Spotlight on Corruption & Anor. v The Information Commissioner & Anor

As regards the BBLS, CBILS and CLBILS, prejudice to commercial interests ‘would be likely’ to arise from disclosure of Borrower names in respect of: (1) Borrowers; (2) Lenders; and (3) BBB and/or BEIS.

In relation to Borrowers BBB identifies four causal mechanisms by which the relevant prejudice was likely to arise:

In relation to Lenders BBB identifies three causal mechanisms by which the relevant prejudice was likely to arise:

In relation to BBB/BEIS, BBB identifies two causal mechanisms by which the relevant prejudice was likely to arise:

Disclosure would be likely to prejudice the commercial interests of the Borrowers, Lenders and/or BBB/UK FF Nominees Ltd.

The causal mechanisms by which BBB submits that such prejudice would be likely to arise in respect of FFS Borrowers are:

The causal mechanisms by which BBB submits that such prejudice would be likely to arise in respect of FF Lenders and ‘other Lenders’ are:

The causal mechanisms by which BBB submits that such prejudice would be likely to arise in respect of BBB/UK FF Nominees Ltd are:

BBB’s position is:

The Commissioner and the Tribunal have to assess a public authority’s compliance with Part 1 FOIA as at the time of the refusal.

Publication started many months after the refusal and is not relevant to this appeal. Publication is equally consistent with prejudice being caused but overridden by the legal duty to publish.

With over a million Borrowers and 130 Lenders, BBB could not sensibly be expected to consult with individual Borrowers (with whom BBB had no direct relationship) as to their commercial interests.

BBB also addresses the specific points made in the grounds of appeal on section 43(2).

Disclosure would be likely to increase the potential for fraud. This view is based on consultation with various counter-fraud bodies.

The three causal mechanisms by which disclosure would be likely to cause such prejudice are:

The public interest in maintaining the section 31(1)(a) exemption in respect of the BBLS, CBILS and CLBILS information outweighs the public interest in disclosure.

BBB would, in the alternative, rely on the aggregated public interest in maintaining both the section 43(2) and section 31(1)(a) exemptions, if both are found to be engaged, as outweighing the public interest in disclosure.

Where a business's name is, or includes, the name of an individual (e.g. a partnership or sole trader) the business's name may constitute that person’s personal data. BBB accepts that there is a legitimate interest in transparency about the Schemes generally and understanding how public money may be spent. Disclosure of the names of individual Borrowers is not necessary for that aim, which could be served by global information or information available under the EU Temporary Framework (in respect of larger loans).

Such a legitimate interest would, in the alternative, be overridden by the interests and/or fundamental rights of the data subject Borrowers. It is likely that this information will be combined with other data sources and analysed for a plethora of reasons, for example, for customer profiling. This form of profiling may result in information (or its outputs) being inaccurate, misused or misinterpreted and potentially cause harm to the business and/or the data subjects associated with it. The information may also be used for more illicit reasons including fraud and identity theft. Law enforcement agencies already have access to the data and are conducting a range of detection activities in a professional manner. Borrowers would not expect their personal data to be disclosed pursuant to a FOIA request. The release of information that identifies individuals who have taken out a loan has the real potential of causing further harm and distress to those individuals.

If it were necessary to identify, locate and extract personal data, this would amount, at a conservative estimate to 25,000 hours of work.

Spotlight submits that the relevant date for the purposes of this appeal is the date of the internal review – 8 October 2020.

Spotlight relies on only facts and matters that either existed at the date of the refusal and/or are relevant in that they throw light on the grounds given for refusal. The fact that publication under the EU Transparency Framework started months after the refusal does not render it irrelevant for the purposes of this appeal. The obligations were already in place at the date of refusal.

The time spent redacting exempt information is not one of the activities specified in 4(3) of regulation 4(3) of the Freedom of Information and Data Protection (Appropriate Limit and Fees) Regulations 2004.

In light of the considerable public interest considerations in favour of disclosure, providing the requested information would be a wholly proportionate exercise.

Spotlight notes that both the BEIS Counter Fraud Team and NATIS are functions within BEIS. BBB has not explained whether this argument applies to Borrowers below the EU transparency threshold or whether disclosure of the names of those Borrowers did in fact increase the potential for fraud.

The alleged increase in the potential for fraud does not prejudice the ability of law enforcement to protect or detect crime.

The GDPR only applies to data relating to individuals acting as sole traders, employees, partners, where the information relates to them as an individual rather than as the representative of a legal person. In the alternative disclosure is necessary for the purposes of legitimate interests.

Section 5 of the Data Protection Act 2018 provides that, ‘The listed GDPR provisions do not apply to personal data consisting of information that the controller is obliged by an enactment to make available to the public’. Spotlight's submission is that the BBB is obliged to make available the names of loan recipients pursuant to FOIA.

The need to provide evidence, rather than speculation, of prejudice to the commercial interests of a third party is well-established in authority and clearly set out in guidance. BBB's failure to produce evidence or consult those allegedly affected is not the inevitable consequence of there being a large number of entities with whom it could consult about the potential prejudice. The BBB failed to meet the evidential threshold to demonstrate the alleged prejudice to commercial interests and appears to have failed to consult with any of the entities it claims would be prejudiced.

In relation to BBB’s assertion that disclosure would lead to, for example, speculation about a business’ financial position, Spotlight submits that the specific context of Covid loan schemes is significant.

The Commissioner and the Tribunal routinely resist the argument that the information should be withheld in order to prevent it being misinterpreted by the public.

BBB's assertion that disclosure would allow competitors to produce profiles of Lenders and thus prejudice the Lender’s competitiveness in the market is speculative.

Any failure by BBB and/or commercial Lenders to communicate the implications of a government-backed loan or anticipate the public interest in disclosure cannot be relied on to evade disclosure under FOIA. Companies are more likely to be prepared to accept greater public access to information about them where they receive heavily subsidised government-backed loans.

‘The Government’ has no commercial interest in introducing such financing schemes, which are not intended to generate profit for the Government but to protect private businesses, employment and the economy. Spotlight agrees with the Commissioner who was not persuaded that the private sector would refrain from engagement in in future schemes, particularly if the circumstance of similar guarantees were in place.

BBB's Response predicates the willingness of investors to work with the BBB on conditions of secrecy, in circumstances where billions of pounds of public money have been lost as a result of poor due diligence, inadequate counter-fraud measures and other failings by the BBB. Spotlight invites the Tribunal to consider whether the argument for the continuation of secrecy in the present circumstances serves the public interest.

The purported risk of prejudice is not very significant and weighty.

Withholding the information significantly reduces transparency and accountability about public spending, in respect of a scheme estimated to cost the public purse billions of pounds during a public health emergency and looming economic crisis. Lord Agnew, the Minister with oversight of counter-fraud, resigned partly as a result of the lack of transparency around the loan schemes.

BBB claims that aggregated data will show the extent to which taxpayers' money may be utilised. The BBB’s argument that events subsequent to the refusal are irrelevant seems to be deployed only to the extent that it supports its position. In any event, the requested information contains new material that would help inform a very important public debate.

BBB acknowledges that the speed of the introduction of the Schemes, the number of loans and substantial amounts of money have given rise to concerns about the risk of fraudulent applications by Borrowers and possible rates of default, and that it is possible that the release of the names of the Borrowers could potentially help law enforcement agencies and other third parties to identify and investigate possible cases of fraud as the information is interrogated by the public.

The administrative costs of the three business loan support schemes will amount to £75 million by the end of 2024-2025, with a cost of f20 million for the year ending 2020-2021.

A recent investigation published by The Times on 26 April 2022 found that suitcases filled with money from Covid loans had been seized at the border, that other loan recipients used the money to fund gambling sprees, home improvements and to pay for luxury cars and watches. The Guardian recently reported that an estimated £4.9 billion of the £47 billion awarded on BBLS will be lost to fraud, and another £12 billion will not be recovered. A report dated 23 February 2022 by the Public Accounts Committee said that the estimated losses due to fraud and error across all Covid response measures is estimated to be at least £15 billion.

Spotlight submits that there is a plausible suspicion of wrongdoing by BBB and disclosing the information would serve the public interest by enabling a proper assessment. Publication would directly increase accountability and help lessons to be learned and shared across Government.

BBB were so concerned by the risk of fraud in BBLS that they wrote a formal Reservation Notice to the Secretary of State for BEIS, warning of the significant fraud and credit risks.

BBB significantly overstate the efforts being made by BBB and wider Government to tackle fraud and financial crime.

Disclosure information would enhance the Government’s efforts to ensure justice, counter-fraud, and recover losses, enable public scrutiny, increase investigative capacity and shed light on the role of commercial Lenders.

BBB’s characterisation of the potential for civil society to assist in the prevention of fraud as ‘essentially vigilante investigation’ overlooks the many occasions on which civil society organisations and other actors have identified wrongdoing by public authorities or private entities.

The Pearce Request was made on 27 August 2020 in the following terms:

BBB replied on 23 September 2020 withholding the information under section 43 ( commercial interests).

BBB upheld its decision on internal review on 22 October 2020 relying in addition on section 41 (information provided in confidence).

Mr Pearce referred the matter to the Commissioner on 23 October 2020.

During the course of the Commissioner’s investigation, BBB withdrew its reliance on section 41 and sought to rely on section 21 and section 22 on the basis that the names of some companies had been published.

In a decision notice dated 14 February 2022 the Commissioner decided that section 43(2) was engaged and that the public interest favoured maintaining the exemption. The Commissioner decided that section 21 and section 22 were not engaged.

As section 21 and 22 are not within this Appeal we will not set out that part of the Commissioner’s decision.

The Commissioner noted that those benefiting from FFS loans were made aware of BBB’s obligations under FOIA and that those companies converting the FFS loan into equity will have their names published. He considered that there was an intention to disclose converting companies’ names and therefore full disclosure at the time of the request would subsequently have allowed the public to make assumptions about those business names not subsequently published. For example those company names not published as converting their FF loans into equity could be assumed to have been less successful and as a result may be commercially prejudiced.

The Commissioner considered that BBB’s comment regarding the receipt of a FFS loan having the connotation of a "bail out" could apply to all the companies prior to the intended publication.

The Commissioner accepted that identification of the businesses could allow for disclosure of the other Lenders who had invested in the business. If the business is commercially prejudiced then its investors would be commercially prejudiced.

The Commissioner was satisfied that the potential for creating hesitancy or reluctance of private sector investors to work with BBB was sufficient to demonstrate that BBB’s commercial interest were likely to be harmed.

The Commissioner was satisfied that the harm alleged by the BBB related to the commercial interests of some if not all of the different groups cited.

The Commissioner considered that BBB had demonstrated that there were circumstances in which commercial prejudice could arise. He also considered that BBB had demonstrated that the consequences of disclosure could not be seen as trivial. He was satisfied that the prejudice claimed was real and of substance for at least some of the parties.

The Commissioner agreed with BBB that amongst the number of loan recipients there is a real and significant risk of prejudice to at least some of the recipients, other Lenders and the BBB.

Accordingly the Commissioner concluded that section 43(2) was engaged.

The Commissioner considered the public interest test was finely balanced. He noted that there was a significant argument in favour of disclosure due to the unprecedented circumstances and the large sums of public money concerned. However, in assessing circumstances at the time of the request in the light of the future disclosure planned at that time and subsequent developments in publishing information, the Commissioner considered that this must be taken into account alongside the likely commercial prejudice to many parties. On balance the Commissioner concluded after much deliberation that the public interest test favoured maintaining the section 43(2) exemption.

The Grounds of Appeal are, in essence, that the Commissioner was wrong to find that section 43(2) was engaged, and was wrong in his assessment of the public interest balance.

In the grounds of appeal Mr Pearce makes the following points:

The Commissioner maintains that the alleged harms are relevant to the applicable interest within section 43(2) FOIA. It is in the commercial interest of a business to ensure customer and Lender confidence, and any loss of such confidence and any resulting loss of trade could in in turn be commercially prejudicial. Likewise it is in BBB's commercial interest to ensure private sector engagement.

The Commissioner noted in the Decision Notice that those benefitting from the Future Fund loans were made aware of BBB’s obligations under FOIA.

The Commissioner submits that the loss of confidence in trading with or investing in loan recipients, associated commercial prejudice to other Lenders and potential reluctance of investors to work with BBB are all prejudices that are real, actual and of substance.

It is clearly a real risk that a company, including one which is pre-revenue/pre-profit, could suffer commercial prejudice, in turn prejudicing investors in that company, if it were to become public that it had received funding during the pandemic but then did not manage to convert the loan into equity for the reasons set out by BBB. It is not fanciful to suggest that some individuals may not wish to conduct business with/invest in a company which is perceived to be struggling. Whether those prejudices are likely to arise, or have already arisen is a matter of evidence for the next criterion.

It is not a stretch of logic to consider that investors or customers would be reluctant to engage with a business if it had secured a pandemic loan, indicating financial vulnerabilities, and accordingly that at least some of the recipients and Investors would be prejudiced, even if they are in pre-profit or revenue. Similarly he does not consider it to be a remote possibility for some private sector investors to be reluctant to work with the BBB as a result of disclosure.

The Commissioner accepted that demonstrating prejudice will sometimes, by its very nature, be a speculative exercise, and on the facts of this case BBB has provided sufficient submissions and evidence to demonstrate that commercial prejudice would have been likely to have been caused to at least some of the parties at the time of the request.

Whilst finely balanced, the Commissioner maintains that the public interest favours non-disclosure. The Commissioner ultimately accepts that if the names of the companies were disclosed it would be likely to cause commercial prejudice to at least some of the parties identified by the BBB, especially given the number of loans provided.

BBB maintains its reliance on section 43(2). BBB no longer seeks to rely on section 21 and section 22.

Disclosure of the names of FFS Borrowers would be likely to prejudice the commercial interests of the Borrowers, Lenders and/or BBB/UKK FF Nominees Ltd.

In relation to Borrowers BBB identifies four causal mechanisms by which the relevant prejudice was likely to arise. These are set out in its response to the Spotlight appeal above.

In relation to Lenders BBB identifies three causal mechanisms by which the relevant prejudice was likely to arise. The first two are set out in BBB’s response to the Spotlight appeal above. The third is that where Lenders have invested in FFS Borrowers, the Lenders have a commercial interest in the success of the FFS Borrower and if the commercial interest of the FFS Borrower is prejudiced so too will the commercial interests of the Lenders be prejudiced.

In relation to BBB/UK FF Nominees Ltd, BBB identifies two causal mechanisms by which the relevant prejudice was likely to arise. These are set out in the response to the Spotlight appeal above.

BBB’s position is:

A public authority (and a requester) may develop their arguments and evidence before the Commissioner and the Tribunal. They are not limited to arguments raised in the refusal notice or internal review.

An appeal to the Tribunal is a complete re-hearing and the Tribunal stands in the Commissioner’s shoes, so any procedural defects in the Commissioner’s investigation are irrelevant.

When combined with the context of the Request the names would disclose that a company had received an FFS loan, which clearly is a matter of commercial significance and sensitivity.

BBB's reliance on section.41 is an irrelevant matter as BBB no longer seeks to rely on that exemption.

The explanation of how prejudice to commercial interests would be likely to arise is cogently reasoned and not inappropriately speculative.

There is no rule of law that a public authority must always provide evidence to the Commissioner of consultation with third parties whose commercial interest is likely to be prejudiced by disclosure in order to establish commercial prejudice. What is sufficient evidence, in the particular circumstances of a case, will always be a matter for the Commissioner (or the Tribunal on appeal) to determine.

BBB could not sensibly be expected to consult with hundreds of individual FFS Borrowers, particularly in light of the tight statutory deadline for responding to a FOIA request. Indeed, had BBB sought to consult a small sample it would doubtless have been criticized by the Appellant as relying on an unrepresentative sample.

BBB did inform FFS Borrowers of its intention to publish the names of FFS Borrowers whose loans had converted. Even that was met with expressions of concern. It is reasonable to infer that FFS Borrowers whose loans had not converted would be at least equally concerned about disclosure

FFS Borrowers or Investors cannot sensibly be said to have accepted that their information would be disclosed under FOIA without regard to the application of exemptions. In reality, the point about Borrower/Lender knowledge of FOIA raised by the Appellant is thus entirely neutral - the key question is whether the section.43(2) exemption is properly engaged in this case.

The CLAs under FFS were not conventional loans. First, FFS applicants would (at the time) have been very unlikely to obtain a conventional loan due to their lack of revenue (indeed, if they could obtain a conventional loan they would have done so, as the terms would have been more favourable than the FFS). Second, the Scheme was aimed at companies who could not get the equity that would usually have been available in the market due to COVID restricting the appetite of venture capitalists, etc. An FFS loan could properly be seen to be akin to a “bail out”.

Disclosure would be likely to prejudice the commercial interests of FFS Investors, notwithstanding that it is Borrower names that the Appellant seeks to be disclosed.

On the contrary, companies in such a position are likely to be in a weaker position and less able to weather the adverse effect of disclosure. Even if a company is not generating revenue or profit, it may still suffer a commercial impact if its losses are increased or the point at which it will make a profit or generate revenue is delayed.

The Commissioner expressly recognized that FFS involved the investment of a significant amount of public money, saying that ‘cannot be easily dismissed’ and recognized ‘a significant argument in favour of disclosure due to the unprecedented circumstances and the large sums of public money concerned.’

He quite properly balanced that against the commercial prejudice that disclosure was likely to cause and the extent to which the public interest was already met by other information being published.

FFS loans are not simply government funding - they include at least half by way of commercial loans from private sector Investors with genuine and legitimate commercial interests of their own.

BBB has failed to consult with Borrowers. The FOIA Code of Practice and the Commissioner’s guidance states that public authorities should consult with third parties where disclosure may potentially prejudice a third party’s commercial interests.

The Commissioner’s guidance for organisations states that ‘if the organisation proposes to withhold information because the disclosure would, or would be likely to prejudice a third party’s commercial interests, it must have evidence that this this accurately reflects the third parties’ concerns. It is not sufficient to simply speculate about the prejudice which might be caused. The authority needs to consult them for their exact views in in all but the most exceptional circumstances.’

No evidence has been provided that that BBB consulted any of the FF investee companies or the FF private Investors nor has it provided any evidence of exceptional circumstances pertaining in in this this case.

In the absence of any such consultation, it is not it is not for the BBB, the Commissioner, Mr. Pearce or anyone else to second guess whether the third parties’ commercial interests are prejudiced or not.

The investee companies applied for a loan in full knowledge that commercial information might be disclosed. This indicates that they perceived no prejudice to their commercial interests from disclosure, or none sufficient to deter them from applying.

Such a request can reasonably be defined as being at the lowest or most basic level of commercial information, therefore not likely to prejudice any commercial interests or, at least, not significantly.

If there is no evidence from the investee companies that their commercial interests are prejudiced by the disclosure of their names, then it follows that there is no evidence of prejudice to the commercial interests of the private Investors nor, nor, by extension, to the BBB. It is difficult to envisage any circumstance in which private Investors would not wish to engage with BBB.

A loan that has just been made by BBB would not be likely to be regarded as a bail out, on the reasonable assumption that BBB would have carried out at least a modicum of due diligence on behalf of the tax-payer.

Investee companies do not have to convert their loan to equity until the end of the 36 month loan term, and the earliest this can occur is March 2023. Until then, there is no evidence available on which anybody would be able to speculate whether a company is struggling or not arising from the request.

At the end of the loan period, some of the investee companies will have converted their loans to equity (295 of the 1190 as at December 2021) and reported to Companies House; their details will also be published by BBB. Other companies may have repaid their loans, and others may have ceased trading. Publishing the company names at the outset, will have no effect on any of these outcomes.

Mr Pearce refutes the suggestion that customers, suppliers and competitors will use the list of company names either to avoid trading with them or to gain competitive advantage. In reality, a customer does not pause to consider whether that that company is in receipt of a FF loan and still less do they consider whether it has received a loan but not converted it to equity before making a purchase. The same applies to suppliers; if they are paid for what they supply, a FF loan would be no reason for them not to trade with that company. With regard to competitors, the appellant contends that that there is no evidence that that there is a competitive edge to be gained from knowing a competitor has received a FF loan.

Mr Pearce contends that, that, while it might be reasonable for a public authority to develop arguments to support its case, that should only occur once a sound basis for refusal under FOIA, has been established. In this case, that did not occur.

Mr Pearce reiterates his submission that section 41 is relevant to this appeal.

Without consultation with Borrowers, BBB’s case for relying on section 42(3) is unconvincing as it entirely based on speculation.

Both the Commissioner’s guidance and Part 1 FOIA s45 Code of Practice are relevant. Mr Pearce has legitimately drawn them to the Tribunal’s attention for its consideration.

Mr Pearce disagrees that he would ‘doubtless have criticised the BBB for consulting an unrepresentative sample of Borrowers', when that is clearly the diametric opposite of what he says.

BBB has had time to consult a a sample of FFS Borrowers to support its case, something which other tribunals have considered essential in order to establish whether commercial interests would be prejudiced or not.

BBB states it received an adverse reaction when it informed FFS Borrowers that it intended to publish the names of those whose loans had converted to equity. BBB gives no details of when this occurred nor how many Borrowers it informed. What concerns were expressed, and how many such expressions were there? None of this information is provided, and we can assume the expressions of concern were allayed (or ignored), given that that BBB publishes a rolling programme of the names of Borrowers whose loans have converted to equity. Furthermore, it is impossible to infer from an unspecified response to one question by an undefined audience, a similar outcome to a different question from a different audience.

If no prejudice to the commercial interests of the Borrower has been established, then there can be no prejudice to the commercial interests of the private Lender.

The names of FFS Borrowers who do not convert their loans to equity will, forever remain secret from the public who lent them the very considerable amount of money. Nobody knows what proportion of companies will convert.

Mr Pearce accepts that FFS loans are not simply Government funding and that they involve up to 50% of the funding from private Lenders. None of the private Lenders’ commercial interests are prejudiced by the request, and BBB has provided no evidence that they would be. be. The Government, on behalf of the taxpayer, is the major Lender and the private Lenders are the lesser.

Section 43(2) provides:

‘Commercial interests’ should be interpreted broadly. The ICO Guidance states that a commercial interest relates to a person’s ability to participate competitively in a commercial activity. 

The exemption is prejudice based. ‘Would or would be likely to’ means that the prejudice is more probable than not or that there is a real and significant risk of prejudice. The public authority must show that there is some causative link between the potential disclosure and the prejudice and that the prejudice is real, actual or of substance. The harm must relate to the interests protected by the exemption. 

S 43 is a qualified exemption, so that the public interest test has to be applied.

In considering the factors that militate against disclosure the primary focus should be on the particular interest which the exemption is designed to protect.

The APPGER case gives guidance on how the balancing exercise required by section 2(2)(b) of FOIA should be carried out:

The Tribunal’s remit is governed by section 58 FOIA. This requires the Tribunal to consider whether the decision made by the Commissioner is in accordance with the law or, where the Commissioner’s decision involved exercising discretion, whether he should have exercised it differently. The Tribunal may receive evidence that was not before the Commissioner and may make different findings of fact from the Commissioner.

The issues for the tribunal determine in the Pearce appeal are:

The following list of issues in the Spotlight appeal was agreed between the parties.

We read an open and a closed bundle. We were provided with a small number of additional documents during the course of the hearing, all of which related to the Spotlight appeal only. These documents were added to the open bundle.

The closed bundle consists of:

The closed witness statement of Alice Carpenter simply exhibits the attached documents. A redacted version of those documents appears in the open bundle. The tribunal was satisfied that it was necessary to withhold the redacted information under rule 14.

We read open witness statements and heard oral open evidence from:

Alice Carpenter confirmed her closed witness statement in a short closed session. The gist of the closed session was given in open session as follows. Ms Carpenter confirmed that her closed statement was true. She was taken to an example document in the closed bundle and confirmed that it was a redacted version of a document in the open bundle. There were no further supplementary questions from Mr Cornwell, no questions from the tribunal and no closed submissions.

Both parties to the Spotlight appeal made submissions on parliamentary privilege, but ultimately were broadly in agreement as to the relevant principles and this ceased to be an issue.

The request is clear and unambiguous. It asks for the names of companies. The letter to the Secretary of State on 16 June 2020 (OB579) from the CEO of Spotlight and others refers to companies. The request for an internal review refers to the names of companies.

The FOIA request was narrow. It was limited to the names of companies. The tribunal must focus on the alleged risk of prejudice arising out of the specific category of information requested.

These are fundamentally not routine commercial transactions. The parties entering the schemes would not have viewed them as routine two party transactions akin to any other private financial transaction. All loan recipients would have reasonably understood that the relationship was between the government, the lending bank, and the company itself as a recipient of state aid, and that this amounted to a different financial arrangement with different expectations as to confidentiality, reporting and transparency.

Borrowers should have been clear that there were entering into a loan scheme with a public body, given the contents of the information that had to be provided to them by the Lender, including the link to BBB’s privacy notice. Borrowers had been notified that BBB was a government development bank wholly owned by the Treasury, that state aid requirements applied and that obligations arising from FOIA may have flowed from their involvement in the scheme.

Therefore in relation to CBILS, CLBILS and BBLS disclosure cannot cause a real and significant risk of prejudice by way of damage to the trust that Borrowers place in Lenders and the other claimed prejudice to Lenders and BBB that is said to flow from that, or by way of Lenders being deterred from engaging with similar initiatives in the future.

The assumption that consumers, suppliers and members of the public would draw adverse inferences from the fact that a company had taken out a loan under one of the schemes which would lead to commercial prejudice is wrong and not supported by the evidence.

Therefore in relation to CBILS, CLBILS and BBLS disclosure would not be likely to cause a real and significant risk of prejudice by way of attracting negative and damaging speculation about a company’s financial position and the other claimed prejudice to Lenders and BBB that is said to flow from that.

The chain whereby the Lender could be identified is remote and depends on a series of assumptions including that the Borrower took out the loan from the bank from which it had existing security which was available on Companies House. Even if the Lender is identified the alleged prejudice is remote.

In relation to FFS, it was clear on the documentation provided that information might be released under FOIA. In relation to any adverse inferences that might be drawn merely from having been part of FFS, this is based on the same wrong assumption unsupported by evidence dealt with above.

In relation to adverse inferences that might be drawn because a company had not converted to shares, this is a prejudice that might arise in 18 months time if and when companies converted to shares.

In relation to the identification of Lenders/Investors, the chain is similarly remote.

If the exemption is engaged, it is only weakly engaged.

Spotlight relies on the following factors in favour of disclosure:

Given our findings on section 43 it is not necessary to set out Spotlight’s submissions on this issue.

Spotlight accepts that personal data, if within the scope of the request, would be exempt.

Given our findings on section 43 it is not necessary to set out Spotlight’s submissions on sections 12 and 14.

At the beginning of his oral submissions Mr Cornwell indicated that he had had instructions that BBB had been alerted to complaints that had been received by UK Finance while these proceedings were ongoing. Mr Cornwell stated that he could recall one of his witnesses if the tribunal preferred him to have a witness deal with that point. The Judge indicated that it was a matter for Mr Cornwell if he wished to apply to recall a witness at this stage in the proceedings and at present there was no evidence on that point before the tribunal. Mr Cornwell did not make an application to recall any of the witnesses.

The tribunal should focus on the requested information, i.e. the names of companies who have received these loans, when considering what disclosure would contribute to the objective of transparency and what prejudice it would be likely to cause.

It is not the role of the tribunal to determine whether the Government or BBB acted appropriately in relation to how it set up the four schemes.

In relation to the potential losses, these are only estimates and these have gone down over time. The tribunal is entitled to take account of evidence of later estimates to assess the public interest in disclosure at the time. It is important to distinguish the different potential types of loss: credit loss, fraud and error cannot be lumped together.

When considering the costs of the scheme, it is important to take account of the costs of what would have happened had nothing been done. There is evidence in the IPSOS MORI report in relation to those potential consequences.

In relation to parliamentary privilege, parliamentary material cannot be used a shortcut to evidence. It is appropriate to rely on the fact that matters had been considered by parliament without going into the details of what was said or decided.

It is important to remember the context in which the decisions were made to introduce the schemes in this way and at this pace. There was a very real fear of grave economic damage unless urgent action was taken. This meant that the schemes had to be set up and implemented very quickly, that funding had to be delivered very quickly and that there was limited opportunity to engage in the normal data gathering and assessment.

The core of CLBILS, CBILS and BBLS is private sector Lenders providing their own money by way of loans to businesses, often to existing customers who had sometimes already taken out loans or other types of finance with that Lender. In relation to CLBILS and CBILS the Lender holds an element of the risk of default.

There is a contingent risk to public funds, but this is a contingent risk and an estimated figure, and those estimates have gone down over time (as have the estimates as to fraud risk). This is not a government grant.

The upfront costs of fees, interest payments for the first year (CBILS and BBLS) and administrative costs are substantial sums but a relatively small proportion of the overall figures.

FFS does involve government funds directly, but at heart there was a conventional financial instrument. This was not a grant and had to be at least matched by a private Investor.

The question for the tribunal is: objectively, in a common-sense manner, what would a reasonable public authority have understood the request to mean? It was reasonable to interpret the request as colloquially referring to businesses or firms rather than literally to incorporated companies. This is supported by later correspondence from Spotlight. This was how the Commissioner understood the request.

Commercial interests have a wide definition.

There are three fundamental mechanisms:

In relation to negative speculation, the evidence of Mr Bearman, Mr De Monchy and Ms Shepperson was that receiving a loan had the potential to be regarded as an indication that a business was in trouble. This flows from the preconditions for the loan – that the business had to be adversely affected.

Some might regard it positively, but there are a sufficient number of people who would not. It is a realistic possibility that it would be regarded as a bad thing. Other entities might look on the business as an unacceptable credit risk, not provide supplies to that business or cut back on the credit provided. Businesses may be subject to unwarranted criticism for taking out a loan.

If the Borrower’s reputation and status is undermined this will affect the company’s market value.

In relation to the confidence of Borrowers in their Lenders, the route by which the Borrower would become aware that FOIA would apply was tenuous. Small businesses would not be aware that FOIA could be engaged. Even if companies knew that information might be disclosed, they would be aware that exemptions apply and it may well not be disclosed. The deterrent effect can properly be taken into account.

In relation to unwarranted targeting by fraudsters and others this is not dependent on reputation or the loss of confidence.

Prejudice to the commercial interests of Lenders flows from the damage to the trust placed in Lenders by their Borrowers. Confidence is undermined in Lenders and the financial services industry as a whole. There are resource implications in dealing with complaints.

Lenders who are known to have participated in these schemes will suffer prejudice through being associated with the mass disclosure of data.

If a Borrower had previously taken out a loan with a Lender which appears on Companies House, and, assuming that the Borrower had taken out a Covid loan with the same Lender, then publishing the name of the Borrower would allow the Lender to be identified with a reasonably high degree of confidence. The evidence was that the majority of Borrowers took out Covid loans with existing Lenders.

Once the Lender is identified, that information could be used to build up an overall picture of, for example, the type of sector that the Lender lends to, and could be used by competitors to the disadvantage of the Lender.

The prejudice to BBB/BEIS flows from Lenders being deterred from engaging with BBB in the future as a result of the disclosure of this information. This would impede the Government’s ability to set up a similar scheme in the future.

BBB/BEIS are likely to have to spend time dealing with complaints from Borrowers if they suffer commercial prejudice.

There is an increased risk that companies will go under as a result of commercial prejudice and be unable to repay their loans. The Government will therefore have to be called upon to pay the guarantees.

There is likely to be speculation and concern about the financial standing of the business that took a loan under FFS. FFS Borrowers are likely to be at an early stage and either pre-revenue or pre-profit and reliant on further external funding to continue trading. Investors often act on the basis of gut instinct.

Once the FFS loan has converted to equity when the company has raised further equity, it would generally be recognised that a company is succeeding. Once the names of FFS Borrowers that had converted to equity were published, this would be an indication of the other FFS Borrowers’ relative lack of commercial success.

Disclosure would be likely to damage the relationship between Investors and the BBB, because it would undermine the confidentiality of their investment relationships, when they had brought the FFS Borrower to the FFS scheme.

Publishing the names of FFS Borrowers would enable Investors to be identified using information on Companies House. In some cases, Investors are also shareholders in the FFS Borrower company. A shareholder listed on Companies House may well be the Investor in the FFS scheme. This would enable information about the Investors to be ascertained and could affect the relationship between BBB and the Investors.

Investors would be deterred from working with BBB. The prospects of FFS Borrowers’ businesses failing would be increased.

The exemption is firmly engaged. There is a strong public interest in preventing prejudice to commercial interests, particularly where Borrowers were in a financially and commercially vulnerable position because of the pandemic.

There is a strong public interest in maintaining commercial confidentiality, as reflected in the principle of confidentiality between a bank and their customer, and maintaining Borrowers’ confidence in their Lenders to respect the confidentiality of their information.

The schemes did involve a substantial amount of public money, but some of the bigger figures are purely estimates and it would be wrong to infer that these amounts will actually be called upon.

There is nothing sinister about the fact that CBILS was rolled out before Commission approval.

In relation to the transparency requirements in the Temporary Framework and the Umbrella Notification, the Commission ultimately accepted that the requirement in the Temporary Framework rather than the Umbrella Notification applied. To the extent that there is a public interest in disclosure it is met and addressed by the requirements of transparency under the transparency framework.

Mr Clarke’s evidence on the public interest in allowing scrutiny and fraud prevention by civil society was based on a misunderstanding. Almost every step that was suggested by Mr Clarke to prevent fraud had been taken by BBB. Some of the steps took time to implement, given the urgency of the situation.

There was an anticipation at the relevant time that there would be a National Audit Office assessment and a House of Commons Public Accounts Committee assessment. This very substantially addresses the public interest in understanding how these schemes operated.

Given our findings on s 43 it is not necessary to set out BBB’s submissions on section 31.

Given Spotlight’s concession and our findings on the scope of the request, it is not necessary to set out BBB’s submissions on this issue.

Given our findings on section 43 it is not necessary to set out BBB’s submissions on sections 12 and 14.

The complaint in relation to section 41 is misconceived. The hearing of the appeal is a full re-hearing.

The evidence of Keira Shepperson should carry considerable weight. Whilst BBB accepts that the third-party evidence was not specifically addressed to FFS, Ms Shepperson’s clear evidence was that the same considerations, e.g. in respect of the mechanisms by which adverse effects would be likely to be caused to Borrowers’ commercial interests applied to the FFS as well as to the other three Schemes.

Assessment of whether prejudice would, or would be likely to, arise involves an evaluative assessment looking ahead to a hypothetical future in which disclosure of the requested information occurs. Inevitably, that involves a degree of speculation as the public authority (and the Commissioner or Tribunal on appeal) will be considering a situation that has not (yet) occurred.

It is not part of BBB’s case that the Tournier principles apply to BBB in its role in the FFS. Regardless of BBB’s legal status, a CLA under FFS is still a commercial contract entered into in the venture capital market. In respect of FFS, BBB’s case is that parties to the CLA (Borrowers and Investors) would reasonably expect conventional commercial confidentiality to apply in respect of their investment relations.

Ms Shepperson accepted that the risk to BBB under the FFS was broadly the same risk as venture capital. However, successful FFS investments through BBB convert into equity, generating a shareholding for BEIS, and hence the taxpayer. As Ms Shepperson explained in her oral evidence, conversion is generally recognised in the venture capital market as a sign of success for a business. A large number of FFS investments have, in fact, already converted (notwithstanding the challenging financial circumstances in 2020-2021) - more than one third of the total as at 30 June 2022.

From the information provided in the FAQs a reader would properly understand that the information that BBB held was subject to FOIA, but that commercially sensitive information could be exempt from disclosure. They could reasonably expect that BBB would seek to withhold information that was properly exempt under section 43(2) FOIA. That is not to elevate the section 43(2) exemption into an absolute exemption. Rather, Mr Pearce’s argument that Borrowers had thereby accepted that their information would be disclosed (if requested) makes the opposite error that if an exemption is not absolute then it is no exemption at all – that is simply to ignore section 43(2) FOIA. And simply establishing that Borrowers knew that FOIA “might” apply takes the appellant nowhere with his argument.

The fact that one business, in one particular sector, apparently considers that it is in their interests to publicise the fact that they have received a FFS loan does not mean that this is true for every business (or, indeed, most businesses) that received a FFS loan.

The tribunal has read and taken account of the submissions to the extent that they are relevant to the issues it has to determine. The following are the most relevant points.

Given the tribunal’s conclusions on the relevance of section 41 to this appeal, it is not necessary to set out Mr Pearce’s submissions on this issue.

It does not matter how many third parties are involved; if there is no evidence before the tribunal from a single one of them as to whether its commercial interests, would, or would be likely to be prejudiced. BBB has also failed to consult with a representative sample. There is no evidence before the tribunal on which it can base its judgment with regard to prejudice to commercial interests.

If BBB can simply ignore the Code of Practice and Commissioner’s guidance, what is their point?

Speculation is speculation whether it is ‘cogently reasoned’ or not and Mr Pearce argues that it is not cogently reasoned in this case.

There is evidence from the one company identified by BBB in its correspondence with the Commissioner that shows that the arguments about prejudice are wide of the mark.

The 1924 Tournier principles about customer/bank confidentiality do not apply to the BBB, as it is not a banking institution. The Lender and the Borrower in FFS have a direct financial relationship with BBB under contractual arrangements which clearly state they are subject to FOIA requests. Rather than legitimately regarding the public disclosure of their commercial information as a violation of their trust, the Investors and Borrowers should expect the reverse with regard to FFS.

BBB’s statement that it did not consult the companies or private sector Lenders with regard to the FOIA requests because ‘we considered the loan to be a commercial contract carried out with the level of confidence normally afforded to such arrangements between commercial entities’ is implausible and contradicts its acceptance that the FFS CLA confirms BBB’s obligations under FOIA to disclose information when it is required to do so.

The information given about FOIA to FFS applicants states unambiguously that FOIA applies. It was made clear at the outset that FOIA requests might be made.

BBB was acting as a de facto venture capital company with tax payers money. This is an extremely high risk investment.

The third parties were not consulted about FFS. Comments made about BBLS. CBILS and CLBILS cannot be ascribed to FFS given the significant differences between the schemes. Further, the Cooperative bank does not operate commercial bank accounts; UK Finance only represents 300 out of 100,000 banking and finance industry firms; and there is no evidence that the CBI was consulted or consulted its members about FFS, and it is unlikely that FFS Borrowers would be members of the CBI. The Lenders whose identities are redacted refer only to BBLS, CBILS or CLBILS.

An Investor would receive the benefit of public money if it is a shareholder or becomes one when the company converts.

Para 45 of Ms Shepperson’s witness statement is contradictory in relation to whether Borrowers were made aware of the possibility of FOIA requests.

In relation to the example of a journalist seeking to investigate a high profile media personality, this does not relate to FFS and should be discounted. Further, it should not be surprising that a high profile media personality would attract media attention.

BBB rely on one specific example of media reporting on a company that had received a FF loan which could have resulted in loss of business and/or companies being persuaded not to consider Government loans or BBB schemes. Mr Pearce submits that this particular company has courted publicity, describing itself as the ‘pin-up’ of FF companies, and does not appear to have suffered any adverse financial consequences having had no difficulty raising over £1 million at its next fundraising event. The single example of a FF company referred to by the BBB and the Commissioner shows no prejudice to commercial interests whatsoever and, in fact, demonstrates the opposite outcome to that speculated by the BBB and accepted by the Commissioner.

Mr Pearce does not accept that his complaint in relation to section 41 is misconceived. A complete rehearing includes exemptions relied on then abandoned.

The tribunal should not accept BBB’s submission that the witness statement of Ms Shepperson carries considerable weight. Ms Shepperson cannot be regarded as impartial, and the evidence from third parties that she relies on did not relate to FFS. Her evidence should be treated with circumspection.

BBB has not made any effort to obtain the views of FFS Borrowers, contrary to its own rubric, the Commissioner’s guidance and the Code of Practice, and rely instead on speculative arguments which Mr Pearce submits are far from logical, coherent or properly evidenced.

The evidence before the Tribunal is that 2206 companies applied independently for FFS loans in the knowledge that FOIA requests could be made and that commercial information might therefore be disclosed.

The Appellant contends that Borrowers and Lenders should expect the reverse of commercial confidentiality, given that the loan involves the investment of taxpayers’ money and the BBB is not a banking institution in the commercial sense.

Approximately 800 companies, i.e. two thirds of the total, had not converted at what is the two thirds stage of the loans. It is anybody’s guess how many more will convert by the end of the loan periods in 2023. Venture capital statistics, and the view expressed by the non-executive Director of the BBB quoted by Mr Pearce, do not augur well.

There should be no circumstance in which the public should be denied knowing the names of private commercial companies in which the public’s money has been invested by a publicly-funded organisation such as the BBB.

Mr Pearce does not argue that Borrowers have accepted their information would be disclosed if requested, as suggested by the BBB. He simply points out that FOIA requests might be made and that, consequently, commercial information could be disclosed.

The only reason why Mr Pearce referred to the details of one particular company is because this company was relied on as evidence by BBB.

We have not been assisted by the decisions of other first tier tribunals referred to by any of the parties.

The relevant date for determining the public interest is at the date of the response to the request. In the Spotlight appeal the response was on 4 August 2020. In the Pearce appeal the response was on 23 September 2020.

The question of whether it was right as a matter of policy to introduce these particular schemes at all, at this speed or in this manner is not a matter for this tribunal.

The policy decisions taken did, however, have consequences that are relevant to our decision. The following extract from the BBB Process Evaluation and early impact assessment from June 2022 (the June 2022 impact assessment) highlights some of those consequences:

The schemes involved the direct expenditure of significant amounts of public money:

The initial estimates for losses from fraud and error from BBLS were extremely high. The precise figure is uncertain and an evolving estimate that has come down over time. It remains and is likely to remain very significant.

The June 2022 impact assessment states as follows at p 11 (p 2013 of the open bundle):

There was a credit risk to the Government of the money loaned directly under FFS and up to the extent of the guarantees in relation to BBLS (100%), CBILS (80%) and CLBILS (80%).

We note that under FFS, BBB was effectively taking the role of a venture capital investor, an investment that inherently carries a high risk.

The estimates of potential losses for the Government, whether due to fraud, error or credit losses, are highly uncertain. This is particularly so in relation to the estimates that had been made at the time the requests were refused.

Mr Cornwell submits that the tribunal is entitled to take into account the revised, lower, estimates that post-date the refusal of the request. He submits that although the public interest must be assessed at the date of the refusal the tribunal is entitled to take into account current estimates of the potential losses that the Government was facing at the time of the refusal.

The following examples show that on any estimate, these schemes involve a significant risk of default and the consequent significant risk of future expenditure of very large amounts of public money.

In July 2020 the Office for Budget Responsibility estimated that 40% of BBLS Borrowers might default, compared with 10% each for CBILS and CLBILS. The central case scenario suggested write-offs of £16.9 billion, of which 95% would come from BBLS. (Footnote: ²)

In March 2021, BEIS estimated that between 31% and 48% of BBLS loans would not be repaid, with its ‘most likely’ estimate of 37%. This equated to an overall loss of £17 billion. Most of this would arise from inability to repay rather than from fraud/error which was estimated to be approximately 11% of loans i.e. £4.9 billion. We accept Mr Bearman’s evidence that this estimate has recently been revised downwards in the most recent BEIS accounts to a figure of 8% occurrence of fraud/error and 4.24% for lifetime losses for the scheme for fraud and error.

Ultimately in our view the particular estimate that we rely on makes no difference to the public interest balancing exercise. All the estimates are necessarily very uncertain, and all support a finding that the schemes represent an extremely significant future risk to the public purse on top of the very high amounts of direct expenditure involved.

In his grounds of appeal, Mr Pearce complains that the Commissioner did not deal with section 41. He submits that it is not unreasonable to conclude that BBB’s invocation of section 41 suggests that it was inclined to deny our request on any grounds, despite its stated commitment to openness and transparency.

We stand in the shoes of the public authority in deciding whether the information can be withheld under the relevant exemption. We are not reviewing the reasonableness of the public authority’s decision. We do not need to determine whether or not BBB was inclined to deny the request on any grounds. As section 41 is no longer relied on, we do not need to make any findings on this issue, nor did the Commissioner.

Procedural failings in the Commissioner’s investigation are not relevant to our decision. We consider the matter afresh. Mr Pearce has been provided with all the relevant information in advance of the hearing and has had the opportunity to respond to BBB’s case as clarified.

We must interpret the request objectively in the light of the surrounding circumstances. In our view the request is not ambiguous. The request asks for names of ‘companies’. The request was made by an organisation which could be assumed to choose its words with care and to know what a company was. It was not a request made by an individual litigant.

In our view the word ‘companies’ should be given its normal meaning. A company is a particular legal entity. A sole trader is not a company. Nor is a partnership. There is nothing in the correspondence from Spotlight at the time of the request or the refusal which suggested that Spotlight meant anything other than what it said.

We accept that later correspondence and submissions from Spotlight could be seen as supporting a wider interpretation of the request, but in our view the request should be interpreted objectively in the light of the circumstances in existence at the time.

Mr Cornwell submitted in the alternative that the request had been narrowed at a late date. We do not accept that there is any correspondence that is sufficiently clear to support such a finding. Further we note that the Commissioner’s investigation and decision notice dealt with the request as made on 15 July 2020, and not any later reformulated request.

Where the specified activity or interest which would be likely to be prejudiced is a public interest, there is an obvious overlap between whether or not the section is engaged and any subsequent application of the public interest test.

There is a public interest in preventing prejudice to commercial interests, and accordingly in this appeal there is significant overlap in the evidence and submissions on the first two issues. We have therefore combined our consideration of the evidence and submissions of those issues, but we bear in mind that although the relevant factors may overlap, the questions that we have to answer are different.

When considering whether BBB has established a causative link or that the prejudice would be likely to happen, we have to take account of the fact that disclosure has not yet happened. It is a hypothetical, future event. There is therefore unlikely to be concrete or direct evidence of the specific effect of this particular disclosure.

In this appeal, the commercial interests of hundreds of companies are in issue and it would be unrealistic to expect consultation with each Borrower. The Commissioner’s guidance suggests, at para 3.5 that it might be helpful to contact a representative organisation. In this appeal BBB have chosen to consult with Lenders and a number of trade organisations in relation to BBLS, CLBILS and CBILS and ask the tribunal to infer that similar prejudice will arise in relation to FFS.

In any event, a failure to comply with the FOIA Code of Practice or the Commissioner’s guidance does not mean that the exemption will not be engaged. The tribunal has to decide whether it is satisfied that the prejudice would be likely to be caused by disclosure on the basis of the evidence before it. Any failure to produce evidence obtained by consulting Borrowers would only be relevant to the extent that the tribunal was not satisfied, in the absence of that evidence, that prejudice would be likely to be caused.

Further it is appropriate for the tribunal to place weight on the opinions of Mr Bearman, Mr De Monchy and Ms Shepperson as to the likely effects of disclosure given their expertise and experience in this area.

When considering the prejudice that might flow from disclosure we have focussed on the consequences of disclosure of this particular information, i.e. the list of names of companies that have taken out loans under the relevant scheme (the Pearce appeal) or schemes (the Spotlight appeal).

Some of the arguments on prejudice in this appeal are founded upon the effect of disclosure of this information on expectations that the information would not be disclosed.

One of the consequences is said to be a loss of trust between the bank and its customers/a loss of trust in the financial services sector. A further consequence is said to be a deterrent effect on Investors or Lenders in taking part in similar schemes with BBB on the future and/or a deterrent effect on Borrowers in taking part in similar schemes in the future.

In relation to BBLS, CBILS and CLBILS, the expectation of Borrowers that the information would not be disclosed was founded, in part, on evidence in the written statements of Mr Bearman and Mr De Monchy.

At para 41 of his witness statement. Mr Bearman explains, in relation to BBLS, CBILS and CLBILS:

Mr De Monchy states at paras 31 and 32 of his witness statement as follows:

The standard Borrower data protection form exhibited by Mr De Monchy requires the Borrower to acknowledge that personal data will be communicated, inter alia, to BEIS and BBB and, inter alia, used by BBB in accordance with the BBB Privacy Notice to which a hyperlink is provided.

Ms McNeill-Walsh took the witnesses through the relevant parts of the Privacy Notice including para 12.1 which states as follows:

There is a similar provision in relation to BBLS.

We accept that the Privacy Notice relates to personal data rather than all information, but it certainly draws the application of FOIA to the attention of the Borrower.

We take judicial notice of the extensive publicity surrounding these schemes, and of the fact that this took place at time when people were likely to be paying significant attention to the news. In those circumstances it is inconceivable that Borrowers understood this to be ‘simply a routine transaction with their Lender’. All Borrowers would, in our view, have understood, in the light of the documentation and the extensive publicity, that this was a Government scheme with funding and/or a guarantee provided by the state. It is clearly flagged up in the documentation as ‘state aid’. Further the documentation provided makes clear, in relation to BBLS, CBILS and CLBILS, that the Borrower’s information would be provided to BBB, and that BBB were part of the Government.

Whether or not the individuals from the company who entered into the loan agreement read the legal documentation, which specifically flags up the possibility of disclosure under FOIA in relation to the three schemes, we find that any properly informed company would have been aware that public bodies were subject to FOIA, and therefore as their identities would have been passed to FOIA, there was a risk of disclosure of their names under FOIA.

Further, any company entering into an agreement ought to read the applicable documentation and cannot, in our view, rely on prejudice caused by unrealistic expectations that they hold solely because of their failure to do so.

On this basis we do not accept that any Borrower could properly have formed the view that their usual expectations as to confidentiality would apply to a loan of this nature.

Further we do not accept that any behavioural changes in the future due to awareness of the risks of disclosure of information held by a public authority under FOIA are causatively linked to disclosure in this appeal. Companies entering into agreements in which BBB or any part of Government is a party ought to know that there is a risk of disclosure under FOIA.

Any reluctance to participate in similar schemes in the future arising simply because there is a risk of disclosure under FOIA, is not in our view caused by our decision, but by the existence of FOIA. The decision to disclose the information in this case does not become the cause of that reluctance simply because our decision might remind people about the existence of FOIA.

For the above reasons we do not accept, in relation to BBLS, CBILS and CLBILS, that there is a causative link between disclosure of the requested information and any prejudice that relies on a mistaken assumption that there was no risk of disclosure under FOIA of information held by BBB.

To the extent that this submission is made in relation to FFS we reject it for similar reasons. We note that the risk of disclosure under FOIA was explicitly drawn to the attention of the parties in the FFS FAQs (OB2662 and 2663). Any hesitancy in working with BBB in the future as a result of the risk of disclosure of information under FOIA is caused by the existence of FOIA, not by the disclosure of the information in this appeal.

On that basis, in relation to all the Schemes we do not accept that the exemption is engaged in relation to any claimed prejudice flowing from a breach of any expectation that the requested information might be disclosed. We find that this includes the claimed prejudices set out in the following paragraphs in BBB’s skeleton argument: 59(3), 61(1), (2) and (5), 63(1), 65(1) and 66(1).

We remind ourselves that we are considering the prejudice that would be likely to be caused disclosure of this particular information, i.e. names of companies, at a particular time, i.e. in August 2020. August 2020 was still a very uncertain time for companies and the most severe restrictions had only recently been lifted. We accept, as Mr Bearman put it in evidence, that this was a ‘moment of crisis’ for companies.

Further we accept that evidence of the impact of disclosure will, to some extent, always involve an element of opinion or speculation, because it relates to a future event that has not yet happened.

We accept, for the following reasons, that there is a real and significant risk, at this particular point in time, of prejudice to commercial interests as a result of a real and significant risk of reputational damage to companies that, in our view, is causatively linked to the disclosure of the requested information. We accept that the prejudice relied on would be to commercial interests and is real actual and of substance. We therefore accept that the exemption is engaged in relation to all Schemes.

In relation to all schemes we accept that there is a real and significant risk that at least some suppliers, customers, providers of credit or potential investors would take a negative view of a company that had taken out a loan under one of the schemes. Further, we find that there is a real and significant risk that at least some of those who formed a negative view would act on that negative view in the light of the very uncertain economic situation in August 2020.

We accept that there is a real and significant risk that, for example, suppliers might alter the terms on which they were prepared to deal with a company, or that they might choose an alternative supplier who had not needed to rely on Government support. This is particularly so at that moment in the pandemic.

We accept that this is the opinion of Mr Bearman, Mr De Monchy and Ms Shepperson, all of whom have experience and expertise in this area. We accept that this is the opinion of a number of Lenders (in relation to all schemes except FFS), who have experience and expertise in this area. We accept that this is also supported to some extent by the opinion of the CBI in relation to those three schemes, although the weight of this is reduced somewhat by the fact that they appear to have been talking about the release of names and amounts of Covid loans.

We found Mr De Monchy’s explanation particularly persuasive on this issue. He stated that although suppliers, for example, might have a lot of sympathy for people who were in extreme difficulty, they would still do what is best for their company, because at the end of the day they want to make sure that they get paid.

We accept that this might, as a result, affect a larger company’s share price.

In relation to FFS we find that there is a particularly significant risk of investors acting on any negative view that they take of a company. We take account of the evidence of Ms Shepperson that investors often act on gut instinct when deciding whether or not to invest. We accept that the evidence of the Lenders, the CBI and the FSB does not explicitly address the consequences of disclosure of the names of FFS Borrowers. However, as a matter of common sense, supported by the evidence of Ms Shepperson, we accept that the argument applies also in relation to FFS Borrowers. In our view the differences in the schemes are not material in this regard.

Further we accept that there is a particularly significant risk that FFS Borrowers would be adversely affected by any decision not to invest, because they are in a particularly vulnerable start up phase.

We accept Mr Pearce’s submission that the particular company relied on by BBB in correspondence with the Commissioner does not appear to be a useful example of prejudice, because that company appears to court publicity and to have suffered no adverse affects. The experience of one individual company does not affect our conclusions that there is a particularly significant risk of other FFS companies suffering damage to their economic interests.

Further we accept in relation to FFS that there was, at the relevant time, a real and significant risk that in the future, when the names of FFS Borrowers who had converted to equity were published, investors would take a negative view of those companies who had not. Again we take account of Ms Shepperson’s evidence that investors act on gut instinct, and we accept her view, in the light of her relevant expertise and experience, that converting to shares is ‘a fairly strong indication that you are doing well’ and that having not done so by the date that you would ordinarily have expected a company to have raised finance might be an indication that the company was doing badly.

We do not accept that the fact that FFS Borrowers entered into the scheme in full knowledge of the risk of disclosure under FOIA means that they perceived no prejudice to their commercial interests from disclosure. We accept that, by definition, FFS Borrowers were not deterred from applying by the risk of disclosure under FOIA. It does not follow from this, in our view, that disclosure would not be likely to lead to prejudice to the economic interests of FFS Borrowers.

We accept that other companies or suppliers or investors may either take a neutral view, or a positive view of those companies that took advantage of these schemes. This does not affect our conclusions as to the risk of prejudice set out above.

We turn now to the level of risk and the extent of likely harm, which affects its weight in the public interest balance.

In relation to BBLS, CBILS and CLBILS, we note that there is no evidence of any prejudice of this nature that has arisen as a result of the publication of the names on the Transparency Database. We accept that this may be as a result of the database not being well known or easy to search. Further we note that only a very small proportion of BBLS loans appear on that database.

However, we find that if disclosure of names was likely to lead to severe and widespread economic damage, at least some evidence of this is likely to have emerged since the publication of a large proportion of the requested names under CBILS and CLBILS. Further we note that there is no evidence from Borrowers themselves as to the risk of economic harm.

Further we accept Ms McNeill-Walsh’s submission that at least some companies or investors would view the taking of a Covid loan positively or neutrally, particularly in the light of the circumstances at the relevant time.

Overall in our view the evidence shows that, in relation to BBLS, CBILS, and CLBILS, some companies would be likely to suffer some financial damage as a result of disclosure. In relation to the FFS scheme, given the nature of investment and the early stage of the companies we find that there is an increased risk of significant financial damage to some companies.

We do not accept that there is sufficient evidence before us on which we could base a conclusion that there is a real and significant risk that any reputational damage and consequent economic harm would be so significant that it would lead to the failure of companies to the extent that it caused more than de minimis economic harm to BBB as a result of having to pay out on more guarantees or more than de minimis economic harm to Lenders as a result of a greater risk of default. In our view there are too many uncertain links in the chain to conclude that this would be likely to be caused by disclosure.

We do accept in relation to FFS that harm to the economic interests of an FFS Borrower is likely to prejudice the economic interests of those that have invested in the company, after conversion of the loan to equity or otherwise, whether Lenders or the BBB.

In relation to the slightly different submission that companies, in particular companies that took out a loan under BBLS, would be likely to suffer reputational damage as a result of some people’s negative view of companies who are seen as ‘scrounging’ from the state, or who have taken advantage of a scheme associated with a high level of fraud, we do not accept that there is sufficient evidence on which we could base a conclusion that this would be extensive enough to cause economic harm. We reach a similar conclusion in relation to the submission that media or other professional subject matter experts may, fairly or unfairly, form an opinion on certain Borrowers or ‘single out’ particular Borrowers. We do not accept that the exemption is engaged in relation to this particular aspect of claimed prejudice.

Despite our finding that the risk of disclosure should not have been unexpected, we accept that disclosure would be likely to lead to some complaints to BBB and/or Lenders as a result of our findings above that some companies would be likely to suffer reputational damage and consequent economic harm and our findings below that there is a real risk of targeting by fraudster/claims companies.

This is likely to cause some time and expense to be wasted. We accept that the exemption is engaged on this basis, but we think the extent of the prejudice is likely to be limited, given that no complaints have yet been received in relation to the publication on the Transparency Database.

Some of the claimed prejudice to Lenders or Investors falls under ‘prejudice flowing from expectations that the information would not be disclosed’. For the reasons set out above, we have concluded that the exemption is not engaged in relation to that claimed prejudice.

Under BBLS, CBILS and CLBILS, in relation to the risk that Lenders would be identified and would be likely to suffer prejudice to their economic interests we are not satisfied that there is a causative link between disclosure of the information and a real and significant risk to the Lender’s commercial interests.

Although we accept that it is not an unreasonable assumption that a Borrower would take out a Covid loan with a bank from whom they had already taken a loan, it is still an assumption. The release of Borrower’s names does not identify any of the Lenders, it simply identifies who some of the Lenders are likely to be.

We are not persuaded that this inherently uncertain and unreliable information is sufficiently valuable to competitors that it would be likely to cause harm to the Lender’s economic interests. Further, we were not satisfied that any ‘added value’ to a competitor in knowing/suspecting that an existing lender had also provided a Covid loan to the same Borrower was sufficient to provide any real competitive advantage.

In relation to FFS we think the means by which an Investor could be ‘identified is even more remote. Again it operates on an assumption that the Investor was an existing shareholder, which may or may not be the case. Further it was not adequately explained to us why an Investor would be likely to suffer any harm to its economic interests as a result of it being known/suspected that it had provided match funding to a company in which it was already a shareholder.

For those reasons we are not persuaded that there is a causative link in this way between disclosure of the information and a real and significant risk to the Investor’s commercial interests.

BBB also argues that Lender’s reputations will be jeopardised by them being associated with the mass disclosure of commercially sensitive data. This does not rely on the identity of individual Lenders. We think it is unlikely that Lender’s reputations will be tarnished by the disclosure by BBB of customer data under FOIA, and certainly not to such an extent that people will act on this to the extent that damage to the Lenders’ economic interest results.

We have dealt with consequential prejudice to BBB and Investors/Lenders as a result of financial harm to Borrowers under ‘Prejudice flowing from reputational damage’ above.

We accept as a matter of common sense and on the basis of the evidence before us, including, for example the opinions of Lenders, that there is a real and significant risk that the list of names will be used by claims companies to target Borrowers to encourage them to submit claims or to or resist making loan repayments without merit. We accept that this is likely to lead some Borrowers to suffer prejudice to their economic interests by way of, for example, consequences such as default action or financial loss through unnecessary fees paid to such companies.

Further we find that there is a real risk that the list of names will be used as a marketing list for anyone wanting to target companies on the assumption that they needed finance.

Finally we find that there is a very clear risk that disclosure would expose the Borrowers to targeting by fraudsters. We were persuaded by the evidence from Mr Bearman and the Lenders that there was a particular risk of fraudsters posing as BBB with the attendant risk that some companies would be likely to fall for the scam and suffer financial loss as a result.

We accept that the prejudice relied on would be to commercial interests and is real, actual and of substance and that there is a causative link between disclosure and the risk of prejudice.

On this basis we find that the exemption is engaged. In terms of the level and extent of risk, we find that there is a really clear risk of unwanted targeting, with a significant risk that some companies will suffer some financial losses as a result.

We conclude that there is a very strong public interest in preventing prejudice to the commercial interests of Borrowers, in particular at a time where Borrowers under all schemes were in a financially vulnerable position through no fault of their own as a result of restrictions imposed by the Government in the interests of public health. The very purpose of the Schemes was to avoid or minimise prejudice to commercial interests caused by Government action in the face of a public health crisis. In these circumstances we take the view that there is very strong public interest in avoiding the risk that the companies who were helped by the Scheme do not suffer prejudice to their economic interests.

The weight of this prejudice in the public interest balance in relation to BBLS, CBILS and CLBILS, is reduced to some extent by the fact that we do not think the harm will be particularly extensive or wide ranging.

In relation to the FFS scheme, given the nature of investment and the early stage of the companies we have found that there is an increased risk of significant financial damage to some companies. We have also found that this leads to a risk of prejudice to the economic interests of Investors in those companies that suffer financial damage.

We accept, in relation to BBLS, CBILS and CLBILS, that is very clearly not in the public interest to release information that would lead to a really clear risk that Borrowers would be exposed to targeting by fraudsters. This carries significant weight in the public interest balance.

Some weight is added in relation to BBLS, CBILS and CLBILS by the risk of targeting by claims companies and those offering finance.

We also add some limited weight as a result of the relatively limited costs/time likely to be spent by BBB and/or Lenders dealing with complaints in relation to all Schemes.

Overall the schemes involved the expenditure and the risk of future expenditure of extremely significant sums of money. Further these schemes were introduced at speed and, in the case of BBLS, with the removal of some of the usual safeguards against fraud and the risk of default. The Government recognised the high risks of fraud and error in relation to BBLS and the question marks over value for money in relation to FFS.

In our view these factors mean that there is an extremely high public interest in transparency and scrutiny in relation to the operation of these schemes. We accept that there was an intention, at the relevant time, that the operation of all these schemes would be subject to scrutiny in a number of ways and that has since happened. This satisfies, in our view, the public interest in scrutiny to a large extent. The extent to which the release of a list of names adds to the detailed evaluation and scrutiny by, for example, the National Audit Office and the House of Commons Public Accounts Committee is, in our view, extremely limited.

We have considered the extent to which the release of the names of the companies who received loans would serve this public interest in scrutiny. In our view the release of the names of companies would not assist the scrutiny of the operation of the schemes to any material extent.

We do not accept that there is significant value in the release of the list of names for the purposes of fraud prevention. We listened carefully to the evidence of Mr. Havenhand and Mr. Clarke, and we have considered their evidence in detail. We accept, on the basis of that evidence, that there will be some value in releasing the information because of fraud detection work which is likely to be taken by civil society and other organisations.

However, we accept on the basis of the evidence of Mr Bearman that the steps that Mr Clarke asserted should be taken to identify and combat fraud were largely already being taken or about to be taken by BBB in any event. The public release of the names was not necessary to facilitate those steps. This significantly reduces the weight of this factor in the public interest balance.

Given that the schemes were still operating at the time that the release was taking place, we do accept that there would be likely to have been some deterrent effect in relation to duplicate applications and we take that into account.

In relation to transparency, we take account of the fact that, at the relevant time BBB was required under the Umbrella Framework to publish all of the names of recipients of loans under BBLS and CLBILS within 12 months of the granting of the loan. The fact that this obligation was later removed is not something we can take into account when assessing the public interests in disclosure at the relevant time. We are not persuaded that there would be any significant benefit from the point of view of transparency in having the names released 12 months earlier.

In relation to CBILS, BBB was required under the Temporary Framework to publish details of any loans over €100,000 (€10,000 in the fisheries and agriculture sectors) within 12 months of the loan being granted. This would result in the publication of the details, not just the names, of approximately 50% of all CBILs loans. In our view this goes a very significant way to meeting the public interest in transparency and significantly reduces its weight in the public interest balance.

Finally in relation to FFS, the names of all those companies that, in the future, converted the loan to equity, and were therefore in a less vulnerable position, would be identifiable through Companies House. BBB had also taken the decision at the relevant time to publish the names of those companies on a rolling basis. Again, the tribunal’s view is that goes a significant way to meeting the public interest in transparency and significantly reduces its weight in the public interest balance.

Although we have considered the public interest separately in relation to the different schemes where appropriate, our overall conclusion on where the balance ultimately lies is the same in relation to all the schemes.

We have found in relation to all schemes that there is a very strong public interest in preventing prejudice to commercial interest, the weight of which is reduced to some extent in relation to BBLS, CBILS and CLBILS by the fact that we do not think the harm will be particularly extensive or wide ranging. In relation to the FFS scheme, we have found that there is an increased risk, accompanied by a risk to the economic interests of Investors.

Added to this, in relation to BBLS, CBILS and CLBILS we have accepted that it is very clearly not in the public interest to release information that would lead to a really clear risk that Borrowers would be exposed to targeting by fraudsters. We have found that this carries significant weight in the public interest balance. Finally some weight is added in relation to BBLS, CBILS and CLBILS by the risk of targeting by claims companies and those offering finance and the relatively limited costs/time likely to be spent by BBB and/or Lenders dealing with complaints in relation to all Schemes.

Overall we take the view that the extremely high public interest in transparency and scrutiny of these schemes is substantially met by other measures which had either taken place or were to take place. The release of all the names at the time of the refusal of the request would not materially add to this public interest. Further although the public interest in detecting fraud is high, the public release of the names was not necessary to facilitate that, save to a limited extent as set out above.

In those circumstances we agree with the Commissioner in both appeals that the public interest in maintaining the section 43(2) exemption outweighs the public interest in disclosure.

In the light of that conclusion, we do not need to address any other issues and both appeals are dismissed.