Upper Tribunal (Administrative Appeals Chamber)

 

 

 

Decision:  The appeal is dismissed.

 

 

REASONS FOR DECISION

 

 

Introduction

1.              This is an appeal brought by Mr Browning against a decision of a First-tier Tribunal (“the FTT”) promulgated on 22 September 2011 ("the FTT Decision”).  By that decision the FTT allowed an appeal by the Department for Business, Innovation and Skills ("the Department") against a decision of the Information Commissioner dated 17 January 2011 (“the IC Decision”).

2.              Mr Browning is a journalist with Bloomberg News.  By an e-mail dated 9 September 2009 he requested from the Department the following information:

“(1) Which companies applied to the Export Control Organisation for export licences for Iran in the first and second quarters of this year?

(2) For those applications that were refused, on what grounds was there reason for thinking that they would breach either criteria 1 or 7 of the Consolidated EU and National Arms Export Licensing Criteria.  Please provide the specific reasoning for each individual application for the first and second quarters of this year.

(3) Please provide the specific application forms for each licence.

(4) What was the total value of export licences refused?”

3.              The Department replied to this request on 17 November 2009.  It provided the information sought at (4).  It claimed exemption in respect of (1), relying on ss. 41(1) and 43(2) of the Freedom of Information Act 2000 (“FOIA”) and it claimed exemption in respect of (2) and (3).  The Information Commissioner upheld the claim for exemption in respect of (2) and (3), but by the IC Decision directed the Department to disclose the information under (1) (referred to by the parties and us as the “Disputed Information”).  It is that direction that was the subject of the appeal to the FTT by the Department. 

4.              We adopt the brief description of the background given at the start of the FTT Decision. They said:

“1. The United Kingdom is subject to international and EU treaty obligations relating to the export of certain classes of goods.  They are enacted in domestic legislation, specifically the Export Control Act, 2002 and the Export Control Order, 2008 made under it.  The Export Control Organisation ("ECO") is part of the Appellant ("DBIS").  It assesses and issues applications for export licences for controlled goods, conducts compliance checks and audits and offers assistance and advice to exporters relating to its functions.  In 2010 it issued nearly 17,000 Standard Individual Export Licenses, a statistic which gives some idea of the scale of the licensing regime.

2. Controlled goods are mainly military, dual use (potentially military), and equipment designed for torture or repression or sources of radio-activity.  Whether a licence is required may depend on the identity of the intended end-user, the exact nature of the goods or the existence of sanctions specific to the intended destination.  As is well-known, Iran is subject to such sanctions as a result of resolutions of the UN Security Council.”

5.              In reaching its decision the FTT considered closed material and part of the hearing was closed in the sense that Mr Browning and his legal representatives did not see that material and were excluded from that part of the hearing.

Overview

6.              Mr Browning advances seven grounds of appeal.  We shall deal with each of them under headings.  His first ground is that the FTT erred in law in refusing his application that his legal representatives be allowed to represent him at the closed hearing on the basis of undertakings relating to disclosure.  We were given conflicting information on whether the application was that his counsel and solicitors should attend or only his counsel, but nothing turns on this. It is the appeal from the refusal of this application that gives rise to points of general importance.

7.              That application was made without any prior notice at the hearing.  By that time, pursuant to directions it had made, the FTT had been provided with closed material containing:

i)                a list of the names of the companies that had applied for licences, and so the Disputed Information, and

ii)               witness statements and documents directed to establishing the claimed exemptions.

The arguments before the FTT and on this appeal did not advance or seek to rely on distinctions between these two classes of information.

8.              If the closed material had been limited to the Disputed Information (i.e. the list of the names of the companies who had applied for licences) there would have been no need for a closed hearing and we suspect that a bundle containing just this information would not have been prepared.

9.              The essential reason for there being closed material and a closed hearing was that the Department wanted to put in further evidence to support the claimed exemptions.  We were told that this further evidence was based on the replies the Department had received to a letter it had written to 166 applicants for licences informing them of the IC Decision.  It had received 92 replies, of which 52 contained strong objections to disclosure and 40 of those who replied indicated that they were prepared for the Disputed Information to be conditionally or unconditionally disclosed.  These responses and two witness statements from witnesses who worked for two of such applicants (who objected to disclosure) were provided to the FTT on a closed basis and we shall refer to this evidence as the Closed Exemption Evidence. 

10.           Some of those responses had been provided to the Information Commissioner and had caused him to change his position from one of opposition to one of support for the Department’s appeal.

11.           Prior to the preparation of the bundle containing the closed material and pursuant to an agreement between the Department and the Information Commissioner four or five of the responses containing strong objections had been provided to Mr Browning in an anonymised, re-typed and redacted form. The purpose of this limited disclosure was to inform Mr Browning of the nature of the evidence that had caused the Information Commissioner to change his mind and thereby to promote settlement of the appeal.  Mr Browning was not so persuaded to abandon his appeal.

12.           Many more, if not all, of the responses to the Department’s letter could have been so disclosed to Mr Browning without disclosing the Disputed Information, as could the content of the witness statements. But this did not happen and the procedure adopted by the parties and the directions given by the FTT resulted in the position that:

i)                Mr Browning accepted that he could not see any of the closed material or attend the closed hearing because if he did he would discover the identities of persons who had applied for licences and thus the Disputed Information (or some of it) and this would undermine the purpose of the proceedings and FOIA, and

ii)               all the parties and the FTT proceeded on the basis that if Mr Browning’s application were granted his representatives should see all of the closed material in an un-redacted and un-anonymised form.

13.           No issue was raised at the hearing that Mr Browning should be, or should have been, provided with more information about the Closed Exemption Evidence, albeit that the substantive purpose of the application that Mr Browning’s representatives should be permitted to attend the closed hearing could only have been to enable them to challenge at the closed hearing the bases on which the exemptions relied on were being claimed. 

14.           It seems that a reason why the issue whether more information about the Closed Exemption Evidence should be provided to Mr Browning was not addressed by the Department, who prepared the bundle, and the Information Commissioner is that for some time they proceeded on the basis that the responses to be included in the Closed Exemption Evidence should be limited to the responses that had been disclosed to Mr Browning in an anonymised and re-typed form.  During the period leading up to the hearing and when it began Mr Browning and his legal representatives had ample opportunity to seek by way of agreement or further direction additional information about the extent, content and nature of the Closed Exemption Evidence and they did not do so.  No doubt they had forensic reasons for taking this approach and they confirmed to us that they did not wish to amend the grounds of appeal to argue that such further information should have been provided.

15.           In our judgment, there are powerful arguments that much more information about the Closed Exemption Evidence could and should have been provided to Mr Browning and so we have considered whether we should examine and comment on this aspect of the preparation of this case and, from that base, generally on the approach to be taken by First-tier Tribunals in FOIA cases to closed material and closed hearings, and thus on the tests that they should apply in determining (i) what should be included in closed material and whether there should be a closed hearing, and (ii) what information about the subject matter of any closed material and hearing should be provided to the requester.  This process will determine what is to be kept from a requester and so will form an essential part of the relevant background to any application that representatives of the requester be permitted to see material that is not to be disclosed to him or her.

16.           However, we have decided not to do so because we did not hear submissions on these issues, and, as we explain later, it is unnecessary for us to do so for the purposes of determining this appeal.

17.           However we comment that since this case was before the FTT further guidance has been issued in respect of the approach to be taken by First-tier Tribunals to closed material and closed hearings in the form of a Practice Note entitled “Closed Material in Information Rights Cases”.  This does not have the force of a rule of law or a practice direction, and this judgment should not be taken as comprehensively endorsing it, but we do consider that it is something that First-tier Tribunals should take into account and, if they do not apply it in a given case, they should explain why they have not done so.  In particular, in our judgment, if no written and reasoned application for there to be closed material and a closed hearing has been made pursuant to that Practice Note, First–tier Tribunals should explain why they have proceeded without one.

18.           More generally, we comment that First-tier Tribunals should consider and give appropriately detailed directions and reasons (i) setting out the nature and subject matter of any closed material and hearing, (ii) why they have accepted that they should consider evidence advanced by a public authority (or anyone else) and argument on a closed basis, and (iii) why further information relating to their content has not been provided.  If this is done it will provide clarity as to what will be, and has been, considered on a closed basis and why, for example, evidence provided to support an exemption has been so considered and more of it, or about it, has not been disclosed.

FOIA

19.           Section 84 provides that information means “information recorded in any form” and s. 1 provides:

“1 General access to information held by public authorities

(1) Any person making a request for information to a public authority is entitled—

(a) to be informed in writing by the public authority whether it holds information of the description specified in the request, and

(b) if that is the case, to have that information communicated to him.

(2) Subsection (1) has effect subject to the following provisions of this section and to the provisions of sections 2, 9, 12 and 14.”

 

20.           So there is a general duty on public authorities to provide information recorded in any form that they hold unless one of the various exemptions applies.  Section 2 provides:

“2 Effect of the exemptions in Part II.

E+W+S+N.I.

(1) Where any provision of Part II states that the duty to confirm or deny does not arise in relation to any information, the effect of the provision is that where either—

(a) the provision confers absolute exemption, or

(b) in all the circumstances of the case, the public interest in maintaining the exclusion of the duty to confirm or deny outweighs the public interest in disclosing whether the public authority holds the information,

section 1(1)(a) does not apply.

(2) In respect of any information which is exempt information by virtue of any provision of Part II, section 1(1)(b) does not apply if or to the extent that—

(a) the information is exempt information by virtue of a provision conferring absolute exemption, or

(b) in all the circumstances of the case, the public interest in maintaining the exemption outweighs the public interest in disclosing the information.

(3) For the purposes of this section, the following provisions of Part II (and no others) are to be regarded as conferring absolute exemption—

 (g) section 41”

21.           So s. 41 confers an absolute exemption. It provides:

“41 Information provided in confidence.E+W+S+N.I.

(1) Information is exempt information if—

(a) it was obtained by the public authority from any other person (including another public authority), and

(b) the disclosure of the information to the public (otherwise than under this Act) by the public authority holding it would constitute a breach of confidence actionable by that or any other person.

(2) The duty to confirm or deny does not arise if, or to the extent that, the confirmation or denial that would have to be given to comply with section 1(1)(a) would (apart from this Act) constitute an actionable breach of confidence.”

 

22.           The exemption provided by s. 43 is not absolute and so s. 2(1)(b) and 2(2)(b) apply to it.  Section 43 provides: 

“43 Commercial interests.E+W+S+N.I.

(1) Information is exempt information if it constitutes a trade secret.

(2) Information is exempt information if its disclosure under this Act would, or would be likely to, prejudice the commercial interests of any person (including the public authority holding it).

(3) The duty to confirm or deny does not arise if, or to the extent that, compliance with section 1(1)(a) would, or would be likely to, prejudice the interests mentioned in subsection (2).”

23.           Sections 45, 47, 50 and 58 provide:

“45 Issue of code of practice by Secretary of State.E+W+S+N.I.

This section has no associated Explanatory Notes

(1) The Secretary of State shall issue, and may from time to time revise, a code of practice providing guidance to public authorities as to the practice which it would, in his opinion, be desirable for them to follow in connection with the discharge of the authorities’ functions under Part I.

(2) The code of practice must, in particular, include provision relating to—

(a) the provision of advice and assistance by public authorities to persons who propose to make, or have made, requests for information to them,

(b) --------

(c) consultation with persons to whom the information requested relates or persons whose interests are likely to be affected by the disclosure of information,

(d) ---------

(e) --------

(3)  The code may make different provision for different public authorities.

(4)  Before issuing or revising any code under this section, the Secretary of State shall consult the Commissioner.

(5) The Secretary of State shall lay before each House of Parliament any code or revised code made under this section.

 

47 General functions of Commissioner.E+W+S+N.I.

This section has no associated Explanatory Notes

(1) It shall be the duty of the Commissioner to promote the following of good practice by public authorities and, in particular, so to perform his functions under this Act as to promote the observance by public authorities of—

(a) the requirements of this Act, and

(b) the provisions of the codes of practice under sections 45 and 46.

(2) The Commissioner shall arrange for the dissemination in such form and manner as he considers appropriate of such information as it may appear to him expedient to give to the public—

(a) about the operation of this Act,

(b) about good practice, and

(c) about other matters within the scope of his functions under this Act,

and may give advice to any person as to any of those matters.

 

50 Application for decision by Commissioner.

E+W+S+N.I.

This section has no associated Explanatory Notes

(1) Any person (in this section referred to as “the complainant”) may apply to the Commissioner for a decision whether, in any specified respect, a request for information made by the complainant to a public authority has been dealt with in accordance with the requirements of Part I.

(2) On receiving an application under this section, the Commissioner shall make a decision unless it appears to him—

(a) that the complainant has not exhausted any complaints procedure which is provided by the public authority in conformity with the code of practice under section 45,

(b) that there has been undue delay in making the application,

(c) that the application is frivolous or vexatious, or

(d) that the application has been withdrawn or abandoned.

(3) Where the Commissioner has received an application under this section, he shall either—

(a) notify the complainant that he has not made any decision under this section as a result of the application and of his grounds for not doing so, or

(b) serve notice of his decision (in this Act referred to as a “decision notice”) on the complainant and the public authority.

(4) Where the Commissioner decides that a public authority—

(a) has failed to communicate information, or to provide confirmation or denial, in a case where it is required to do so by section 1(1), or

(b) has failed to comply with any of the requirements of sections 11 and 17,

the decision notice must specify the steps which must be taken by the authority for complying with that requirement and the period within which they must be taken.

(5) A decision notice must contain particulars of the right of appeal conferred by section 57.

(6) Where a decision notice requires steps to be taken by the public authority within a specified period, the time specified in the notice must not expire before the end of the period within which an appeal can be brought against the notice and, if such an appeal is brought, no step which is affected by the appeal need be taken pending the determination or withdrawal of the appeal.

(7)This section has effect subject to section 53.

 

58 Determination of appeals.E+W+S+N.I.

 

This section has no associated Explanatory Notes

(1) If on an appeal under section 57 the Tribunal considers—

(a) that the notice against which the appeal is brought is not in accordance with the law, or

(b) to the extent that the notice involved an exercise of discretion by the Commissioner, that he ought to have exercised his discretion differently,

the Tribunal shall allow the appeal or substitute such other notice as could have been served by the Commissioner; and in any other case the Tribunal shall dismiss the appeal.

(2) On such an appeal, the Tribunal may review any finding of fact on which the notice in question was based.”

 

24.           A party has a further right of appeal "on any point of law” to the Upper Tribunal pursuant to s. 11(1) of the Tribunals, Courts and Enforcement Act 2007 (“the TCEA”), subject to the grant of permission (see s. 11(3) – (4)).  So that is the basis of this appeal and the Upper Tribunal's power to grant an appellant relief is dependent upon a finding that the making of the decision under appeal "involved the making of an error on a point of law" and if it does the Upper Tribunal may (but need not) set aside the decision of the First-tier Tribunal (see s. 12(1) of the TCEA).

The powers to consider Closed Material and to hold a Closed Hearing

25.           Section 22 of the TCEA provides that there are to be rules governing the practice and procedure to be followed by the First-tier Tribunal (and the Upper Tribunal).  The most relevant rules for the First-tier Tribunal are Rules 2, 5, 14, 15 and 35 of the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 as amended (“the 2009 Rules”).  We set them out in the Schedule hereto.

26.           The 2009 Rules clearly give wide powers to enable the First-tier Tribunal to determine cases fairly applying the overriding objective and the terms and purposes of the relevant legislation governing the appeal to it.

27.           We agree, as was common ground, that they give the First-tier Tribunal the power to restrict the access of a requester or his representatives to material put before the tribunal, and to hold a closed hearing.  We also agree that this conclusion is supported by s. 58 of the Data Protection Act 1998 which provides that no enactment or rule of law shall preclude disclosure of information to the Information Commissioner, the First-tier Tribunal or the Upper Tribunal that is necessary for the discharge of their functions.  The support comes from the point that there may be such an enactment and rules of law that prohibit or restrict disclosure to others and it is implicit in s. 58 that in carrying out their functions the Information Commissioner and the Tribunals must have regard to them.

28.           We also agree with the common ground before us that the 2009 Rules also gave the FTT power to allow Mr Browning’s representatives on them giving undertakings to see closed material and to attend the closed part of the hearing.

The approach of the parties and the FTT to the application of s. 41

29.           It was correctly recognised by the parties before the FTT that Convention rights, and in particular Articles 8 and 10, are engaged in determining whether or not a disclosure of information would involve a breach of confidence and that there are arguable points in respect of the need for a claimant to show detriment to establish a breach of confidence. But, as we understand it because of the commercial nature of the information in question, the common approach taken by the parties and the FTT was to consider the elements required for establishing a duty of confidence set out in Coco v A. N. Clark (Engineers) Ltd [1969] RPC 41. This explains the formulation of some of the grounds of appeal and this approach has not been the subject of challenge or argument on this appeal.

30.           It was also common ground before the FTT, and not an issue that was raised or argued before us, that the consideration of whether disclosure would constitute a breach of confidence that is “actionable” incorporates all parts of the breach of confidence action, including the absence of a public interest defence.  This accords with existing First-tier Tribunal decisions (see for example, Gurry on Breach of Confidence 2^nd edit para 13.130 and in particular HCFC v IC & Guardian News and Media EA 2009/0036).  On that approach, the point that s. 41 is an absolute exemption is not as significant as it might first appear because within it there is a need to weigh the competing public interests, and as pointed out in a footnote to that paragraph in Gurry, the reverse approach to weighing the public interest in respect of a breach of confidence to that set out in s. 2 of FOIA in respect of a qualified exemption, if anything, makes it easier to establish the s. 41 exemption but is unlikely to become a determinative factor.

31.           It is therefore surprising that, when setting out and determining the issues in respect of s. 41, the FTT did not include or address the existence or absence of a public interest defence.  However, this failure was not advanced as a ground of appeal and counsel for Mr Browning confirmed to us that he did not wish to advance it.

32.           It was therefore accepted before us that the public interest conclusion of the FTT in respect of s. 43 could and should be read across to, and included within, its conclusion on s. 41, because that was a fair and proper reading of the FTT Decision against the background of the way the case was argued before them.  We have adopted that approach.

33.           As part of his argument, Mr Browning invited us to decide the issue of disclosure ourselves, rather than remit, if he established that the FTT had erred in law.  This argument was based on his establishing such an error and therefore that the conclusions of the FTT that the exemptions applied were flawed.  He did not advance a free standing argument that, on the assumption that those conclusions stood, the public interest balance fell in favour of disclosure.  Over the adjournment of the hearing Mr Browning prepared a further statement to address the public interests in favour of the Disputed Information being provided to him.  The other parties objected to this statement being added as they did not accept its accuracy and because Mr Browning had already made his points on the public interest.  We admitted it on the basis that we would only consider it as part of a reasoning process to found a conclusion that, if his assertions therein were taken at their highest, the public interest would fall against him being provided with the Disputed Information.  We record that, in our view:

i)                on the basis that Mr Browning failed to establish that the FTT erred in law, which is the conclusion we have reached, his public interest arguments taken at their highest would not establish that the public interest fell in favour of disclosure, and Mr Browning has at least implicitly recognised this by not advancing this alternative argument, and

ii)               if we had found that the FTT had erred in law as alleged, we would not have attempted to determine the appeal on the facts found by the FTT but would have remitted it to a differently constituted First-tier Tribunal with directions that it should consider the reasons advanced for there being closed material and a closed hearing and in the light thereof (i) the extent and content of the Closed Exemption Evidence and the subject matter of any closed hearing, (ii) what disclosure of the Closed Exemption Evidence should be made to Mr Browning and what he should be told about its extent and content and (iii) whether it should invite Mr Browning to set out lines of enquiry or other matters  that he wanted the First-tier Tribunal to pursue with the witnesses, the Department or the Information Commissioner during the closed hearing.

34.           We also record that no argument was advanced to us that the names of applicants for licences whose responses to the Department had been that they did not object to disclosure, or who had not responded, should be disclosed.  We record that our preliminary view was that this would not have been a persuasive argument because the responses did not, or at least arguably did not, constitute an informed consent to such disclosure.

Evidential issues on the appeal to the FTT

35.           Through the open material and witness statements, issue was clearly joined on the central issues concerning ss. 41 and 43 of FOIA.  It is also apparent from Mr Browning’s  witness statement, and the five points advanced by counsel on his behalf in the outline of his case to the FTT, that Mr Browning was relying on the following points (which mirror the points made by the Information Commissioner in his original Response to the appeal before he changed his position) namely:

i)                the weakness of the untested views of the respondents to the Department, absent details of what they had been asked and disclosure of only a small selection in re-typed and redacted form,

ii)               the vagueness and generality of the points made about banking difficulties, and the lack of evidence by any bank that a lawful export to Iran would cause a bank to act as asserted (i.e. by restricting or removing facilities),

iii)              the vagueness and generality of the assertion that the USA will penalise, or seek to penalise, a company that is complying with international restrictions, the point that the assertion falls short of one that such sanctions or penalties have been imposed by the USA on such companies and the lack of any direct evidence from US or third party sources of this being done or threatened, 

iv)             the evidence to support the assertion of negative media coverage, including coverage based on the misguided perception that companies trading with Iran must be breaking or seeking to circumvent the law, is unspecific and continued lack of disclosure would be likely to compound the problem (if, and so far as, it exists), and

v)               even if it is assumed that there is at least one active campaigning group seeking to embarrass companies who trade with Iran, this would not establish detriment.

So, as one would expect, Mr Browning and his advisers were well aware of a number of avenues for cross examination and submission concerning what was said on behalf of the Department, the limited extent of the particulars of the sources of the hearsay allegations advanced and the limited examples of the problems referred to and thus the overarching point that the Department (and the British – Iranian Chamber of  Commerce (“BICC”), who through a director had provided an open witness statement) were “over egging” the pudding.  This would also have been apparent to the FTT on reading the open evidence.

36.           As the notes of evidence show, the recognition and acknowledgement in chief by the witness who gave evidence on behalf of the Department that his references to there being an overwhelming majority of responses indicating objection to disclosure were wrong, provided an additional line of cross examination as to the reliability and weight of the Department’s evidence that was pursued by Mr Browning’s counsel.  Also, counsel for Mr Browning has drawn our attention to a number of points in his cross-examination, namely that (i) the Department’s witness accepted that 40 of the respondents had said that they could not see any harm in the disclosure with some conditions, (ii) in the witness’s analysis of the public interest he was unaware of the air safety controversy, (iii) he accepted that air safety was a matter of real concern, (iv) he had no evidence that release of the names would stop anyone applying for a licence, (v) he had no evidence from banks as to what they would do, (vi) he had no first-hand evidence of retaliatory conduct by US agencies and (vii) he accepted that some companies who had applied for licences to export to Iran were not afraid to publish the fact. This shows, as one would expect, that the lines of cross-examination from what was asserted to be under particularised, careless and possibly partial open evidence were pursued with vigour and some success.

37.           It is plain, and so must have been appreciated by Mr Browning and his legal representatives, that these lines of cross examination might have been informed by further knowledge on an anonymised basis of the content of the Closed Exemption Evidence.  As we have already indicated, they did not seek any such further information. 

Ground 1 of the Appeal - the FTT erred in law by refusing to give Mr Browning's legal representatives access to the closed material or to participate in the closed hearing, on the basis of the undertakings offered

38.           As we have mentioned, an essential part of the background to this and any such application in other cases are the decisions and directions made by the First-tier Tribunal on the material that is not to be disclosed to the person who has made a FOIA request and the subject matter of any closed hearing.  This is because an essential premise for any such application is a determination that material is not to be disclosed to the requester and he or she is not to be present during a part of the hearing.

39.           In our view correctly, it was not asserted that such attendance by Mr Browning’s legal representatives would be a convenient and appropriate way of providing information to his representatives about the Closed Exemption Evidence that could or should have been provided to Mr Browning in an anonymised and redacted form. The FTT correctly recognised (see the quotation in paragraph 43 below) that throughout the proceedings a tribunal carrying out its investigatory function must keep under review whether information about closed material should be provided to an excluded party in, for example, an anonymised form.  But, as mentioned in paragraph 15 hereof, such a review is part of the essential background to, and sets the premise for, the consideration of the different question whether representatives of an excluded party should, by seeing closed material or attending a closed hearing, have information that has not been given to that party, and that the First-tier Tribunal has at that stage determined is not to be given to him or her.

40.           It follows that, absent any challenge to the directions relating to them, issues as to whether Mr Browning should have been provided with more information about the Closed Exemption Evidence can be put on one side and, in line with the approach taken by the FTT and all the parties in this case, and the First-tier Tribunal in the earlier cases relied on by the FTT, this appeal can proceed on the basis that prior to any such attendance no further information about the Disputed Information and the content, nature and extent of the Closed Exemption Evidence was to be given to Mr Browning.

41.           The FTT and all the parties also proceeded on the basis that, as was the case, disclosure of the closed material to Mr Browning, and/or attendance by him at the closed hearing, would reveal to him the Disputed Information (i.e. the names of applicants for licences).  This is reflected in paragraph 35 of the FTT Decision, where (with our emphasis) it states:

“35. The asserted need for confidentiality relates only to the names of the witnesses and their businesses and the nature of those businesses, from which the names might be deduced. ----------------“

42.           As will appear later, under the sub-heading “Discussion” we are of the view that the need to avoid disclosure of the requested information is an obvious and good reason for there being closed material and a closed hearing, but in some cases this may not be the only reason that justifies a First-tier Tribunal considering closed material and holding a closed hearing. 

The FTT Decision in respect of Ground 1

43.           After only a very short time to consider relevant earlier rulings of First-tier Tribunals, the FTT stated that they derived from them the following principles, each of which they considered to be well founded:

“(i) GRC r. 5(1) empowers the Tribunal to grant such an application;

(ii) The replacement of the 2005 Rules with the GRC Rules did not alter the Tribunal's powers nor modify the approach that should be adopted to such applications.  In particular, GRC r 14 (which empowers a GRC Tribunal to prohibit disclosure to any person of information or of a document where disclosure might cause harm to that person or another) has no bearing on the exercise of the r. 5(1) power on such an application.

(iii) Closed sessions are commonplace in this jurisdiction.  That is regrettably inevitable, given its nature.  An application will succeed only if there are exceptional circumstances specific to the appeal.

(iv) Practice in competition litigation provides no assistance in the field of information rights.

(v) Tribunal members are accustomed to making critical appraisals of the evidence and will generally be able, in the ordinary run of cases, to make a fair assessment of the value of evidence heard in closed session.  The position may be different where complex technical issues or voluminous documentation are involved.

(vi) The use of special counsel, as an alternative, is likewise exceptional.  Particular problems arise where an advocate cannot take instructions from a client nor otherwise communicate with him.

We note that the application failed in each of these cases.  Special counsel was appointed by the Tribunal in Campaign against the Arms Trade v ICO EA/2006/0040 but only because the case was "exceptional, having regard to the nature and extent of the documents concerned" and the fact that the appeal was joined to another.

There was nothing exceptional about the closed session evidence in this case.  It was quite straightforward and came from two businessmen who exported to Iran.  This we knew when refusing the application.  The evidence, when heard in closed session, reinforced that conviction.  As we indicated before the session began, we were ready to review the position, if our preliminary impression, for any reason, changed.  It did not.

We concluded that this was far from an exceptional case and refused the application.”

 

44.           That summary of the approach to be taken is in large measure based on the approach set out in  BUAV v IC and Newcastle University EA/2010/0064 (11 November 2011), where the First-tier Tribunal (through Andrew Bartlett QC) summarised the position (see in particular paragraphs 14 to 16 of Appendix 2 to the decision). 

45.           In our view, correctly it was not argued that the summary in the FTT Decision did not reflect the earlier approach taken by First-tier Tribunals.  It follows that the FTT was not either:

i)                applying an “exceptionality test”, or

ii)               introducing a requirement that exceptional circumstances must be shown if such an application is to succeed

but was recognising that the application of the approach they took based on the earlier cases, and in particular the BUAV case, will lead to the result that it will only be in exceptional and so rare cases that a legal representative of a party seeking information under FOIA will be permitted to see closed material and attend at a closed part of the hearing.  

Discussion

46.           The test applied in the BUAV case and so by the FTT raises the question whether the functions of the First-tier Tribunal in a FOIA case include the consideration of material on a closed basis and the holding of closed hearings because it is only if this is so that the tribunal can exercise the powers given by the 2009 Rules to achieve that result.

47.           The answer to this question turns on the interpretation and application of FOIA.  It was common ground before us that Parliament intended that a First-tier Tribunal should be able to consider closed material and hold a closed hearing in a FOIA case.  We agree, but it is necessary to examine why this is so to determine whether in the exercise of its discretion it should take the approach contended for by Mr Browning or that taken by the FTT in determining whether representatives of a requester who is excluded from the closed material should be allowed access to it on terms.

48.           Mr Browning’s central argument is that:

i)                the principles of open and natural justice and of fairness require, or strongly support the conclusion, that their application in the context of adversarial civil litigation should be departed from to the least extent possible (his and our emphasis) in the determination of an appeal to the First-tier Tribunal under FOIA, and therefore

ii)               his application that his legal representatives should see the closed material and attend the closed hearing, on giving the undertakings offered, should have been granted, because this minimises the departure from the way in which those principles have been developed and applied by the courts in adversarial civil litigation with the result that the general position in such litigation is that a party should see all material seen by the court.

49.           Mr Browning therefore argues that the approach taken by the FTT (based on earlier cases) was wrong.  Indeed, his argument leads to the conclusion that if and when there is closed material or a closed hearing the First-tier Tribunal should generally exercise its power to permit the representatives of the excluded party to see the material and attend the hearing.

50.           The principles of open and natural justice and of fairness. In the context of adversarial civil litigation, these principles and their application are summarised and commented on by Lord Dyson in his judgment in Al Rawi v Security Service [2011] UKSC 34, [2012] AC 531 at paragraphs 10 to 17.  At paragraph 14, he makes the point that a “closed material procedure” (defined in paragraph 1 of his judgment) involves a departure from both the open justice and natural justice principles.  The latter includes the principle that one side may not advance contentions or adduce evidence on a closed basis and thereby keep the other in ignorance of those matters.  As recorded by Lady Hale in paragraph 34 of her judgment in Re A (a child) (disclosure) [2012] UKSC 60, [2013] 1 FCR 69, the Supreme Court held in Al Rawi that there is no power to adopt a closed material procedure in civil litigation (albeit flagging up that arguably greater latitude may be allowed in children cases – which have adversarial and investigatory elements – see Re R (Care Disclosure Nature of Proceedings) [2002] 1 FLR 755 at 771E to 772G).  Re A concerned serious allegations of sexual abuse against a father by X (who was not a party).  The allegations were central to the establishment of the relevant risk to his child and so their resolution engaged an adversarial aspect of the proceedings, and at paragraph 35, Lady Hale concluded that X’s private rights (and we add the public interests in preserving and promoting them) were not a sufficient justification for the grave compromise of the fair trial and family life rights of the parties which non-disclosure would entail. 

51.           That conclusion reflects the point that in civil and therefore adversarial litigation the general position is that relevant material must be disclosed to all the parties and the public interest in promoting the confidentiality of relevant material will not prevent that disclosure to the parties and so disclosure at the public hearing (although in limited cases this might be to a “confidentiality club” and/or in a private hearing).

52.           It is well established that the principles of fairness and of open and natural justice that lead to this result in adversarial civil litigation are flexible and their application in differing situations is something that must be assessed by reference to the character of the decision making body, and the circumstances and subject matter of the case it is deciding (see, for example, the commentary, cases and passages cited under the heading “Fair hearings – General Aspects / The Preservation of Flexibility in Wade and Forsyth Administrative Law 10^th edition at pages 420/1).

53.           In the present context, that flexible approach to the application of the principles of fairness and of open and natural justice, and any departure from the way they are applied in adversarial civil litigation, fall to be considered having regard to the statutory scheme introduced and governed by FOIA, and the 2009 Rules.

54.           The purposes of FOIA. The principal purposes of FOIA are public purposes, based on the public interest in a democratic society of providing access to information held by public authorities, because (in brief) it tends to promote transparency, accountability, and democratic participation, and hence tends to improve public governance.  So, FOIA contains provisions concerning the duty of public authorities to adopt and maintain schemes for the publication of information; in particular, s. 19(3) requires a public authority, in adopting or reviewing a publication scheme, to have regard to “the public interest in allowing public access to information held by the authority”. This reference illustrates that there is an assumption built into FOIA that the disclosure of information held by public authorities is in itself of value and in the public interest.

55.           The long title of FOIA describes it as an Act to make provision for the disclosure of information held by public authorities, and there is no provision which expressly confines the use of information requested under s1(1) to the pursuance of public interests.  Also, there is no prior qualification for the making of a valid freedom of information request: any person can make such a request at any time, usually without cost.  So, FOIA can legitimately be used to assist private interests where a person’s interests are affected by matters on which a public authority holds information. But, and it is an important but, FOIA also provides, via the substantive exemptions in Part II, appropriate protection for information which ought not to be disclosed having regard to other and competing public interests (such as freedom to develop policy in candid discussions, national security concerns, prevention of crime and many other matters, including confidentiality).

56.           In addition, exemptions in Part I provide public authorities with tools for preventing disproportionate use of the rights available under FOIA, so as to protect authorities’ limited resources from being misused (s12 – costs limit; s14 – vexatious requests).

57.           Importantly in this case, some of the substantive exemptions also provide protection for private interests (and the public interests in promoting them) which would be adversely affected by the release of information, such as the privacy of personal data (s 40(2)) and the preservation of confidential or commercially sensitive information (ss 41 and 43).

58.           FOIA also provides a decision-making process involving first the Information Commissioner and then an appeal to an investigatory tribunal.

59.            These aspects of FOIA and its underlying purposes mean that, when a disputed request for information reaches the First-tier Tribunal pursuant to the statutory scheme put in place by FOIA, the relevant background and landscape of rights, interests and duties is materially different from that which obtains in criminal and civil litigation in the courts. 

60.           Characterisation of proceedings under FOIA and a comparison of them with adversarial civil litigation. It follows from the points we have made about the purposes of FOIA that, in our view, to characterise the First–tier Tribunal’s function, within the statutory scheme established by FOIA, as or equating to ordinary civil and therefore adversarial litigation because it is deciding a dispute between the parties before it, or deciding whether to vindicate a right claimed by the applicant, is an inadequate and inaccurate description; rather, its function is investigatory and is to see that FOIA is properly applied to the circumstances. This involves consideration, in the manner provided by FOIA, of the right which is given by s. 1(1) in pursuance of the interests served by the release of information, together with the assessment of countervailing public and private interests in accordance with the terms of the exemptions.

61.           The existence of those exemptions means that the statutory scheme requires that the Requested / Disputed Information must be protected until it has been decided whether it may be revealed.  If this were not the case, the purpose of the FOIA process and the appeal to the First-tier Tribunal would be destroyed.

62.           Pausing there, this aspect of the statutory scheme:

i)                 informs the application of the principles of open justice, natural justice and fairness to the requirements of the FOIA jurisdiction and thus to the way in which the First-tier Tribunal exercises its powers under the 2009 Rules. (This approach accords with that taken to the employment tribunal jurisdiction and its rules in Tariq v Home Office [2011] UKSC 35, [2012] 1 AC 452), and by so doing

ii)               identifies a fundamental difference between proceedings in the FOIA jurisdiction and adversarial civil litigation, namely that in FOIA proceedings the information that is the subject matter of the proceedings cannot be shown to a party to them, whereas in adversarial civil litigation the starting point is that all parties should see what is put before the court.  In turn, this founds

iii)              the need for a closed material procedure in FOIA proceedings and the point that a central part of the investigatory role of a First-tier Tribunal in FOIA proceedings must include an ability to consider material that cannot be shown to the person who has requested it under FOIA.

63.           The need for the availability of a closed procedure in FOIA proceedings and thus for the ability of the First-tier Tribunal to conduct it does not stop there. It is also based on the existence of the exemptions, the evidence that is relevant to establishing whether they apply in a given case and the competing rights and interests they give rise to. 

64.           FOIA exemptions exist in respect of confidential information and trade secrets that bring into play competing public and private interests of (i) persons who have provided information to, and (ii) persons who have requested information from public authorities.  In respect of many FOIA requests where those, or other, exemptions are engaged, it is likely that to demonstrate the existence of the exemption the persons who have provided the requested information, or a public authority or others on their behalf, would often need to refer to:

i)                private information about themselves and their dealings with others, as to which they may owe, or be entitled to the benefit of, duties of confidence, or which is private information that a requester has no right to see, and importantly

ii)               information to which a FOIA exemption would or may apply if it were requested under FOIA.

65.           As to the latter, in our judgment:

i)                 it is clear that Parliament did not intend that there should be such a “back door” route to information in respect of which a FOIA exemption could be claimed.  It follows that there is a need to protect it from disclosure to a requester that is equivalent to that which exists in respect of the information he or she has requested, and

ii)              it is also apparent that Parliament did not intend to spawn disproportionate and satellite disputes on whether an exemption applies to information put forward to establish a claimed exemption, and this is a reason why it chose an investigatory appeal process to a tribunal comprising persons with relevant expertise.

66.            What about the former?  In adversarial civil litigation when issues arise concerning the disclosure of such material the first question is whether it is relevant and, if it is, issues arise as to whether notice should be given to persons before their confidential or private information is disclosed in the proceedings.  This can cause practical and costs problems in that context, but, as mentioned earlier, the general position is that confidential and private information has to be disclosed if it is relevant to the resolution of the issue before the court in adversarial civil litigation.

67.           Given the different way in which such confidential or private information becomes relevant in FOIA proceedings, in our judgment Parliament did not intend an equivalent approach to be adopted in FOIA proceedings to confidential or private information that a requester has no right to see and has not requested under FOIA.  Such an equivalent approach would fly in the face of the protection that FOIA gives to such information on a class and contents basis and the obvious intention of Parliament to introduce a proportionate and where possible quick and inexpensive decision-making process in respect of FOIA requests by involving the Information Commissioner and an investigatory tribunal whose members have relevant experience.

68.           In our judgment, the points made above concerning evidence relied on to support the existence of an exemption are powerful factors in favour of the conclusions that:

i)                 the role of the First-tier Tribunal in FOIA proceedings is significantly different from that of a court in adversarial civil litigation, and in particular

ii)               Parliament intended that that investigatory tribunal would be able to consider closed material, and therefore

iii)              the way in which the principles of fairness and of open and natural justice are applied in adversarial civil litigation before a court is not an appropriate benchmark or analogy for the exercise of the discretion of a First-tier Tribunal in respect of its consideration of closed material and its conduct of a closed hearing.

69.           The other side of the coin concerning the application of the FOIA exemptions is of course that the requester may want to challenge the reasons and evidence which are advanced to establish them and thereby show that the requested information should be provided to him or her pursuant to FOIA.

70.           This competing right and interest within the FOIA scheme is founded on the right of access to information held by public authorities that is given by FOIA.  So it is one of the starting points for the need for a decision-making process to weigh competing rights and interests and does not mean that a closed procedure is not needed within that decision-making process.  Also, as we have indicated, this competing right and interest under FOIA is not equivalent to a right that a party to adversarial litigation is seeking to establish.

71.           Conclusion.  The exercise by the First-tier Tribunal of its discretion under the 2009 Rules to consider closed material and to hold a closed hearing is not governed directly, or by analogy, by the approach taken by the civil courts to the disclosure of relevant material and we therefore reject Mr Browning’s central argument that it should be exercised to achieve a result that departs to the least extent possible from the approach taken in adversarial civil litigation.

72.           The approach taken by the courts to the disclosure to representatives of a party of information that they cannot disclose to their client.  It follows from what we have said earlier about the differences between civil proceedings and a FOIA appeal to the First-tier Tribunal that we do not suggest that the conclusions of the courts on such disclosure are directly applicable to the exercise of the discretion of a First-tier Tribunal under the 2009 Rules.  But we accept the submission that they provide powerful confirmation and support for the view that such disclosure to a representative creates a number of problems.  

73.           In criminal cases:

i)                it is recognised that such a course puts counsel in an invidious and, at times, unsustainable position, in relation to his or her client (see for example R v Davis [1993] 1 WLR 613 at 616H to 671H, R v Preston [1994] 2 AC 130 at 152H to 153D and R v G [2004] 1 WLR 2932 at paragraph 13), and

ii)              in those cases, the conclusion reached was that counsel cannot or should not be permitted to see material on the basis that he could not discuss it with his client. 

74.           In Somerville v Scottish Ministers [2007] 1 WLR 2734 the House of Lords considered a procedure that had been adopted in the Inner House of the Court of Session to resolve a public interest immunity dispute under which the disputed documents had been shown to senior counsel for the petitioners on conditions of confidentiality, but not seen by the judge. That case concerned an ECHR damages claim relating to prisoner segregation. The House of Lords disapproved the procedure and, for example, at paragraph 152 Lord Rodger said:

“--- Although devised with the best intentions, this procedure was, in my view, wrong in principle. As a result, it not only gave rise to very real practical difficulties  ----------------------------------- As it was, counsel for the petitioners was left in a very difficult situation where, as a result of reading the documents, he had information that he was not able to reveal or discuss with his clients or instructing solicitors.  -------------- In agreement with all of your Lordships, I am satisfied that no such procedure should be followed in future.”

75.           So, ironically to achieve a result as close as possible to the application of the principles of fairness and of open and natural justice in adversarial civil cases, Mr Browning argues that First-tier Tribunals should generally adopt a course that has not been favoured as a solution by the courts.  And it is difficult to see why the reasons for the conclusions reached by the courts do not apply with at least as much force to the investigatory appeal process under FOIA in which Parliament intended that the tribunal could consider and apply its expertise to closed material.

76.           Also, once such a representative has seen the closed material he would be in a similar position to the Information Commissioner in seeking to put any points on behalf of the requester to the tribunal in the sense that he could not seek further instructions in a way that might reveal what he has seen or heard on a closed basis.  So the value added of the approach over that of suggesting lines of enquiry to the First-tier Tribunal and the Information Commissioner is likely to be limited to what the representative knows of his client’s position before he takes part in the closed process. 

77.           Apart from problems in the given case (including any further appeal) concerning (i) the limitations the suggested approach puts on full communication between representatives and their clients, and (ii) the risk of accidental disclosure, we accept the submission that longer term problems and difficulties could arise if such directions were given regularly in FOIA cases because:

i)                representatives might build up a reserve of knowledge that it would be difficult, if not impossible, to segregate from their general experience and expertise in this field,

ii)              there would also be problems in respect of other representatives, self-represented requesters and those who regularly seek information under FOIA (see paragraphs 14(l) and (m) of Appendix 2 to the BUAV decision), and

iii)             it may discourage the production of evidence to support exemptions and so mean that the First-tier Tribunal is not properly informed of factors that establish exemptions.

78.           The points made under this sub-heading all point to the conclusion that it will only be in exceptional and so rare cases that it would be appropriate to exercise a discretion in favour of directing disclosure of closed material to a representative of a person who is not to be provided with it.

The approach to be taken to the disclosure of closed material to the representatives of an excluded party and their attendance at a closed hearing, on undertakings.

79.           Clearly, a First-tier Tribunal has a continuing duty throughout the proceedings before it to act fairly and to have regard to the overriding objective (set out in Rule 2 of the 2009 Rules) which applies to directions concerning:

i)                what should be included within closed material and the subject matter of a closed hearing, and what the excluded person should be told about them and, when that has been done,

ii)              whether the representatives of a requester should see closed material and attend a closed hearing.

It is also clear that what is decided and directed at (i) will inform the decision and direction if and when (ii) is reached because it determines what the excluded party is excluded from and what he knows about that material. 

80.           In our judgment, for the reasons set out under the heading “Discussion” the approach taken by the FTT to Mr Browning’s application was the correct one and we therefore endorse it and accordingly the approach taken in the BUAV case.  In our judgment, in line with the approach encapsulated, for example, in paragraph 15 of Appendix 2 to the BUAV decision we have concluded that a First-tier Tribunal should not direct that a representative of an excluded party should see closed material or attend a closed hearing unless it has concluded that, if it does not does so:

it cannot carry out its investigatory function of considering and testing the closed material and give appropriate reasons for its decision on a sufficiently informed basis and so fairly and effectively in the given case having regard to the competing rights and interests involved.

81.           We also acknowledge and confirm that this approach will lead to the result that it will only be in exceptional and so rare cases that a representative of a party seeking information under FOIA will be permitted to see closed material and attend at a closed part of the hearing.  Indeed, we have not been able to identify circumstances in which we think that this would be appropriate, but acknowledge that it cannot be said that this should never be done.

82.           We add that, in our view, this approach applies whether or not Article 6 applies to an appeal to the First-tier Tribunal.  As to that, we agree with the Department and the Information Commissioner that the present position on the authorities is as stated in Sugar v BBC [2008] EWCA Civ 191, [2008] 1 WLR 2289, at paragraphs 41, 42 and 52, namely that s. 1(1) of FOIA does not create a civil right within the meaning of Article 6 of the ECHR. This conclusion was not dealt with by the House of Lords in the Sugar case, but we were told that it may be an issue that will shortly be considered by the Supreme Court or the ECHR.  However, we add that in our view, although the right conferred by FOIA to obtain information held by public authorities may in a particular case be of legitimate benefit to the individual applicant, it is not a right that is particular to any individual and is not a right which in itself affects the applicant’s personal situation. Further, if it were to be found that an applicant was entitled to the full protection of Article 6, logic, fairness and parity of treatment would all indicate that that protection be afforded to everyone whose private rights might be adversely affected by the release of the information, which leads back to the need to balance the various competing rights and interests that are in play under FOIA in a given case. In some cases the numbers of persons potentially affected may be large, making it impractical for them all to be represented in the proceedings. Moreover, burdens of cost and time would be imposed on members of the public who had provided information to a public authority if they had to be notified of and respond to requests that it be disclosed, or if they had to go to the First-tier Tribunal to argue for the protection from disclosure of that information, simply because another member of the public had chosen to make a FOIA request for it.

Our conclusion on Mr Browning’s first ground of appeal

83.           Our conclusion that the FTT applied the correct test effectively disposes of this ground because it was argued on the basis that they applied the wrong test.

84.           However we record that we acknowledge that, as was submitted on behalf of Mr Browning:

i)                In cases such as this when the Information Commissioner decides not to oppose an appeal against his decision that requested information is to be provided after he has seen closed material, the point that he provides support to the requester because he can and will pursue questioning and argument in closed session that promote the requester’s cause, is unlikely to be a strong one.  But, in other cases, it will be, particularly when the Information Commissioner is arguing in favour of disclosure pursuant to a request or is pursuing a line of questioning to assist in the assessment whether, for example, an exemption would apply to closed evidence if it was the subject of a request for its disclosure under FOIA.

ii)               In this case, it is accepted there was no prospect that counsel would not have been in a position to observe his undertakings.

85.           But these were the high points of Mr Browning’s arguments on the discretionary factors to be taken into account and, in our view, they fall well short of establishing that the FTT erred in law in refusing his application.  And, in part their force is based on our misgivings about the position reached that further relevant information about the Closed Exemption Evidence was not sought by, or provided to, Mr Browning as an alternative or precursor to his application that his representatives attend the closed hearing.

86.           However, as we have pointed out that was the position, and it was apparent and recognised by all that a key point in this case was whether the Department had provided evidence to support the contentions it advanced on the negative impacts of disclosure and, in particular, on whether disclosure would make it more difficult for the companies who had applied for licences to trade, and cause them difficulties with their banks.  The Information Commissioner was satisfied that such evidence had been provided, whereas by reference to what he had been told about the new evidence Mr Browning was not, and the issue for the FTT was whether the open evidence together with the closed evidence did establish those negative impacts, and so the application of s. 41 and/or 43 of FOIA.

87.           The evidence and issues revealed by the open material about the relevance and impact of the Closed Exemption Evidence did not involve any technical issues and the assessment of that evidence was well within the expertise and experience of the members of the FTT and so for the reasons given by the FTT it could carry out its investigatory function of considering and testing the closed material and give reasons for its decision on a sufficiently informed basis and so fairly and effectively in the given case having regard to the competing rights and interests involved.  Those reasons were as follows:

“35. The asserted need for confidentiality relates only to the names of the witnesses and their businesses and the nature of those businesses, from which the names might be deduced. The effect of their evidence was straightforward and can be shortly summarised in the publicly available decision.

36. Both had direct experience of lawfully exporting to Iran over a substantial period, hence of the licensing regime. Both had experienced critical problems in the withdrawal of banking facilities by major UK banks because of their trade with Iran. The bank’s letter withdrawing facilities was exhibited to the statement of one of the witnesses. Both suffered repeated rebuffs from other banks, which they approached to provide facilities. One ultimately overcame the problem by “disguising” the source of payment through routing via a foreign bank. The “disguise”, apparently, was required by the bank that eventually provided facilities so that there was no evidence that it knew that funds came from Iran - surely a deplorable state of affairs. Similar problems were confronted when attempts were made to transfer funds, lawfully held in Iran, to a UK account. European banks refused to act. Eventually a bank within the EU agreed to make transfers but at a very high rate of commission.

37.  Both witnesses stated that these problems had done immense damage to their businesses, indeed that they had faced closure. Both spoke of competitors facing these difficulties.

38. Their evidence confirmed that the risk of withdrawal or refusal of banking services extended to European and, plainly, to US institutions.

39. It was made clear to them that this aversion to Iranian transactions was the result of the perceived risk of withdrawal of US correspondent banking licences without which a bank cannot trade in US dollars. Major European banks have, of course, a considerable presence in the USA for more general business purposes.

40. Evidence was also given of the potential loss of business from US companies, if this trade were publicised. On the other hand, major suppliers refused to do any business with a company trading with Iran, even for the purposes of exporting to a quite distinct end user.

41. More generally, both companies feared scrutiny by the US authorities and their inclusion on a blacklist which would cut off all trade contacts with the USA and perhaps more widely. We were referred to the website of the Office of Foreign Assets Control (“OFAC”), an organ of the US Treasury, which enforces economic sanctions worldwide and blacklists companies and individuals with which US entities are prohibited from trading.

42. All these measures are liable to be taken against companies engaging in trade which is perfectly lawful according to EU law and the domestic law of the country in which they are registered and controlled.

43. One of the witnesses emphasised his expectation of confidentiality in making a licence application, having regard to the consequences of disclosure which he described.”

 

88.            Addendum.  We have already mentioned that the FTT recorded that it reviewed its decision on Mr Browning’s application in light of the Closed Exemption Evidence (see quote in paragraph 43 hereof).  And we add that, in our view, if more information about the Closed Exemption Evidence had been provided to Mr Browning this would have supported the conclusion that his application that his legal representatives attend the closed hearing should be refused.

Ground 2 of the Appeal - the FTT was wrong in law to extend s. 41(1)(a) FOIA to include information recorded by a public authority.

89.           The basis of this ground is that the requested information was not “obtained” by the Department as is required by s. 41(1)(a) but was simply recorded by it.

90.           We do not agree.  As a matter of ordinary language and by reference to the underlying purposes of FOIA generally, and of s. 41 itself, it is clear that the information sought that is now held and recorded by the Department (i.e. the identities of companies who applied to it for licences) was obtained by the Department from the applicant companies.  It derives from the fact that the applications were made to the Department (as the licensing authority) with the consequence that the Department obtained the information in and through the application; the Department did not create it, or only record it.

Ground 3 of the Appeal – the FTT erred in law by concluding that the name of a company that makes an application for a statutory licence has the necessary quality of confidence.

91.           In our view the FTT did not so err.

92.           At least in part, this ground and ground 4 are based on ground 2 and the distinction that Mr Browning seeks to make between “the content of the application” and “recording the fact that such an application has been made”, Mr Browning’s point being that, absent statutory provision, the latter does not have the quality of confidence about it.  In our view, this starting point relies on a false distinction and in agreement with the Information Commissioner, when he made his decision, and with the FTT, we consider that the identity of the persons who have applied for a licence has the necessary quality of confidence. As the Information Commissioner concluded, and we agree, this is so because the fact of the application was not trivial information, was not information that the applicant would normally publicise (in particular if it had been unsuccessful) and was not otherwise generally available.  The fact that a company has made such an application carries with it, at least, the information that it is contemplating trading with an entity in Iran and we agree with the FTT when they said:

“Quite apart from the considerations specific to Iran, an intention to contract in a particular jurisdiction and to seek permission to do so is a matter which an exporter will often not wish to publicise in advance for good commercial or even political reasons, the more so as he runs the risk of refusal.”

Ground 4 of the Appeal – the FTT erred in law by concluding that the Requested Information was imparted in circumstances importing an obligation of confidence.

93.           In our view, the FTT did not so err.

94.           Arguments relating to this ground have an overlap with those advanced in respect of ground 3. Mr Browning argued that (i) s. 8(1) of the Export Control Act 2002 and Articles 37 and 43 of the Export Control Order 2008 (SI 2008/3231), and (ii) the consent given by applicants to the Department to pass on information in the application form to “international organisations or other governments in accordance with commitments entered into by Her Majesty’s Government” did not, as the FTT concluded they did, import or support an obligation of confidence but indicated that there was no such obligation.  We do not agree.  Like the FTT, it seems to us that, by identifying certain uses that can be made of the information derived from an application for a licence, such provisions (i) indicate the primary and secondary purposes for which that information can be used and thereby limit other uses (save with consent or in the public interest), and by doing so (ii) confirm and support the conclusion that the information was imparted in circumstances importing an obligation of confidence. 

95.           We also consider that the FTT approached the Department’s document “Frequently Asked Questions” correctly by considering its overall message and concluding that that message supported the conclusion that the information in the application for a licence was imparted in circumstances importing an obligation of confidence.

96.           Further, and importantly, the open evidence alone (and together with the closed evidence) provides ample evidence, which the FTT were entitled to accept, to found the conclusion that both (i) the fact that an application had been made by a particular company, and (ii) the other information provided by the content of the application, comprised information that was confidential to the applicant and which was provided to (and so obtained by) the Department in circumstances that imported an obligation of confidence. 

97.           Indeed, we agree with the Department that it would have been perverse for the FTT not to reach this conclusion.

Ground 5 of the Appeal – the FTT erred in law by accepting the evidence of detriment that was said would result from disclosure without addressing the five shortcomings in that evidence which had been identified by Mr Browning.

98.           We have mentioned these five points above (see paragraph 35 hereof). We have also recorded that the forensic approach taken by Mr Browning was not to press for further disclosure of the particulars and information relied on by the Department to found the hearsay evidence it relied on, or of the Closed Exemption Evidence, but to rely on the lack of them.

99.           Although we doubt that we would have used the same language as the FTT in dealing with the hearsay nature of the Department’s open evidence it is clear that having heard cross examination on that evidence the FTT were satisfied that it was based on reliable experience and sources (albeit in large measure unparticularised) and, to use the expression we have used earlier, was not “over egging the pudding”.  Also, it is clear (because they say so, in their open account of the closed evidence) that the FTT tested the closed evidence, were convinced by it and concluded that it provided first hand confirmation of the matters giving rise to the detriment that the Department relied on (e.g. a letter from a bank withdrawing facilities and direct evidence from the closed witnesses of the problems they had faced and their effects).  Further, although Mr Browning criticises their view, the FTT addressed his points about the lack of evidence from banks and USA authorities, in a manner that was open to them.

100.       Further, it is clear from the open account of their evidence that the closed witnesses A and B gave direct evidence of their experiences and backed this up with some third party material.  Their evidence concerned matters within their own knowledge affecting their companies and the FTT found them to be truthful and convincing witnesses.  From that base, in our view, the FTT were entitled to conclude, as they did, that:

i)                the closed witnesses provided credible and compelling evidence of examples of the points being made by the Department to establish the exemptions in ss. 41 and 43, 

ii)              these examples were sufficient to overcome the lack of particularity and vagueness asserted by Mr Browning, and

iii)             these examples, together with the hearsay evidence given by others, provided a sound evidential base for the finding that there was a significant risk that disclosure of the Disputed Information would cause widespread damage to the commercial interests, including their relationships with their banks and customers, of those applicants for licences.

101.       It was not clear to us whether this ground included a reasons challenge.  But, we record that, in our view, when read fairly against the background known to the parties the FTT Decision does address Mr Browning’s five points and the potential weaknesses in the open evidence they exemplify and, in so doing, explains why the FTT did not accept them and were satisfied that, although much of it was in general terms and hearsay, the open evidence, together with the direct evidence from closed witnesses A and B, established detriment. 

102.       So, there was evidence and argument before the FTT upon which they could properly found their conclusion on detriment and reject Mr Browning’s argument, assertion and evidence on that issue.  The conclusion they reached cannot be said to be perverse or one that left out of account relevant factors.

103.       Accordingly, we reject this ground of appeal. 

Ground 6 of the Appeal- the FTT erred in law by not identifying the prejudice that would be suffered or the commercial interests that would be said to suffer it, or addressing the likelihood that it would result from the disclosure to Mr Browning of the Requested Information.

104.       It was submitted, and we agree, that this ground rests on what was alleged to be the FTT’s flawed treatment of detriment and thus ground 5.  In our view, it falls with that ground.

105.       For the reasons set out in respect of ground 5, in our view, Mr Browning’s assertions that the FTT’s conclusions involved a misapplication of principle or that they were not logically supported by the evidence the FTT identify, are wrong.  In our view, the FTT were entitled to reach the conclusions they did on the totality of the evidence.

Ground 7 of the Appeal – the FTT erred in law by accepting that disclosure under FOIA would endanger the due completion of export control applications.

106.       The relevant paragraph of the FTT Decision is paragraph 68:

“We also have regard to DBIS’ argument that disclosure endangers the frankness and caution with which intending exporters currently appear to approach the question of export control.  It seems to us have some force.”

In our view, it is not clear whether that is a finding upon which the FTT based its decision but, if it is, it is severable and was added only as a makeweight. And, it is clear from the emphatic terms of paragraph 69 of the FTT Decision that it did not affect the FTT’s overall conclusion on the balance of the public interests.

107.       If it is a finding, we accept that there was opinion evidence from the Department and BICC to this effect that the FTT were entitled to consider, and which had some force and accords with human nature.  But:

i)                it is a finding as to only one of the factors that fall to be taken into account in determining whether disclosure would cause damage to the public interest in the proper and efficient engagement with, and performance of, the licensing of exports generally and/or to Iran (to which the points about precautionary applications are directed), advanced by the Department and BICC, and so it is not a finding that

ii)              disclosure would so damage that public interest, because such a finding involves the assessment of the relevant competing factors.

108.       If we are wrong and the FTT made a finding that disclosure would damage that public interest, we have concluded that in reaching that finding the FTT erred in law by failing to take into account the crucial and obvious factor that exporting without a licence (when one is needed) is a criminal offence.  This factor is also left out of the reasoning advanced by the Department and BICC. In our view, this failure of the FTT to take into account a relevant factor is not saved by the argument that there was evidence (necessarily of opinion and belief) upon which they could base this conclusion because the issue is not one of primary fact and the lawfulness of the finding is dependent on the decision maker (the FTT) considering all relevant factors.

109.       As mentioned during the hearing, it seems to us that courts, tribunals and the public are entitled to expect that when a Government Department (or anyone else) advances a public interest argument it will refer to all the centrally relevant factors for and against the conclusion asserted.  The Department (and BICC) did not do this and the failure to do so is not excused by the nature of requests under FOIA, or the point that the witnesses could be cross examined on the issue, as was suggested in argument.

110.       However, if this error of law was made, it is not an error of law that founds a conclusion that the FTT Decision should be set aside (see s. 12(2) of the Tribunals, Courts and Enforcement Act 2007), because it relates at most to a makeweight finding and the FTT Decision stands without it. 

 

 

Mr Justice Charles

 

Mr Justice Mitting

 

UT Judge Andrew Bartlett QC

 

 

20 May 2013

 

 

 

 

 

 

 

 

 

 

 

 

Schedule to Decision of the Upper Tribunal Browning v Information Commissioner and DBIS [2013] UKUT 236 (AAC)

SCHEDULE

The most relevant rules for the FTT are Rules 2, 5, 14, 15 and 35 of the Tribunal Procedure (First-tier Tribunal) (General Regulatory Chamber) Rules 2009 as amended. These provide:

Overriding objective and parties’ obligation to co-operate with the tribunalThis section has no associated Explanatory Memorandum

2 (1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.

(2) Dealing with a case fairly and justly includes—

(a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties;

(b) avoiding unnecessary formality and seeking flexibility in the proceedings;

(c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings;

(d) using any special expertise of the Tribunal effectively; and

(e) avoiding delay, so far as compatible with proper consideration of the issues.

(3) The Tribunal must seek to give effect to the overriding objective when it—

(a) exercises any power under these Rules; or

(b) interprets any rule or practice direction.

(4) Parties must—

(a) help the Tribunal to further the overriding objective; and

(b) co-operate with the Tribunal generally.

 

Case management powers

5 (1) Subject to the provisions of the 2007 Act and any other enactment, the Tribunal may regulate its own procedure.

(2) The Tribunal may give a direction in relation to the conduct or disposal of proceedings at any time, including a direction amending, suspending or setting aside an earlier direction.

(3) In particular, and without restricting the general powers in paragraphs (1) and (2), the Tribunal may—

 (g) decide the form of any hearing;

 (i) require a party to produce a bundle for a hearing;

Prevention of disclosure or publication of documents and information

14 (1) The Tribunal may make an order prohibiting the disclosure or publication of—

(a) specified documents or information relating to the proceedings; or

(b) any matter likely to lead members of the public to identify any person whom the Tribunal considers should not be identified.

(2) The Tribunal may give a direction prohibiting the disclosure of a document or information to a person if—

(a) the Tribunal is satisfied that such disclosure would be likely to cause that person or some other person serious harm; and

(b) the Tribunal is satisfied, having regard to the interests of justice, that it is proportionate to give such a direction.

(3) If a party (“the first party”) considers that the Tribunal should give a direction under paragraph (2) prohibiting the disclosure of a document or information to another party (“the second party”), the first party must—

(a) exclude the relevant document or information from any documents that will be provided to the second party; and

(b) provide to the Tribunal the excluded document or information, and the reason for its exclusion, so that the Tribunal may decide whether the document or information should be disclosed to the second party or should be the subject of a direction under paragraph (2).

(4) If the Tribunal gives a direction under paragraph (2) which prevents disclosure to a party who has appointed a representative, the Tribunal may give a direction that the documents or information be disclosed to that representative if the Tribunal is satisfied that—

(a) disclosure to the representative would be in the interests of the party; and

(b) the representative will act in accordance with paragraph (5).

(5) Documents or information disclosed to a representative in accordance with a direction under paragraph (4) must not be disclosed either directly or indirectly to any other person without the Tribunal’s consent.

(6) The Tribunal may give a direction that certain documents or information must or may be disclosed to the Tribunal on the basis that the Tribunal will not disclose such documents or information to other persons, or specified other persons.

(7) A party making an application for a direction under paragraph (6) may withhold the relevant documents or information from other parties until the Tribunal has granted or refused the application.

(8) Unless the Tribunal considers that there is good reason not to do so, the Tribunal must send notice that a party has made an application for a direction under paragraph (6) to each other party.

(9) In a case involving matters relating to national security, the Tribunal must ensure that information is not disclosed contrary to the interests of national security.

(10) The Tribunal must conduct proceedings and record its decision and reasons appropriately so as not to undermine the effect of an order made under paragraph (1), a direction given under paragraph (2) or (6) or the duty imposed by paragraph (9).

 

Disclosure, evidence and submissions

15 (1) Without restriction on the general powers in rule 5(1) and (2) (case management powers), the Tribunal may give directions as to—

(a) the exchange between parties of lists of documents which are relevant to the appeal, or relevant to particular issues, and the inspection of such documents;

(b) the provision by parties of statements of agreed matters;

(c) issues on which it requires evidence or submissions;

(d) the nature of the evidence or submissions it requires;

(e) whether the parties are permitted or required to provide expert evidence, and if so whether the parties must jointly appoint a single expert to provide such evidence;

(f) any limit on the number of witnesses whose evidence a party may put forward, whether in relation to a particular issue or generally;

(g) the manner in which any evidence or submissions are to be provided, which may include a direction for them to be given—

(i) orally at a hearing; or

(ii) by written submissions or witness statement; and

(h) the time at which any evidence or submissions are to be provided.

(2) The Tribunal may—

(a) admit evidence whether or not—

(i) the evidence would be admissible in a civil trial in England and Wales; or

(ii) the evidence was available to a previous decision maker; or

(b) exclude evidence that would otherwise be admissible where—

(i) the evidence was not provided within the time allowed by a direction or a practice direction;

(ii) the evidence was otherwise provided in a manner that did not comply with a direction or a practice direction; or

(iii) it would otherwise be unfair to admit the evidence.

(3) The Tribunal may consent to a witness giving, or require any witness to give, evidence on oath, and may administer an oath for that purpose.

Public and private hearingsThis section has no associated Explanatory Memorandum

35(1) Subject to the following paragraphs, all hearings must be held in public.

(2) The Tribunal may give a direction that a hearing, or part of it, is to be held in private.

(3) Where a hearing, or part of it, is to be held in private, the Tribunal may determine who is permitted to attend the hearing or part of it.

(4) The Tribunal may give a direction excluding from any hearing, or part of it—

 

(b) any person whose presence the Tribunal considers is likely to prevent another person from giving evidence or making submissions freely;

(c) any person who the Tribunal considers should be excluded in order to give effect to the requirement at rule 14(10) (prevention of disclosure or publication of documents and information); or

(d) any person where the purpose of the hearing would be defeated by the attendance of that person.

(5) The Tribunal may give a direction excluding a witness from a hearing until that witness gives evidence.