Riding up in the glass lift at the Richard Rogers-designed offices of the Press Recognition Panel in the City of London I muse that regulating the regulator of the press is rather more lucrative than reporting on it.
The PRP has been granted £3m of public money to decide whether or not any future press regulators meet the criteria set out by Sir Brian Leveson in his 2012 report.
Its funding appears all the more generous considering that the only press regulator which so far has any members, the Independent Press Standards Organisation, won’t be applying for recognition.
IPSO members (most of the major newspaper and magazine publishers) officially view the Royal Charter-backed Press Recognition Panel as a move towards Robert Mugabe-style state control of journalism.
In the face of this hostility, the PRP will focus its efforts on recognising rival press regulator Impress – which does not yet have any members, but has revealed interest from independent local publishers. Impress may also yet sign up the FT, Independent, Evening Standard and Guardian – which have so far rejected IPSO.
While most national publishers may view the PRP as irrelevant to their work, later this year they may be forced to reconsider.
That is because the financial consequences for publishers that refuse to join a PRP-recognised regulator (ie. those in IPSO) could be huge.
The Conservative government portrays itself as taking a laissez faire approach to press regulation.
But the Royal Charter-backed system created in 2013 after a cross-party deal, complete with legislative carrots and sticks, is set in stone and looks unlikely to be unpicked.
David Wolfe QC is chairman of the Press Recognition Panel, which was born on 3 November 2014 after the Royal Charter was granted on 30 October.
He explained the benefits, as he sees them, of being part of a press regulator which has the approval of his body.
“The cost benefit for a publisher is partly in the Crime and Courts Act. You won’t face exemplary damages," he says.
“If you are publishing and you are part of a recognised regulator and somebody sues you, you won’t get any costs against you. At the moment if you’re the Salford Star and somebody threatens to sue you, you run the risk of having to pay their costs. That risk will be taken away from you.
“You get a letter from Carter Ruck of whatever, you get your lawyers involved – you are paying your own lawyers to respond to their lawyers and also if they do sue you, you might end up having to pay their costs.
“You could basically say to them: ‘I can’t stop you suing me but if you do sue me you won’t get your costs back if you win or lose – I suggest you go through our regulator’s arbitration process which is designed to be cheap for both of us'.”
To set this in context, in 2009 The Guardian was issued with a costs bill of more than £800,000 from lawyers Carter Ruck for a libel claim brought by Tesco which was settled out of court.
Around the same time the Lancashire Evening Post had to pay libel damages of £1,000 to settle a libel claim, but paid legal fees of £25,000.
The creation of a low-cost arbitration system is one of 28 Leveson hurdles which any regulator will have to jump over if it is to get PRP approval and avail itself of the protection from legal costs set out in the Crime and Courts Act.
Wolfe’s panel has just begun a consultation process looking at how it interprets the Leveson criteria set out in the Royal Charter and how it goes about the business of recognition.
For instance, the Royal Charter says regulators should provide a whistleblowers’ hotline – the PRP consultation fleshes out how such a system could work.
The deadline for consultation feedback is 31 July and the PRP plans to be up and running by September.
This means that provided Impress gets its application in promptly, and achieves recognition, the carrots and sticks in the Crime and Courts Act could come into force in November.
Newspapers and magazines outside a Royal Charter-backed press regulation scheme at that point will then face paying both sides libel costs even if they win libel and privacy cases.
Asked whether the big publishers are engaging with the consultation (even though they don’t believe in the PRP), Wolfe says: “We’ve met with IPSO, the Financial Times, Independent, The Guardian – the non-aligned bit.
“We’ve not gone below the lid of IPSO, but made clear if anyone else wants to come to meet us that’s fine.”
Wolfe does not accept that “most” publishers are already tied into non-Leveson compliant IPSO.
“If you look at the definition of relevant publisher [in the Royal Charter] , numerically the national press is only a very small proportion of the total number of publishers. There are a lot of small publishers out there, often with a handful of people doing really good local work…
“The Brixton Bugle, Port Talbot Magnet, Salford Star – there are hundreds of them. The 87 publishers in IPSO are only fraction of the total number of publishers out there.”
Wolfe mentions these small publishers often during our discussion. I put it to him that the Leveson Inquiry was not set up to sort out local papers, but to make the tabloids clean up their act.
And I suggest that a few tiny ultra-local titles are not going to be able to support a regulator which will have running costs of at least several hundred thousand pounds a year. The Royal Charter states that the PRP will charge up to £300,000 to a regulator for processing a recognition request.
Wolfe says: “We’ve got public money for the first three years of our operation. Anybody who applies in the next two years (after September) won’t have to pay anything.
“After that we have to start making charges. We’ve got to consult on a publisher charging scheme. My intention is we will design a scheme that works for those organisastions. We won’t have a charging scheme that means that a regulator whose members are the Salford Star can’t join…if we do then we’ve failed.”
Wolfe says that for these “smaller publishers” litigation is a “big anxiety”.
He says: “Being free from the risk of costs is a very big benefit if you’re the Salford Star or the Port Talbot Magnet or whatever.”
I put it to him that established regional publishers fear low-cost arbitration would open them up to new payouts by lowering the cost of bringing libel claims.
He says: “I don’t quite understand that…You couldn’t have people bringing a huge load of spurious claims.”
Quoting Royal Charter criteria 22 he notes that any arbitration process must “contain transparent arrangements for claims to be struck out for legitimate reasons (including on frivolous or vexatious grounds”.
He says: “That’s actually a better filter than the courts system provides. We will be assiduous in making sure that kind of filter mechanism in place.
“The safety valve is there, it's our job to make sure it's implemented. If those publishers want to give us a better idea of how to specify this then please take part in our consultation.”
Looking at the fancy offices (to be fair, the PRP rents one fairly small open plan space at 88 Wood Street), the eight staff and the general issue the funding, why is recognising a press regulator such an expensive business?
The six-strong board which Wolfe heads (and which will do the actual recognising) is collectively paid £55,000 a year.
Wolfe says the PRP has spent £240,000 since November and is budgeted to spend a total of £800,000 in the current financial year.
The workload has, he says, been high because of launch costs and the task of putting the recognition system out to public consultation.
“Once this is all up and running, whatever happens, it will be much more streamlined because the workload is much smaller.”
He adds later: “We are doing the job the charter set us up to do. The £1m [a year] figure came through in the all-party discussions that preceded the charter. We are under spending.
“This is giving effect to the recommendations of the Leveson Inquiry, the Leveson report and the Royal Charter and to not do that properly would waste all the work that had come before.
“We are small and tightly run, we don’t have huge expenses. The team keep reminding me they’ve only got one stapler and one hole punch. We are not an extravagant organisation. My personal approach is a fairly austere one.”
He said that seven of the staff are on nine-month contracts, with a review planned later in the year.
“In order to have an organisation that does the job properly takes a certain amount of money. In terms of the cost to do things in the public sector, in my experience of doing things, we are doing it really cheaply. People are amazed at the amount we are doing for the money.
“£800,000 may sound like a lot but actually in the bigger scheme of things it’s a drop in the ocean. I don’t have any qualms about that. We are doing a cost-effective job of delivering on the next phase of the Leveson process.”
Most major newspaper publishers appear happy to ignore Wolfe's Royal Charter-backed press regulation system because they believe any punitive costs order against them in a libel case could be challenged in Europe.
Wolfe says: “Do you know of any serious media lawyers who are saying that…would succeed?”
I say that I do (more details here) – but Wolfe evidently disagrees.
What does he say to those who think a Royal Charter-backed system of press regulation created by Parliament is akin to state regulation of the press?
“To amend the charter requires a two thirds majority of the Scottish Parliament, and the House of Lords and the House of Commons and we would also have to unanimously agree.
“We have complete security of tenure and independence that allows us to approach these things without any outside influence .
“People may not like the charter mechanism, but it delivers independence and a way for us to get on with the job.”
He says that the two-thirds majority rule makes it harder for a future Parliament to get involved in press regulation than before (when it could have done so with a simple majority).
Even if IPSO is found to be doing a decent job of regulating the press, Wolfe makes clear that its current constitution means there is no chance of it achieving official recognition even if it wanted it.
He says: “There are 28 criteria, if someone meets the 28 criteria we have to recognise them. If they don’t meet 28, that’s not good enough.
“The ones that are most important, the ones that IPSO doesn’t even claim to come close to, are the ones at the beginning about independence of the board and independence of funding.
“People say the PCC’s complaints handling was quite effective, the problem was the people in charge.
“Many people say the constitution of the board, its appointments process and its independence is almost the most fundamental thing and everything flows from that.
“I don’t think an organisation which didn’t meet all the criteria would ever get public confidence…We went through the huge public inquiry, all-party support, the Prime Minister stands up saying this is what’s essential – to provide a free press on the one hand, proper complaints etc on the other hand.
“To generate public confidence I think a regulator has got to meet all these criteria.”
For all their misgivings and deep-seated opposition to Royal Charter-backed press regulation, will the IPSO publishers ultimately be forced to change their regulator’s rules and apply for official recognition?
Wolfe appears optimistic that they will.
Talking about those small publishers again, who may sign up to Impress, he says: “People are saying ‘I want to be able to say to the public we are recognised, respectable, properly regulated, you can be confident in our standards’ – as opposed to ‘why don’t you want to meet the standards that were set by this big public process?' People are always going to be suspicious about that aren’t they?”
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