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Lord Hunt of Wirral: The noble Lord, Lord Brennan, was right to draw our attention to what could be a difficult situation. Perhaps I may refer back

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to the code. Under exemption 13 there is a clear statement. On third parties' commercial confidences it refers to:

    "Information, including commercial confidences, trade secrets or intellectual property, whose unwarranted disclosure would harm the competitive position of a third party".

That was clear and simple. Following the juxtaposition of the legacy of exemption 13 with Clause 41 and the quotation from the code which the noble Lord, Lord Lester, has just read out, I saw immediately that there could be some gaps where there would be uncertainty, particularly if it were left very much to the public authority to decide whether to consult the third party. That causes me concern. I could hear that concern reflected in the words read out by the noble Lord, Lord Lester. So it would not be a right of a third party to be notified automatically as soon as a request was made about information which could well be commercially confidential. We know of many occasions in government when that arises and in the past the procedure has been very simple and easy to follow.

What does cause me concern is that, as is always the case when one tries to set out a detailed position in legislation, it is usually incapable of that detailed application without introducing the sort of complexity which one heard from the noble Lord, Lord Lester, in reading out what should have been a very simple statement but which has been qualified to such an extent that it is now completely ambiguous, in my mind, as to whether or not the third party has that automatic right--

Lord Lester of Herne Hill: I do not know whether the noble Lord appreciated, from my rather gabbled reading, that where there is a legal right because the information is covered by contract--and of course there has to be consultation as a matter of binding contract--there is no ambiguity about that. Indeed the code makes that clear.

Lord Hunt of Wirral: I appreciate that. I was talking about the other instances where there is no automatic right. That was causing me some concern, particularly, as the noble Lord will see when he refers back to what he read out, there are a whole series of instances where the third party is not automatically consulted. That does cause me some concern and it leads us back to Amendment No. 70, put forward by my noble friend Lord Cope. It does seem to suggest that this is one way in which the gap could be filled. I am not too sure that my noble friend has confidence that he has finally achieved the exact wording required but certainly this is a move in the right direction, which would do much to underpin that right of the third party. When the noble and learned Lord the Minister responds, it would be very helpful indeed if he could relate this particular amendment to Clause 41, to the original code and to the code which the noble Lord Lester read out in full--which was most helpful--just to make sure it is in the record. If the noble and learned Lord the

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Minister could bring all those aspects together I think it would be a great help and of great assistance to the Committee.

Lord McNally: Just before the Minister replies, I should like to intervene with some trepidation. I do not know the polite collective term for a group of lawyers, but I am in the midst of them--

Lord Lester of Herne Hill: A barrackroom of lawyers!

Lord McNally: Thank you. Perhaps I could approach this in another way. I think the noble Lord is right: this is a key part of the Bill. The point was made earlier that successive governments have moved more and more what were thought of as public sector responsibilities to the private sector. Successive governments have encouraged public/private partnerships which bring public authorities and the private sector into very close co-operation. I served on your Lordships' Select Committee that looked at changes that had taken place in the public service in the 'eighties and 'nineties. It was a dramatic if not a noisy revolution, which I do not think people fully appreciate, on which this Bill will impact.

My concerns are twofold. The brief we received from the CBI sets out very clearly the risk of disclosure of trade secrets and of commercial information, prejudicing commercial interests. This means that business will be more reluctant to provide information in the first place and perhaps more reluctant to get into bed with the public sector on joint projects which both sides of the Committee want to encourage.

How do we get round this? It is clear--perhaps it is something that the CBI and the private sector will have to take on board--that doing business with the public sector, which for many companies is very profitable indeed and very attractive, carries with it certain freedom of information responsibilities.

The kind of culture we are trying to encourage in the public sector as regards the citizen's right to know will spill over into the private sector as well. At the beginning of this debate it was said that one of the intentions behind the Bill was to bring about a cultural change and a shift in the balance of power.

The relationship between the private and public sectors and how the Bill will interface between them will form extremely important parts of the legislation. From the way the lawyers have been jousting this evening in their efforts to get it exactly right, one can see that that is going to take some considerable skill. That is one reason why I look with such confidence to the noble and learned Lord, Lord Falconer.

Lord Falconer of Thoroton: This is an important amendment which requires careful consideration. It would add to the Bill a provision specifying that, where a request relates to the commercial interests of a third party, the authority must notify the person whose commercial interests would be affected of the request, tell the third party what information it holds, and give

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him the opportunity to comment on whether the information is exempt. We are dealing here with a case where the commercial interests of a third party--namely, not the applicant--can be affected by the disclosure.

There are two possible situations to consider here. The first is where the third party has a legal right to ensure that the information is not disclosed--for example, an enforceable right in contract--in confidence or because it is a trade secret. The Government believe that the right way to deal with this is that such a person should be consulted before any disclosure is made. If, on examination either through the consultation or separately, it emerges that he has a legal right which would prevent disclosure, then no disclosure should be made.

The Government feel that the best way to ensure that that is put in place in practice is not by reference to detailed provisions in the Act but by a code of practice which sets out a process requiring the relevant public authorities to consult and contact someone, and not to disclose where such a legal right exists. That forms the extract from the code quoted by the noble Lord, Lord Lester of Herne Hill. I am most grateful to him for doing so. For the record, it is the code of practice, paragraphs 19 to 23. Where there is a doubt about it, the code specifically states that consultation should take place where the views of the third party may assist the authority to determine whether information is exempt from disclosure under the Act. Thus, where there is a genuine question about it, the public authority should get in touch with the third party.

Lord Hunt of Wirral: I apologise for intervening. Will the Minister reflect on the fact that presumably it would be for the public authority to decide? That would therefore be an arbitrary decision taken by the public authority which could compromise the rights of the commercial interests of another party. The third party would not be involved in that decision. It would be a unilateral decision taken by the public authority. Is that not another area which may cause some concern?

Lord Falconer of Thoroton: So far as concerns the public authority, it is obvious that it must act sensibly and reasonably under the provisions of the code. What is the alternative? The alternative would be that, wherever the authority thought conceivably that the commercial interests of a third party might be affected by disclosure, it would have to consult that third party.

Perhaps I may cite an example. Suppose that information was sought to be disclosed which would prejudice the interests of a whole range of people in a particular industrial or agricultural field. Is it sensible for the public authority to be put under an obligation to have to consult every single business that runs a particular kind of process against the remote possibility--an extremely remote one--that one of them might have a legal interest? Does every pig farmer have to be consulted before something relevant to the farming of pigs is disclosed? The noble Lord, Lord Carter, makes a noise in relation to that. As the

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Government Chief Whip knows, that would make this part of the Bill effectively unworkable, and it would do so in a way that would provide very little protection in relation to legal rights.

Lord Lester of Herne Hill: If the public authority acted in breach of contract, trust, confidence, trade secrets and so on, it would be legally liable. Therefore there is no question of it being an arbitrary decision. The public authority is bound by law to comply with these obligations in any event. Or am I mistaken?

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