Thursday, October 01, 2009

Right to inspect audit documents trumps commercial confidentiality

The High Court has issued an important decision on the right of electors under section 15(1) of the Audit Commission Act 1998 to inspect and make copies of certain documents relating to the council's accounts at the time of the annual audit.

Mr Dowen had applied to Nottinghamshire Council to inspect and take copies of documents relating to an £850m waste management contract between the Council and Veolia. The disputed documents comprised schedules to the contract and monthly invoices submitted to the Council by Veolia, which Veolia sought to prevent the Council from making available for inspection.

The issue before the Court was whether the documents fell within the category of "books, deeds, contracts, bills, vouchers and receipts" "relating to" "the accounts to be audited".

Veolia argued that a wide interpretation of s.15(1) would lead to confidential information being disclosed. However, Mr Justice Cranston stated:
The concern about commercial confidentiality I can well understand...But the plain fact is that there is no duty to keep commercial confidentiality in section 15...In my view the express provision for confidentiality in section 15(3) in the case of personal information suggests that commercial confidentiality is to be ignored in the interpretive exercise. The reality is that in recent times Parliament has addressed the issue of confidentiality in relation to section 15 and has not considered it necessary to extend it to commercial cases such as the present.
He concluded:
Accounts are not defined but the 1998 Act indicates that they are the record of the Council’s financial activity over a period and of the financial position at a particular time. The statement of accounts is a summary of the accounts. In my view it is plain that each of the disputed documents relate to the Council’s accounts as that phrase is to be construed in its statutory context. In the result Mr Dowen is entitled to inspect and copy these documents.
Mr Dowen was represented by Friends of the Earth. The FoE press release is here.
The judgement itself is here.


jonathan b said...

Hi Katherine

I think it's important to stress that the s15(1) rights are not restricted to local electors - "any person" has a right to inspect and copy relevant documents.

best wishes

Katherine Gundersen said...

Hi Jonathan,

It's not "any person" but "any persons interested". In R (on the application of HTV Ltd) v Bristol City Council [2004] 1 WLR 2717 (Admin), the judge accepted that ITV West qualified as "persons interested" but only because the company paid local non-domestic rates.

Best wishes,

Andrew said...

This case has been blogged, here.