Chapters: 01 | 02 | 03 | 04 | 05 | 06 | 07 | 08 | 09 | 10 | 11 | 12 | 13 | 14 | 15 | 16
The following components of this "purpose" are particularly important:
There is no special definition of 'regulatory' action, but the term is widely recognised as referring to a system of formal or legal governance of particular sectors or particular activities, as opposed to more generally applicable legal requirements. 'Regulatory action' has a wide ambit and will typically include the exercise of powers by a responsible body -
There are now a substantial number of bodies responsible for statutory regulatory action, including, for example, in the areas of charities (Charity Commission), health and safety (HSE), the communications industry and broadcasting (OFCOM); the rail industry (Office of the Rail Regulator); the water and sewerage industries (OFWAT); financial services (Financial Services Authority); pensions (OPRA), medicines and healthcare (MHRA); the electricity and gas industries (OFGEM) and other industries and activities. This provision is not limited to the purposes of such bodies although it will include them.
Most enactments providing for regulatory action also make specific provision for disclosure and non disclosure of information obtained and held for the statutory purposes. Authorities engaged in regulatory investigations or action themselves should therefore look first to the relevant domestic and EC framework and consider the potential applicability of sections 44 (prohibitions) and 21 (alternative rights of access) before turning to consider the application of sections 30 and 31.
For example, the FSA has powers to investigate firms currently and formerly authorised under the Financial Services and Markets Act 2000. To encourage disclosure to the FSA, the Secretary of State, and experts appointed to report on a firm, section 348 of the FSMA 2000 restricts the disclosure of confidential information. Thus, for the FSA and those involved in regulating authorised firms, section 44 of the Act will need to be considered first when a request is received under the Act. (It should be noted that section 348 of the FSMA 2000 would not apply to internally generated information, such as policy documents.)
Similarly, OFCOM has functions under the Communications Act 2003 to consider complaints in relation to broadcasting. Those receiving requests under the Act will first need to consider section 393 of the 2003 Act, as this imposes limits on the disclosure of information relating to the affairs of any particular business obtained under the 2003 Act.
In addition, in some instances the regulatory authority will be obliged, either as a result of procedural requirements, or as a matter of policy, to provide full disclosure to the subject of the investigation at the outset of any regulatory action.
It has been noted above that section 31 does not apply where section 30 does.
The statutory frameworks which govern many regulatory authorities provide for the sanction of criminal prosecution for non-compliance. Information relating to investigations in relation to the exercise of such powers may be covered by section 30(1), provided that the investigations fall within the detailed terms of the subsection.
In addition, subsection 30(2) will apply where the investigation (including investigations conducted for the purposes described in section 31(2)) is conducted by virtue of the prerogative or by virtue of statutory powers, and where it relates to the obtaining of information from confidential sources.
Section 31(2)(a) and (b) will apply for the purposes of ascertaining whether a person has failed to comply with the law or whether any person is responsible for any conduct which is improper (these two categories will cover much information held by a regulatory authority).
Other potentially overlapping provisions
Other provisions particularly likely to overlap with section 31(2)(c):
Section 35 (formulation of government policy) but only where the regulatory authority holding the information is a government department or the National Assembly for Wales.
Section 36 (prejudice to the conduct of public affairs)
Section 40 (personal information) (absolute exemption.)
Section 41 (Information provided in confidence) (absolute exemption)
Section 42 (commercial interests).
Section 31(2)(c) applies to the "purpose" of consideration by a person or body as to whether regulatory action should be taken in a particular case or class of cases, as distinct from whether unlawful or improper conduct has occurred.
Examples of the type of disclosure to which Section 31(2)(c) would be likely to be relevant might be:
The section 31 (2) purpose is linked to the prejudice test imposed by section 31 (1) and the test of the balance of the public interest. The information will only be exempt information if:
How these tests will play in different regulatory contexts will depend on the nature of the regulatory regime and the particular information sought. But it should be borne in mind that there is a clear public interest in the satisfactory operation of statutory regulatory regimes in particular - a public interest which has after all been reinforced by Parliament in the parent legislation itself. Where a disclosure would or would be likely to have an adverse impact on that regime (that is, prejudice a relevant function), the regime's underlying policy should be clearly understood, considered, and where necessary articulated as part of the process of balancing the public interest both for and against disclosure. If the prejudice test has been satisfied, the policy underlying the statutory regime in question is to some extent put in jeopardy, and the public interest to that extent weighs against disclosure. But the nature, magnitude and probability of the prejudice always have to be taken into account in balancing the public interest.
An example of the prejudice and public interest tests in the context of section 31(2)(a) to (c) can be seen from the exercise by the FSA of its powers to investigate problems which have been identified in a particular market. Disclosure of the fact that an investigation was taking place, the methods used (such as the use of mystery shoppers) and the factors taken into account in deciding whether to take regulatory action, might allow firms to take evasive action and artificially represent themselves in a favourable light and thus undermine the effectiveness of the investigation. That would be likely to prejudice its regulatory functions. There is a clear public interest in the proper operation of the markets; that is fundamental to the stability of the economy and the security of individuals and companies who rely on it, and underlies the entire regulatory regime. The prejudicial disclosure has a clear potential to inhibit the proper operation of market controls and therefore of the markets themselves. There is therefore a clear public interest weighing against disclosure.
On the other hand, disclosure of information itself has a part to play in the delivery of the policies underlying statutory regulatory regimes. Very often, these regimes are designed to provide public reassurance that particular activities are being conducted to reliable standards and by reliable people or bodies. Public confidence in regulated activities does rely to some extent on public confidence in the regulators and the proper conduct of regulatory activity. That can be enhanced by transparency, and the public interest in the disclosure of information in these areas must be fully taken into account.
It is therefore likely to be necessary at the same time to consider disclosure from the point of view of its potentially prejudicial effects in an individual case, and its potentially prejudicial effects on the operation of a regime more widely, at the same time. The public interest in avoiding that prejudice then has to be carefully weighed against the advantages of transparency and the public interest in disclosure.
The following example considers the application of section 31(2)(c), with particular emphasis on the tests in the context of material potentially exempt under 31(2)(c):
Ofsted receives a request for information relating to an investigation of a registered childcare provider that has been carried out with a view to ascertaining whether that provider should be de-registered, or whether other remedial action short of de-registration should be taken.
Section 35 (formulation of government policy) - (Ofsted, is a Non Ministerial Government Department.)
Section 36 (prejudice to the conduct of public affairs) - premature disclosure of an investigation may allow childcare providers to give a false impression of the services they offer.
Section 40 (personal information) - if what was requested amounted to personal information then the request would have to be considered within the terms of section 40.
The relevance of the exemption from the duty to confirm or deny may be of particular importance to regulators where a decision is being, or has been, taken as to whether it is appropriate to take regulatory action in a particular case. For example, in the context of the award of broadcasting licences, for OFCOM to reveal whether or not they had received a bid from a specified party is governed by the specific legislation governing licence awards (e.g. on awarding an ITV licence, OFCOM must publish certain information once bidding has closed, and invite representations), and the considerations underlying the maintenance of confidentiality in such circumstances would need to be taken into account. Sections 41 and 43 could also potentially be relevant here. Indeed, specific disclosure provisions may impliedly prohibit other forms of disclosure, in which case section 44 would be relevant.