The Supreme Court of Canada’s recent judgment in the case of Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3 (“Merck”) provides some important guidance and clarification with respect to the protection of third party information when a request for disclosure is made under the federal Access to Information Act. Although the case arose in the context of a request under federal legislation, the general principles enunciated by the Court are relevant throughout Canada, including British Columbia, where the Freedom of Information and Protection of Privacy Act sets up a very similar scheme.
The Merck case addresses the protection of third party information from both a procedural and a substantive perspective. It looks at the procedural questions of how a public body faced with a disclosure request must go about reviewing the records in its possession, and when it must give notice to a third party of its intention to disclose records. The purpose of notice is to give the third party an opportunity to make submissions about information it believes should be exempt from disclosure. The case also looks at the substantive question of what sort of third party information is exempt from disclosure under the legislation.
The Merck case made its way to the Supreme Court of Canada after a protracted dispute between Merck Frosst and Health Canada, involving several hearings in the federal courts. A request was made under the Access to Information Act for disclosure of records relating to Merck Frosst’s application for approval to market a new asthma medication. After its initial review, Health Canada concluded that a small number of the hundreds of pages of relevant records contained confidential or other exempt information, and should not be disclosed. It also identified a small number of pages it considered to contain no exempt information and disclosed them to the applicant without notifying Merck Frosst first.
Health Canada then redacted what it considered to be exempt information from some of the remaining pages. The redacted records, along with the rest of the hundreds of remaining pages of records were provided to Merck Frosst, with notice that Health Canada intended to disclose them to the applicant. Merck Frosst was asked to make representations on why the records should be exempt from disclosure. Merck Frosst took the view that only a handful of the relevant records should be disclosed, and that the vast majority – including the pages already disclosed by Health Canada – should be exempt from disclosure because they contained trade secrets, confidential information, or other information that could harm the interests of Merck Frosst.
The Access to Information Act, like the Freedom of Information and Protection of Privacy Act, provides that the head of a public body must refuse to disclose information relating to trade secrets of a third party or other confidential information the disclosure of which would be harmful to the business interests of the third party. There is an inherent tension in the legislation between this duty to protect certain third party information, and the public right of access to government information, which is one of the animating principles of the legislation. The head of the public body is obligated to balance these competing principles. In Merck the Court has stated that the duty to disclose information to the public and the duty not to disclose exempt third party information are equally important, and must be taken equally seriously.
With respect to the threshold decision about whether or not notice to the third party must be given, the Court has stated that the head of a public body should disclose third party information without notice only where the information is clearly subject to disclosure and there is no reason to believe that it is exempt, and conversely the head of a public body should refuse to disclose third party information without notice only where the information is clearly exempt and there is no reason to believe that the information is subject to disclosure. In other words, only where the status of the information in a record (i.e., exempt or not) is clear to the head of the public body will notice to the third party be unnecessary. Notice must be given to the third party if there is any doubt about whether the information is exempt from disclosure. Notice is also required where the head of the public body intends to rely on the “public interest” override to disclose information that is otherwise exempt, or where the head of the public body intends to disclose a record that has been redacted in part.
With respect to the nature of the review that must be conducted in response to a request for disclosure of records, the Court rejected Merck Frosst’s assertion that the head of the public body must conduct a “genuine and thorough” analysis of whether each record contains exempt information and whether notice must be provided to the third party. The head of a public body may not have the industry-specific expertise, or the resources, to make a well-considered determination of every piece of information in every record. However, the Court has stated that the head of the public body must make a “serious attempt” to decide whether information in a record meets the threshold for notification to the third party. In practical terms, the head of the public body must examine each record to determine whether it clearly is, or is not, subject to disclosure, and if the record is not clearly at one end of the spectrum or the other, the head of the public body is then obligated to provide notice to the third party and to seek representations from the third party that will assist in making a final determination. The Court summarizes its conclusions on this point in the following way, at paragraph 90 of the judgment:
“From the third party’s perspective, it is, of course, prudent and in accordance with common sense to be as helpful as it can be in identifying precisely why disclosure is not permitted. Nonetheless, the head must make a serious attempt, with the available information and having regard to the practical constraints, to discharge the responsibility imposed by the Act to apply the requirements to disclose or not disclose. A cooperative approach is necessary in order for the system to work. The head cannot simply shift his or her responsibility on the third party and similarly the third party must provide reasonable assistance to the head in carrying out his or her duties under the Act.”
On the substantive question of when information will be exempt from disclosure on the basis that disclosure would be harmful to the business interests of a third party, the Court has affirmed that determinations must be made on a case-by-case basis in light of the particular facts and circumstances. Whether or not information constitutes a trade secret, confidential information, or information the disclosure of which could otherwise result in harm, depends on the nature of the information and the nature of the industry, among other contextual factors.
Despite its reluctance to make any categorical statements with respect to the types of information exempt from disclosure, the Court has provided some guidance on the question of what degree of probability of harm to a third party is necessary in order to invoke the exemption. There must be a “reasonable expectation of probable harm” in order to invoke the exemption from disclosure. This means that the risk of harm must be something above a mere possibility, but it need not be proven that the harm is more likely than not to occur.
Finally, the Court has commented on the duty of the head of a public body in relation to severing, or redacting exempt information from a record, the remainder of which is, or appears to be subject to disclosure. In this regard the head of the public body should apply the same analysis discussed earlier, namely identifying any information in a record that is clearly exempt from disclosure, then giving the third party notice that the head of the public body intends to disclose the remainder of the record in redacted form.