Leveson and the Regional Press: the misconceived “arbitration problem” – Hugh Tomlinson QC

19 02 2013

RegionalOne of the key recommendations of the Leveson Report is that a new independent press regulator should provide a “fair, quick and inexpensive” arbitration service.  This is one of three “arms” of the new regulator: standards enforcement, complaints handling and arbitration.  It is proposed that the arbitration service will deal with “civil” complaints – cases which would otherwise be the subject of Court proceedings.  There is a helpful diagram in the Report (Vol 4, K, 4.3, p.1759).

This distinction – between, on the one hand, complaints of code breaches and, on the other, civil claims – is the answer to the oft repeated claim that a Leveson compliant regulator will be “too expensive” for the regional press.

It is said that an arbitral service will be so expensive that, as a result, it will be cheaper for the regional press to “walk away from Leveson”. This view is argued by a “Devil’s Advocate” in a blog post yesterday by Roy Greenslade entitled “What’s to stop regional publishers walking away from press regulation?“.  He draws attention to a recent interview given by the editor of the South Wales Argus in which he foresees “a substantial increase in spurious complaints driven by people seeing pound signs before their eyes”.

These concerns are misconceived.  The true position is the opposite: it will be cheaper for the regional press join a “Leveson compliant regulator” and more expensive for it to stay out. Let me explain.

At present, complaints of “code breach” are dealt with by the Press Complaints Commission – this covers things like “accuracy”, “privacy” or “intrusion into grief”.  Take a recent example. In November 2012, the PCC upheld a complaint by a woman that the Wiltshire Gazette & Herald had published an article which contained excessive detail about a method of suicide, in breach of clause 5 of the Code.  This method of resolving “code complaints” is generally thought to work well for the regional press.  It provides an outlet for complainants at low cost to the newspapers.

What change will there be under the proposed new system?  None at all. Complaints of breaches of new “Standards Code” will be dealt with by the new regulator – this will continue to be quick and cost free.  There will be no adverse effect on the regional press.

The position is different if the complaint is a civil one – a claim for defamation or invasion of privacy.  At present such claims are dealt with by the courts and the legal costs are substantial – even in the case of cases which are quickly resolved.  Such cases against the regional press are relatively rare (although one involving a Cambridgeshire newspaper was settled last week with a Statement in Open Court).

What change will there be under the proposed new system?  Instead of being taken to court these case will be dealt with by the “”fair, quick and inexpensive” arbitration – with, it is expected a considerable saving of costs.

So what is the problem for the regional press?  It is said that the arbitration system is going to be too expensive for them.  What is the basis for this?

It is said that there will be two sources of increased costs. First there are the administrative costs of running the arbitration system itself.  But, as Roy Greenslade says, this can be delat with by “some kind of mathematical formula to ensure the regionals pay only a proportionate amount”.  In other words, if the regionals don’t use the system very much they will not pay very much.

But, secondly, it is said, there is a more serious cost which the regionals will face if an arbitration system is brought in.  Roy Greenslade puts the argument this way:

“the existence of an arbitral arm might well encourage complainants to seek financial compensation. Then the process starts to cost, big time”.

The problem with this argument is that it misses the distinction between complaints and civil claims.  Most complaints do not give rise to civil claims: inaccuracy is only actionable if defamatory, intrusion into grief is not usually actionable at all.  To use the example, already mentioned, the publication of “excessive detail about a method of suicide” does not give rise to any civil claim.  It could not be the subject of an claim to the “arbitral arm” of a new regulator.

The idea that there are legions of potential claimants out there – with accompanying fleets of “ambulance chasing” claims farmers – does not bear serious examination.  At present, a libel or privacy claim can be brought – with the benefit of a conditional fee agreement and “after the event insurance” – at no cost to the claimant.  This system has been in place for some years and has not resulted in a flood of claims against the regional press.  If arbitration is cheaper for the media (as contemplated) and there are restrictions on costs awards to claimants then such a system is likely to get rid of “ambulance chasers” who prey on the regional press (if there are any) rather than encourage them.

The arguments in favour of the regional press joining a new “Leveson compliant” self-regulator are even stronger.  Let us just assume, for a moment, that the national press establishes a regulatory body but the regional press refuses to join.  What then?

Once such a body had been established then the “Leveson incentives” would kick in. These would include, importantly, costs penalties for publishers who could have joined a regulatory body but choose not to do so.  These costs penalties (which are in similar form in the draft “Government clauses [pdf]” to accompany a Royal Charter or the Hacked Off “Leveson Bill” [pdf]) would mean that a non-regulated newspaper will not recover its costs in libel proceedings, even when it wins.

Let me spell this out.  If a regional newspaper decided not to join a regulator – to save itself the costs of the arbitral arm – it would be exposed to “no cost” legal actions by those who complained about material which it had published.  The newspaper would have to pay its own costs – at High Court rather than “arbitration service” rates.   It is going to be much worse “outside” the new system than inside.

And it gets worse. When the new regulator gets to work there will no longer be a PCC.  Complainants who have been content to use the PCC system up to now will have nowhere to go if they have issues with coverage in the regionals.  They will, indeed, be driven to make legal complaints – through the courts, with little costs risk (because of the Leveson incentives).  More court claims will inevitably result.

The purpose of the new arbitration system is to provide low cost access to justice for complaints and to remove costs burdens from newspapers. It is not a system to provide compensation where none is available at present. Regional newspapers face low levels of legal complaints at present and are going to face low levels of arbitral claims.  They should be charged accordingly by the new regulator.  If they stay outside however, they will face increased levels of legal complaints – from individuals who have no PCC to go to and can bring “costs free claims”.

Lord Justice’s Leveson’s proposal for a voluntary and effective self-regulator set up by the press is the best solution for the regionals as well as the nationals.  It is a carefully balanced package – protecting both press and public.  The press has embarked on a two month campaign of Leveson misinformation but the regional press should not be misled.  Leveson will benefit them as well.

Hugh Tomlinson is the Chair of Hacked Off and an editor of Inforrm.

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3 responses

25 02 2013
Law and Media Round Up – 25 February 2013 | Inforrm's Blog

[...] Leveson and the Regional Press: the misconceived “arbitration problem” – Hugh Tomlinson QC [...]

28 05 2013
Leveson, Arbitration and the Local Press: Three Misconceptions | LSE Media Policy Project

[…] to national newspaper publishers but not to their regional and local counterparts.  As I have pointed out before on Inforrm, the concerns which have been expressed are based on a number of misunderstandings and […]

6 07 2013
The Evening Post - Why the regional publishers cannot accept arbitration

[…] have read Hugh Tomlinson’s arguments (here and here) in which he believes the regional industry’s concerns stem from “misunderstandings and […]

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