged collective action by pharmacy contractors in response to the HSE's announcement in September 2007 of new reimbursement arrangements for drugs dispensed under the Community Drugs Schemes.

In its original and internal review decisions, the HSE refused the request in full, variously referring to sections 20(1), 21(1)(a), 22(1)(a), and 23(1)(a) of the FOI Act. Aside from the claim of legal professional privilege (section 22(1)(a)), the rationale for its decisions related in pertinent part to the on-going process of the investigation by the Competition Authority. The Competition Authority concluded its investigation September 2009 with the publication of its "Notice in Respect of Collective Action in the Community Pharmacy Sector".

On 14 November 2008, following my acceptance of the application for review, the HSE forwarded to my Office two files of records which it had identified as being relevant to the Applicant's FOI request. The HSE released File 1 to the applicant, but made various claims for exemption and exclusion in relation to the 22 records held in File 2. In addition, in a submission to this Office dated 21 November 2008, the HSE referred to the existence of four additional documents which it said it did not consider as coming within the scope of the Act. Nevertheless, the HSE invited me to inspect the four documents with a view to assessing and considering whether I deemed them to fall within (a) the scope of the Act, and (b) the request itself.

In April 2010, Ms. Melanie Campbell, Investigator, contacted the HSE to request that a copy of the four additional records be furnished to this Office as in the normal course of any review. It required many further contacts, however, including a reminder of my enforcement powers under section 37 of the FOI Act, before the additional records were finally received by my Office in August 2010. Ms. Campbell also requested the HSE to reconsider its position in light of the conclusion of the Competition Authority's investigation and the passage of time generally. In a letter to this Office dated 22 July 2010, the HSE indicated that it was willing to release a number of the records included in File 2. However, the HSE neglected to provide a copy of the revised schedule identifying the records in File 2 which it considered as "'exemption removed' to reflect the change in circumstances" and did not reply to telephone messages left by Ms. Campbell notifying it of the oversight.

In letters dated 7 October 2010, Ms. Campbell advised the parties, including the Competition Authority, of her preliminary view on the matter. She noted that one of the four additional records post-dated the original request and did not form part of the review on this basis. She considered that the other three additional records, consisting of minutes of meetings held in March 2007 and April 2007, respectively, and handwritten notes of a teleconference held in November 2007 between the HSE's solicitors and the Competition Authority in relation to the pharmaceutical industry and other parts of the health sector, fell within the scope of both the Act and the request. She also considered, however, that the three additional records consisted of exchanges of information of a confidential and sensitive nature concerning the enforcement of or compliance with the competition laws. In her view, the release under FOI of records containing such exchanges could reasonably be expected to prejudice or impair the enforcement of or compliance with the competition laws and thus that section 23(1)(a)(ii) of the Act was applicable. She identified other exchanges between the HSE and the Competition Authority of confidential, sensitive information as a legal opinion included at record number 22 of File 2 and an unredacted version of the Indecon report entitled "Review of Pharmacy Wholesale Margins", which is included at record number 5 of File 2. She also noted that the legal opinion would qualify for exemption under section 22(1)(a) on the basis of legal professional privilege given that it contains legal advice and was shared with the Competition Authority for the limited purpose of consulting with the Authority in relation to the competition law issues arising from the process of making new arrangements for the reimbursement of community drugs.

However, Ms. Campbell found no basis for withholding the records that were at issue containing information that she considered to be of a routine or predictable nature, particularly since the relevant investigation by the Competition Authority had ended. Ms. Campbell explained that, given the HSE's mutual interest in the relevant competition law issues, she did not accept that disclosure of information of a routine or predictable nature could reasonably be expected to deter such cooperative exchanges in the future.

In reply to Ms. Campbell's preliminary view, the Competition Authority stated in a letter dated 29 October 2010 that it had no comments to make other than that it did not disagree with her view and that it would have no difficulty with the release of those documents that she had indicated as being suitable for release. In a letter dated 4 November 2010, the IPU acknowledged the receipt of Ms. Campbell's letter of 7 October 2010 and stated that it was happy for her preliminary observations to be brought to my attention for a binding decision.

In its response, dated 3 November 2010, the HSE welcomed Ms. Campbell's view in relation to the four additional records that were forwarded to my Office in August 2010, the legal opinion at record number 22, and the unredacted version of the Indecon report at record number 5. It expressed surprise at Ms. Campbell's suggestion that it had neglected to provide a copy of its revised schedule for File 2, which it claimed had been furnished to this Office on 16 July 2010. (For the avoidance of any doubt, I note that this Office has no record of receipt of a revised schedule identifying any records in File 2 as "exemption removed" prior to the submission dated 3 November 2010.) The HSE enclosed a further updated schedule of records in which most of the records in File 2 are identified as "exemption removed". The HSE argued, however, that record number 2 was exempt under sections 21(1)(c), 22(1)(a), and 23(1)(a)(ii) of the FOI Act. In support of its claims, it provided what it describes as "highly confidential" background information.

I have now completed my review in accordance with section 34(2) of the FOI Act. In carrying out this review, I have had regard to the submissions made by the applicant, the Competition Authority, and the HSE, including the "highly confidential" background information provided by the HSE in support of its claims for exemption in relation to record number 2. I have decided to conclude this review by way of a formal, binding decision.

Conducted by the Information Commissioner in accordance with section 34(2) of the FOI Act.

Scope of the Review

I note that, while the IPU did not dispute Ms. Campbell's preliminary view, it did not expressly exclude any particular records addressed in her letter from the scope of its request. In light of the HSE's revised position, however, I take it that the records now identified as "exemption removed" will be released to the Applicant accordingly and are therefore no longer at issue in this review. In the circumstances, I consider that the scope of my review in this case is now concerned solely with the question of whether the HSE's decision to refuse access to the following records is justified under the FOI Act:

• the three additional records of contacts held between the HSE's solicitors and the Competition Authority in March, April, and November 2007 insofar as they relate to the pharmaceutical industry;
• the legal opinion included at record number 22 of File 2, which is dated 9 October 2006 and was forwarded to the Competition Authority under cover of an email dated 13 March 2007;
• the unredacted version of the Indecon Report included at record number 5 of File 2, which was forwarded to the Competition Authority under cover of an email dated 21 November 2007;
• record number 2 of File 2, consisting of an email from the HSE's solicitors to the Competition dated 2 October 2007 and including internal HSE emails dated 1-2 October 2007, respectively.

Submissions

.

Findings

Preliminary Matters

I wish to emphasise that the underlying presumption of the FOI Act is that requests for access will be granted, subject only to necessary restrictions. Under section 34(12)(b) of the Act, the burden of proof is on the HSE to show to my satisfaction that its decision to refuse to grant the request is justified.

I should also note, however, that while I am required by section 34(10) of the FOI Act to give reasons for my decisions, this is subject to the requirement of section 43 that I take all reasonable precautions to prevent disclosure of information contained in an exempt record during the course of a review. This constraint means that, in the present case, the description that I can give of the contents of the records at issue is limited.

General Background to the Records at Issue

As described by Ms. Campbell in her preliminary view letters, in early 2007, contacts were made between the HSE, through its solicitors, and the Competition Authority relating to efforts by the HSE to negotiate, or otherwise make arrangements for, reduced fees for the supply of community drugs. At the time, the HSE had embarked upon a process aimed at reforming the system of drugs reimbursement under the Community Drugs Schemes. The HSE was concerned about a number of matters, including the need to ensure that any negotiations or arrangements for drugs reimbursement complied with Irish and EU competition laws, particularly section 4(1) of the Competition Act 2002. The HSE was also concerned, however, about perceived and anticipated anti-competitive practices within the pharmaceutical industry and how community pharmacists could seek to resist the reform process through collective anti-competitive conduct.

Subsequently, in September 2007, the HSE announced new reimbursement arrangements for drugs dispensed under the Community Drugs Schemes. Following this announcement, a large number of pharmacists notified the HSE of their intention to withdraw from the Methadone Treatment Services Scheme, and the Competition Authority launched an investigation to determine whether the pharmacists were engaging in collective anti-competitive conduct in violation of the Competition Act. Given its mutual interest in the matter under investigation, the HSE continued to exchange relevant information with the Competition Authority during this period.

In its submission dated 3 November 2010, the HSE has provided further background information, which it describes as "highly confidential". However, I do not believe that I would be revealing exempt information in violation of section 43(3) of the Act by observing that, according to the HSE's own description, the confidential process referred to ended in 2008. (I note, moreover, that the process referred to cannot objectively be considered as very confidential given that it has been discussed in a number of written answers to Parliamentary Questions that are available on the Internet.) The HSE also refers to litigation initiated by the IPU and certain pharmacists in 2007.

Relevant Exemptions

As noted above, the exemptions now claimed by the HSE in this case are sections 21(1)(c), 22(1)(a), and 23(1)(a)(ii) of the FOI Act. The relevant provisions are as follows.

Section 21(1)(c)

Section 21(1)(c) allows a public body to refuse to grant a request where access to the record concerned could reasonably be expected to disclose positions taken, or to be taken, or plans, procedures, criteria, or instructions used or followed or to be used or followed, for the purpose of any negotiations carried on or being or to be carried on by or on behalf of the Government or a public body. Section 21(1) does not apply, however, if the public interest would, on balance, be better served by granting rather than by refusing the request (section 21(2) refers).

Section 22(1)(a)

Section 22(1)(a) states that access shall be refused to records which would be exempt from production in proceedings in a court on the ground of legal professional privilege. Legal professional privilege enables the client to maintain the confidentiality of two types of communication:

• confidential communications made between the client and his/her legal adviser for the purpose of obtaining and/or giving legal advice, and
• confidential communications made between the client and a legal adviser or the legal adviser and a third party or between the client and a third party, the dominant purpose of which is the preparation for contemplated/pending litigation.

Unlike several other of the exemptions in the FOI Act, the provision at section 22(1)(a) does not provide for the setting aside of that exemption where to do so would serve the public interest.

Section 23(1)(a)(ii)

Section 23(1)(a)(ii) provides that a request for access to a record may be refused where its release could reasonably be expected to prejudice or impair the enforcement of, compliance with or administration of any law. Section 23(1) is subject to section 23(3), which provides that consideration must be given to the possibility that the public interest would be better served by the release of the information rather than by it being withheld, in the event that one of three conditions is fulfilled. The first condition is that the record under consideration "discloses that an investigation for the purpose of the enforcement of any law... is not authorised by law or contravenes any law". The second condition is that the record contains information concerning "the performance of the functions of a public body whose functions include functions relating to the enforcement of law" and the third condition is that it contains information concerning "the merits or otherwise or the success or otherwise of any programme, scheme or policy of a public body for preventing, detecting or investigating contraventions of the law".

Records Other Than Record Number 2

I am satisfied that the decision to refuse access to the legal opinion included at record number 22, the unredacted version of the Indecon report included at record number 5, and the three additional records of contacts held between the HSE's solicitors and the Competition Authority in March, April, and November 2007 is justified for the reasons stated in Ms. Campbell's preliminary view letters dated 7 October 2010. The legal opinion contains legal advice that is exempt under section 22(1)(a) of the FOI Act. Moreover, I accept that all of the records at issue, apart from record number 2, contain confidential, sensitive information concerning the enforcement of or compliance with the competition laws. As Ms. Campbell explained, the release of these records could reasonably be expected to deter or inhibit similar such exchanges in future. Inhibiting the flow and/or recording of such information would, in turn, make it more difficult to devise and implement effective strategies and plans for enforcing or ensuring compliance with the competition laws. Accordingly, I find that the release under FOI of the records could reasonably be expected to prejudice or impair the enforcement of or compliance with the competition laws. For the sake of completeness, I note that I am also satisfied that none of the conditions set out in section 23(3) applies. I find therefore that the records are exempt under section 23(1)(a)(ii).

Record Number 2

Record number 2 comprises an exchange of emails dating from 1-2 October 2007. The initial email is an internal HSE communication dated 1 October 2007 that was also forwarded to staff members of the Department of Health and Children on the same day. On 2 October 2007, the email was forwarded to the HSE's solicitors, who in turn forwarded it to the Competition Authority with an additional message.

Section 21(1)(c)

The HSE asserts for the first time in its submission dated 3 November 2010 that record number 2 "concerns" the position taken and the plans to be used by the HSE for the purposes of the confidential process referred to above. However, the HSE has not shown, nor do I otherwise find, that access to the record could reasonably be expect to disclose any position taken or plans to be used for the purpose of the process concerned. Again, and particularly in light of the information that is freely available on the Internet, I do not believe that I would be revealing exempt material in violation of section 43(3) by observing that, while the author of the first internal HSE email makes references to a process, it is apparent from the queries that he makes that he was not directly involved in the process concerned. The email also makes what may be considered to be a candid statement of the risks associated with the threatened boycott by community pharmacists, but it seems to me that such risks would have been self-evident given the nature of the Methadone Treatment Services Scheme. Subsequently, on 14 October 2007, the HSE publicly acknowledged in a press release entitled "HSE Contingency Arrangements to Counter Withdrawal of Pharmacists from Methadone Protocol" that the "action by pharmacists" carried with it a "significant clinical risk".

I further note that the email to the Competition Authority refers to what may be considered to be a "plan", but the plan appears to have been in the nature of an information-gathering exercise in relation to the threatened boycott by community pharmacists. There is nothing to indicate that the plan related at all to the confidential process referred to above or to any other negotiations. Indeed, given the HSE's description of the process as "highly confidential", the exchange of the email with the Competition Authority, without any apparent effort to highlight its sensitivity at the time beyond inserting a generic assertion of confidentiality following the email signature, would itself tend to undermine any claim of sensitivity with respect to its contents.

In any event, by the HSE's own description, the process is now over. The HSE has not shown that the release of the record could reasonably be expected to prejudice any current or future negotiations or cause some other such harm. On the other hand, there is a public interest in openness and transparency with respect the performance of the HSE of its functions in relation to the Community Drugs Schemes. Therefore, even assuming for the sake of argument that the record qualified for exemption under section 21(1)(c), I find that it would be subject to release in the public interest under section 21(2).

Section 22(1)(a)

The HSE also asserts for the first time in its submission dated 3 November 2010 that record number 2 is exempt under section 22(1)(a) on the basis of the litigation limb of the legal professional privilege rule. The HSE suggests that the email to the Competition Authority took place at a time of "serious contemplation" of litigation by pharmacies and the IPU. However, even assuming that litigation was seriously contemplated at the time of the communication with the Competition Authority, I find no evidence whatsoever to show that the dominant purpose of the communication, or of the internal HSE emails included with the communication, was preparation for any contemplated or pending litigation at the time. On the contrary, it is apparent that the communication, like other emails which the HSE has now accepted are "exemption removed", is a response to the threatened boycott by community pharmacists. In the circumstances, I do not accept that section 22(1)(a) applies.

Section 23(1)(a)(ii)

Lastly, the HSE now argues, in essence, that the email exchange in record number 2 is similar in nature to the three additional records of contacts held between its solicitors and the Competition Authority in March, April, and November 2007. Having compared the contents of the relevant documents, I disagree. It is no longer a matter of secrecy that the two bodies exchanged information regarding the threatened boycott. This would have already been apparent from the nature of the Competition Authority's investigation as well as from the release of File 1. As noted above, the "plan" referred to in the email to the Competition Authority appears to have been in the nature of an information-gathering exercise in relation to the threatened boycott. I further note that the email itself acknowledges that the plan could not be carried out on a confidential basis. Given the HSE's mutual interest in the relevant competition law issues, I do not accept that the release of this email could reasonably be expected to deter similar such cooperative exchanges in the future, nor do I accept that either of the public bodies would be deterred from engaging in other relevant information-gathering exercises.

Moreover, while the first internal HSE email provides what may be considered to be a candid statement of the risks associated with the threatened boycott, as I said above, it seems to me that such risks would have been self-evident given the nature of the Methadone Treatment Services Scheme. It also seems to me that it would have been the threatened boycott itself, rather than the potential consequences of the boycott, that would have been of relevance in relation to the competition laws. In any event, the Competition Authority no longer objects to the release of the record. In the circumstances, and having regard to the burden of proof under section 34(12)(b) of the Act, I am not satisfied the release of email exchange could reasonably be expected to prejudice or impair the enforcement of, compliance with or administration of the competition laws. I therefore find that section 23(1)(a)(ii) does not apply.

Decision

Having carried out a review under section 34(2) of the FOI Act, I hereby vary the decision of the HSE in the following terms:

• I affirm its decision in relation to the legal opinion included at record number 22, the unredacted version of the Indecon report included at record number 5, and the three additional records of contacts held between the HSE's solicitors and the Competition Authority in March, April, and November 2007.
• I annul its decision in relation to record number 2 of File 2 and direct the release of the record in full.

Right of Appeal

A party to a review, or any other person affected by a decision of the Information Commissioner following a review, may appeal to the High Court on a point of law arising from the decision. Such an appeal must be initiated not later than eight weeks after notice of the decision was given to the person bringing the appeal.

Emily O'Reilly

Information Commissioner

13 January 2011