Regulation of the press

Further written evidence submitted by DC Thomson Ltd [ROP 005b]

Thank you for inviting me as part of the regional press day at the CMS Committee session on the 21 st of May. I hugely appreciated your committee’s detailed examination and courtesy. I have enclosed for you a brief presentation we have pr epared on press self-regulation which you and the Committee might find helpful. I would draw perhaps your attention to pag e 11 which away from Leveson covers some of the elements parliament and government could be helpful with. We do feel that we can be a hub of creativity in our key centre and help young people.

I hope it is not too late to appeal to you and the party leader s and your committee to consider some amendments to the Royal Charter aimed at mitigating the severe risks for the regional press, and indeed magazines and national press, which I strongly believe arise as an unintended consequence of measures understandably developed to curtail behaviour confined to some parts of the national press.

DC Thomson & Co Ltd welcomed the Leveson Inquiry, and we consider the Report a brilliant analysis with generally solid conclusions; we genuinely desire to engage with Parliament over it. We seek to find some way to get to a result which satisfies Leveson’s basic principles, but which also can work for publishers and get a sufficient degree of buy-in from them.

However, in two areas – group complaints and arbitration – the Charter poses serious risks of unintended consequences for the regional press. We also think that editors retaining control over the Code of Practice is likely to prove crucial to winning industry support. I have been a publisher for some 35 years, and I genuinely fear the consequences for the press if the three areas of the Charter I discuss below are not in some way modified. (Those consequences potentially also relate to the magazine industry. We also own a number of well-known magazines.)

Let me briefly outline our thinking for you. As we see it, Parliament is, through its Royal Charter, trying to get the press to accept five things:

(i) Some state involvement – however arms-length – in the regulation of the press.

(ii) A regulator with substantial powers, new functions (some of which have never been tried before in this context, including the arbitration service) and the ability to take complaints from a wider range of complainants than before.

(iii) A regulator whose appointments processes are independent of the industry.

(iv) Industry sign-up in advance of the regulator being set up, its board selected, its code of practice drawn up and its approach to complicated matters set out (e.g. how it will filter out attempts to use the complaints service to lobby or harass editors, and how it will interpret ‘the public interest’).

(v) No commitment from Parliament to review the most controversial and untested elements of the system.

Some of these we are not seeking changes to . Indeed, in the case of (iii) we positively welcome it. What we wish to highlight is that the combination of (ii)-(v) creates a potential ‘straightjacket’ scenario. The Royal Charter will enter force, the industry will set up a regulator, the regulator will begin to operate (and achieve recognition, meaning the exemplary damages and cost shifting provisions come into force); then any one of the following could happen:

i) The regulator is run badly, or in a manner which is too sudden a change

ii) The system is able to be ‘gamed’ in some unanticipated way by lobby groups.

iii) The number of complaints and arbitration claims made are in excess of the number assumed by Leveson when he made his recommendations and by Parliament when it settled on the details of the 18 th of March Royal Charter.

iv) Costs increase far beyond what was anticipated.

Any publisher who leaves the system will, by then, have contributed not insubstantial money to setting up the regulator, and then be vulnerable to cost shifting and exemplary damages. Alternatively, if the entire industry sees or even a significant number of Publishers see the system as unacceptable or it becomes unworkable and opt to leave the regulator, the system will collapse and presumably a tougher statutory solution would be imposed. That would be very close to state regulation, and probably cause a full-blown constitutional crisis

Our reading of the Report is t hat Leveson put down two clear M arkers which are relevant here. They are overriding concerns he wanted to sit above the recommendations he makes:

1. The freedom of the press: Leveson made the point that nothing that is done should be used to impinge on or dismantle press freedom.

2. Cost: Leveson also believed that the solution should not add anything to the financial burden of the regional press (indeed, he made the point that Parliament should find a means of supporting the regional press).

I strongly believe that, in each of the three areas I highlight below, one or both of these clear M arkers risks being undermined or overruled, and so request that these be looked at and modified to minimise those risks.

There is, of course, a sixth element which the press must accept: the responsibility for setting up the new regulator. There is a difference between imposing regulation on an industry and imposing the conditions for a new regulatory system on an industry, one of which is for the industry to set up its own regulator. We do not think it is reasonable to expect the latter while also requiring the industry to accept a system it will then be straitjacketed into with no guarantee that reasonable changes will be able to be made; we strongly believe the attempt to do so will fail.

1.   Group complaints

Schedule 3, clause 11 b), and perhaps c), of the Royal Charter

In his Report, Leveson identified the problem of discriminatory reporting about informal groups – LGBT people, asylum seekers, etc. – in parts of the national press. Page 673 of Leveson's report lays it out very clearly. Clause 11b) in the Recognition Criteria is there to address that concern.

Our problem with this clause is that, while it will be highly effective for the issue it was designed to address, it risks generating far-reaching and unintended consequences for the regional press, and indeed magazines, as well as the national press. The post-Leveson climate is seeing many more organisations and individuals feel they can use the ‘stick’ of Leveson to intimidate editors and journalists. Looking at the powers and functions the new regulator will have, we think there is a danger that this climate could become the new status quo. While it is true that the PCC was/is able to accept complaints from groups, it is also possible that many individuals or organisations didn’t bother with pursuing complaints because they believed the PCC lacked the power to impose effective remedies. There is a danger that a tougher, more independent regulator means many more organisations will try to lobby newspapers more intensively, with the threat of getting the regulator to require a correction or apology as leverage. I understand that it may be right for many complainants to get that additional leverage, but there is always the risk that it will be abused. To reiterate, it is perfectly possible that the new regulator will act in a way that is completely different to the way the PCC has done over the past twenty years, and not as Leveson envisaged.

Newspapers will have PR companies onto them wanting to pre-read and pre-approve stories; editors will allow many more press releases to be dressed up as editorial. Even if some of this may go on to a limited extent now, this is not a good practice and should be resisted. It encourages a generally bad practice but will be justified on the basis that, otherwise, editors will risk a particular company’s ire if they publish something that company do es not like. I am not arguing that there will be an explosion in complaints, but I am arguing it is a real and potentially large risk, for regional publishers in particular, and that as long as that risk goes unacknowledged by Parliament, it is hard to see how many publishers will view joining a regulator as preferable to staying outside the system. This is not only about cost: it is about a threat, or perceived threat, to good journalism and freedom of the press.

The issues that Leveson singled out when he recommended the group complaints provision are entirely understandable: they are critical national issues. While the clause has been mildly diluted - he made no ‘public interest’ requirement –  as a concession to the newspaper industry , it still risks unintended and subtle, but very real consequences (and, importantly, huge consequences in the minds of publishers - they see it as potentially calamitous.) I believe that the wording in the Pressbof Charter is better here: a ‘substantial’ public interest should be the bar complaints from groups have to cross. Failing that, I strongly believe the industry needs a guarantee that the Recognition Panel will review the impact of group complaints after a year or so of a regulator being set up and recommend changes to 11b) or c) in a report to Parliament if it finds they are having an adverse effect on press freedom.

2. Arbitration

Leveson envisaged arbitration for the purpose of making access to justice cheaper, but also to help the national titles fend off libel intimidation, which relies on the threat of huge court costs. We in the regional press do not get much of that, and, plainly speaking, what it does for us is the complete reverse, potentially turning many present complaints into speculative arbitration claims in the future. Even if claims are rejected, the work of deciding each case will not be negligible, and will be paid for by the regulator. We are clearly going to end up paying more – perhaps substantially more, both in cost and editorial time.

The arbitration proposal is completely untested, and we do not have any guarantees that the courts will, in practice, grant publishers the cost protections that have been promised for regulated publishers. We would like to see proof that our concerns are unfounded before we accept arbitration: a pilot scheme or trial period, ideally. If it works, naturally the trial would be extended and ultimately arbitration would be rolled out. I will only be too happy if it works; but what if it adds to our costs very significantly? You can hopefully see why some publishers feel they are being locked into a system, key features of which have never been tried before, without a clear guarantee that it will be revised if it turns out badly. It doesn’t take many of these cases against a title to make that title unprofitable and for a publisher to close it, and the fact that the title is unprofitable does not mean it isn’t important to the community it serves. If a trial period is not acceptable, we would again ask for the Recognition Panel to have the power to recommend changes to the system to Parliament if it is a disaster in practice.

3 Editors’ code

Schedule 3, clause 7

I have always felt that the real key to improving the governance, culture and ethics of the press is to allow proprietors to be properly accountable for the standards of their titles. Some of this has happened already because of the Leveson process, though the regional press has been almost entirely exonerated (I say almost since none of us are perfect). The way to make sure failures of proprietorship do not happen is to put in place governance practices which enable the proprietors to hold editors to account. Many of us have these in place already in one way or another. But if those editors have a Code of Practice foisted on them, the role of the proprietor becomes much more difficult. If our editors do not agree with the code they are required to abide by, how can we hold them to account? For that reason, I would argue that the Code Committee should be minimum 50% editors ( and perhaps 25% journalists and 25% members of the public or as thought best) .

I understand the concerns around editors controlling the Code Committee, but in seeking to correct the behavior of some national titles, there is a risk that Parliament may end up alienating the majority of editors from the Code of Practice they are not just required to uphold but to ensure others uphold too, and potentially to fire people for not upholding. It is worth noting in this connection that Leveson did not criticise the existing Code of Practice – yet that was a document drawn up by a Code Committee of some 12 editors. Moreover, the editors who serve on the Committee would still be chosen by the independent Board. It is also important that enough editors have involvement in the setting of the Code they are to enforce. There are many different types of newspaper and magazine. There are about 78 daily paid for newspapers in the regional press, let alone the national titles and hundreds of magazines and local weekly newspapers . It is an honour and great responsibility to serve on the Code Committee and it is important to have sufficient numbers to promote and to be proud of it.

The actual difference between a Code of Practice drawn up by editors and one drawn up by editors, journalists and members of the public might look small, but the difference in terms of industry buy-in will be significant. For that reason, it seems to me a worthwhile concession for Parliament to make.

Conclusion

I cannot stress strongly enough how we really need flexibility in approach on these three matters. If we could get it, I think we could at least have a very real chance of agreement between most of the industry and Parliament. I do hope you look at what can be done to provide either a guaranteed, clearly delineated review process assessing the practical and financial implications of how these three clauses work in practice when the regime is up and running, or, preferably, some means of amending the three clauses before the Royal Charter is set up. We strongly believe that if they are not addressed they could well prove to be an insurmountable obstacle to publishers in the regional press and magazine industry signing up to the system.

John, if t here is anything further I can do or help with on the Levenson matter please let me know.

On the subject of what could be done to help the Regional Press, page 11 as I mentioned above of my attached presentation makes some suggestions including one that the Regional Press be encouraged to be the local new media hub ( which they are in embr yo) and with tax breaks to help transition to the new media world. For example we have just formed an Innovation Centre in Dundee and also in Shoreditch (two of our employme nt centres) to help bring on young (and older) talent. We see our role as to really help Innovation in the areas we work in and to help those communities.

I can explain more if you would like.

Note on clause 23 of Schedule 3 in Parliament’s Charter:

At the CMS Committee hearing, you both raised the omission of the clause from the Pressbof Charter. There is in fact an equivalent clause in Schedule 2 – clause 5. As far as I can see, they are substantially the same albeit differently worded.

May 2013

 

      

Prepared 28th June 2013