The Privy Council did not act rationally when rejecting PressBof’s industry charter, the High Court has heard.
The industry's bid for a judicial review is believed to include an 11th hour request for an injunction to stop ministers going to the Privy Council today with plans to seek the Queen's approval for a rival royal charter.
The rival charter is backed by the three major political parties but bitterly opposed by much of the industry. If the application for an interim injunction is successful, it will put everything on hold until the legal challenge has been heard.
Opening the case for the Press Standards Board of Finance (PressBof), the industry body which funds the regulatory system, Richard Gordon QC told the judges the essence of the claim for judicial review was that the industry charter "has simply not been considered fairly".
Gordon said: "We would add to that it has not been considered rationally and we would add to that it has not been considered lawfully.
"We submit the process of consideration of the press charter includes a number of elementary defects."
Lawyers for the Culture Secretary deny there has been any unfairness or abuse of power and the application for judicial review should be rejected.
The Queen has already been urged by a group of international press freedom bodies not to sign the cross-party charter, and industry sources said the Privy Council should now reconsider its plans.
Today's application asks the High Court to quash the 8 October decision by a committee of the Privy Council, made up of Government ministers, not to grant the industry charter.
It argues that the application was not dealt with fairly, that the Government and Privy Council failed to consult with the press and that the procedures used were "irrational".
The application for permission to seek judicial review is to be heard at London's High Court by Lord Justice Richards and Mr Justice Sales.
PressBof chairman Lord Black of Brentwood said the decision to go to court had been made because of the "enormous ramifications for free speech" of the case in the UK and across the globe.
The proposals going before the Privy Council involve the establishment of a new Independent Press Standards Organisation (Ipso) to replace the Press Complaints Commission as the industry's watchdog.
Lawyers for Culture Secretary Maria Miller will be opposing today's legal challenge.
A spokesman for the Department for Culture, Media and Sport said the industry royal charter had been considered in "an entirely proper and fair way" by a Privy Council sub-committee and the Culture Secretary had secured significant changes to the cross-party charter to address press concerns.
"The Government is working to bring in a system of independent press self-regulation that will protect press freedom while offering real redress when mistakes are made," the spokesman said.
The rival royal charters are similar in many respects. Both would create a "recognition panel" to oversee an independent self-regulatory body with powers to impose fines of up to £1 million on newspapers for wrongdoing.
But while the press charter would require industry-wide approval for any amendments, the politicians' version could be changed by a two-thirds majority in Parliament, sparking fears within the industry that future governments could seek to encroach upon media freedom.
The Privy Council meeting scheduled for today was called specifically to deal with the press regulation royal charter, so will not go ahead if the injunction is successful.
If that legal challenge fails it will still meet, with Deputy Prime Minister Nick Clegg, Lord President of the Council, "definitely" attending, Government sources said. Names of the other ministers who would be involved, or the venue for the meeting, have not been made public.
The injunction specifically relates to today's meeting, not the content of the charter, the source was keen to stress.
"None of this at all is a judgment on the merit of either charter or a decision on whether either charter can go forward. It's a process point."
Prime Minister David Cameron's official spokesman said: "There are legal proceedings that are under way and decisions that the court may take.
"But there has been no change to the current timetable."
Roger Alton, executive editor of The Times, told BBC Radio 4's Today programme that the Independent Press Standards Organisation, the new regulator supported by the newspaper industry, would be a tough watchdog.
"It is extremely tough, it's a contract-based system. You sign a contract into the regulator and you are liable for extremely severe fines," he said.
"The idea that somehow a deal stitched up between a few politicians over pizzas and a handful of lobbyists from Hacked Off, which is essentially an anti-newspaper group, the idea that such a deal is the thing that now controls the press, which is one of the most vital safeguards in our democracy, I find extraordinarily depressing, very sad … It will be resisted."
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