Leveson, Arbitration and the Press: clearing up some issues – Hugh Tomlinson QC

9 03 2013

arbitrationAccording to Lord Justice Leveson, one of the key requirements of a new independent press regulator is an “arbitration service”. The recommendation is that the regulator should provide “an arbitral process in relation to civil legal claims against subscribers, drawing on independent legal experts of high reputation and ability on a cost-only basis to the subscribing member” (Recommendation 22).

The Report goes on to recommend that

“The process should be fair, quick and inexpensive, inquisitorial and free for complainants to use (save for a power to make an adverse order for the costs of the arbitrator if proceedings are frivolous or vexatious). The arbitrator must have the power to hold hearings where necessary but, equally, to dispense with them where it is not necessary.The process must have a system to allow frivolous or vexatious claims to be struck out at an early stage“.

The purpose is to provide a quick and cheap alternative to court proceedings for both claimants and the press. But how would such a system work in practice?

The System in Practice

It appears that what is envisaged is a system which takes in something like the following stages:

  • Stage 1:  A newspaper which subscribes to the regulator publishes an article which a claimant believes breaches his or her legal rights (as opposed to his or her rights under the Standards Code).  The claimant writes to the newspaper which considers his or her complaint in its internal system.  If it offers acceptable redress then that is the end of the process.  If not, then, Stage 2:
  • Stage 2:  The claimant writes to the “arbitral service” and says that s/he wants to make a legal complaint.  There is a “first sift”: a member of staff decides whether the complaint appears to be within the rules of the service (which it would not be if, for example, it was an “accuracy” complaint which was plainly not defamatory) or whether the claim is manifestly misconceived.  If, on first sift, the claim appears to be valid, the claimant is sent a copy of an arbitration agreement to sign and a claim form to fill in (with explanatory notes).
  • Stage 3:  The claimant returns the signed arbitration agreement and completed claim form.  The claim form is then put before an arbitrator who decides how to proceed.  This is, in effect, a “second sift”.  The arbitrator may decide that the claim appears to be “frivolous and vexatious” and invite the claimant to make written representations as to why it should not be struck out with costs.  The arbitrator may decide (taking on his or her”inquisitorial function”) that the claim needs reformulating or supporting by further evidence.  On the other hand, the arbitrator may decide that the claim calls for a defence and will then send it to the newspaper so that it can produce a defence.
  • Stage 4:  The arbitrator will, in the light of the claim and the defence decide how to proceed.  S/he may require witness statements or disclosure of documents.  S/he may decide to make an interim award (for example, on meaning) – on paper or at a hearing.
  • Stage 5;   Final determination.  When all appropriate steps have been taken, the arbitrator will make a final determination – either on paper after inviting representations or at a hearing with witnesses.  S/he may to decide to have the hearing in public if that is appropriate.

In many cases – though not the most complex – this is a process which could be concluded in a matter of weeks.  Complex cases may take a little longer but, with efficient arbitrators the process should quick and effective.

Issues about the Operation of the Arbitration System

A number of issues have been raised about the way in which this system would operate. On proper analysis none of them represent an insuperable barrier to the proper operation of the arbitration system.

The first issue, which has been raised by the regional press, concerns the cost of dealing with frivolous complaints on the basis that if this was done by an arbitrator this could be very expensive in comparison to the current complaints system.    It is true that in order to be binding on a claimant (and to be compatible with Article 6 of the European Convention on Human Rights) a determination that a complaint is frivolous and vexatious would have to be made by the arbitrator in accordance with system rules.  If this was not done there would not have been an “arbitration” at all and the claimant could simply renew the claim in the courts.

But nevertheless, there is nothing to prevent the arbitration service carrying out the “first sift” by an employed lawyer.  As mentioned above, this is a sensible stage in the procedure (Second Stage above).  This sift would get rid of the frivolous claims at the outset.  Although it would not be a binding determination it would send a clear message to a complainant.  If a strict standard was applied then it is highly unlikely that a claimant would be able to bring a successful court claim after a “first sift refusal”.

The second concern is that arbitration is not an appropriate way to deal with defamation and privacy claims at all.  This is an important point which was raised by the legal commentator David Allen Green in a New Statesman blog piece

“Uniquely in the law of England and Wales, the law of defamation is (or should be) about vindication: the goal of the wronged claimant is a public declaration that the defamation was unfounded.  Damages are awarded to demonstrate this vindication, and statements can be made in open court.  Whilst arbitrations can be suited to contractual disputes – or even privacy disputes – they are not well geared for defamation.  [Leveson ] … does not show how the successful complainants will get their public vindication in the closed setting of an arbitration.  What is needed in respect of defamation is not to make it harder for complainants to get their rightful vindication in open court, but to make it easier and cheaper to rely on their substantive legal rights“.

This point not directly addressed by Leveson himself.  However, the answer lies, in the basic duties of arbitral tribunals (set out in section 33 of the Arbitration Act 1996).  As well as a duty to act fairly and impartially, an arbitral tribunal must

“adopt procedures suitable to the circumstances of the particular case, avoiding unnecessary delay or expense, so as to provide a fair means for the resolution of the matters falling to be determined” (s.33(1)(a)).

Although the general rule is that arbitrations are dealt with in private, there is nothing to prevent a public hearing being held.  There is a strong argument that in some libel cases, the “procedures suitable to the circumstances of the particular case” would include a public hearing.  The rules of the arbitration system should make it clear that there can be public hearings in libel cases.

In addition, there is a strong argument that the final decision of the arbitrator (known as “the award”) should be made public.  This will provide vindication for claimants – or justify the stance taken by the newspaper.  The publication of awards would also provide useful precedents.  Once again, this is something which can be clearly dealt with in the scheme  rules.

The third point concerns the impact of the requirement that the procedure be “inquisitorial” in nature.  Some commentators have even suggested that this would mean that the arbitrator would not be bound by the rules of defamation law.  This is not correct. In an arbitration that parties agree on the law which applies to their disputes and it would obviously have to a term of the arbitration agreement that English law would apply.  Even an “inquisitorial” arbitrator would be bound by that agreement and – after inquiring into the parties’ cases and their evidence – would have to apply the ordinary rules of law.

Suggestions by the Press

Two further matters have been floated by the press in relation to the arbitral process – as ways of restricting access to the system in order to reduce the number of complaints.

The first is that complainants should be required to have a code breach dealt with by the complaints arm of the regulator before making an arbitration claim.  It is difficult to see how there could be any justification for this approach.  It is already clear that one of the features of the complaints system must be that complaints should not be received directly until the newpaper’s internal complaints procedure has been engaged (Recommendation 10).  Similarly, a person using the arbitration should first have to use the internal complaints system (Stage 1 above).

But there is no legitimate basis for requiring a person who has a legal claim to use the complaints system before the arbitration system. It is true that, in many cases, a publication which gives rise to a legal claim will also give rise to a breach of the Code.  However, if the claimant does not wish to pursue a code complaint there is no proper reason for forcing him to do so as pre-condition for using the arbitration system.  The aim of such a requirement would be to reduce the number of arbitration claims.  This is not a legitimate basis for restricting access to legal process.

Second, the press have sought to argue that excessive numbers of arbitration claims could be discouraged by charging a fee.  A fee of £200 to £250 has been mentioned. The charging of such a fee would plainly be contrary to the terms of the Leveson recommendations.  He states, at recommendation 22 that the arbitral process should be free for complainants to use.  His references to the system being “inexpensive” concern the overall costs of the system (which is to be met by the press).

The imposition of a fee for making an arbitration claim would be contrary to the clear terms of the Leveson Report.  It would also be a serious fetter on the ability of claimants to use the arbitration system.  There are some members of the public for whom a fee of £250 would be a real barrier to the use of the arbitration system.

Conclusion

In summary, Lord Justice Leveson’s recommendation for an arbitration system for claims against the press is a workable and practical solution to the problem of access to justice.  Administered properly such a scheme would save costs for newspapers and would provide quicker and more effective remedies for claimants.  It is an essential element of a new self-regulatory regime.

Hugh Tomlinson QC is the Chair of Hacked Off and an Editor of Inforrm

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9 responses

9 03 2013
Godwin Busuttil

Please could you explain one or two things about this proposed scheme?

First, what exactly does “cost-only” mean?

Second, you say that access to the scheme must be ‘free’. Does this mean that the subscribing member will bear the cost of a contested arbitration come what may?

Third, if a claimant wishes to instruct lawyers, say where the subscribing member is running a case of justification, will these costs be recoverable from the subscribing member if the claim succeeds?

Fourth, is it envisaged that the arbitrator will decide the complex points of law that frequently crop up
in defamation cases?

I’d be interested in your thoughts.

9 03 2013
INFORRM

First, the recommendation is that the arbitration service should be provided on a “cost-only basis to the subscribing member”. I understand this to mean that a newspaper will have to pay the actual cost of the arbitrator in a given case.

Second, the proposal is that the scheme will be “free for complainants to use”. In other words, the subscribing member will bear its own costs come what may (unless the claim is frivolous or vexatious).

Third, Lord Justice Leveson says nothing about the question of whether a successful claimant can recover costs. If costs are not recoverable in complex cases then there would be an inequality of arms. The scheme rules will have to provide that claimants will be entitled to recover their costs where access to justice or procedural fairness require it (the most recent drafts of a statutory version of the Leveson scheme make this clear).

Fourth, it is certainly envisaged that the arbitrator will decide the complex points of law that frequently crop up in defamation cases. Arbitrators in commercial cases often decide points of law which are at least as complex as those in defamation cases. There is a right of appeal (with permission) to the High Court under section 69 of the Arbitration Act 1996 (again, the most recent drafts of the statutory version of the scheme make this clear).

9 03 2013
Godwin Busuttil

Thank you for that clarification. But there are some serious problems here, aren’t there? It is as yet unclear whether claimants can recover their costs. If they can’t, as you say, the system will be fundamentally unfair.

But assuming they can, it seems as though the subscribing member can never recover its costs from the claimant, even if it wins and the claimant can afford to pay. I can see why the press might not be happy with that idea.

I would also hazard a guess that there might be a fair few appeals to the High Court.

I still cannot see what is wrong with court for legal proceedings (unless the parties choose to arbitrate). If the Defamation Bill (as was, prior to the Puttnam amendment) to be enacted, and jury trial confined to the exceptional case – increasing the scope for active case management – is there really any reason to think that we are going to be better off costs-wise or in any other respect with an arbitral system?

9 03 2013
INFORRM

In relation to your points:

1. The idea is that the arbitrators will be “independent legal experts of high reputation” – in other words people who understand media and privacy law and will be able to “cut through” the cases without the procedural complexities of High Court litigation.

2. The arbitrators will be “inquisitorial” and so will be able to assist inexperienced claimants so that, in ordinary cases, they will not require lawyers.

3. Although the press cannot recover their costs this is no different from “qualified one way costs shifting” (which is “means blind”) – and, as Jackson says, is cheaper for defendants than ATE. The attraction for the press should be that the whole process should be much cheaper.

4. The number of appeals will depend on the quality of the arbitrators – but if they are of the same quality as High Court or Deputy High Court Judges then there is no reason to expect large numbers of appeals.

5. The argument against Court proceedings is that they are extraordinarily expensive and all attempts to keep costs down have largely failed. The hope is that a new “arbitral system” will be much cheaper for everyone. High Court proceedings without juries are still extraordinarily expensive (and beyond the reach of all but the wealthiest litigants – particularly if the changes to CFAs and ATE are applied to media proceedings).

The system has not, of course, been “road tested” – and it is possible that, like many other attempts to find a way of resolving disputes at a lower cost it will not be successful. However, the only way to find out is to try it. A couple of years of operation should reveal whether it will in fact work. If it doesn’t then the “voluntary self-regulator” could then ask the recognition body to change its “recognition criteria” to provide for a different system.

10 03 2013
Leveson, Arbitration and the Press: clearing up some issues - Hugh Tomlinson QC | The Leveson Report | Scoop.it

[...] According to Lord Justice Leveson, one of the key requirements of a new independent press regulator is an "arbitration service". The recommendation is that the regulator should provide "an arbitral…  [...]

11 03 2013
Law and Media Round Up – 11 March 2013 | Inforrm's Blog

[...] Leveson, Arbitration and the Press: clearing up some issues – Hugh Tomlinson QC [...]

14 03 2013
Gill Phillips

There is a real concern from many small regional publishers + mags that the Arb Scheme will be used by many trying to squeeze code complaints through the arbitration route because therein (unlike a Code breach) lies treasure. The trouble is there is an overlap – a high end accuracy or privacy complaint may also amount to a civil claim. A free arb scheme will be very tempting. It is naive to predict that there will not at least initially be a deluge.

There is also a very real concern that having an internal sift mechanism as Hugh envisages will not be Art 6 compliant, so that it wont achieve the desired affect as people will still be able to go to court anyway. If it is done by the external Arbitrator then there are issues of cost and consistency.

14 03 2013
INFORRM

I can understand those concerns although it is difficult to see the empirical evidence for them. After all, if there are serious privacy and accuracy complaints then they could, at present, be brought cost free with CFAs and ATE. As far as I am aware there are very few being made against regional publishers or magazines. Why should it be any different under an arbitration scheme?

In relation to the sift mechanism – the first sift will clearly not be Article 6 compliant – it will not be a “determination” of a civil right or obligation. This means that the complainant can take the case to court. But, if the sift system is working properly then only manifestly misconceived complaints will be thrown out at this stage. If the complainants were then foolish enough to go to court then they would lose (and be penalised in costs for wasting everyone’s time).

Nevertheless, I accept that there are potential problems with the arbitration system and it is something which should be reviewed after a couple of years “road testing” (incidentally, I believe that the latest version of the Royal Charter contains a special “review provision” in relation to arbitration).

Hugh Tomlinson

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

[…] have already dealt with this point in a March 2013 Inforrm post.  In that post I set out the stages envisaged  in the “self-regulator’s arbitration” […]

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