Memorandum submitted by The Guardian
The DCMS Committee in 2007 recommended that self-regulation be retained for the press, while adding that it must be seen to be effective if calls for statutory regulation - described by the Committee as "a very dangerous interference with the freedom of expression" - were to be resisted. 
The inquiry asks whether the McCanns' successful action against the Daily Express and others for libel indicates a serious weakness with the self-regulatory regime. This case is highly unusual, and we doubt that it is indicative of a general trend, or general failings in the interaction between the libel laws and self-regulation.
We support a robust and effective system of self-regulation.
Self-regulation - through the PCC or other means - offers a quick, cheap, flexible and effective remedy in most cases.
The PCC's chief sanction is to require the newspaper to publish in full and with due prominence an adjudication by the PCC upholding a complaint against a particular publication. This is effective in its own right as newspapers do not relish the prospect of what is seen as a form of public humiliation and a failing in standards. Indeed the case against Brighton Argus illustrates this - the newspaper apparently sought to bury its report of a PCC adjudication against it on page 32. The PCC made a second judgment against the paper: and required it to publish both adjudications with sufficient prominence.
Self-regulation includes the responsibility of individual editors for regulating the conduct of staff. At Guardian News & Media standards are set out in an editorial code. The code begins with a statement from C.P. Scott, "a newspaper's primary office is the gathering of news. At the peril of its soul it must see that its supply is not tainted." The introduction to our editorial code makes it clear that the most important currency of the Guardian is trust, and that the purpose of the code is to protect and foster trust between Guardian publications (in print and online) and its readers. Compliance with the standards set out in the editorial code, and the PCC Code serves to protect the integrity of the Guardian's editorial content.
The Readers Editors for Guardian and Observer publications play a vital role in self-regulation as independent ombudsmen, offering a free and quick settlement of complaints. MediaWise Trust said in evidence to the CMS Committee in 2007, 'MediaWise has always encouraged publications to appoint their own in-house Readers Editor to deal with complaints, act as an internal auditor reviewing the publication's journalism, and publish a well sign-posted Corrections Column. As the Guardian has demonstrated, this system can perform a dual function, providing accountability and enhancing media literacy."
INTERACTION BETWEEN LIBEL LAWS AND PRESS REPORTING:
The chilling effect of libel laws has long been recognised by the courts . In particular, the burden of proof is on the Defendant's shoulders who must prove the truth of any factual allegations. The claimant only needs to show that the allegations are defamatory, that they are identified and are the subject of the libel, and that the defendant is responsible for the publication. The fact that the burden of proof lies with the defendant has encouraged forum shopping and made London the libel capital of the world. The burden of proof should be reviewed.
Senior US Courts have refused to enforce foreign defamation judgments that do not conform with the first constitutional protection of free speech.
The question of costs is an integral part of the interaction between libel laws and press reporting. The costs of defending a libel action are often prohibitive, particularly for small publishers. Even at the pre-publication stage, the costs may be excessive. The attached article by Alan Rusbridger, 'A chill on the Guardian', New York Review of Books outlines some of the difficulties and huge expenses involved in obtaining pre-publication advice on issues that involve large corporations, in particular where the investigation concerns complex issues such as off-shore tax structures.
Conditional fee agreements were originally introduced to help claimants who did not have the means to launch a libel action. In practice, they have most often been used by lawyers representing wealthy clients, to enhance their recoverable costs. Lawyers on CFAs are entitled to success fees of up to 100% on a base fee. In addition to success fees, a losing defendant must pay any 'notional' after the event (ATE) insurance premium (around £68,000 for £100,000 of cover). The claimant does not have to pay the premium, and has little or no incentive to monitor the costs their lawyers are incurring, including hourly rates. The courts have recognised that CFAs may breach Article 10. There should be cost capping in cases concerning freedom of expression, and the recovery of legal costs should be limited to those costs that are certified as reasonable and proportionate.
It should be possible to reach a prompt and cost-effective settlement, even where proceedings have been issued, when a newspaper admits it has got it wrong. The offer of amends procedure was designed by Parliament to settle cases quickly and with low costs. The publisher admits its error, publishes a correction and apology, and a judge to decide damages if appropriate. The level of damages depends in part on the sufficiency of the correction and apology. However, even this procedure can become lengthy and time-consuming where major corporations resort to highly aggressive and expensive libel actions.
While the Law Lords in Jameel v Wall Street Journal 2006 did not accept the argument that trading companies cannot suffer injury to feeling and should only be able to sue where they can prove special damages, Baroness Hale reminded the court of the McLibel case, where the European Court of Human Rights found it was disproportionate to award damages against McDonalds' critics, since McDonalds had not established any financial loss. Baroness Hale said
"it seems, therefore, that while the retention of the rule that a company does not have to show that it has in fact been harmed in any way may be within our margin of appreciation, we should scrutinise its impact with some care to see whether it may have a disproportionately chilling effect upon freedom of speech." 
In other jurisdictions corporations are restricted in libel actions. For example, the Uniform Defamation Laws 2006, Australia, prevent corporations from suing for defamation involving damage to reputation unless they have fewer than ten employees or they are not-for-profit organisations. Corporations can only sue for 'injurious falsehood' where they can prove actual economic loss.
Some reform of the British legal system is required. In 1975 the Faulks Committee recommended that changing the law so that any company wishing to sue for libel would have to prove quantifiable damage. It stated:
No action in defamation should lie at the suit of any trading corporation unless such corporation can establish either-(i) that it has suffered special damage, or (ii) that the words were likely to cause it pecuniary damage. 
A proposal set out in the attached article is that before any corporation is permitted to sue it should be a requirement that it must first attempt to resolve matters via mediation-whether through an ombudsmen or regulatory or self-regulatory bodies.
The law is unclear, particularly on internet archives and online publication. In the case of William Beggs, 2001 High Court of Judiciary in Scotland, Lord Osborne made it clear that newspapers publishing online archives containing 'accessible' material which was potentially 'seriously prejudicial' to the accused were not in contempt of court. The Law Commission's Scoping Study No. 2, 2002 endorsed the view that 'much of the prejudicial effect' of online material could be removed by an appropriate judicial direction to try the case on the evidence. It should be standard practice for judges to give jurors robust instructions at the outset of a trial not to search for material on the internet.
Perhaps of greater concern to news publishers is the difficulty of reporting trials. Many trials - particularly terrorist trials - are closed to contemporaneous reporting in case something is published that might impact on a jury in an alter trial. In 'Media law', Geoffrey Robertson QC and Andrew Nichol QC comment as follows:
'.. many judges proceed to 'balance' their sense of fair trial against free speech, with their professional instincts naturally favouring the former. This is not in fact the procedure laid down by Article 10 itself (which requires a presumption in favour of free speech which should only be overridden in cases of necessity by narrowly construed exceptions) but it is a process which has, regrettably, been adopted.'
EXEMPLARY DAMAGES FOR LIBEL OR BREACH OF PRIVACY
Damages should be compensatory only. The Neill Committee recommended in 1991 that exemplary damages in defamation should be abolished. In Elton John v MGN 1996 the Court of Appeal established that damages in libel claims are intended to be compensatory and any exception will be rare, and must follow ' a pressing social need'. Freedom of expression would be undermined if exemplary damages were awarded in privacy cases, as HJ Eady stated in Mosley v News Group international 2008 - exemplary damages for privacy would fail the test of 'necessity and proportionality' required to justify a restriction on free speech. 
We recognise and support the right to privacy under Article 8 ECHR, and this is reflected in the PCC Code and the Guardian's editorial code:
'In keeping with both the PCC Code and the Human Rights Act we believe in respecting people's privacy. We should avoid intrusions into people's privacy unless there is a clear public interest in doing so.'
The right to privacy must be weighed against the right to impart information to the public under Article 10. The courts should narrowly interpret Article 8 to protect the intimacies of personal and family life; the concept of privacy should not be used to protect reputation itself.
While it is suggested by some that judges are over-sensitive to the rights of those claiming privacy, we have yet to see a reasoned judgment in a case where a genuine countervailing public interest argument might be more convincingly pressed than in the privacy cases dealt with so far. The courts should pay special regard to s12 (4) Human Rights Act 1998:
(4) The court must have particular regard to the importance of the Convention right to freedom of expression and, where the proceedings relate to material which the respondent claims, or which appears to the court, to be journalistic, literary or artistic material (or to conduct connected with such material), to-
(a) the extent to which-
(i) the material has, or is about to, become available to the public; or
(ii) it is, or would be, in the public interest for the material to be published;
(b) any relevant privacy code.
In summary, it is vital that newspapers are free to report, and the public are therefore informed of, matters of public interest. News publishers fulfil a vital function in reporting on the activities of organisations and individuals, public figures and governmental bodies. They provide a forum for comment and debate, and the free flow of information and ideas. The libel laws should be reviewed, in particular the burden of proof on the defendant should be eased, and there should be some limitation on defamation actions by corporations, particularly in relation to matters of great public interest. There should be controls on costs in defamation and other actions where its impact threatens to limit freedom of expression. Contempt laws should be clarified and jurors clearly directed not to search for material concerning a trial; there should be no threat of contempt proceedings for publishing material in online archives. News publishers should be encouraged to adopt the ombudsman system of Readers Editors to enable a quick and effective resolution of complaints.
The importance of Article 10 of the ECHR, and section 12 of the Human Rights Act 1998 should be at the forefront when there is any judicial consideration that involves restricting freedom of speech, bearing in mind the words of Lord Steyn:
"Freedom of expression is, of course, intrinsically important: it is valued for its own sake. But it is well recognised that it is also instrumentally important. It serves a number of broad objectives. First, it promotes the self-fulfilment of individuals in society. Secondly, in the famous words of Holmes J. (echoing John Stuart Mill), "the best test of truth is the power of the thought to get itself accepted in the competition of the market:" Abrams v. United States (1919) 250 U.S. 616, 630. per Holmes J. (dissenting). Thirdly, freedom of speech is the lifeblood of democracy. The free flow of information and ideas informs political debate. It is a safety valve: people are more ready to accept decisions that go against them if they can in principle seek to influence them. It acts as a brake on the abuse of power by public officials. It facilitates the exposure of errors in the governance and administration of justice of the country." 
 Seventh Report of Session 2006-07 "Self-regulation of the press" , House of Commons 2007 
 Ev 8, 4.26 HC Culture, Media and Sport Committee, Seventh Report of Session 2006 - 2007 'Self-regulation of the press', House of Commons 2007
 Reynolds v Times Newspapers Ltd 1999, Lord Nicholls (at 192H) "the common law has long recognised the 'chilling effect' of the rigorous reputation protection principle'.
 Following libel judgement in High Court, London against Rachel Ehrenfeld, Senators Lieberman & Specter introduced Free Speech Protection Act of 2008. This bill would protect American journalists from libel suits brought in foreign courts that do not have the same protections for free speech that are found in the U.S. constitution.
 Campbell v MGN Ltd 2005, Lord Hoffmann 'freedom of expression may be seriously inhibited in defamation actions conducted under CFAs'.
 See attached 'A chill on the Guardian', Alan Rusbridger, New York Review of Books, Janaury 2009
 Jameel v Wall Street Journal HL 2006 (154)
 Report of the Faulks Committee on Defamation (Cmnd 5909) (1975), ¶342
 'A chill on the Guardian', Alan Rusbridger, New York Review of Books, Janaury 2009
 'Robertson & Nicol on Media Law', Fifth edition, Thomson, Sweet & Maxwell
 Mosely v News Group International 2008 (197)
 In Reg. v. Secretary of State for the Home Department, Ex parte Simms  A.C. 115, Lord Steyn (at 126E-G):