Amaryllis Ltd v HM Treasury No. 2

THE APPLICATIONS

The factual background to this claim for damages, said to be worth some £11 million, is set out in my earlier Judgment, neutral citation number [2009] EWHC 962 (TCC), in which I dismissed the Defendant’s application to strike out the claim. The trial on liability is due to commence for four days on 20^th July 2009. At very much the eleventh hour, disputes have arisen as to the adequacy of the Defendant’s disclosure.

The Defendant’s List of Documents was dated 3^rd April 2009. The documents were divided into Appendix A (those documents of which the Defendant did not object to inspection), and Appendix B (those documents in respect of which objection to inspection was taken). The relevant documents in Appendix B for present purposes were identified as follows:

“1.

Pre-tender supplier meetings

2.

Pre-Qualification Development

3.

Initial Business Case to commence the tender exercise

4.

Contract Notice development

5.

Stakeholder correspondence

6.

Questions and Answers to matters posted on the Bravo Solutions Tender Portal from 4^th December 2007 and continuing up to and including 22^nd May 2008.

7.

Pre-qualification Evaluation

8.

Pre-qualification Report (original version and c.f. that redacted and sent to the Claimant following a request for information made under the Freedom of Information Act).”

The reasons for objection were also set out in Appendix B. They were stated to be as follows:

“i)

that inspection of the documents would damage the public interest. Disclosure of that information would seriously if not irreparably damage the reputation of the Defendant leading to a loss of confidence in the wider market place if information that the Defendant had received from other potential suppliers at the PQQ stage were to be released to a competitor.

ii)

that the matters contained are highly commercially sensitive and confidential and to disclose them to a competitor would undermine not only the present procurement decision but also HM Government’s public procurement processes generally, all of which being clearly damaging to the public interest;

iii)

that the documents are irrelevant to the litigation given the nature of the allegations as pleaded and/in the alternative the alleged breaches complained of by the Claimant are particular to its own circumstances so that the details of its competitors bids are also irrelevant to the claim.”

The Claimant’s solicitor did not seek to challenge this stance until the letter of 19^th June 2009. A week later, on 26^th June 2009, the Claimant issued an application pursuant to CPR 31.12 seeking an order for disclosure and inspection of a large number of documents, principally related to those categories of documents identified in Appendix B of the Defendant’s List. A date of 2^nd July 2009 was fixed for the hearing of that application.

On 1^st July 2009, the Defendant issued a separate application for an order pursuant to CRP 31.19 that the Defendant be permitted to withhold inspection or disclosure of the documents in Appendix B of the List because “disclosure would damage the public interest.” That application was also heard on 2^nd July.

At the end of the hearing on 2^nd July 2009, I indicated to the parties what documents should be disclosed and in what form. There was not time on that occasion to provide my reasons for that order. Those reasons are therefore set out in this Judgment.

I set them out in this way. It seemed to me that, despite the focus of the argument being on the public interest issue, the starting point for any investigation under CPR 31.12 are the issues of relevance and proportionality. Accordingly, I deal with those matters first. Thereafter, I deal with the arguments as to public interest immunity/confidentiality. I am again grateful to leading counsel on both sides for their helpful submissions.

RELEVANCE AND PROPORTIONALITY

Principles

CPR Part 31.6 requires a party to disclose only those documents on which he relies and those documents which either support the other party’s case or adversely affect his own case: see Harrods Ltd v Times Newspapers Ltd [2006] EWCA Civ 294. That is what is meant now by relevance, and it is a more restricted category of documents than that which used to be required under the ‘train of enquiry’ category referable to the decision in Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882) L.R. 11 QBD 55, CA. In addition, orders for disclosure or inspection should always be proportionate, in accordance with the overriding objective at CPR Part 1.1.

The Factual Background

This is a claim based on alleged breaches of Regulation 4(3) of the Public Contracts Regulations 2006. The particular procurement process involved the supply and installation of furniture for a variety of Government departments. The Claimant maintains that the Defendant failed to deal with its first stage tender (referred to below as the PQQ, the pre-qualification questionnaire) in an equal, transparent, and non-discriminatory way. There are four essential strands to this argument. First, the Claimant complains about the decision to allocate no marks at all to Section F of the PQQ, dealing with previous experience and comparable contracts, particularly in circumstances where the PQQ indicated that all Sections would be marked. This is an area where the Claimant believes that it would have scored highly. Secondly, the Claimant complains that the Defendant evaluated the PQQ responses without informing the tenderers of the relative importance it ascribed to each question/topic. Thirdly, there are complaints about the Defendant’s evaluation of the environmental management sections of the PQQ. Finally, the Claimant complains that it was awarded zero marks for Section A of the PQQ, on the sole basis that it was a supplier of furniture rather than the manufacturer of the furniture itself. The essential complaint here is that the Defendant had an unstated – and unfair - preference for manufacturers rather than suppliers.

Particular Pleaded Issues

In the majority of procurement disputes arising out of the treatment or evaluation of one company’s tender, comparisons with at least some aspects of the tenders of other third party companies are almost inevitable. Whilst some of the allegations in the present case, summarised above, might not require such a comparison exercise, others plainly do. For example, as Mr Bowsher properly conceded, under paragraph 10 of the particulars of claim, the alleged breach at sub-paragraph (3)(b)(v) - timber sustainability - and sub-paragraph (4) - business activities - appear to raise a direct comparison issue.

Moreover, I consider that the Defendant’s defence also puts in issue questions of comparison. By way of example only, I refer to paragraph 19.6 of the defence which pleads:

“If marks had been allocated for provision of the 5 relevant contracts, as required in Section F, the Claimant would have been awarded fewer marks than the twelve successful candidates invited to tender for Lot 1, because the claimant failed to provide the required information, while the successful candidates all did provide the required information”.

It seems to me clear that this averment is raising an issue which can only be determined by a comparison between the Claimant’s PQQ and those of the other tenderers.

Likewise, at paragraph 34 of the defence, which deals with the environmental management criticisms, the Defendant pleads:

“None of the candidates had an EMAS system in place, and all candidates (including the Claimant) were awarded zero for question 8.1. This Question had no effect on the result of the competition.”

Again it seems to me plain that this averment expressly puts in issue the contents of the other PQQ’s; it will be necessary for the court to consider those other PQQ’s in order to see if the Defendant is right to say that all applicants received zero marks for this section of their PQQ.

For these reasons, so it seems to me, the other PQQ’s and the Defendant’s evaluation regime are prima facie relevant documents in these proceedings. With that in mind I then turn to the individual categories of documents sought.

THE DOCUMENTS SOUGHT

Introduction

The documents sought fell into a number of clear Categories. Category 1 included those documents which have previously been provided by the Defendant to the Claimant, albeit in a redacted form. Category 2 is made up of the eight categories in Appendix B of the Defendant’s List (paragraph 2 above). Category 3 is said to include documents relating to the eight categories in Appendix B, although they are not separately identified in Appendix B. Category 4 is a miscellaneous grouping of other documents.

Category 1: Documents Previously Provided In Redacted Form

The Marked Version of the Claimant’s PQQ

There is, I think, no doubt that the marked version of the Claimant’s PQQ - that is to say, the document evaluated by the Defendant, and from which this action stems - is a highly relevant document. It should be disclosed in unredacted form. This was not opposed by Mr Bowsher on behalf of the Defendant.

The Defendant’s PQQ Evaluation Report and Scoresheet

It is again clear beyond doubt that the Defendant’s PQQ evaluation report, dealing with all the PQQ’s received, together with the scoresheet summarising the results of that report, are both highly relevant documents. They should prima facie be disclosed. I deal in Section 5 below with the separate issue as to public interest immunity/confidentiality arising out of the contents of these documents.

Category 2: The Appendix B Documents

Pre-tender Supply Meetings

It appears that the Defendant had meetings with around 30 suppliers before the PQQ process commenced, although for reasons which are unclear, the Claimant was not invited to such a meeting. A note of one of these meetings has been disclosed by the Defendant to the Claimant, although it is now suggested that this disclosure was made “by mistake”. As Ms Hannaford correctly pointed out, there is no evidence to explain how this mistake arose and why it is now alleged by the Defendant that the document should be returned.

Be that as it may, the disclosed note of the meeting is in template form and is described as a Supplier Information sheet. Apparently, there is one such document for each pre-tender supplier meeting. Some of the material on that document is on any view irrelevant, but some of it, particularly those parts dealing with the issue as to ‘manufacturer/dealer’, ‘ISO status’ and ‘timber status’ is plainly relevant to the issues in this case. Thus, subject to the PII/Confidentiality point, I conclude that at least parts of these documents are relevant to the issues in these proceedings and should be disclosed.

Pre-Qualification Development

Initial Business Case

Contract Notice Development

These documents are all part of the Defendant’s own internal procedures, dealing with the development of the PQQ and related issues. Although identified in Appendix B as being documents which should not be disclosed as a result of public interest and/or irrelevance, it appears that such an objection is now no longer maintained in relation to these three sub-categories of documents because the Defendant has agreed to provide them. I need therefore say nothing further about them at this stage.

Stakeholder Correspondence

The Defendant is acting for a number of government departments and agencies, referred to as stakeholders. The Claimant has sought the correspondence between the Defendant and these various stakeholders in relation to the development of the PQQ. Although a public interest immunity point is taken in relation to these documents, it seems to me that the Claimant’s claim for inspection of these documents fails at a more fundamental level: they are simply not relevant to the issues in this case. Even if they had some marginal relevance, it would not be proportionate to require the Defendant to hunt them out and disclose them. Accordingly, I refuse the order in relation to this category of documents.

Questions and Answers on the Bravo Portal

A portal was established to allow prospective suppliers to raise questions with the Defendant about the PQQ, and for those questions to be answered. The Defendant has agreed to provide all questions and answers that were published on the portal (save possibly for one or two that are said to be confidential). In the interests of proportionality, Ms Hannaford indicated that that was acceptable to the Claimant. Therefore no issue arises under this category of document.

Pre-Qualification Evaluation

Under this rather broad heading, three sub-categories of documents were identified. They were:

The PQQ’s provided by the other suppliers;

The notes prepared by Mr Graham Threlfall (the team leader) and others relating to the Claimant’s PQQ;

The notes prepared by Mr Threlfall and others relating to the PQQ’s of the other suppliers.

In terms of relevance and proportionality, my view is that the PQQ’s of the other suppliers are plainly disclosable documents. I have already explained that a comparison exercise between at least part of the Claimant’s PQQ and the equivalent parts of the PQQ’s provided by the other suppliers will form a key part of the evidence at this trial. Accordingly, the only remaining issue raised in connection with the PQQ’s of the other suppliers is that of PII/Confidentiality, which I address in Section 5 below.

I also consider that the notes prepared by Mr Threlfall and the other members of the Defendant’s team concerning the Claimant’s PQQ are also of relevance to the issues as to its fair and transparent evaluation. The Claimant needs to know precisely how its own PQQ was evaluated and these notes may well provide some insight into that process. They are therefore relevant documents and should be disclosed. For reasons set out in paragraphs 51 and 52 below, there can be no PII point in relation to these internal documents, which do not contain any information from third parties.

However, I do not consider that the Defendant’s evaluation notes relating to the PQQ’s of the other suppliers are of very much (if any) relevance to this case. Moreover, I am firmly of the view that, even if they had some peripheral relevance, it would not be proportionate, particularly in view of the lateness of this application, to require the Defendant to disclose them. Accordingly, that aspect of the Claimant’s application, which might have involved a large amount of documentation, must fail at this hurdle.

The Pre-Qualification Report

This is the same document that I have dealt with in section 3.2 (b) (paragraph 16) above. For the reasons set out there, this document is plainly relevant to the issues in the case.

Category 3: Documents Which Should Also Have Been Identified In Appendix B

All Other PQQ’s

This is the same category of documents identified at section 3.3 (g) (i) (paragraph 23) above. I have already concluded that these documents are relevant and, subject to the PII/Confidentiality point, should be disclosed.

All Pre-PQQ Communications With Suppliers

At section 3.3 (a) (paragraphs 17 and 18) above, I have set out my reasons why the notes of the pre-tender meetings with the suppliers (the so-called Supplier Information sheets) are relevant and should be disclosed, subject to the PII issue dealt with below. However, I am doubtful as to whether any other pre-PQQ communications with the suppliers would be relevant and I am firmly of the view that, even if they were, such relevance would be peripheral. It would not be proportionate, at this late stage, to require the Defendant to disclose that material. Accordingly, to the extent that this was an attempt to seek documents beyond the Supplier Information sheets, it is rejected.

Documents Relating To The Decision-Making Process

Again, I have already indicated that, subject to the PII/Confidentiality arguments, the PQQ’s of the other suppliers, and the Defendant’s evaluation of those PQQ’s as recorded in the report and the scoresheet, should be disclosed. That is in addition to the development documentation at section 3.3 (b), (c) and (d) (paragraph 19) above, which the Defendant has now agreed to disclose in any event. In those circumstances, I am not prepared to make a further order in the terms sought in relation to this (very similar) category of documents. It seems to me that this category is, in any event, much too widely-drawn. It would impose a disproportionate burden on the Defendant to investigate whether there are any further documents caught by these wide words which have not already been disclosed in the other categories identified above. Accordingly, this aspect of the Claimant’s application must fail.

Category 4: Other Documents

Attachments to the Evaluation Report

The evaluation report of 12^th March 2008 came with three attachments: the marking and weighting criteria spreadsheet; the evaluation results spreadsheet; and the project plan and timescales. I have already said that, subject to PII, the evaluation report itself is a plainly relevant and disclosable document. It seems to me that the attachments to that same report must fall into precisely the same category. They should therefore be disclosed in unredacted form, if that has not already happened.

Documents referred to in the Defendant’s letter of 17^th March 2008 and in the Defendant’s Framework Category Requirement Review

In the Defendant’s letter to the Claimant of 17^th March 2008, telling them about the outcome of the PQQ process, there was a reference in the fourth paragraph to “a policy to supply all providers with a written response”. The Claimant seeks a copy of that policy. To the extent that that policy is in writing, it is plainly a relevant document and should be disclosed.

Similarly, in the Defendant’s lengthy Framework Category Requirement Review, there was a reference to “a plan to have manufacturers only on the framework”. This is, of course, a very relevant aspect of this dispute, because it is one of the Claimant’s principal complaints that this “plan” was never passed on to them, and was not made clear in the PQQ. Again, to the extent that this plan was in writing, it seems to me that it is therefore a relevant document and should be disclosed. I would also include in this sub-category any other document in which this important policy decision/plan was formulated, discussed and reviewed.

Various Documents relating to Other Suppliers

The Claimant sought a large number of documents relating to other suppliers, including “all documents relevant to requests for meetings, agendas, notes of meetings with incumbent or potential suppliers…all documents relevant to making the industry aware of the defendant’s intentions in relation to FSC or other accreditation or ISO requirements…and supplier information sheets”.

I have already said that the Supplier Information sheets, which record information as per the pre-PQQ supplier meetings, are disclosable documents, subject to the PII/Confidentiality point (paragraph 18 above). I have also decided that all other communications with suppliers before the PQQ process are of peripheral relevance and that it would be disproportionate to order the Defendant to provide them (paragraph 28 above). Accordingly, this claim succeeds to the extent that it mirrors the documents sought in section 3.3 (a) (paragraphs 17 and 18) above, but not otherwise.

Documents Relevant to Policy Decisions

This category was defined as “all documents relevant to the policy decision to include the question of design to draw out their status as either suppliers or dealers”. I regard that as too widely-drawn. Particular policy documents are to be disclosed under some of the other categories set out above. It would not be proportionate to make a further order in these general terms. Accordingly this aspect of the Claimant’s application fails.

Documents relating to Reconsideration of Weightings

In an e-mail from Mr Threlfall to some of the stakeholders dated 8^th November 2007, there was a reference to a possible re-evaluation of a particular question in the draft PQQ and a reconsideration of percentages and weightings. This was before the final version of the PQQ was available to be downloaded. It does not seem to me that it is relevant to know precisely how percentages and weightings were calibrated in advance of the PQQ; what matters are the percentages and weightings that were actually applied to the Claimant’s tender and to the tenders of the other suppliers who completed the PQQ. Accordingly I do not consider that these documents are relevant, and even if they were it would not be proportionate to require the Defendant at this late stage to make efforts to try and find them. This aspect of the application therefore also fails.

Detailed Procurement Strategy

The internal e-mail from Mr Threlfall of 6^th December 2007 refers to “a product and supplier strategy” which contained “a high level view of our aims”. The e-mail goes on to say “a more detailed procurement strategy is currently being worked on”. It seems to me clear that the product and supplier strategy, if it has not already been disclosed, should be disclosed forthwith. The Defendant should also identify and provide copies of the more detailed procurement strategy then “being worked on”. If, for some reason, that more detailed procurement strategy was never completed, then the Defendant should explain what happened to it.

Individual Marking for the Claimant’s PQQ, Composite Marking and Calibration

I have already made plain that both the Claimant’s PQQ, and the PQQ’s of the other suppliers should, subject to the PII/Confidentiality point, be disclosed. They are plainly relevant. It does not seem to me that this category of documents adds anything further.

Versions 2 and 3 of the PQQ Marking Scheme

It appears that the Claimant has been provided with version 1 and version 4 of the PQQ marking scheme. It was version 4 that was the applicable version. Versions 2 and 3 have not been easy for the Defendant to identify and it may be that they were simply updated into Version 4, with no clear record of the amendments. In any event, it does not seem to me that Versions 2 and 3 are of relevance to the issues in this case. I therefore decline this aspect of the Claimant’s application.

Summary as to Relevance/Proportionality

For the reasons set out above, I have concluded that many of the categories of documents sought by the Claimant are relevant to the issues between the parties, and that their disclosure/inspection would be proportionate. Prima facie therefore, they should be disclosed. But at this point the second issue arises, namely whether those documents are covered by public interest immunity or some other rule relating to confidentiality which would protect them from inspection. Of particular relevance to those arguments are the Supplier Information sheets (paragraphs 17 and 18 above), the PQQ’s of the other suppliers (paragraph 23 above), the Defendant’s evaluation of those PQQ’s (paragraphs 16 and 24 above), and the Defendant’s own internal evaluation documents (paragraphs 19, 30, 31, 32 and 37 above). It is to that topic that I now turn.

PUBLIC INTEREST IMMUNITY/CONFIDENTIALITY: THE LAW

Confidentiality

The general principle in the UK is that a litigant is not entitled to claim privilege for documents and information merely because they were supplied to him in confidence by a third party: see Science Research Council v Nasse[1980] AC 1028; [1979] 3 All ER 673 HL. Although there are exceptions to this principle, the only relevant exception in the present case would appear to be the alleged public interest in their non-disclosure.

Public Interest Immunity: The Old Position

Prior to the Matrix Churchill case, and the subsequent enquiry by Sir Richard Scott, it was commonplace for public interest immunity (“PII”) to be claimed in respect of classes of documents, often without very much thought having been given to the alleged danger to public interest actually caused by the documents in question. However, following that case and its attendant publicity, on 26^th February 1996, the then Attorney General, Sir Nicholas Lyell QC announced that, in future, the process of claiming PII would involve three distinct steps. First a decision would be taken as to relevance. Secondly, if the document was relevant, a decision would then be taken as to whether the document attracted PII. The Government recognised that it was no longer helpful to consider this issue by reference to classes of documents, and that instead it would ask the fundamental question as to whether disclosure of a particular document would cause real damage to the public interest. Thirdly, if the document attracted PII, the decision-maker would consider the balancing exercise between the public interest in non-disclosure and the public interest in the proper administration of justice and the need for a fair trial.

PII: The New Position

In R v Chief Constable of West Midlands Police ex parte Wiley [1995] 1 AC 274, Lord Woolf set out in clear terms the three stages noted above. As to the tension between the interests involved, he said:

“Although it is the practice to talk of conflicting interests this can be misleading. The conflict is more accurately described as being between two different aspects of the public interest. If it is decided that the aspect of the public interest which reflects the requirements of the administration of justice outweighs the aspect of the interest which is against disclosure, then it is the public interest which requires disclosure.”

It is important to note that there is a special procedure for asserting PII pursuant to CPR 31.19. In addition, the notes in Vol 1 of the White Book at para. 31.3.33 make plain that, if there is an objection on PII grounds prior to trial, the decision to object should be taken by the Minister or, in certain instances, the permanent head of the department in question. Although Mr Bowsher contended that it was not always necessary for such high-level individuals to take the decision to rely on PII, I do not agree. It seems to me plain that part of the sea-change following Matrix Churchill was a desire to ensure that the decision to assert PII was made at a high level, after proper consideration, in order to prevent mistakes or the potential abuse of the system. That is particularly important where, as here, a class-based objection is maintained, despite the clear statement (paragraph 42 above) that such an approach was ‘not helpful’.

Indeed, in the present case, I cannot help but note that, although there are two witness statements from two different solicitors, neither say that they had any involvement in the decision to claim PII. There is no evidence that any senior official has even considered the issue. The List is signed by Colin Formby, a ‘senior manager’ with the Defendant, but he has not signed a witness statement, and there is no evidence to suggest that the three stages of the decision-making process, referred to above, were even contemplated, let alone gone through, either by Mr Formby or anyone else. I need hardly say that this is of considerable concern to me: it smacks of the bad old days when a government department objected to everything on PII grounds and then, if there was a challenge, grudgingly provided some documents on a piecemeal basis. Moreover, until the day before the hearing, the Defendant had not even complied with the procedure set out in CPR 31.19, because no application had been made for permission to withhold disclosure of the documents set out in Appendix B.

There are numerous cases in which the courts have been called upon to decide, in a particular set of factual circumstances, which aspect of the public interest identified by Lord Woolf outweighed the other. Thus in Alfred Crompton Amusement Machine Ltd v Customs and Excise Commissioners No 2[1974] AC 405, documents held by the defendant, which consisted principally of information obtained from third parties, were held to be privileged from production on the ground that it was in the public interest that they should not be disclosed, since knowledge that the commissioners could not keep such information secret might be harmful to the efficient working of the Purchase Tax Act 1963. Lord Cross said:

“Here, on the other hand, one can well see that the third parties that have supplied this information to the commissioners because of their statutory powers would very much resent disclosure by the commissioner to the appellant and that it is not at all fanciful for Sir Louis to say that the knowledge that the commissioners cannot keep such information secret may be harmful to the official working of the Act. In a case where the considerations for and against disclosure appear to be fairly evenly balanced the court should I think uphold the claim for privilege on public interest and trust to the head of the department concerned to do whatever he can to mitigate the ill-effects of non-disclosure.”

In other cases, it has been in the public interest for such documentation not to be protected. Thus in Norwich Pharmacal v Customs and Excise [1974] AC 133 the names of those who might have violated the claimant’s patent rights were not protected from disclosure. Similarly, in R v Bournemouth Justices ex parte Grey [1986] 150 J.P.392, the records of the adoption agency which contained an admission of paternity by the putative father were not protected by PII.

Of course, one way in which the competing aspects of the public interest can be reconciled is by the redaction of the documents in question, so that certain information is blanked out, or by the hearing in camera of evidence in relation to those confidential documents. These and other possibilities are identified in the judgment of Silber J in a recent procurement case, Letting International Limited v LB Newham [2008] EWHC 1583 QB.

Varec SA v Etat Belge (Case C-450/06, Judgment 14^th February 2008, European Court of Justice)

In this case, the claimant was a disgruntled tenderer for a contract to provide track links for Leopard tanks. Varec sought sight of the successful tender as part of its action to annul the decision to award the contract to a third party, Diehl. It is clear from the judgment that the particular information, to the disclosure of which Diehl objected, was that contained in detailed drawings and specifications relating to their particular track link system. They maintained that this was confidential scientific information which would obviously be of considerable interest to a competitor. The court’s conclusions included the following:

“43.

It follows that in a review procedure in relation to the award of public contracts, the body responsible for that review procedure must be able to decide that the information in the file relating to such an award should not be communicated to the parties or their lawyers, if that is necessary in order to ensure the protection of fair competition or of any legitimate interests of the economic operators that is required by Community Law….

47.

The adversarial principle means, as a rule, that the parties have a right to a process of inspecting and commenting on the evidence and observations submitted to the court. However, in some cases it may be necessary for certain information to be withheld from the parties in order to preserve the fundamental rights of the third party to safeguard an important public interest….

51.

It follows that, in the context of a review of a decision by a contracting authority in relation to a contract award procedure, the adversarial principle does not mean that the parties are entitled to unlimited and absolute access to all of the information relating to the award procedure concerned which has been filed with the body responsible for the review. On the contrary, that right of access must be balanced against the right of other economic operators to the protection of their confidential information and their business secrets…

53.

To that end, the body responsible for the review must necessarily be able to have at its disposal the information required in order to decide in full knowledge of the facts, including confidential information and business secrets….

54.

Having regard to the extremely serious damage which could result from improper communication of certain information to a competitor, that body must, before communicating that information to a party to the dispute, give the economic operator concerned an opportunity to plead that the information is confidential or a business secret”

Mr Bowsher relied on Varec to make a number of far-ranging submissions. He said that:

Varec was authority for the proposition that confidentiality, of itself, might give rise to public interest immunity and that therefore it could be argued that the decision in Science Research Council was no longer good law in the UK.

There was some sort of halfway house between the public interest immunity cases (and the procedure for dealing with them, requiring a first decision by a Minister or a high level official) as set out above, and cases where the immunity being asserted did not relate to potential state secrets, but commercial information provided by third parties. In those cases, of which he said this was one, the first decision was not required to be taken at such a high level and could be reviewed by the court in any event.

There was a need for a new kind of procedure or protocol under CPR 31 whereby documents which fell into this lesser PII category would be considered by the court (“the body responsible for the review” in the words of Varec) and to that end, the court, but not the other side, would have to be provided with an unredacted version of the documents in issue in order for the court to decide, by reference to the documents themselves, the proper resolution of the PII/Confidentiality issue.

Ms Hannaford, on the other hand, submitted that Varec was a case concerned with business secrets of the scientific/technical variety and was of no direct applicability to the present case. She also said that, notwithstanding Varec, the law and practice summarised in section 4.3 above remained unchanged.

In my judgment, the ruling in Varec does not entail a radical departure from the existing UK law relating to disclosure and PII. Neither does it require a separate or new protocol or amendment to the CPR. It seems to me that Varec is simply an example of a case in which, in considering the competition between the public interest in the open administration of justice, and the public interest in maintaining commercial confidentiality, the facts of the case (and in particular, the technical nature of the information that was the subject of the challenge) meant that the latter outweighed the former. As to procedure, it seems to me that the current procedure identified in CPR 31.19, and the notes in the White Book at 31.3.33 are not affected by Varec. A decision to object to the documents on PII grounds must still be taken by a senior official, going through the three stage process. Furthermore, if and when the court reviews that decision, the court should be provided with an unredacted version of the relevant documents in order to reach its own view as to the strength or otherwise of the PII point.

With those various principles in mind I therefore turn to address the question of PII/Confidentiality in the present case.

PII/CONFIDENTIALITY: THE PRESENT CASE

The Internal Documents Relating To The Defendant’s Decision-Making Process

Some of the documents identified above concern the Defendant’s own decision-making and internal evaluation procedures. They include the documents referred to at paragraphs 16, 19 and 24 above.

Other than the bald statement in Appendix B of the Defendant’s List, noted in paragraph 3ii) above, no justification for asserting PII in relation to these internal documents has been put forward by the Defendant, let alone sustained. I have already set out my concerns about the whole way in which the Defendant has approached this issue in paragraph 45 above. It seems to me to be incontestably wrong in principle for the Defendant to confirm, on the one hand, that they are committed to open government and compliance with Regulation 4(3) of the Public Contracts Regulations 2006, and then to assert, on the other, apparently without proper consideration, that it would cause real damage to the public interest if the public knew how this part of HM Treasury had approached and performed this important procurement task.

The way in which the Defendant went about the evaluation exercise lies at the heart of this case; indeed, in any case involving Regulation 4, the way in which the evaluating body has gone about the exercise will be central to the issue of whether the process was conducted in a fair and transparent way. In those circumstances, it would be a truly exceptional case where there was some form of public interest in keeping secret any aspect of that internal evaluation process. In the present case, the Defendant has offered no justification for objecting to the disclosure of the identities of those involved in the development of the PQQ and the evaluation process itself; the way in which those individuals approached and performed those tasks; and the results of that exercise.

Accordingly, where PII/Confidentiality was asserted by the Defendant in relation to their own internal documents, it seems to me that, subject only to the point about confidential information from third parties, dealt with in section 5.2 below, the argument must fail. In my view, PII for the internal documents should never have been claimed at all, still less in the unsatisfactory way in which it was. Thus the PII/Confidentiality point would not affect my decision to order disclosure and inspection under paragraphs 16, 19, 24 30, 31, 32, and 37 of this Judgment.

The Documents Relating To Third Parties

The most important documents sought by this application contain information provided by third parties (see for example paragraphs 17, 18, 23 and 24 above). Some, although by no means all, of the documents sought contained information from these third party suppliers which might be regarded as commercially sensitive, and the suppliers themselves might be anxious to ensure that such information did not find its way into the hands of the Claimant, who are, after all, one of its competitors. On the other hand, as I have identified in Section 2 above, a comparison exercise between at least parts of the Claimant’s PQQ and the corresponding parts of the PQQ’s provided by the other suppliers is rendered inevitable by both sides’ pleadings in this case. How can these two aspects of the public interest be reconciled?

I make two general observations before answering that question directly. First, I am not in a position to evaluate the nature of the allegedly confidential information because I have not been provided by the Defendant with the documents in question which, on the basis of Varec, is a fundamental requirement if the review is to work properly. However, doing my best with the information that I do have, it does not seem to me that much of the third party information in the possession of the Defendant is of a particularly sensitive or confidential nature. The PQQ’s themselves contain very little information that could possibly be regarded as commercially sensitive: the highest that it can be put is that there is some information there about turnover and other business activities which may be sensitive. It is a long way from the sort of unique technical and scientific information that was at issue in Varec.

Secondly, although I have been provided with 5 letters from other suppliers protesting about the disclosure of this information (all but one of which being very short and containing very scanty information), I am bound to say that, in the circumstances, I do not consider that it is appropriate to give too much weight to those complaints. That is because General Instruction 7 in the PQQ made plain to each of those suppliers that:

“any information submitted to [the Defendant] may be subject to disclosure in response to a request under the Freedom Information Act” (instruction 7.1);

“if you consider that any of the information included in your PQQ response is commercially sensitive, please identify and explain (in broad terms) what harm may result from disclosure if a request is received, and the time period applicable to that sensitivity” (instruction 7.2);

“you should be aware that, even where you have indicated that information is commercially sensitive, we may be required to disclose it under the Freedom of Information Act in response to a request where such disclosure is considered to be in the public interest…. ”(instruction 7.3).

There is no evidence that any of the other suppliers said in their PQQ that the information in question was confidential, and no evidence that any of the suppliers complied with instruction 7.2. For all these reasons, therefore, it seems to me that every supplier was aware that the information in their PQQ might be disclosed to third parties in any event.

In my judgment, the answer to the potential conflict in the present case is straightforward. A mixture of redactions and substitutions will be more than sufficient to ensure that such confidential information as there might be is not unnecessarily disclosed, whilst at the same time ensuring that the Claimant is given sufficient information to make its full case by reference to all the relevant material. The form of the redactions is set out below.

As to the PQQ evaluation report of 12^th March 2008 and the scoresheet (section 3.2 (b), paragraph 16 above) each of the names of the other suppliers should be redacted and each company should instead be given a separate designation letter A, B, C, etc. That will allow the necessary comparison exercise to be done without any risk that the other suppliers might be identified. That aside, it seems to me that the evaluation report and the scoresheet should be provided in unredacted form.

As to the documents referred to at section 3.3 (a) (paragraphs 18 and 19 above), namely the Supplier Information sheets, filled out following the meetings with the other suppliers pre-PQQ, I take the view that the bulk of those sheets contain material that is irrelevant and might also be redacted on PII grounds. However, some of that information, such as the date of the meeting, the ‘manufacturer/dealer’ box, the ‘1S0 status box’, the ‘timber status’ box, the ‘installation’ box, and possibly the ‘comments’ box too, should be left unredacted. The name of the company can be replaced with the same designation A, B etc as noted above.

In that way, it seems to me that the Claimant will be able to obtain the information that it is entitled to, but not more, and there is no risk to the third party suppliers of the type identified in the Alfred Crompton case. Moreover, I am bound to note that, in relation to these documents, I have only been able to reach that detailed conclusion because (allegedly through the inadvertence of the Defendant), I have been provided with an unredacted version of one such Supplier Information sheet.

The other important documentation to be considered under this heading relates to the PQQ’s of the other suppliers (section 3.3g), paragraph 23 above). Obviously, the identity of the company filling out the PQQ should be replaced with the designation A, B, C etc previously noted. In addition, if it is thought desirable, some parts of those PQQ’s could be redacted, because they do not relate to the particular issues raised by the Claimant’s claim in these proceedings. However, those sections of the PQQ’s provided by the other suppliers which dealt with those elements of the tender which are now in issue (such as environmental management, manufacturer/supplier, business activities and the like), should be left unredacted.

Finally I should say that, if there are any further debates as to the precise extent of the redactions referred to above, or if any of the suppliers wish to be heard on any remaining issues, they can be resolved by the court at the adjourned PTR on 13^th July. Of course, in order to achieve that, I will need to be furnished with the proposed redacted version and the original version of any document still the subject of dispute.

CONCLUSIONS

For the reasons set out in Section 3 above, I have considered the documents on a category by category basis, applying the tests of relevance and proportionality. Some categories fail that test. Of those that are relevant, and where it would be proportionate to require inspection, many are said by the Defendant to be covered by PII.

For the reasons set out in Section 5.1 above, I consider that the Defendant’s own internal documents are not protected by PII, and I regret that the assertion was ever made. As to the confidential information provided by third parties I consider that, in this case, the aspect of the public interest concerned with the fair administration of justice outweighs the public interest in the protection of commercially confidential information if (and it is an important ‘if’) the documents can be provided in a form which prevents the identification of the relevant suppliers and the disclosure of largely irrelevant but potentially confidential information. For the reasons set out in Section 5.2 above, I consider that this result can be achieved by the substitution of the supplier names in the documents with a capital letter, and the redaction of those parts of their PQQ’s and other documents which are not the subject of the particular complaints made by the Claimant in these proceedings.

As indicated to the parties on 2^nd July 2009, and reiterated above, if there are any further disputes as to the extent or nature of the redactions so ordered, I will address those at the PTR. I would require both the unredacted and the proposed redacted versions of the documents in question in order to accomplish that task.