Hilary Drenth, MSc
Principal Associate
Article
14
Regeneration and development has long been a focus of public interest and activism. The public is increasingly aware of its rights around the disclosure of information held by public bodies, using disclosed information to scrutinise - and sometimes challenge - the planning and development process.
In this article, our Information Law and Property Law experts look at the recent case of Mr Jeremy Clyne v The Information Commissioner and London Borough of Lambeth, which highlights some of the issues in dealing with requests for disclosure made under the Environmental Information Regulations 2004 and outline five essential tips for managing this risk.
Mr Clyne made a request to see the developer's viability assessment for a London Borough of Lambeth development. At first his request was refused by the local authority. The Information Commissioner's Office agreed that exemptions to the obligation to disclose requested information had been correctly applied by the authority and the assessment could be withheld.
The Information Tribunal disagreed on the basis of a material public interest in seeing the information, which outweighed the interests of the developer in retaining confidentiality to protect its economic interests.
The case highlights that if a local authority has an existing planning policy which is overturned by a particular application, then there is even more reason to consider and give weight to the public interest in disclosure.
The Environmental Information Regulations 2004 (EIR) apply to "environmental information", which is wide-ranging in scope and includes "measures such as policies, legislation, plans, programmes, environmental agreements" and "activities" likely to affect the environment, as well as related "cost-benefit and other economic analyses and assumptions".
The EIR requires public bodies such as local authorities to disclose the environmental information that they hold when requested to do so by members of the public.
This means that any environmental information supplied by a property developer to a local authority could be subject to disclosure. This information may include commercially sensitive material such as viability assessments and contract terms, information that a developer may prefer to remain confidential.
There are exceptions to the requirement to disclose environmental information. For information supplied by developers, one of the most relevant exceptions is where disclosure would adversely affect the confidentiality of commercial or industrial information "where such confidentiality is provided by law to protect a legitimate economic interest" (EIR, Regulation 12(5)(e)).
The exceptions to the duty to disclose are applied on a case by case basis, and are only engaged if the authority considers the public interest in non-disclosure outweighs the public interest in disclosure. Even if the information is supplied on a confidential basis in order to protect a legitimate economic interest (for example the developer's negotiating position), this will not protect information from disclosure under the EIR if the authority determines that the public interest is best served by disclosing it.
This recent appeal before the First-Tier Tribunal General Regulatory Chamber considered the operation of the Regulation 12(5)(e) exception to protect a legitimate economic interest.
Mr Clyne made a request to see the developer's viability assessment for a London Borough of Lambeth development.
The local authority, and subsequently the Information Commissioner, decided that certain parts of the developer's viability assessment could remain confidential on the basis that they protected the developer's economic interest. The assessment contained potentially sensitive information, including the residual land value, expected profit margin, estimated construction costs and anticipated sale values for private and affordable housing (together with other data that it was claimed could allow someone to calculate them). This material supported the developer's case (which was accepted by the local authority) that there should be a much lower provision of affordable housing than local planning policy required - any more would make the development unviable.
The tribunal was asked to decide whether this information should be disclosed. It was argued that disclosure would compromise the development by exposing the developer's negotiating position with purchasers and building contractors. The appellant (an ex-councillor) contended that the public could not assess the viability argument that underpinned the lower affordable housing provision without seeing those figures.
The tribunal found that the Regulation 12(5)(e) exception applied. The material was commercial, a common law duty of confidentiality applied to it, it protected a legitimate economic interest - how the developer priced the scheme - and that disclosure would have an adverse effect for the developer, albeit a limited one.
In considering the public interest arguments around disclosure of the information, the tribunal noted that the objective of the EIR is to allow a community to have the information it needs to participate effectively in environmental decision making, including before planning consent is finalised. In this particular case, the transparency of the viability assessment was very important, since it allowed the public to understand the reasons why the developer was unable to fulfil core policy on affordable housing. While the public interest in withholding the information was significant because of the importance of respecting confidential information, it was "vastly outweighed by the interests in disclosure".
Although there was an argument that the requirement of openness might lead to viability reports becoming more generic and less useful for local authorities, the tribunal remarked that it has to assess the balance of public interest in each case. In this case, the developer would have had to provide the material that the Council needed to determine what level of affordable housing was possible. The tribunal did not accept the proposition that disclosure would have in any way endangered the development.
For this particular case, the tribunal found that:
The Clyne case is not binding on future tribunals and the application of each exception to disclosure under the EIR will be based on the facts and public interest in each case. However, the findings of this tribunal may well be applied by local authorities in making their own disclosure decisions.
Based on this case and our experience at Gowling WLG, we can highlight five essential areas to consider when dealing with local authorities.
Developers should bear in mind that they may at some point be required to disclose environmental information - our experts in information law, real estate development and planning can help you navigate the issues for specific transactions. Please contact us if you would like to talk about avoiding disclosure of commercially-sensitive information in these situations or steps that could be taken to reduce the impact of disclosure on your organisation.
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