Leveson Update – 20 March 2013

Unless you were on the International Space Station (and even then it is quite possible you would have heard something), you surely cannot have missed the recent political machinations over the Leveson recommendations. The cross-party talks were on – then they were off – although they actually continued – and finally, in the early hours of Monday morning, agreement was reached by the three main parties, narrowly avoiding a vote in the House of Commons.  Since then, a full-scale spin war has raged on whether or not the proposals amount to statutory underpinning (something to which Cameron had said, as soon as the Leveson Report was published, he would never agree).

We expect there to be many more months of scaremongering, drafting and negotiating until the system is fully functional.  How well the new Regulator (or Regulators) will work in practice is yet to be seen.  They will have powers to impose large fines and demand prominent corrections/apologies, and the courts will be allowed to impose exemplary damages on any press who fail to sign up. However, there are still quite a few unknowns.

Here are some basic facts about where we appear to be at present:

Statutory Underpinning

There will, in effect, be statutory underpinning – even if it isn’t being named as such by some politicians.

The press had been concerned that, if a statutory regime were implemented, politicians might easily change the law for political purposes, leading to greater political control over the press.  Equally, some victims of press intrusion had feared that press pressure on politicians might lead in the future to a watering down of any regulatory regime.

The agreed proposals call for the establishment of a Royal Charter – not itself a statute. However, an amendment will be made to the Enterprise and Regulatory Reform Bill that says all new Royal Charters cannot be changed except by the terms set out in the Charter itself.  The new Charter will contain a provision that says it cannot be changed by ministers unless two-thirds of MPs and Lords vote in favour.

There will also need to be statutory intervention in order to bring the damages and costs regime into play (more below).

This underpinning will give the regulator teeth, something that Leveson and the victims had argued is necessary for the public to have faith in it.

Multiple Regulators

Under the Charter, a new “Recognition Body” will be established.  This body will authorise the creation, and monitor the performance of, one or more Regulators.

It is possible that newspapers will refuse to sign up to the same Regulator and instead create their own bodies.  In theory, at least, there could be multiple Regulators, each regulating different publishers.  Hopefully this can be avoided as it does seem unnecessarily complicated.

Of course, some publishers may refuse to join a recognised Regulator at all.  They of course will risk exemplary damages and costs awards from the court (see below)

(Fit for) General Purpose Rule

The Recognition Body will not be able to withdraw recognition of a Regulator unless there have been specific and repeated failures by the Regulator.

Appointments Panel

The Regulator(s) will be governed by a board, and an appointments panel will be established to decide on the membership of the board.  The newspaper industry will be entitled to appoint one person to sit on a Regulator’s appointments panel, but it will not have a veto over board membership of a Regulator, which is something they had sought.

Code of Conduct

The Regulator(s) will operate according to a new Press Code of Conduct.  The Code will be written by a committee, and that committee will consist of one-third newspaper editors, one-third journalists and one-third lay people.  The press had campaigned hard to be able to write its own Code, and so the presence of lay members on the Code committee is a major victory for victims.

The Regulator, not the press, will decide whether a breach of the Code has occurred. One of the many criticisms of the existing Press Complaints Commission (PCC) was that it was too close to the newspapers, it was controlled by the editors and it failed to enforce the existing code strictly enough.

Who is covered?

It is currently unclear whether the new regime applies to all forms of the press.  For example, what about personal bloggers, special interest publications, tweeters, news aggregators, or social networking sites?  It appears, at least at the time of writing, that there may be a move to exclude some of these, although quite how widely the regulated non-mainstream press will be defined or limited is yet to be determined.

Power to investigate

A further major criticism of the PCC was that it had no powers to investigate its signatories, or to adjudicate absent a complaint from a person who was directly involved.  The new Regulator(s) will be able to do all of this.

Arbitration

The new Regulator(s) will set up an arbitration system under which an arbitrator can be appointed to resolve disputes between the press and their alleged victims.

The arbitrator is not intended to replace the court, and we expect that there will be many situations where an arbitrator is unlikely to be an appropriate forum, such as in complex cases.  We envisage that, over time, it will be become much clearer which type of cases will be appropriate for the arbitrator to oversee and which cases are best left to the courts.

The Charter provides that arbitration should be inexpensive for all parties.  We therefore expect that arbitrators will play an inquisitorial role in order to ensure that arbitrations are conducted swiftly and without unnecessary complication.
It is unclear whether arbitrations will be conducted in private or public.

Fines

The new Regulator(s) will be able to impose fines on the press of up to £1m.  Over time it is believed that the risk of large fines will act as a deterrent against the greater excesses of certain elements of the press.

The funds from fines will be reinvested into the arbitral arm of the Regulator (see above).

Apologies

The regulator will be able to “direct” apologies from newspapers.  It is unclear whether it will be able to dictate the prominence of an apology in a newspaper, but it can dictate that an apology must be published, and, given the Prime Minister used language such as “upfront apologies”, it is likely to be able to insist on due prominence.

Exemplary damages and costs

A newspaper which fails to submit to an approved Regulator may face exemplary damages and costs if they lose a claim in court.  This change will be underpinned by a change to the Crime and Courts Bill.

As to legal costs in court proceedings, the general rule appears to be that if a claimant chooses to use the courts when it would have been appropriate to use the Regulator’s arbitration system, then even if they are successful they may not get their costs awarded to them.  However, in cases where arbitration is not an appropriate forum (such as in complex cases), it is very likely that the courts will awards costs to a successful claimant.

As to legal costs in arbitration proceedings, the Charter will provide that arbitration should be free for complainants. The Charter will also provide that successful claimants shall be entitled to recover costs, but subject to a cap.

Michael Simkins LLP
20 March 2013
www.simkins.com

Gideon Benaim is a partner at Michael Simkins LLP and a specialist in reputation protection. He can be contacted at Gideon.Benaim@simkins.com or on +44 20 7874 5685.