Freedom of Information, Contracts and Records Retention

Retaining Records of Contracts

The recommended retention period contained in the JISC infoNet Records Retention Schedules (RRS) for records concerning the negotiation, establishment and review of contracts and agreements between the institution and others is 'termination of contract plus six years'.

In England and Wales, limitation periods are imposed by statute, primarily the Limitation Act 1980. The position is that all actions associated with contractual obligations must be raised within a period of six years from the date on which the relevant breach occurs. The six year recommended retention period can be tied to termination or expiry of the contract, in that, in general terms, no breach can occur after the rights and obligations of the parties fall away upon termination - although certain obligations (such as confidentiality obligations) may be expressed to survive termination.

In Scotland the Prescription and Limitation Act (Scotland) 1973 states that such actions should commence within a period of five years from the date the obligation became enforceable. In some situations knowledge of the loss arising from a breach of contract may not come to light until some time after the contract has expired or terminated and the five year period will commence on that later date.

Where a fraud/error has occurred or the individual involved has suffered a legal disability, an action may still arise after the five year period. This is subject to a maximum of twenty years from the date upon which the loss had occurred. In other words, a claim cannot normally be bought at all after a period of twenty years following the date upon which the loss occurred.

Thus FE and HE institutions in Scotland may wish to adjust the retention period to take account of this.

Further specialised guidance on the Prescription and Limitation Act (Scotland) 1973 is available in the HEI Records Retention Schedule Prescription & Limitation (Scotland) Act 1973 Guidance Note on the JISC infoNet website at http://www.jiscinfonet.ac.uk/partnerships/records-retention-he/hei-pla-guidance.

Keeping Records for Taxation Purposes

Generally, you must keep all your business records for VAT purposes for at least six years. Records that you use for other tax purposes may need to be kept for longer periods. Further specialised guidance is available on the HM Revenue & Customs (HMRC) website.

Freedom of Information - Transparency and Openness

The freedom of information legislation provides the public with a right to access information held by UK public authorities, which includes most universities and colleges. The legislation has brought changes in terms of increased transparency and openness. This applies equally to information about tendering processes and contract negotiation. A public authority cannot contract out of its responsibilities under the legislation and unless information is covered by an exemption it must be released if requested.

It is important that contractors have an understanding that requests may be made for information and that where a request is received, information will be disclosed unless it is covered by an exemption.

Public Sector Contracts and Confidentiality

Many of the tendering processes undertaken and contracts entered into by public authorities have been traditionally carried out on the basis that most, if not all, the information concerning commercial relationships would remain confidential. Often contracts would include confidentiality clauses with the intention of prohibiting the disclosure of such information.

Exemptions from Disclosure

The Freedom of Information Act 2000 (FOIA) recognises that there are valid reasons for withholding some information in response to a request. Two relevant exemptions are:

• section 41 FOIA, information which has been provided in confidence, and
• section 43 FOIA where the release of information is likely to prejudice someone's commercial interests.

Only information that is in fact confidential in nature, or which could prejudice a commercial interest if released, can be withheld under these provisions.

[Source: Information Commissioner's Office, Freedom of Information Act Awareness Guidance No. 5 - Annexe: Public Sector Contracts]

Similar exemptions in terms of freedom of information are in place for Scottish public authorities. These are detailed on the Scottish Information Commissioner's website at http://www.itspublicknowledge.info/Law/FOISA-EIRsGuidance/Briefings.asp. For detailed interpretation of these Scottish provisions please contact JISC Legal at www.jisclegal.ac.uk/enquiry.

Practical Approach

One approach would be to identify clearly what information held in connection with the tendering process, contained in the contract, or about the subsequent performance of a contract is commercially sensitive and over what period that information is likely to remain sensitive. Once identified the information could be listed in a schedule or appendix to the contract. This would have the advantage of providing the contractor with a degree of certainty as to what information is likely to be withheld in response to a request as well as assisting the institution in determining whether an exemption applies.

In other circumstances it may be more appropriate just to provide a more general assurance to the contractor that commercially sensitive information will be protected and then in the event of a request being made consult with them on what information would prejudice their commercial interests were it to be released and how that damage would be caused.

JISC Legal provide detailed specialist guidance on the freedom of information legislation at http://www.jisclegal.ac.uk/foi.

Acknowledgement

Some of this commentary is taken from specialist guidance on the Information Commissioner website at http://www.ico.gov.uk/for_organisations/freedom_of_information/internal_guidance.aspx.