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  1. Media Law
January 11, 2017

Guardian, FT, RSF and English Pen call for repeal of Section 40 – Hugh Grant sets out case in favour

By Dominic Ponsford

The Guardian, Financial Times, Reporters Without Borders and English Pen today joined calls for the repeal of Section 40 of the Crime and Courts Act.

And they have also called for the termination of the Leveson Inquiry, responding the Government consultation which closed at 5pm yesterday.

The News Media Association has warned in its submission to the consultation that enacting the legislation would cost the regional and national newspapers it represents £100m a year.

Meanwhile, actor Hugh Grant (pictured: Reuters) has outlined the case in favour of enacting Section 40 in a comment piece for The Guardian.

Section 40 aims to persuade publishers to join a Royal Charter-backed press regulator by forcing them to pay both sides’ costs in libel and privacy actions win or lose.

Freedom of speech groups English Pen and Reporters Without Borders said in a densely-argued legal submission that such “coercion” would “seriously undermine freedom of expression”.

The NMA has said its members would refuse to join a Royal Charter-backed press regulator so Section 40 would cost national newspapers £52m a year in extra legal costs and local newspapers £48m.

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It said these figures are based on “an average number of legal actions, the cost of striking out the estimated number of legal claims currently received in a year together with the cost if just 10 per cent of general complaints against local papers were converted to legal claims”.

The Guardian said in a leader column today: “A free press is a constitutional necessity, not an ornamental timepiece. There is no other option but to repeal section 40. The Guardian believes that the independence of the press is best served by self- not state- regulation.”

The Guardian also said: “…we are concerned that the current approved regulator has no major news publishers as members and is funded largely by a trust linked to Max Mosley, a former victim of tabloid press intrusion and vocal advocate on regulatory issues

However, The Guardian (with the FT, Independent and Evening Standard) still refuses to sign up to a system of external press regulation itself.

Setting out the case for terminating the Leveson Inquiry and repealing Section 40, Financial Times editor Lionel Barber said in his submission: “The newspaper industry operates in a world utterly transformed since the Leveson Inquiry Part I. The digital revolution – which was not within the Inquiry’s Terms of Reference – has accelerated. Newspapers occupy a small space compared to Apple, Facebook, Google and Twitter.

“These giant aggregators control the most powerful advertising and distribution channels, and command the public’s attention. Equally, the smartphone and digital technology in general mean, in effect, that everyone can be a publisher, around the clock, every day of the week.

“These developments continue to put immense pressure on traditional newspaper business models, many of which remain dependent on print advertising for the major source of their revenues. This is one reason why publishers are so concerned about another public inquiry which would be costly, time-consuming and far removed from their existential struggle for survival, let alone the quest for sustainable profitability.”

Making the case against Section 40 he said: “Section 40 is a measure which would inflict disproportionate, unjust and potentially disastrous legal costs on newspapers, irrespective of their record on the ethical issues which initiated the Leveson Inquiry. These pressures affect all news publishers, including global businesses like the FT, but they are particularly acute for publishers of local and regional newspapers. We are already in danger of losing a vital dimension in the UK’s ecology of democratic checks and balances.

“The FT’s commitment to quality journalism has meant that it has not been involved in substantial media litigation since the Collins Stewart Ltd case in 2004-2006, but that case provides an indication of the scale of the financial issues at stake. Even settling pre-trial, legal costs came to approximately £4 million. It is one thing for a newspaper to be forced to bear its own costs: those can, at least, be controlled to a greater or lesser degree by negotiation with lawyers over rates. But to have to pay the costs of an unreasonable or wealthy opponent, who knows that the FT will almost certainly have to pay that bill irrespective of outcome, would simply invite unmeritorious litigation that would threaten the FT’s journalistic freedom and activity.”

Setting out the case for signing up to a Royal Charter-backed press regulator and an arbitration scheme which would be free for claimants, Hugh Grant writes in The Guardian: “Hitherto, if a paper had an important story about a wealthy and powerful person, they might reluctantly decide not to publish because the threat of being dragged through expensive court actions was too great. A wealthy oligarch would only need to win once to bust the paper.

“But under the new system, our litigious oligarch would first be offered the new cheap arbitration system. If he took this option, the matter would be settled at a tiny fraction of the time and cost for the newspaper.

“But if he insisted on going to court (as is his right) he would have to pay his own costs even if he won. This is why investigative journalists such as Nick Davies (who of course broke the phone hacking story in the Guardian in the first place) are so keen on the Leveson recommendations, in full.

“This solution was voted into law (as section 40 of the Crime and Courts Act) by big majorities in Parliament in March 2013. But a law that has been enacted by parliament still requires the subsequent pressing of a green button by the secretary of state. This is known as “commencement” and is a formality in 99% of cases. This government, under intense lobbying from the corporate press, has so far not commenced the law.

“And here is the gentlest of nudges to the esteemed editor of the Guardian and to the Scott Trust. A recent YouGov poll commissioned by Hacked Off found that 93% of Guardian readers with an opinion on the matter (which is, of course, most) agree with the Leveson system or something stronger. That seems like a mandate to me.”

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