Settlement agreement lawyer, Jenny Hall looks at a recent case involving a freedom of information request.
In the recent case of Trago Mills (South Devon) Ltd v Information Commissioner EA/2012/0028, the First-tier Tribunal (Information Rights) (FTTIR) upheld the Information Commissioner’s decision that Teignbridge District Council was right not to disclose the details of a former employee’s settlement agreement in response to a freedom of information request.
Trago Mills (South Devon) Ltd has a history of planning disputes with the Teignbridge Council. Over the course of several years, the Council’s senior planning officer (referred to as ‘X’ in the Tribunal papers) had refused a number of planning applications in relation to Trago’s shopping centres and commercial premises. The most recent dispute centred on proposed upgrades to the filling station and the building of more of the iconic ‘Trago towers’. Trago made a complaint of prejudice and bias against X and an independent investigation into X’s conduct was launched in December 2009. No evidence was found to support Trago’s allegations.
In early 2010 Teignbridge DC announced that X, along with five other members of senior management, would be taking voluntary early retirement. They insisted that there would be no “golden goodbye” payments made to these employees as their departure was due to budget-cuts. Trago suspected that “misconduct” was the real reason for X’s departure and that the Council was covering it up. Trago applied to the Council for details of X’s contract of employment, salary and settlement agreement under the Freedom of Information Act 2000 (FOIA).
The Council provided a redacted copy of X’s contract but refused to disclose any other information including any settlement agreement on the grounds that it was exempt under section 40 (2) of the FOIA.
Having exhausted the Council’s internal procedures, Trago filed a complaint with the Information Commissioner. The Information Commissioner upheld the Council’s decision.
Trago then appealed to the FTTIR. The Council submitted confidential information relating to the circumstances of X’s departure. This “closed bundle” was only seen by the Tribunal.
The FTTIR upheld the Information Commissioner’s decision, confirming that Teignbridge District Council had been entitled to refuse the part of the request relating to the terms of X’s departure, as this information was exempt under section 40(2) of the FOIA. There was no evidence in the “closed bundle” of any wrongdoing, misconduct or performance issues therefore the FTTIR felt that there was no public interest in terms of his salary or settlement agreement.
In reaching this decision the FTTIR had to balance the need for a public authority to be accountable for its use of public funds with an individual’s reasonable expectation of privacy. It found that even without an express confidentiality provision, an individual would have a reasonable expectation that the terms on which his employment came to an end would be treated as confidential. In this case, X’s expectation of privacy outweighed the Council’s duty of transparency. Furthermore it said that even if Trago had successfully shown that X had been guilty of wrongdoing in a public office, this would only support a legitimate public interest if the wrongdoing had been so serious that the Council could have been criticised if it had failed to take the misconduct into account when considering X’s application for early retirement.
The FTTIR found that Trago had been motivated by a personal grievance against X rather than concerns about public interest.
In its decision notice, the Information Commissioner noted the value of settlement agreements: they allow employers and employees to end a business relationship and part ways with heads held high. If the terms of a settlement agreement were to be revealed then that could undermine this.
This case therefore highlights both the strength of the expectation that the terms of a legally binding settlement agreement will remain private and the resistance which will be met by those who wish to challenge it. There must be a valid public interest reason for revealing the terms of a settlement agreement: in T W Gibson v Information Commissioner EA/2010/0095 for instance, the FTTIR did order a local authority to disclose the financial details of its former chief executive’s settlement agreement. In this case she had been responsible for an overspend of £800,000 and left in the middle of the resulting financial crisis. Although the agreement was subject to a confidentiality clause the FTTIR decided that it was unreasonable for either party to expect the information to remain confidential because it related to misuse of public funds.
In the Trago case the findings of the FTTIR were unanimous:
“We do not find that the council’s duty to be transparent and accountable about the expenditure of public money outweighs the requirement to respect the former employee’s reasonable expectation of privacy.”
“We conclude that disclosure would have breached data protection principles.”
“In the light of our findings, we have concluded that the appeal should be dismissed.”
Trago has vowed to fight on.
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