State-imposed press regulation analysis: The view from the other side of the Rubicon

The die is cast and here we stand on the other side of the Rubicon.

In an improbable turn of events the legions of the popular press have been overpowered by an ad-hoc campaign group representing the victims of press intrusion.

The end result is a system of press “self-regulation” which is strictly prescribed by Parliament at the outset – but which is henceforth protected from interference either by politicians or press owners and publishers.

The question is will the press sign up to it?

At present many are clearly angered and dismayed by the fact that the final deal resulted from talks between politicians and Hacked Off – Leveson had intended the new form of press regulation have the consent of the industry.

And while the will of Parliament and so – the people – could not be clearer, the new system of press regulation remains a voluntary one.

While the FT, Independent and Guardian have already given the new system cautious backing –  the more powerful right-of-centre coalition of Telegraph Media Group, Associated Newspapers and News International have already sounded alarm bells.

They (together with the Newspaper Society, Northern and Shell and the PPA) have raised questions over “deeply contentious issues” which remain with the Royal Charter.

Top-level lawyers are pouring over the exemplary damages amendment  to see if it contravenes Article 10 of the Human Rights Act (freedom of expression).

If exemplary damages stacks up, the cost incentive to join is a powerful one – with the implication being that publishers who are not part of the state-recognised press regulator will be heavily-penalised in libel cases. They will be  punished by judges for putting the state through the cost of a trial when a perfectly good low-cost libel arbitration scheme was available and they chose not to use it.

For refuseniks like The Spectator, and possibly Private Eye, this could be costly even for cases which don’t go to trial. Lawyers will be able to argue for much higher out-of-court settlements because of the threat of higher potential court costs.

On the other hand, publishers who are in the new regulation club may be able to save themselves hundreds of thousands in legal fees by dispensing with claims via the new low-cost arbitration service.

This doesn't just apply to newspapers and magazines – but to anyone who produces "news-related material, produced by multiple authors and under editorial control". So blogs and news websites, but not broadcasters as they are already covered by Ofcom.

The industry has always funded and run the PCC (at a current cost of £2m) because it staved off the threat of statutory controls. Now a statutory-solution has been imposed on publishers, they may well now wonder what is in it for them.

The major publishers will not only have to fund the new regulator by collecting levies (perhaps up to £3m a year) – but senior figures are going to have to give up a considerable amount of time to administer the new complex regulatory framework ensuring that it complies with the detailed recognition criteria outlined in the Royal Charter.

Under the final press regulation deal agreed yesterday, the industry appears to have no influence over the Recognition Panel which will licence the new press regulator.

Industry figures will sit on the board of the new press regulator itself, but be in a minority and be appointed via an independent process – so they may not be the industry figures the owners want.

The industry also loses control over the Editors’ Code Committee which underpins press regulation. Under the new plan, appointments to it will be made by the independent board of the new regulator – with equal weight given to members of the public, editors and journalists.

While the chief objections to the new regime from the big three on the right are on the grounds of principle and power – for the regionals the chief concern is cost.

You only have to look at the full-year results of regional press giant Johnston Press to see that the regional press is in a perilous financial position.

The new libel arbitration service will not be cheap to set up and fund. Its mere existence could well encourage complainants to seek libel damages where previously they would have been satisfied with a PCC-brokered correction or apology.

By making libel claims so much easier and quicker (the service will be free for complainants) – it could lead to many more being made.

Under the arbitration system, complainants recoup their own legal costs if they win – but publishers do not.

With such an overwhelming democratic mandate behind the new system (the exemplary damages clause was passed in the Commons by 530 votes to 13 last night) – I fear the industry may have little choice now than to go along with it and hold on to what little control and influence it still has over the regulator.

Nearly everyone does afterall agree that in the wake of the hacking scandal something drastic has to be done to restore public confidence in our trade.

But in view of the fact that regional newspapers were found to be completely blameless by Lord Justice Leveson – the industry has to find a way to insulate them from extra costs caused by the new system.

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