Case number: OIC-138733-K6C5K1

Whether the Council was justified in refusing access to two insurance documents submitted by Contractors relating to the N72 Pavement Scheme in 2015

 

8 November 2023

 

Background

In a request dated 12 September 2022, the applicant sought access to insurance details of two contractors who had carried out works at a junction near her mother’s property. The works had been carried out as part of the N72 pavement strengthening scheme by the Council in June 2016, and involved the alleged unauthorised opening of a new shared entrance and the widening of an existing entrance onto the same road. The applicant has alleged that the first contractor had not completed the works they were employed to carry out and she alleged that the second contractor interfered with the safety of her mother’s property.

In a decision dated 10 October 2022, the Council refused access to the applicant’s request. In the decision which issued, the Council set out that it was refusing access to the first contractors insurance document on the basis that it contained commercially sensitive information, and as such was exempt from release under section 36(1)(b) of the FOI Act. The Council refused access to the second contractors insurance document on the basis that it did not hold the record concerned. It advised the applicant that the second contractor had been procured through a Transport Infrastructure Ireland (TII) framework, and as such that they would be the relevant record holder. Accordingly, the record was refused under section 15(1)(a) of the FOI Act.

On 4 November 2022, the applicant requested an internal review of the Council’s decision. On 25 November 2022, the Council issued its internal review decision in relation to the matter, the internal review upheld the original decision.

On the 12 June 2023, the applicant applied to this Office for a review of the Council’s decision.

I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the submissions made by the applicant and by the Council in support of its decision, and by the first contractor. I have also had regard to communications between this Office and the Council and applicant on the matter. I have also had regard to the contents of the records concerned. I have decided to conclude this review by way of a formal, binding decision.

Scope of Review

This review is concerned solely with whether the Council was justified in refusing access to the first contractor’s insurance details under section 36(1)(b) of the FOI Act (record 1), and whether it was justified in refusing the second contractor’s insurance details (record 2) under section 15(1)(a) of the FOI Act.

Preliminary Matters

Before I address the substantive issues arising, I would like to make a number of preliminary comments first.

It is important to note that under section 22(12)(b) of the Act, a decision to refuse to grant a request is presumed not to have been justified unless the FOI body satisfies this Office that its refusal was justified. This means that the onus is on the Council to satisfy this Office that its decision to withhold access to the records concerned was justified.

The applicant has made a number of comments in relation to how the Council has dealt with the alleged unauthorised opening of the new entrance, but as the applicant is aware, this Office has no remit to investigate complaints, to adjudicate on how FOI bodies perform their functions generally, or to act as an alternative dispute resolution mechanism with respect to actions taken by FOI bodies.                                                                                                        

Analysis and Findings

The records

The records in this case constitute insurance documents submitted by two contractors. Record 1 provides a summary of the insurances of the contractor in question, it outlines the various policies, indemnity limits, and periods of cover. The document also states that policy terms, conditions, limits and exclusions could alter after the date of the document, and that the limits set out could reduce over time.

As stated above, the Council have argued that it was never in receipt of the policy for the second contractor as the contractor was allocated by the National Roads Authority (now Transport Infrastructure Ireland) at the time.

Section 15(1)(a)

Section 15(1)(a) of the FOI Act provides for the refusal of a request where the records sought do not exist or cannot be found after all reasonable steps to ascertain their whereabouts have been taken. In such cases, the role of this Office is to review the decision of the FOI body and to decide whether that decision was justified. This means that I must have regard to the evidence available to the decision maker and the reasoning used by the decision maker in arriving at his/her decision.

It is important to note that the FOI Act does not require absolute certainty as to the existence or location of records, as situations can arise where records are lost or simply cannot be found. What the FOI Act requires is that the public body concerned takes all reasonable steps to locate relevant records. Furthermore, it is open to this Office to find that an FOI body has satisfied the requirements of section 15(1)(a), even where records that an applicant believes ought to exist have not been located.

During the course of this review, this Office sought submissions from the Council as to the reasons for its decision to refuse access to record 2. As stated above, it is the Council’s position that it was never in receipt of this document. Accordingly, I must consider the Council’s position as a refusal under section 15(1)(a), i.e that the record does not exist as it is not held by the Council.

As noted above, the Council provided this Office with details of the searches it undertook in an effort to locate the record covered by the applicant’s request and of its reasons for concluding that the relevant record was not held by the Council. An outline of the Council’s submissions has been provided to the applicant and she has made comments in response. While I will not set out both submissions in detail, I can confirm I have had regard to them for the purpose of this review.

In essence, the Council have maintained that both Contractors were procured through separate frameworks, the first contractor, whose insurance details the Council do hold, was procured through a Cork County Council framework. The second contractor, whose insurance details the Council claims never to have held, was procured through a TII Framework at the time. It argues that it was informed by TII that it had allocated that specific contractor from the framework agreement for consulting engineers as a consultant for a number of schemes on the N72 and N73 in Cork. It has clarified that the TII framework was used for the purpose of road projects across multiple local authority jurisdictions and, for practical purposes, the insurance details for the framework members (of which the second contractor was one) were assessed by TII.

It further stated that Cork County Council’s lead engineer for the scheme in question was consulted in 2022, when the original request was received. He advised that under the circumstances, he would not have sought to obtain a copy of the insurance. The Council advised that he nevertheless undertook a search of all his records, including the office network and his hard copy files and confirmed that he did not obtain a copy of the insurance certificate. The FOI Officer and an additional senior executive engineer also undertook a search of records, across hardcopy files and the network and did not yield any results.

The applicant has argued that by virtue of a separate FOI request which she submitted to Cork County Council in November 2017, she was informed that the second contractor was engaged by Cork County Council to prepare the design and contract for the pavement strengthening scheme on the N72. She also pointed out that she had been in touch with TII on the matter, and had submitted an FOI request in February 2022, seeking contract details relating to the specific contractor such as date of contract and parties to the contract. In response to her request TII released information it held relating to the parties to the contract and the cost of the relevant works. She pointed out that the other records which she requested, were refused by TII as they informed her that Cork County Council were the record holders. The letter which the applicant provided, states the following:

“…TII’s role is that of an approving authority for funding. TII provided funding for the N72 pavement scheme and approved certain stages of funding for the scheme as is the case with almost all national road schemes in Ireland. The N72 scheme was overseen and developed by Cork County Council, as the road authority for the area and as the contracting authority for the scheme.” It further noted that TII is not typically party to road scheme contracts.

The applicant further argued that subject to a previous FOI request which she submitted in November 2020, she was informed that Cork County Council requested a copy of the insurance document from the contractor, and the contractor responded to the Council stating that it would be inappropriate to issue a potential third party claimant their insurance details. In the email in question, the Council have stated that they engaged the firm in 2016, their insurances were in order at the time and that they are not at liberty to share their insurance details. 

My Analysis

I have had regard to the submissions of both parties in relation to this case. It seems to me that the two main issues in relation to this case are the unclear role of TII in the matter at the time, and whether the insurer provided the record to the Council upon the applicant’s previous request in 2020. 

Having taken into consideration the applicant’s engagements with the Council in 2020, I sought additional clarity from the Council on whether record 2 had been shared by the contractor with the Council at the time of that specific engagement. I was informed by the Council, that the relevant member of staff who handled the matter at the time was contacted, the staff member confirmed that he did not receive an insurance document from the contractor at the time, or any other time, and indeed never had sight of the document in question. He stated that at the time, the applicant requested several documents not through FOI and that he would have explained to her that the Council would have satisfied itself before work commenced that satisfactory insurances were in place.

In respect of the applicant’s engagement with the TII, I have reviewed the request for information which was submitted to TII. In that request for information, the applicant sought the brief that was given to the contractor in respect of the scheme and dates and parties to the relevant contract, the cost of the works involved and information on specific portions of the contract. As indicated above, the response provided by TII indicated that they approved the funding for the contractor. The applicant did not request a copy of the insurance document which would have been assessed prior to the allocation of funding.

In their submissions to this Office the Council clarified that TII informed Cork County Council in 2014, that it had allocated the contractor from their framework agreement for consulting engineers as the consultant for a number of schemes on the n72 and n73 in Cork. The Council have stated that it is their understanding that the TII framework was used for the purpose of road projects across multiple local authority jurisdictions and for practical purposes, the insurance details for framework members of which this contractor was one, was assessed by the TII.  

There is information available in the public domain regarding procurement and contract details relating to TII. The information confirms that the contractor in question was engaged and awarded a contract for services as part of a TII framework for consultancy technical services at the time in question. This ties into the information provided by the Council that the contractor in question was allocated by TII to the Council for work on the relevant contract in question. The online guide to the structure and functions of TII sets out clearly that TII is responsible for managing the procurement process for the public private partnership (PPP) of national road schemes, and that as part of their responsibilities TII maintains oversight of revenue related aspects of PPP contracts including insurance risk.

It is important to note that the FOI Act does not require absolute certainty as to the existence or location of records, as situations can arise where records are lost or simply cannot be found. What the FOI Act requires is that the public body concerned takes all reasonable steps to locate relevant records. Public bodies are not required to search indefinitely for records in response to an FOI request. Furthermore, it is open to this Office to find that an FOI body has satisfied the requirements of section 15(1)(a), even where records that an applicant believes ought to exist have not been located.

Based on the explanation provided by the Council, the searches which it states were carried out by staff and the information in the public domain concerning the procurement of the contractor in question, I am satisfied that I have no evidence before me to suggest that further searches are warranted. Accordingly, I find that the Council was justified in refusing access to the insurance details of the second contractor under section 15(1)(a) of the FOI Act       .

Section 36(1)(b) – Commercially Sensitive Information

Section 36(1)(b) provides a mandatory exemption to the release of a record where it contains financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.  It should be noted that the essence of the test in section 36(1)(b) is not the nature of the information, but the nature of the harm which might be occasioned by its release.

The harm test in the first part of subsection (1)(b) is whether disclosure of the information “could reasonably be expected to result in material financial loss or gain”. The test in this regard is not a question of probabilities or possibilities, but rather whether the FOI body’s expectation is reasonable. Thus, a body citing section 36(1)(b) should demonstrate the nature of the harm envisaged and a basis for a claim that such harm could reasonably be expected to result from disclosure of the particular information in the record at issue.

The harm test in the second part of subsection (1)(b) is whether disclosure of the information “could prejudice the competitive position” of the person in the conduct of his or her profession or business or otherwise in his or her occupation. This is a considerably lower standard of proof than that contained in the first part of section 36(1)(b). This being said, in invoking the phrase "prejudice", the damage which could occur as a result of disclosure of the information must be specified with a reasonable degree of clarity.

In its submissions to this Office, the Council have stated that the insurance was procured through a broker and that risks were covered by different providers. The Council have argued that should the record be released there would be no control over onwards transmission and that it could be viewed by competing contractors. It has argued that insurance is a significant cost for contractors and having precise knowledge as to which insurers are being used by which competitors for which insurable elements would enable a contractor to cut out the broker and save significant costs. It maintains that this would place the company at an advantage in the competitive construction market where margins are tight.

It argues that given the lack of control over onwards transmission, the release of the record could result in wide availability of precise information concerning the contractor’s insurance limits. It argues that this could result in a higher value of claims, which could ultimately increase the premiums and could result in the company failing to secure insurance cover at viable rates. The Council have also claimed that they believe that the insurance document is not specific to the local authority contract, and included additional cover insurance which was not required in the thresholds for this type of public contract. Finally, it maintains that without knowing the precise nature of the contracts entered into by the company across the broad spectrum of clients, they could not be sure when making the original decision what statutes of limitations applied.

The Council engaged with the contractor in question during the course of this review, to seek their views on whether or not the document in question could be considered commercially sensitive. In the response which the contractor provided, it confirmed that it objected to the information in question being released on the basis it could have a negative impact to the business, if released to unknown parties. I also consulted with the contractor as part of this review and sought specific information as to the harms which could arise should the document be released. I specifically sought to know how a material financial loss or gain could arise from disclosure of the relevant information in the record. I did not receive a response from the contractor.

The applicant in her submissions had argued that all insurance policies cover risks and that even if not specific to local authorities, they must cover the specific risks needed to fulfil local authority contracts. She argued that had the contractor completed the works in accordance with the work requirements for the relevant contract, she would not be seeking the relevant information. She alleged that the Council would be aware that the contractor had not fully implemented their contracts to an equivalent standard or better, she also argued that it would take a massive premium for this company to incur a significant financial loss.

My Analysis

With regards to the record in question, it contains details of the cover which the contractor had at the time of the works and the claim limits in respect of each type of cover. The insurance is to cover building and civil engineering contracts, and sets out that the period of cover is for 2015 – 2016. Upon engagement with the Council, I sought details on the insurance requirements for the tender and schedule for public work contracts for minor building and civil engineering works. The Council provided these details to me, the document contained the minimum indemnity limit for the relevant insurance requirements set out for the works in question. The contractor had one additional type of cover which was not required by the tender. In respect of the other types of cover, the thresholds required by the local authority are the same thresholds which the contractor was insured for. Accordingly, it seems to me that the majority of the cover requirements are already public information. In addition, I note that the document states that the policy terms, conditions, limits and exclusions could be subject to change after the date of the document or the relevant insurance could be terminated or cancelled. Considering the document was submitted in 2015,  it seems highly unlikely that the relevant thresholds, or insurance cover would not have altered in some way.

While I agree with the Council, that in the ordinary course of business, insurance thresholds for businesses could be considered commercially sensitive information, considering the particulars of this case, the fact that minimum thresholds are already in the public domain and that the insurance policies were taken out in 2015 to cover a period of a year. I find it difficult to justify a finding that the release of this information would potentially prejudice the competitive position of the company, or that it could result in a material financial loss to the business at this time. In terms of the document potentially being seen by other contractors, each type of cover which was in place at the time would have elapsed by this point or could have been changed in the time since. I also fail to see how insurance thresholds from a specific contract could reasonably result in a higher value of claims more than 6 years later.

I also consider that the identification of such information regarding insurance, does not reflect poorly on the company or which could damage its reputation in anyway or otherwise affect the competitive position of the company. I cannot envisage a manner in which the release of this information could reasonably be expected to lead to the harms in either test under section 36(1)(b).

On that basis, I find that the document is not commercially sensitive and section 36(1)(b) of the Act does not apply to it.

 Decision

Having carried out a review under section 22(2) of the FOI Act, I hereby vary the Council’s decision. I find that the Council was justified under section 15(1)(a) in refusing access to record one on the basis that it is not held by the Council. I find that the Council was not justified in withholding access to the first four insurance covers detailed in the second record, with the exception of the cover not detailed in the tender requirements for the relevant contract.

Right of Appeal

Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated by the applicant not later than eight weeks after notice of the decision was given, and by any other party not later than four weeks after notice of the decision was given.

 

Rachael Lord
Investigator