Industry breathes sigh of relief over removal of libel costs threat, but Leveson's big stick remains in reserve

The Government appears to have removed the main stick in its post-Leveson legal settlement which was designed to force publishers to sign up to an official press regulator.

The move deals a blow to Impress, which plans to apply for official recognition, and to the £1m a year Press Recognition Panel set up under the Royal Charter-backed press regulation scheme.

Under the Crime and Courts Act 2013, publishers who refuse to sign up to a Royal Charter-backed regulator face paying both sides’ costs even if they win a privacy or libel case.

This clause was due to come into force once a regulator existed which had Royal Charter recognition. But it must be signed into force by the Secretary of State at the Department of Culture Media and Sport.

Minister John Whittingdale told editors yesterday that he was not currently minded to sign it into force.

There was a palpable sense of relief in the room after yesterday’s announcement to the Society of Editors' conference.

Some believe the cost-shifting move would have made membership of an officially-recognised press regulator all but compulsory.

Forcing all newspapers to join a system of regulation created by Parliament, backed by legislation and licensed by a state-funded body is genuinely seen by many as ending 300 years of UK press freedom.

As the publisher-backed pamphlet Leveson’s Illiberal Legacy put it last week:

Would advocates of the post-Leveson regime be content if the Russian courts forced newspapers to pay the costs of government officials or oligarchs in the event of a defamation action that the newspaper one, if they refused to sign up to a recognised state-backed regulator.”

As it stands, from 3 November members of Impress (if it gains official recognition) will be protected from the threat of new exemplary damages in libel and privacy case under another clause in the Crime and Courts Act which Whittingdale is backing.

Members of a regulator which sits outside the Royal Charter (ie. IPSO) will face exemplary damages in civil cases if they show “deliberate or reckless disregard of an outrageous nature for claimant’s rights”.

At first sight it sounds like the bar on those damages has been set high. But what a judge considers outrageous could well be fairly mild by the standards of a tabloid editor.

In my view, Whittingdale has come up with a good compromise.

He is now the landlord of the last chance saloon, where the press continues to sup. Like the baseball bat kept behind the bar in rougher pubs, the costs provision of the Crime and Courts Act lies in easy reach if journalists slide back into the excesses of the past.

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