News publishers have launched a bid to stop rival press regulator Impress getting official approval from the Press Recognition Panel set up by the Government.
Members of the News Media Association argue that Impress breaches 20 of the recognition criteria which the Panel must judge it against under the Royal Charter on press regulation.
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Most significantly they say it fails the central test, of independence, because it is almost entirely funded by one wealthy donor: the press reform campaigner Max Mosley.
Publishers want to stop Impress from getting official recognition to avoid the penalty clauses in the Crime and Courts Act being enforced against all publishers who are not part of an officially recognised regulator.
These clauses protect members of an approved regulator from paying exemplary damages in legal actions and mean non members must pay both sides' costs even if they win libel and privacy cases. The current Government has indicated that it is unlikely to enact the second of these provisions.
Most UK newspaper and magazine publishers have instead signed up to the Independent Press Standards Organisation, which has no plans to seek official recognition.
Impress has applied for recognition and the NMA made its submission to the Recognition Panel in response to a call for evidence.
The NMA, which represents 1,100 UK local and national newspapers, has given the Press Recognition Panel a 45-page submission explaining why the Impress application for official approval should be refused.
The NMA argues in summary that Impress is "unrepresentative of the press as a whole, it relies for its funding on a single wealthy donor Max Mosley, it has no editorial code of standards and it cannot be described as independent, credible or effective".
It says: "It would be irrational for the PRP to recognise IMPRESS as a regulator and that doing so would not help to create an effective regulator. It would, however, unfairly impose on the vast majority of UK publishers a system of penalties in circumstances that were never intended."
NMA notes in its submission that Impress relies on its funding from "a single benefactor with outspoken views on press conduct and regulation". Mosley has campaigned for press reform since his extra-marital sexual activities were exposed by the News of the World.
Not set up by 'relevant publishers'
It says that under the Royal Charter, the recognised press regulator should be "an independent body formed by or on behalf of relevant publishers".
Impress so far as 13 publishers who it says have signed up as members. They are all small operations and comprise a mixture of online-only and hyperlocal titles.
The NMA says these titles do not appear to be "relevant publishers" as defined by the Royal Charter-related clause in the Crime and Courts Act. And it says there is no evidence that Impress was set up on their behalf.
It says: "It is extremely surprising that a body should be making a serious application for recognition as a press regulator with such a limited base of potential members."
Impress states in its recognition application that it is mainly funded by an "independent" charity called the Independent Press Regulation Trust which has committed to give it £950,000 a year for the first four years.
The NMA notes that total subscription income for Impress from its members is set to be around £1,000 a year in 2016/2017.
No mention of Mosley in application
The IPRT was registered as a charity on 20 July 2015 and its only apparent donor is the Alexander Mosley Charitable Trust, set up by Max Mosley and his family.
The NMA notes that Impress never mentions Mosley or the AMCT in its recognition application.
The four-year funding agreement for Impress is said to give it "absolute operation independence".
But the NMA notes that the IPRT can choose to stop funding Imp0ress if it wishes.
It says: "It is surely obvious that if Impress fails to meet AMCT's (or Max Mosley's) expectations in any way it will lose its funding."
The NMA notes that from 2017 Impress has projected that it will be charged £220,000 a year by the Recognition Panel.
It says this arrangement also compromises the independence of the Recognition Panel: "Just as Mr Mosley has the power to close down Impress, so he would have the power to close down the PRP. In other words, the PRP cannot credibly claim it is independent if it recognises a body that relies for its funding on Mr Mosley."
Impress 'too expensive' for big publishers to join
NMA says Impress is unlikely to any major publishers largely because it is "so expensive". The five largest publishers in IPSO are said to pay a total of £780,000 towards the body. The NMA claims that according to the Impress rate card, they would pay £800,000 each to join it.
It says that if two large national titles and two large regional newspaper groups joined IPSO it would have funding of £3.4m a year, £500,000 more than IPSO which regulates 85 publishers.
The NMA also slates the libel disputes arbitration system set up by Impress, as required by the Royal Charter.
It notes that this would be free for claimants, with publishers paying their own costs and arbitration fees of up to £3,500. Publisher could also have to pay claimant costs of up to £3,000.
The NMA claims that under this scheme publishers could "easily" be liable for costs of £10,000, plus damages. It says the cost of even one arbitration could "easily endanger the viability" of one of the small publishers regulated by Impress.
And it says that a scheme with no financial risk for claimants could lead to a "proliferation of claims".
Impress response: 'Power figures fear change'
Impress said in a statement: "We know that Impress represents change – the kind of change which editors, journalists and members of the public have consistently called for. But there are some powerful figures in the news industry who resist, or even fear, change.
"They are accustomed to having the final word on press regulation, and we are not surprised that they have made their views known via the PRP call for information. Just how much they fear change and challenge is demonstrated today by the huge effort and concerted energy they have devoted to attempting to prevent our small organisation emerging to compete. Nonetheless, we look forward to engaging fully with the detailed points they have made."