Publishers – to include websites containing news-related material, as well as newspapers and magazines – will soon be regulated by a new and more powerful watchdog, to be established within the next six to eight months.
The impact on the press will be significant both in terms of the financial and editorial aspects of publishing.
This follows the eleventh-hour deal between the main political parties, setting in motion a process leading to the establishment of a new independent Rrgulator.
Some aspects pose a serious threat to publishers but there should be significant advantages in terms of reducing litigation.
Statutory underpinning and the first steps
The Royal Charter does not, by itself, equate to statutory regulation.
However, amendments were made to two pieces of legislation, first, to prevent changes to the Charter without a two-thirds majority of Parliament and secondly to enable courts to levy additional (“exemplary”) damages, as well as impose cost penalties on publishers who do not submit to regulation by the new body.
Under the Charter, a new “recognition body” will first be established. This body will authorise the creation of and, subsequently, monitor the performance of the regulator.
Sections of the press are, however, contemplating setting up a parallel regulatory body which can then apply for official recognition so it is possible there may be more than one recognised regulator.
Financial benefits and burdens of the new system
The overriding aims of the new regime are to provide greater protection and redress for those who are the subject-matter of irresponsible coverage by publishers, whilst at the same time significantly reducing the number of libel and privacy actions.
The press will face higher costs of membership than under the PCC because of the increased scope and duties of the regulator including its ability to intervene and arbitrate. In addition, fines of anything up to £1m may be levied for serious breaches of the new code, although these will be reinvested in the arbitration arm of the regulator.
Together, these additional financial aspects pose a serious problem, in particular, for regional publications and many websites with news content.
The regulator is tasked, under the Charter, with providing an arbitral process for civil claims. Members of the public with complaints which frequently give rise to long-running and costly libel and privacy litigation may instead have them determined in a far swifter, less complicated and therefore less costly manner.
The Charter states that arbitration should, so far as possible, be on an inquisitorial basis, rather than adopting the more combative adversarial system on which legal actions are conducted. As with standard litigation, a successful complainant will recover their costs from the subscribing publisher.
It should be noted that complex cases are nevertheless likely to be considered more appropriate for determination by the Courts.
Those publishers who feel unable to subscribe to the approved regulator now face the additional risk of further financial penalties in circumstances where their conduct shows a “deliberate or reckless disregard of an outrageous nature”.
This results from the inclusion in the Crime and Courts Bill of an amendment allowing courts to award “exemplary” damages.
These are a controversial category of compensation which are intended to punish the defendant, rather than compensate the claimant.
In determining the level of such additional damages, the court is required by the Bill to take into account both the harm caused but also whether any benefit was derived by the defendant as a result of publication.
We are at the beginning of the process by which future regulation of publishers will be determined.
A great deal of argument and spin over coming months from both the press and those who look for more effective controls will follow this week’s news.
Christopher Hutchings is head of media at Hamlins LLP. His team represent a number of publishers, advising clients who gave evidence to the Leveson Inquiry. He also acts for a number of victims of phone-hacking.