Regulation of the press

Written evidence submitted by the Newspaper Society [ROP 006a]

Introduction

The Newspaper Society has been asked to outline why it has raised objections to the proposals within the state sponsored draft Royal Charter for a mandatory arbitration scheme, free for the use of the claimant.

The NS has outlined its reasons in submissions and more detailed discussions with the Government, Opposition and House of Commons Select Committee. It is concerned that the creation of a free arbitration scheme will encourage the development of a compensation culture amongst claimants and claims farming by local law firms and others against the regional press, where neither currently exists.

In particular, it is anticipated that allegations of code breach or trivial or unjustified complaints of the type currently resolved by the editor direct or by the ‘free fast and fair’ Press Complaints Commission, will instead be presented as legal claims for compensation or other legal remedies and application made for arbitration. Even if struck out at the first stage by an arbitrator, such claims will still incur costs for the publisher. It is estimated that there are around 1000 claims a year which would affect the local and regional newspaper industry.

Moreover, new claims could well be engendered. They would be encouraged by publicity surrounding the new regulator and its arbitral system as well as by professional advice which must outline any option of legal action open to a client. Of course, the use of arbitration will be driven by the Crime and Courts Act 2013 provisions which mandate offer of arbitration or risk of payment of both sides’ costs, win or lose. The punitive and chilling effect of these costs provisions upon the regional press will be exacerbated yet further because of the failure of the government post Leveson Report to implement secondary legislation reforming the cfa regime in publication cases, despite the ECtHR judgement and regional press examples which prompted action by past Justice Secretaries. Under the Act’s provisions, any regional publisher who was outside the new regulatory system or who did not agree to arbitration would not be able to recover his own costs even if he won a case. It therefore appears that the publisher would remain at risk of liability not only for his own costs and the costs of the claimants but also for 100% success fee uplifts upon those costs and exorbitant ATE premiums as well. The Act provides yet another incentive to claimant and lawyer to litigate -or force settlement- in weak cases rather than seek other forms of resolution.

The combination of the arbitration system and the Crime and Courts Act 2913 costs provisions also strengthen the system in favour of a claimant with a weak case who demands an immediate quick financial settlement from a newspaper, either directly, or as part of a code complaints resolution, as a cheaper option for the newspaper than defending a claim before an arbitrator or court.

Rather than encourage free mediation and resolution of complaints, the proposed system could encourage litigation and undermine the complaints function of the new regulator before it could become established.

There are also the complex interactions of Royal Charter, Recognition Panel, Regulator with arbitration, enforcement/sanctions by fine, complaints/mediation and the arbitration and exemplary damages provisions of the Crime and Courts Act 2013.

Legal action, which could all too easily spiral into satellite litigation to test the new regulatory system, every detail of its own rules, the new legislation and courts’ interpretation of the new law and application of their discretion, is likely to be deployed or threatened against publishers and indeed the new Regulator.

Publishers might also be fearful that a spate of free arbitration applications against them, whatever the actual merits and outcome, could instigate a Regulator’s investigation or even sanctions.

The Newspaper Society’s members have objectively assessed the potential effect of the arbitration system actually proposed by the draft state sponsored Royal Charter, which is based on the inconsistencies and somewhat sketchy treatment in the Leveson Report, which failed to give anything but cursory reference to its application to the regional and local press. Publishers, editors and legal advisers have considered the impact of the proposals with reference to their actual experience of complaints, whether presented as professed legal claims or code breaches or other complaints, which they receive and resolve direct or are referred to the Press Complaints Commission for conclusion, resolution or adjudication.

Thus the views being put forward by the Newspaper Society are the views of its members.

1. Arbitration: Detailed consultation of NS members and consideration by regional newspaper companies

The Newspaper Society represents regional media companies which publish around 1100 regional and local newspapers with 1600 associated websites in the United Kingdom. The NS is a membership organisation which encompasses nearly all regional and local newspaper publishers. Its policies and views set out in its representations are discussed and directed through the very active direct participation of member companies’ CEOs, through constant consultation and their work on committees, forum, NS Board and the NS Council. Every company in membership is represented on its Council, which has just under 40 members (which includes the Scottish Newspaper Society as an associate member). Its Board of 10 is drawn from the CEOs of companies representative of both the largest groups and independent publishers, publishing around 90% of the UK’s regional and local newspapers.

The proposals for the future of press regulation have dominated the work of the NS and its members. The views put forward by the NS to Government, Opposition and Parliament on arbitration has therefore been informed by constant and detailed discussion with our members. In addition regional media companies, their publishers, editors and legal advisers have discussed the problems in their own meetings with MPs, Opposition and Government.

In considering and assessing the potential effect of an arbitration system upon their own companies the CEOS of member companies have consulted the editors of their titles, websites and digital or other information services, in order to ensure that they are informed by those who have prime responsibility both for dealing with complaints and with assessing any legal risk that might chill investigation and publication.

Our members have also been involved in the very detailed discussions and consultations relating to the devising and formulating of any arbitration scheme, informed by legal advice from leading counsel, with relevant Opinions circulated to Government on a confidential basis. There have been a series of conferences with leading counsel, all followed up by detailed legal advice and consultative drafts, so that all feasible options can be thoroughly explored by our members. In - house lawyers who advise regional press editors and companies have been particularly closely involved, such as the Head of Legal of Newsquest Media Group, one of the largest regional media groups, who deals with editorial matters; members of Trinity Mirror’s editorial legal department who deal with issues referred to them by their regional as well as their national titles; and the NS PERA Department’s lawyers provide an editorial law advice service to subscribing member companies, which includes advising on complaints received by editors. Regional press publishers, editors and legal advisers have therefore examined all aspects of the arbitration proposals at all stages, with reference to their own companies’ experience of complaints, claims, complainants, complaints handling and litigation.

This detailed examination has informed the views and strong concern expressed by regional media companies and by the NS on its members’ behalf. Leading counsel, the highly experienced legal advisers to the regional press, whose expertise has ensured their inclusion in ministerial advisory groups on substantive and procedural media law reform and evidence to past Parliamentary select committees, publishers and editors all consider that the introduction of an arbitration system could result in unjustified and trivial claims, which are costly to dismiss, fostering the development of a compensation culture and claims farming to the detriment of the regional press.

The Leveson Inquiry and Leveson Report did not examine this issue in any detail, nor the related provisions in the Crime and Courts Act 2013. These legislative provisions and the draft state sponsored Charter as agreed by the party leaders failed to receive any detailed scrutiny by Parliament. We have however scrutinised the proposals in detail. Opinions from Leading Counsel have confirmed that the proposed draft state sponsored Royal Charter and the Act’s provisions on exemplary damages and costs do not comply with Article 6 and Article 10 of the ECHR. In addition to the objections of law and principle, we have outlined and explained the problems and burdens which would be created for the regional press by the drafting and requirements of the proposed state sponsored Royal Charter and the consequences of its strictures of mandatory arbitration, free application and interaction with the Crime and Courts Act 2013. We have informed the Government of the huge additional costs with which the regional press will be faced. We have outlined the measures which we believe could address these problems and avoid placing new burdens upon the regional press, in accordance with Lord Justice Leveson’s recommendations.

The regional press has supported the Independent Royal Charter as submitted to the Privy Council as it allows flexibility in establishment, structure and scope of an arbitration scheme. The draft Independent Royal Charter would both enable a pilot scheme to be set up and, most importantly, allow changes to be made as a result, including discontinuation. The industry does not want to fetter or handicap an other wise effective system of press regulation by a mandatory arbitration system if such a scheme threatened to undermine the regulator’s prime purpose of code compliance, enforcement and adjudication, or encouraged a flood of unjustified or trivial legal complaints. There may be less radical modifications, such as exclusion of local newspapers or the institution of a modest application fee refundable in the event of success, that might enable the development of a mutually beneficial scheme.

2. Views of specialist and highly experiences independent counsel, independent and in- house legal advisers to regional newspaper companies

The Government has previously received the Opinions of leading silks Lord Pannick QC, Desmond Browne QC and Antony White QC on the proposals for the draft state sponsored Royal Charter, the exemplary damages and costs provisions of the Crime and Courts Act 2013 and additional supplementary Opinion by Antony White QC on specific issues on arbitration raised by the regional press.

These explain the precise legal basis for the structure of the scheme, its potential effect and resultant concerns and hence the reasons for the industry’s views as to the potential effect of the arbitration. These have been further discussed at specific meetings and have been the subject of focussed discussion with lawyers and officials from the MoJ, Cabinet Office, BIS and DCMS.

The Government and its legal advisers have not contradicted their views. Other leading media lawyers, such as Lord Lester QC have independently expressed similar views on particular points in Parliament and in print.

Even public commentators such as Hugh Tomlinson QC have accepted the validity of the arguments – see for example his posting on the Inforrm website of 9 March 2013

http://inforrm.wordpress.com/2013/03/09/leveson-arbitration-and-the-press-clearing-up-some-issues-hugh-tomlinson-qc/#more-20152

‘The first issue, which has been raised by the regional press, concerns the cost of dealing with frivolous complaints on the basis that if this was done by an arbitrator this could be very expensive in comparison to the current complaints system. It is true that in order to be binding on a claimant (and to be compatible with Article 6 of the European Convention on Human Rights) a determination that a complaint is frivolous and vexatious would have to be made by the arbitrator in accordance with system rules.  If this was not done there would not have been an "arbitration" at all and the claimant could simply renew the claim in the courts………..

He then acknowledges that a sift by a lawyer employed by an arbitrator’ would not be a binding determination’ and that simultaneous legal claims and code complaints will be generated which cannot be diverted to the Regulator’s code complaints system:

‘…there is no legitimate basis for requiring a person who has a legal claim to use the complaints system before the arbitration system. It is true that, in many cases, a publication which gives rise to a legal claim will also give rise to a breach of the Code.  However, if the claimant does not wish to pursue a code complaint there is no proper reason for forcing him to do so as pre-condition for using the arbitration system. The aim of such a requirement would be to reduce the number of arbitration claims. This is not a legitimate basis for restricting access to legal process’.

Most tellingly of all, Hugh Tomlinson also accepts that it is possible that the arbitration system would fail and changes to the recognition criteria would be necessary:

‘The argument against Court proceedings is that they are extraordinarily expensive and all attempts to keep costs down have largely failed. The hope is that a new "arbitral system" will be much cheaper for everyone. High Court proceedings without juries are still extraordinarily expensive ……

The system has not, of course, been "road tested" – and it is possible that, like many other attempts to find a way of resolving disputes at a lower cost it will not be successful. However, the only way to find out is to try it. A couple of years of operation should reveal whether it will in fact work. If it doesn’t then the "voluntary self-regulator" could then ask the recognition body to change its "recognition criteria" to provide for a different system.’

However, as the NS and industry have pointed out, this would not be possible under the state sponsored draft Royal Charter. The state sponsored draft does not allow the Recognition Panel to change its recognition criteria in response to a request by the regulator if the arbitration system does not work.

Hugh Tomlinson’s views on publishers’ assessment of litigation risk and his vastly different perception as to what constitutes acceptable levels of costs are at odds with those with closer knowledge of regional media businesses.

The views put forward by the NS and industry are informed by the legal advice which it has received from external experts and from regional media companies’ professional and in house legal advisers who deal with editorial complaints and claims against NS members.

The advice of Antony White QC in the Opinion, which was previously forwarded in confidence to the DCMS in March, supports the views put forward by the industry and the NS.

‘It is important to appreciate that Article 6 requires everyone to have access to a court or other dispute resolution tribunal that is independent and impartial, whether their claim has merit or not.’

‘Some media organisations, in particular the regional press, have expressed a real concern that an increased number of complaints about breaches of the standards code will be submitted to a new civil claims regime under a new arbitration scheme. If such a new arbitration scheme is free complainants may well feel that they have nothing to lose by lodging claims for compensation. This would result in small publishers having to spend considerable sums to answer claims which are currently dealt with satisfactorily by internal processes such as correspondence with the Editor, or as a last resort by the PCC complaints procedure.’

These concerns have led the regional press to consider ways in which access to the new arbitration scheme might be limited or restricted so as to prevent or discourage trivial or groundless claims without undermining the availability of the scheme for genuine and serious claims. A number of options have been considered …….’ ‘There is a very real concern that a new, free arbitration service may open the floodgates to trivial claims – if it costs nothing to make a claim why not put one in? Unscrupulous complainants will understand that it will be cheaper for publishers to buy off nuisance claims than to contest them.’

We have also received unchallenged and unequivocal legal advice on why lawyers employed by an arbitrator cannot ‘sift out’ claims but they have to go forward for determination by the arbitrator. A number of reasons are given, with this as foremost:

‘Following this kind of the rejection of a claim by the arbitration service, the complainant could simply bring his or her claim to the court, and the expense of the sifting procedure would be entirely wasted. A rejection of a claim by an in-house lawyer would have no validity. This would defeat the object of the arbitration service, which is to reach an efficient and final resolution of claims against the press.’

The enclosed letter from Tony Jaffa, Partner, Foot Anstey [1] (http://www.footanstey.com/component/content/article/12-bio/399-tony-jaffa) whose expertise in this field has been acknowledged by his membership of past law and procedural reform groups convened by the Justice Secretary and MoJ) substantiates the regional newspaper industry’s concerns.

This sets out Tony Jaffa’s independent professional observations on the impact of an arbitration system upon regional media companies, informed by his longstanding experience in advising regional media companies in membership of the NS which publish daily and weekly newspapers and provides an ever expanding range of digital news and information services across media platforms. He advises regional newspaper companies in NS membership such as Local World, Johnston Press, Archant, Tindle Newspapers, Midland News Association and Newsquest Media Group. These are a mixture of large groups publishing daily and weekly titles throughout the United Kingdom and independent family owned companies with their publications range from the largest circulation regional daily newspaper (Express and Star, Wolverhampton,) to the weekly local newspapers and hyper local sites characteristic of Tindle Newspapers, and from the oldest newspaper in the world (Worcester Journal) to the latest digital innovations pioneered by the regional press.

He also attests to ‘the real risk that the reforms being proposed will result in a flood of legal claims against the regional press’- and the chilling effect that will have upon investigation and publication.

‘Under the arbitral scheme approved by the three main political parties, I have come to the view that complaints which hitherto would have been resolved by mutual agreement via the PCC, are very likely to be converted into legal claims. From a legal perspective, I do not think it will be difficult to achieve such conversions.

The reason why I am fearful that this will happen is because if the last 23 years of advising the regional press has taught me anything, it is that if those with complaints (irrespective of whether or not they are warranted) think they have an entitlement to money, they will pursue such claims, irrespective of the actual merits. This is particularly so if the complainant assumes no personal financial risk in bringing a claim, even if s/he is unsuccessful. The 'no win no fee' system has clearly demonstrated the way in which a well intended regime can be misused.

The current proposal for arbitration envisages a system in which the complainant has absolutely nothing to lose, and everything to gain, by bringing a legal claim. To use the vernacular, why wouldn't s/he? What has s/he to lose? The answer to that question must surely be a resounding 'nothing'.’

He also points out the financial consequences:

‘Given that the regional press, in reality, consists of many small businesses which are all already under severe financial pressure because of fundamental structural changes being experienced by the publishing industry, my concern is that the proposed system will add considerable, and perhaps even unsustainable, financial burdens to these businesses. Even disposing of an unmeritorious or vexatious claim at an early stage will be expensive.

Many London-based commentators with little experience of the workings of the regional press have described the proposed arbitration scheme as "inexpensive". With the greatest of respect to all these commentators, I think they are quite wrong in so concluding. The costs which will be incurred will be significant in the context of local publishing businesses, and I know of no editor or publisher who will consider such expenditure, whatever it may be, as anything but disastrous.’

‘In addition, I think that the proposals as presently drafted will create a real risk of local solicitors with no experience of publishing law trying to jump on this new legal bandwagon, particularly as the 'no win no fee' regime continues to apply to publishing cases.

In the months following the publication of the Leveson Report, many of the complaints I saw included a reference to the Report. These attempts to rely on Leveson were often clumsy, but the fact is that they were made. This is why I think it is likely that lawyers will try to convert such complaints into legal claims, and to use the proposed arbitral system to seek compensation for complaints which currently are resolved by mutual agreement, without compensation being paid or legal costs incurred.’

The enclosed statement of Simon Westrop, Company Secretary and Head of Legal Newsquest Media Group is also of relevance. [2]

Newsquest is one of the UK's largest regional newspaper publishers with more than 200 newspapers, magazines and trade publications, including 17 paid-for dailies. It has a weekly readership of 13 million and a weekly circulation of 10 million.

Its daily titles include The Herald (Glasgow), The Northern Echo (Darlington), Telegraph & Argus (Bradford), Evening Times (Glasgow), Southern Daily Echo (Southampton), The Argus (Brighton), The Press (York), Oxford Mail and South Wales Argus (Newport). Its weekly publications include Berrow's Worcester Journal, the oldest continuously published newspaper in the world. Newsquest is also a major internet player, with a network of more than 160 local newspaper and portal websites that are independently audited. http://www.newsquest.co.uk/

Simon Westrop has particular insight into the potential application of arbitration upon a regional media company publishing daily and weekly newspapers across the UK while developing its digital media services. He notes that:

‘We receive many more low-level complaints on a daily basis, sometimes described as 'legal claims', sometimes through solicitors, sometimes not; often misconceived or trivial. Presently we can deal with these at limited cost. If an arbitration scheme becomes available which is virtually free to claimants and offers at least a chance of cash compensation, all of those complaints would be drafted wherever possible as 'legal claims' and submitted to that process. The deal would be too good for a complainant to ignore.

Similarly, all those complaints made currently to the PCC under the Code that could be re-cast as legal claims would become exactly that-especially privacy claims, I suspect. (Remember that there is quite a wide overlap between the Code and potential legal claims). The Code complaints process would become relatively unattractive and so greatly devalued.

I would emphasise strongly that the legal costs and damages arising from the three or four libel claims that a regional newspaper group might actually pay out to settle in a bad year (probably only one over £10k damages) would be vastly outweighed by the legal costs and awards of damages of an arbitration service processing dozens of small claims annually for each group that would have otherwise been resolved by the PCC. And we will have to pay for that process even if the claim is thrown out.’

He also foresees that arbitration will undermine a regulator’s informal, free resolution of code complaints.

‘Arbitration will make the PCC process (or its replacement) redundant. Who will settle for a correction when they smell cash? Minor privacy claims in particular will mushroom, and have price tags attached, whereas now, they would be PCC matters.’ Why does the Government want a pecuniary punishment instead of corrections and apologies? Make no mistake, that is what arbitration is all about.’

‘All that is happening here is that a perfectly serviceable complaints resolution process enforcing the Editors Code is being monetized. Who really gains from that, except some claimant lawyers who will be able (under the Government’s vision) to recover costs and who will then see it as an income stream? But in a system which is compulsory for the publisher and free of any cost to the claimant or other penalty, there will be no incentive to accept an apology from the publisher instead of going to the arbitrator, or even to discuss settlement at all, except to go through the motions as the arbitration scheme might require; the claimant might as well take a chance on getting through the filter.

When the Crime and Courts Act 2013 is added to the equation, it appears that a regional newspaper publisher is in fact caught in Catch-22: the arbitration scheme could be financially ruinous, but so could staying outside the regulatory system.’

He too describes the wider ramifications:

‘It will have a serious effect on the budgets and editorial decisions of small local papers. Its chilling effect will be to deter coverage of anything in future that may involve an arguable infringement of privacy, reducing further the role for the already-stretched local press as inquirer and questioner in a democratic society.’

The Newspaper Society provides ‘first stop’ legal advice services to subscribing members. Its editorial law service is used by editors of regional and local daily and weekly newspapers published by the major regional media companies and by some of the smallest independent companies. It does not conduct litigation on behalf of members, but it is consulted by editors in receipt of complaints. This includes advice on the complaints received by the titles and their editors themselves, not just those referred to the editor by the PCC or which subsequently progress to the PCC.

A review of cases over 2012 and 2013 display precisely the same characteristics as those described by Tony Jaffa and Simon Westrop. They are largely low level complaints, sometimes from lawyers, sometimes from others on behalf of the complainant or direct from complainants. The complaints most often allege inaccuracy or breach of privacy. Editors seek to resolve these quickly or if referred to the PCC despite their best efforts, will work with the PCC to reach a resolution. Many disclose no real cause for legal action, but complainants are often adamant that some breach of the law or code has occurred, or, with the assistance of lawyers allege that the claim is capable of giving rise to legal action, or might press for compensation as part of a quick resolution of their complaint. If an arbitration system is introduced that holds out the possibility of making a compensation claim free instead, then it seems highly likely that applications for arbitration will be made, rather than complaints of code breach. Complainants would simply make a cursory approach to the title in order to fulfil any requirements of exhaustion of the newspaper’s internal complaints procedure and attempt to press for immediate compensation to ward off such claims and applications.

Editors of regional newspapers and digital services have repeatedly made the same point.

An editor of a Northern Ireland title, where litigation is pursued aggressively, costs are high and any benefits of the Defamation Act 2013 are not to apply, expresses the views shared by editors across the NS membership:

‘The option of the regional press opting out of arbitration is an illusion if we continue to face the risk of exemplary damages in the courts. So the financial considerations (not to mention demands on time) of joining in with the arbitration process remain a very real concern for us. There will be a huge increase in people taking this route without any barrier. Court action is very rare yet arbitration, heavily promoted to complainants as a cheap and quick option, is tantamount to flashing a green light to those who have hitherto taken a fulsome apology after the complaints procedure is exhausted. There are plenty of no-win no-fee lawyers who will take a keen look at this option. I foresee a nice little sideline earner here for some firms. The fees for arbitration are likely to be a new burden upon regional and local titles. So we are left in the Catch 22 situation of having no real need for an arbitration service for the regional press yet risking extra financial punishment in the traditional courts if we do not join in.’

Nor should commentators draw contrary conclusions as to potential level of arbitration claims from the low level of cfa (conditional fee agreements) funded litigation involving the regional press before the courts. The attached statements from the legal advisers to the regional press are consistent with the experience of various regional media companies on the fast settling of cfa funded litigation and its threat prior to launch of litigation, even where the claims were without merit or defendable, due to their financial concerns about the disproportionate costs. Again, the attached statements explain why the arbitration system proposed by the state sponsored Royal Charter and the Crime and Courts Act 2013 will exacerbate rather than alleviate this problem.

Complaints about the regional press to the Press Complaints Commission

The Press Complaints Commission estimates that around 45% of investigated complaints concern regional, Scottish and Irish publications. The PCC publishes statistics and case summaries for public review www.pcc.org.uk. There were 5,563 concluded complaints recorded for 2012 and 1602 for the first three months of 2013.

A review of the published tables of complaints concluded and resolved by the PCC in 2012 and 2013 suggest that it dealt with over 1200 complaints relating to NS members’ titles in England, Wales and Northern Ireland in 2012 and just under 300 in the first three months of this year (see www.pcc.org.uk ). There are then many more complaints recorded as concluded and resolved by the PCC made in respect of regional and local newspapers in Scotland, plus the Evening Standard and Metro (which are not in membership of the NS). A few complaints against regional and local titles proceed to adjudication and are upheld, but most are resolved or otherwise concluded, which includes those which are not pursued or outside remit. However, the vast majority of complaints do allege inaccuracy or infringement of privacy with reference to breaches of relevant clause of the Editors’ Code, whether capable of being upheld or not. Those are likely to lend themselves to presentation as legal claims for defamation and infringement of privacy, irrespective of actual merit.

Most of the current type of complaints could easily be converted into attempts to claim compensation by being drafted as ‘legal’ complaints and an application for arbitration made free of any charge to the complainant, without any real attempt to resolve matters by way of the newspaper’s internal system and without any need for reference to the code complaints handling system. A binding and final determination such as striking out by an arbitrator as trivial or vexatious will incur substantial costs for the publisher.

This will be the case even if data protection, copyright and other civil legal actions are excluded from the arbitration system and its remit limited to the ‘relevant claims’ listed in the Crime and Courts Act 2013. The situation would be further exacerbated if these could not be excluded and if the Leveson recommendations on removal or weakening of the vital journalistic protections in the Data Protection Act 1998 were implemented. These defences and exemptions were specifically framed to prevent day to day newsgathering, reporting, editing and publication, including online archives, as well as investigative journalism, from being rendered continuously vulnerable to legal complaint and claims, aimed at securing compensation, prior restraint and other remedies.

Even now, some complainants attempt to use complaints against the regional and local press under the current self- regulatory system and PCC involvement as a means of effecting permanent removal or take down of published material and as a way of gaining financial recompense or compensation or donations to charities, even in the current system where it has no formal place. They already seek financial and other remedies in cases without merit, or which might have resulted from genuine misunderstanding or mistake and which were followed by immediate publication of appropriate apology or clarification. There will also always be persistent complainants who will pursue any free avenues open to them, even if the publication itself is neither in breach of the code nor of the law nor committed any misdemeanour at all.

The establishment of an arbitration scheme will engender increased complaints. Past publicity for the PCC generated more complaints. Any new regulator will have to publicise its arbitral functions. Anyone providing straightforward information about the system – regulator, publication – as well any independent legal advisor or other adviser would outline the options open to any potential complainant seeking information. Regional and local newspapers already deal with complaints which do not involve the PCC and such complainants could also opt to lodge free application for arbitration in future. The new system would require that all complaints must first be referred to the newspaper, but if unresolved, the complainant would be aware of the option of a free arbitration application for compensation under the system operated by the new Regulator, as well as free complaints resolution. The pattern of past complaints underlines the views of those who currently deal with complainants that arbitration claims will be launched because of the chance of compensation.

This will put a high financial burden on regional and local newspaper publishers in funding a new Independent Regulatory Body, including its enforcement arm and arbitration system, and in paying for the costs of individual arbitration cases, even in cases where they are brought unsuccessfully without any reasonable prospect of success.

The Press Complaints Commission costs the regional and local newspaper industry approximately £800,000 a year. Any new system will cost many times this sum. If in addition, as is predicted, upwards of 1000 arbitration cases are initiated each year against the regional press alone, the costs of the new regulator attributable to its arbitration functions and the proportion of the costs to be borne by the regional press will spiral upwards. Individual regional and local newspaper companies would then face the addition of the new costs of arbitration claims threatened and brought against them, with all their wider attendant costs for legal advice, legal costs, arbitrator’s fees even if the publisher is successful.

The Newspaper Society and the individual regional newspaper companies in its membership have examined the proposed state sponsored draft Royal Charter and Crime and Courts Act 2013 in detail; have explained the reasons for the industry’s objections with reference to the law, principle and practice; have evaluated and explained the potential editorial effect upon their own publications and the financial impact upon their own business. They have set out how these problems can be addressed by the industry’s application for an Independent Royal Charter and expressed their support for it. The industry now needs these concerns to be properly and fully addressed.

June 2013