Independence will be the key question for new press regulator proposed by publishers

Eight months after Lord Justice Leveson called for the creation of a new independent press regulator, the newspaper and magazine industry has outlined exactly what it proposes to create.

The broad principles of what that regulator will do have been known for some time. Unlike the Press Complaints Commission it would have the power to launch its own investigation into some future equivalent of the hacking scandal and issue fines of up to £1m. It would also have extra powers to ensure compliance with the Editors' Code and to uphold editorial standards.

The key potential sticking points for the new scheme lie in two areas: libel arbitration and independence.

Under the Parliament-backed press regulation scheme, the creation of a libel disputes arbitration service is compulsory. The plan put forward by the press industry yesterday says only that it "may" create an arbitration service, provided that a workable system can be found (this satisfies the concerns of regional publishers who fear increased costs).

The other key difference lies with independence.

Under the Parliament-backed scheme the appointments process for both the board of the regulator and the complaints-handling committee would be independent of both Parliament and the press.

Under the scheme put forward by the press industry today, the board of the regulator would comprise 12 members: an independent chair, six further independents and five people with recent senior experience in publishing. The appointments board must "take into account" the views of the Regulatory Funding Committee (ie. the press owners) when making its appointments.

And there must be "consensus" on the appointments panel for all appointments. The appointments panel comprises three independents and two publishing industry representatives. The publishers say this doesn't equate to power of veto over appointments though others, such as Lord Prescott, dispute that interpretation.

Do these differences matter?

Well they could do, because like it or not – future press regulation has to take statute into consideration. 

Under the Crime and Courts Act 2013  most major publishers of "news related material" will be subject to the threat of exemplary damages in libel trials if they are not members of an 'approved regulator'.

That legislation defines an 'approved regulator' as one which is recognised by Royal Charter. 

So while the press industry carries on regardless with the creation of a new regulator, the Royal Charter process still matters.

This new regulator is going to be expensive to join, possibly double the cost of the old PCC (Chris Blackhurst estimated the cost for the Independent and Standard as  £400,000 a year). So publishers are going to be much more likely to sign up to the complex contracts published yesterday (see links below), which would bind them in to the new system, if it has the advantage making libel disputes cheaper to resolve.

The indications from the Government are that the Privy Council is only planning to consider the Pressbof press regulation Royal Charter in order to cover itself legally before the Parliament-backed press regulation Royal Charter goes to the Privy Council later this year. 

If the Parliament-backed Royal Charter is passed in its current form, the Independent Press Standards Organisation outlined yesterday would not meet its recognition criteria and so fail to insulate its members from the threat of exemplary damages. This could mean that it is unsustainable and unlikely to attract membership from outside the core newspaper and magazine publishing industry,

My hunch is that Parliament's Royal Charter, and the industry plan outlined yesterday, will both move enough towards each other for the new regulator outlined put forward by publishers to gain official recognition.

I suspect that the press industry will have to concede that the Recogition Panel, which decides whether the regulator is genuinely independent and effective, will have to be totally independent of the press owners in exchange for retaining more influence over the composition of the regulator itself. And the Government will have to concede that the Royal Charter is not underpinned by the statutory provision already passed in the Enterprise and Regulatory Reform Act 2013.

This legislation underpins the passage in the Parliament-backed Royal Charter stating that it can only be changed in future with a two-thirds majority of both Houses of Parliament. That legislation does not apply if the passage on super-majorities is removed from the Royal Charter.

Here are some useful links to the relevant documents:

Royal Charter documents:

The Parliament-backed Royal Charter Draft Royal Charter on self-regulation of the press (published on 18 March 2013) 

The Pressbof (newspaper and magazine industry) Royal Charter for the Independent self-regulation of the press (published in May 2013)

Independent Press Standards Organisation documents:

Financial Sanctions Guidance

Regulations

Contract between publishers and the regulator

Articles of association for the new community interest company

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