ENGLISH PEN RESPONSE TO CONSULTATION ON PRESS STANDARDS BOARD OF FINANCE PETITION FOR A ROYAL CHARTER

English PEN welcomes a public consultation on the issue of the future regulation of the press. That this consultation comes at the eleventh hour, after relevant legislation has been passed by Parliament, and that the consultation period is woefully short (thus not adhering to the Government’s own principles with regard to consultations 1) is however disappointing. We hope that despite the timing and low profile of this consultation, due consideration will be given to the arguments put forward and proper time will be taken to reach a conclusion on the critically important issue of how the press in this country should be regulated. Such diligence is necessary now because the Government’s approach to implementing a new regime to regulate the press has so far been opaque, with closed meetings taking place between the Government and the press, or politicians and one specific interest group, without the opportunity for any wider input. One very specific point – that concerning ‘small-scale bloggers’ – was consulted on slightly more widely, over a very short time period, but this does not add significantly to the legitimacy of the process. Even parliamentarians were asked to pass legislation which had not been subject to any scrutiny in committee, concerning not just the specific issue of press regulation, but the constitutional question of how royal charters can be amended. In the mêlée that followed the introduction of draft legislation on the issue to the Crime and Courts Bill, the Government suddenly realised that the legislation would have an adverse impact on bloggers. This impact was described by Hacked Off, which lobbies in favour of press regulation, as ‘unforeseen’2 and a last minute scramble produced an amendment to try to provide bloggers with an exemption from the relevant consequences. The impact would not, however, have been unforeseen if a proper

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https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/60937/ConsultationPrinciples.pdf 2 http://hackinginquiry.org/news/hacked-off-the-law-bloggers-and-small-publishers/

consultation had been carried out: in December 2012, following the publication of the Leveson Report, English PEN warned that, if implemented, this very problem would arise 3. That the Government’s haste to introduce legislation about press regulation followed Lord Leveson’s public inquiry on the same subject matter is not a good reason to ignore the usual consultation process. The inquiry did not consult on its preliminary findings, as it might have done, thus meaning that nobody had an opportunity to respond formally to the recommendations made, and in any event the Government is seeking to implement different proposals to those made by Lord Justice Leveson. The issues at stake are not just of concern for the mainstream press, but for individuals and small organisations as well. The Government’s proposals will affect all publishers. Given the ease with which anyone can publish on the internet, this could have implications for each and every one of us. Furthermore, the issues are not only important for those in the UK, but also for the rest of the world, with other countries frequently looking to the UK when considering their own democratic and compliance structures. We, and many other organisations and individuals, have very serious concerns about the Government’s proposals for press regulation. We are pleased that the Government is finally consulting on this hugely important matter and hope that it will listen. Press regulation – an overview The framework of the system of press regulation envisaged by the Government is formed both by the Royal Charter (whether the Government’s version or the press’s version) and by sections of the Crime and Courts Act 2013. This legislation introduces the prospect of a certain class of defendant – a ‘relevant publisher’ ̶ having to pay exemplary damages and punitively high costs in civil, media-related claims. Such ‘relevant publishers’ will be exposed to making these payments if they are not members of a regulator approved by a recognition panel established by Royal Charter. English PEN cannot comment on the proposed Royal Charters for press regulation without also commenting on the legislation (which has already been passed) which forms part of the same system. 3
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http://www.englishpen.org/what-about-the-bloggers/

To aid understanding of our views, it will assist if we make clear now that we do not believe that the proposed system of press regulation amounts to voluntary regulation. Two aspects of the approach undermine the ‘voluntary’ nature of signing up to an approved press regulator (or rather signing up to one that applies to become approved). The first is the consequences in litigation for failure to sign up – both exemplary damages and punitive costs orders; the second is the threat that if publishers do not sign up voluntarily, something more drastic should be put in place. This comes partly from Lord Justice Leveson’s personal view as expressed in the report4 that if no approved regulator is established, or if a significant publisher remains outside this regime, then Parliament should move to bring in statutory regulation. The threat is reinforced through the measures in the Government’s Royal Charter to ensure that the recognition commission must report to Parliament, after a year, if either of these two situations exist. As a consequence this approach to press regulation amounts to coercion – the process is to force force publishers to join up to an approved regulatory body.

Whether the new system is voluntary or not is important for several reasons.

Firstly, a new, approved regulator will have a standards code that addresses issues of conduct, privacy and accuracy. This is the first sign of content regulation. If participation in the regulatory body is truly voluntary, this is not problematic. The participants would voluntarily be holding themselves to particular standards which may include ethical considerations, but if participation is de facto compulsory publishers would be required to meet standards imposed on them other than by law.

Secondly, an approved regulator will be able to impose significant fines (of up to £1m) and direct or require the placement of corrections and apologies. To be forced to join such a regulator would have a clear impact on the right to free speech.

Thirdly, membership of the body – and use of its arbitration scheme ̶ must be voluntary to comply with article 6 of the European Convention on Human Rights.

Crime and Courts Act 2013

4 Volume 4, Part K, Chapter 8, Para 7.3

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Exemplary damages Under s.34 of the Crime and Courts Act, exemplary damages may be awarded by the court against a relevant publisher if it does not subscribe to an approved regulator, if it is found liable in respect of a media-related claim, if the claimant has asked for such damages to be awarded and if “the court is satisfied that— (a) the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights, (b) the conduct is such that the court should punish the defendant for it, and (c) other remedies would not be adequate to punish that conduct.” 5 The Court must take into account whether membership was available to the publisher, the reasons for the defendant not being a member, and whether internal compliance procedures were in place. Exemplary damages may also be awarded against a relevant publisher who does subscribe to an approved regulator if the regulator’s decision in respect of penalising (or not penalising) the defendant was manifestly irrational. The availability of exemplary damages for media torts clearly restricts the right to freedom of expression, a freedom guaranteed by article 10 of the European Convention on Human Rights (ECHR). Article 10 ECHR allows such restrictions only if they are prescribed by law and are necessary in a democratic society, and (amongst other reasons) to protect the reputation and rights of others. The Government argues exemplary damages are necessary to protect the rights and reputation of others, but has failed to take into account that less restrictive measures could achieve this same result, meaning that exemplary damages are not necessary6. Furthermore, article 14 ECHR provides that signatories may not discriminate between parties in respect of convention rights, yet the legislation provides for ‘relevant publishers’ to be treated differently to those who are not ‘relevant publishers’ in respect of the article 10 right to freedom of expression. This discrimination makes free speech

5 s.34(6) Crime and Courts Act 2013
6 See analysis by Article 19 http://www.article19.org/data/files/medialibrary/3687/13-04-02-LA-uk.pdf
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cheaper for certain publishers – those who are members of an approved regulator – than others, creating a two-tier system of justice. Costs s.40 of the Crime and Courts Act provides for the court to make different awards of costs in media- related claims. The established rule in civil proceedings in England and Wales with regard to costs is that costs follow the event, meaning that if a party loses, it will pay the winner’s costs as well as its own. This has become somewhat distorted in recent years with changes to a number of different court rules and funding mechanisms making costs rules more complex, but can still be said to be the broad principle which is applied. The Crime and Courts Act will change this rule for ‘relevant publishers’ in media-related claims. The new rules state the court must not award costs against a relevant publisher who is a defendant to a media-related claim if that defendant subscribed to an approved regulator at the time the claim commenced, unless that regulator’s arbitration service could have been used to resolve the claim and was not. The new rules also state the court must award costs against a relevant publisher who is a defendant in a media-related claim if that defendant did not subscribe to an approved regulator at the time the claim commenced, unless the approved regulator’s arbitration scheme would not have been able to resolve the claim7. Once again, this makes free speech cheaper for some people and more expensive for others. It also raises the very real prospect of a publisher acting within the law, being taken to court by a complainant who loses the case, and finding itself being penalised by not being able to recover its legal costs because it does not subscribe to the regulator. It is an infringement of freedom of speech to punish someone for lawful publication of material. There is a concern that publishers may be driven out of business because of this, but even if there was no risk to the overall business there would still be an objection – it is punishment for no offence.

7 There are exceptions to these general rules for defendants who are unable to be a member of an approved
regulator for reasons beyond its control, or if was unreasonable for the defendant to have been a member at that time. It must also be ‘just and equitable in all the circumstances of the case’ for the Court to make the order for costs. (s.40 Crime and Courts Act 2013)

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Furthermore, the Government’s costs rules discriminate between those who choose to join the regulator, giving them cheaper access to justice than those who do not. This once again raises issues under art 14 ECHR. If the intention was truly to drive down costs of proceedings, rather than force publishers to join a new regulator, the costs sanctions would depend on a party’s behaviour in litigation and their willingness to use alternative methods of dispute resolution, as opposed to whether they are a member of a regulator or not. Surely a publisher who acts within the law and offers arbitration on exactly the same basis as envisaged by the regulator should not be punished merely for the fact that they choose not to join what is supposed to be a ‘voluntary’ regulator. In addition, the costs rules would seem to contravene the right to a fair trial, which is guaranteed by article 6 ECHR in relation to civil as well as criminal cases. Article 6 gives parties the right of access to a public hearing before an independent and impartial tribunal and underpins the established principle that a party cannot be forced to use arbitration instead of going to a court hearing. This principle was reiterated in Stretford v FA Ltd8, when the Court of Appeal held that an agreement to arbitrate must be voluntary and not compulsory and, amongst other things, must be entered into without constraint. In the Alternative Libel Project9, English PEN and Index on Censorship proposed that parties should have to explain to the court in a confidential witness statement if they were not prepared to use alternative means of dispute resolution to try to resolve the dispute in hand. If the court does not accept those reasons the party may have to pay increased costs if it loses the case/may not get all of its costs back if it wins.

The project’s submission to the Leveson inquiry10 envisaged a voluntary regulator offering an ADR process as was being discussed in many circles at the time. Members of such a regulator could offer use of that process to claimants; if either party chose not to use such a system costs consequences could follow. This would apply equally to defendants who were not members of a regulator – there could be consequences if they did not choose forms of ADR available to them. 8 [2007] Bus LR 9 http://www.englishpen.org/wp-content/uploads/2012/03/Alternative_Libel_Project_FinalMarch2012.pdf 10 http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Alternative-Libel-ProjectEnglish-PEN-and-Index-on-Censorship.pdf

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The Alternative Libel Project’s proposals would apply to all parties regardless of status, and would not contravene article 6 or article 14 ECHR. Definition of relevant publisher/exclusions The new system of press regulation is intended to ensure big players become regulated. Lord McNally, in debate in the Lords, said ‘We do not want to draw in too broad a range of publishers. Our aim has been to capture the main elements of the press, as well as what I find it helpful to refer to as "press-like" activity online.’ 11 Yet the Government’s draft Royal Charter will mean that many other publishers will be caught by punitive measures intended to apply only to these main elements of the press, or those who carry out press activity online. The punitive measures – exemplary damages and higher than usual costs – will apply to so-called ‘relevant publishers’. Given the Government’s stated intention, one would have thought that the definition of relevant publisher would have been drafted quite narrowly, so as to not draw in ‘too broad a range of publishers’. On the contrary, it has been drafted widely, and exempts specific groups of people. A ‘relevant publisher’ is defined as “a person who, in the course of a business (whether or not carried on with a view to profit), publishes news-related material— (a) (b) which is written by different authors, and which is to any extent subject to editorial control.” 12

News-related material means news or information about current affairs, opinion about matters relating to the news or current affairs, or gossip about celebrities, other public figures or other persons in the news.13 The exempt publishers, identified in schedule 15 of the Crime and Courts Act, include one for broadcasters, as well as trade and hobby like magazines, scientific and academic journals, and company news publications are also exempt if they contain news-related material on an incidental basis that is relevant to the main content of the title. Public 11 Lords Hansard, 25 March 2013, Column 849 12 s.41(1) Crime and Courts Act 2013 13 s.42(7)Crime and Courts Act 2013

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bodies and charities that publish news- related material in connection with carrying out its functions are also exempt, as are book publishers. We are very concerned about the approach of having a very wide definition of ‘relevant publisher’ accompanied by an exhaustive list of exemptions, which leaves significant room for doubt. For example, how will a public body be defined? (Presumably it will include public universities but not private universities). When will a title relate to a particular pasttime, hobby, trade, business, industry or profession? Will this include blogs and websites which cover a range of issues and professions such as a financial services blog or Mumsnet? When will the book publisher exemption apply? If a website publishes both a book and online news, does this mean it will be exempt? There are many more uncertainties that can be envisaged. Indeed, it would be extremely difficult, if not impossible, to come up with a definition which includes this range of publishers, and the inevitably non-exhaustive nature of the list means that even by listing all of these types of publisher as specifically exempt, there is still a risk that other categories of publisher will miss out on an exemption ̶ not by intention, but by omission. These uncertainties themselves inhibit everyone’s right to exercise freedom of speech: an individual unsure of whether they fall into the category of relevant publisher will be faced with a choice of joining a regulator (with the restrictions on the person’s ability to speak freely that this brings), not publishing anything contentious, or publishing something contentious as a non-member of a regulator and risking an expensive court battle to prove they are not a relevant publisher. Draft Royal Charters It will be clear from the above that we have very significant concerns about the legislation which will in effect compel publishers to join an approved regulator. We are disappointed that both the Government’s draft and the press’s draft of a new Royal Charter will trigger the availability of exemplary damages and punitive costs orders in cases concerning media torts14. Our comments on the charters drafted by the Government and the press should therefore be seen in this context.

14 s.42(2) and (3) Crime Courts Act 2013
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The main differences between the Government’s charter and the press’s charter are about influence and control. We believe that any recognition panel and regulator should be completely independent from Government and politicians. This is critical for the independence of the press, which has an important role to play in bringing politicians to account. The press and other publishers cannot perform this role properly if there is a risk of political interference in their work. We also recognise that if the proposed recognition system is to operate as intended, the public needs to have confidence in the independence of the recognition panel. It is from that perspective that we make the following specific points.

The board of the recognition panel should include one person with experience of the press industry, and one person with experience of making public policy in the field of consumer rights. The press charter requires one member of the board of the recognition panel to have experience and understanding of the newspaper and magazine industry; the Government charter requires experience in making public policy particularly in the context of consumer rights. We support the presence of somebody with experience of the press industry sitting on the board of the recognition panel. This person need not (and perhaps should not) have any continuing interests in the industry, but could bring important knowledge of the way the industry operates to a board that may otherwise be completely unaware of this. We see no reason, however, why there should not also be a requirement for a person who has experience in making public policy in the context of consumer rights to be on the board of the recognition panel. This would bring balance to the board.

There should be no requirement for the board of the recognition panel to report to Parliament. The Government charter contains the requirement for the recognition panel to report to Parliament on the success or failure of the system: it also creates a duty to inform Parliament if there is no recognised regulator for a continuous period of three months after the first anniversary of the commencement of the charter or if in the opinion of the recognition panel, the system of regulation does not cover all significant news publishers.

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This raises two questions. Firstly, how will the recognition panel define ‘significant publisher’? This is a term that has been used many times since the publication of the Leveson report but has yet, as far as we can see, to be defined. Will it just extend to the national newspapers or, as is more likely, go further and include national magazines and popular websites?

Secondly, if the recognition panel reports that not all significant publishers subscribe to an approved regulator, how will Parliament respond? The clear implication in the Leveson report is that the Government should then consider statutory regulation, which would amount to licensing of the press. The concern is that there will be significant political pressure to do this, given the many ‘last chances’ the press has appeared to have been given to get its own house in order.

The very fact that the recognition panel must report to Parliament in the event that no regulator has been approved or a significant publisher does not subscribe, is a threat to the voluntary nature of the system.

The press’s version of the charter contains no such requirement, and so is much preferred in this respect.

There should be no political involvement in press regulation, including in the amendment of the Royal Charter.

The press’s charter may be amended with the unanimous agreement of the members of the Recognition Panel, the members of the board of any recognised regulator, and the members of the boards of all trade associations represented on the Industry Funding Body (a ‘body established by the newspaper and magazine

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industry to collect and provide funding for the independent self-regulation of the press’).

This is in contrast to the Government’s version of the Royal Charter, which may only be amended with the approval of both Houses of Parliament (obtained by 2/3 of members present voting in favour of the proposed changes). We are incredibly uneasy about the prospect of any political involvement in the regulation of the press. There should be no prospect of political interference with the press, however remote.

The Royal Charter should specify that an approved regulator be able to ‘require’ remedial action as opposed to ‘direct’ such remedial action. Both the presss’ and the Government’s draft of the Royal Charter intend that the regulator should be able to decide on appropriate remedial action for breach of standards, specifically the nature, extent and placement of a remedy. In our view, to ‘require’ such action will be sufficient for an approved regulator to act with authority. Any publisher which has signed up to be a member of an approved regulator will be obliged, by the membership contract, to comply with the regulator’s decisions. To fail to act when the regulator has required it will be in breach of that contract. This makes it unnecessary to use the word ‘direct’, which is seen by some as giving approved regulators too much power. Submitted by English PEN, Free Word Centre, 60 Farringdon Road, London EC1R 3GA 020 7324 2535 23 May 2013

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