On the issue of self-defence, as the House will recall, Clause 30 provides householders with greater protection to defend themselves in the event that they are confronted by intruders in their homes. Householders will not be treated as criminals in these terrifying circumstances if they use a level of force that was reasonable in the circumstances as they saw them but which turns out to have been disproportionate. The

25 Mar 2013 : Column 836

Government are anxious to avoid any unnecessary delay in delivering what is a specific coalition commitment and an important enhancement to the protection that householders have to defend themselves. We think the public would find it difficult to understand why commencement had been delayed beyond Royal Assent if, in the intervening period, a householder came face to face with a burglar and could not rely on the heightened defence. Commons Amendment 43, therefore, will mean that the householder defence provisions in Clause 30 of the Bill will come into effect on Royal Assent.

In moving on to the restorative justice provisions in the Bill and Commons Amendment 132, I reiterate the Government’s absolute commitment to ensuring that high-quality RJ is embedded into and established across the criminal justice system. Following further debate in the other place, it was agreed that it would be beneficial to amend the Bill to provide that RJ practitioners must have regard to any guidance that is issued by the Secretary of State, with a view to encouraging good practice in the delivery of pre-sentence restorative justice. The Government believe this will allow us to ensure that RJ can continue to grow and local innovation can continue to flourish while at the same time ensuring that good practice is spread nationwide. Commons Amendment 132 gives effect to this.

Finally, Commons Amendments 32, 34, 35, 42, 51, 61 to 92 and 94 to 129 make a number of minor and technical amendments to judicial appointments and the family court, as well as removing the privilege amendment made when the Bill was last in this House. I can provide further details should any noble Lord have a particular question about them. I beg to move.

Lord Beecham: My Lords, I will confine myself to two topics. Taken in reverse order of importance, the first is what has become known in common parlance as “bash the burglar” legislation. The Minister emphasised the need for bringing this measure into force as quickly as possible. Given the paucity of cases to which this would apply, as we discussed when we were debating the Bill, I find this to be little more than an example of gesture politics of the cheapest kind.

The second more significant matter, which I entirely support the Government in raising, is Amendment 9 about making use of films and other recordings of proceedings. I would not have spoken at all on this matter except that there was a report in the press at the end of last week about the position in Scotland where it now appears that a drama is going to be broadcast based entirely on recordings in the criminal court. This is under Scottish legislation; it is not legislation that applies in this country. This is exactly what those who have expressed fears about filming proceedings in court were really worried might take place. Apparently witnesses, parties in criminal cases and, in this particular case, a retrial of a significant case regarding a serious offence have been filmed and will be shown on Scottish television, presumably, as a rather dramatic production rather than a factual and low-key look at how the courts work. The English legislation that we are debating does not facilitate that, and I would be glad to hear the Minister give a firm assurance that it will not be extended to allow that kind of development, which would be a significant change in the way that the

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Government have envisaged matters and one in which we should in no way seek to experience what Scotland is about to undergo.

Lord Ahmad of Wimbledon: I thank the noble Lord for his support for much of what has been covered. He referred to self-defence as “bash the burglar”. He may think that; I could not possibly comment. We believe it is important that if the legislation is passed, no one should fall into the trap between Royal Assent being given and this becoming law so that it can be used as a defence. If we are making these changes, it is important that they happen as quickly as possible so that we prevent any occurrence of people who act. I contend that anyone confronted with a burglar, faced with such a situation where they are protecting their home, their family and their loved ones, is often faced with that instant decision. It is important that we give that instant protection. I therefore believe that the Government have taken the right way forward on this. I am sure that, on reflection, the noble Lord would agree with me.

The noble Lord mentioned broadcasting and, again, I welcome his support. As I said, we have put four locks in place. He raised the specific issue of broadcasting in Scotland and the filming of all parts of a trial. I assure him that we are not proposing to allow this at all. The safeguards that I have outlined will protect such an extension. He raised the specific issue of witnesses. I share his concern. The Government’s intention is to provide that level of protection. With those clarifications, I beg to move.

Motion agreed.

Motion on Amendment 4

Moved by Lord Ahmad of Wimbledon

That this House do agree with the Commons in their Amendment 4.

4: Page 17, line 21, at end insert—

“Part 4A amends the selection procedure for certain senior judicial appointments until Part 4 of the Schedule is in force,”

Motion agreed.

Motion on Amendment 5

Moved by Lord McNally

That this House do agree with the Commons in their Amendment 5.

5: Insert the following new Clause—

“Enforcement by taking control of goods

(1) Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (procedure for taking control of goods) is amended as follows.

(2) In paragraph 17 (enforcement agent may use reasonable force to enter etc where paragraph 18 or 19 applies) for “or 19” substitute “, 18A, 19 or 19A”.

(3) After paragraph 18 insert—

“18A (1) This paragraph applies if these conditions are met—

(a) the enforcement agent has power to enter the premises under paragraph 14;

(b) the enforcement agent reasonably believes that the debtor carries on a trade or business on the premises;

(c) the enforcement agent is acting under a writ or warrant of control issued for the purpose of recovering a sum payable under a High Court or county court judgment;

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(d) the sum so payable is not a traffic contravention debt.

(2) “Traffic contravention debt” has the meaning given by section 82(2) of the Traffic Management Act 2004.”

(4) After paragraph 19 insert—

“19A (1) This paragraph applies if these conditions are met—

(a) the enforcement agent has power to enter the premises under paragraph 16;

(b) the enforcement agent has taken control of the goods by entering into a controlled goods agreement with the debtor;

(c) the debtor has failed to comply with any provision of the controlled goods agreement relating to the payment by the debtor of the debt;

(d) the debtor has been given notice of the intention of the enforcement agent to enter the premises to inspect the goods or to remove them for storage or sale;

(e) neither paragraph 18 nor paragraph 19 applies.

(2) For the purposes of a notice under sub-paragraph (1)(d), regulations must state—

(a) the minimum period of notice;

(b) the form of the notice;

(c) what it must contain;

(d) how it must be given;

(e) who must give it.

(3) The enforcement agent must keep a record of the time when a notice under sub-paragraph (1)(d) is given.

(4) If regulations authorise it, the court may order in prescribed circumstances that the notice given may be less than the minimum period.

(5) The order may be subject to conditions.”

(5) In paragraphs 24(2) and 31(5) (no power to use force against persons except to extent provided in regulations) omit “, except to the extent that regulations provide that it does”.

(6) Omit paragraph 53(2) (controlled goods to be treated as abandoned if unsold after a sale).

(7) Omit paragraph 56(2) (securities to be treated as abandoned if not disposed of in accordance with notice of disposal).

(8) In consequence of the repeals in subsection (5), in section 90 of the Tribunals, Courts and Enforcement Act 2007 (regulations under Part 3)—

(a) omit subsection (4) (procedure for regulations under paragraphs 24(2) and 31(5) of Schedule 12), and

(b) in subsection (5) omit “In any other case”.

(9) In Schedule 13 to that Act (taking control of goods: amendments)—

(a) in paragraph 37 (repeal in section 66(2) of the Criminal Justice Act 1972) for the words after “etc.),” substitute “omit subsection (2).”,

(b) in paragraph 74 (repeal of sections 93 to 100 of the County Courts Act 1984) after “93 to” insert “98 and”,

(c) in paragraph 85 (amendment of section 436 of the Insolvency Act 1986) for “436” substitute “436(1)”,

(d) in paragraph 125 (amendment of section 15 of the Employment Tribunals Act 1996) for ““by execution issued from the county court”” substitute “the words from “by execution”, to “court” in the first place after “by execution”,”, and

(e) in paragraph 134 (which amends Schedule 17 to the Financial Services and Markets Act 2000) for “paragraph 16(a)” substitute “paragraphs 16(a) and 16D(a)”.”

The Minister of State, Ministry of Justice (Lord McNally): I beg to move that this House do agree with Commons Amendments 5. I shall speak also to Amendments 6 and 31. As the debates in this House and the other place have shown, there is broad agreement that more needs to be done to protect debtors from the unscrupulous practices of a minority of bailiffs, while

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at the same time ensuring that legitimate creditors can collect the money that they are owed. The Government are committed to achieving this. On 25 January, the Ministry of Justice published the Government’s response to the

Transforming Bailiff Action

consultation, which sets out the key reforms that we are undertaking to deliver on this commitment.

It may assist the House if I give a brief overview of the Government’s reforms, which centre on the implementation of Part 3 of the Tribunals, Courts and Enforcement Act 2007. Among other things, they will remove antiquated and confusing laws, provide clarity about the power of bailiffs, allow for the introduction of regulations setting out what goods a bailiff can or cannot seize and introduce a clear and fair charging regime. Furthermore, new mandatory training and an enhanced certification system will ensure that the individuals carrying out this difficult job are the right people, and will build on the existing remedies available if things go wrong.

The Government believe that the framework for the regulation of bailiffs in Part 3 of the Tribunals, Courts and Enforcement Act 2007 generally strikes the right balance between ensuring that all bailiffs operate to appropriate minimum standards and not subjecting the industry to overburdensome regulation. As such, I hope that the House can readily agree Commons Amendment 5, which will enable us to correct a number of inadequacies in the legislation. Having done so, we will be able to move quickly to bring Part 3 of the 2007 Act into force.

The key changes made to the 2007 Act are threefold. First, the amendment removes the ability to make regulations that would confer a power on enforcement agents to use reasonable force against debtors. It is one thing to countenance the use of reasonable force to enter premises; it is quite another to authorise such force against a person. Here the 2007 Act plainly got the balance wrong and it is right that we should provide this additional safeguard.

5.45 pm

Secondly, the amendment will allow enforcement agents who are executing a High Court or county court debt to use reasonable force to enter commercial premises. As I have said, using reasonable force to secure entry into premises is quite different from using force against an individual. Enforcement agents already have such powers under common law and we believe that the failure to confer an equivalent statutory power was an omission from the 2007 Act. The third key change to the 2007 Act is to allow enforcement agents to re-enter any premises, domestic or commercial, where the debtor is in breach of a controlled goods agreement to which they have consented. Here again, we are seeking to provide in statute what is already the position under common law.

The balance of our reforms is to encourage compliance by debtors, including by encouraging the use of controlled goods agreements, which allow debtors to keep their possessions but enter into an agreed payment plan with the enforcement agent. There is a danger that without these changes we may remove the possibility of negotiation and in fact encourage bailiffs to use

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aggressive action. Without the assurance that they will be able to re-enter premises quickly and remove goods should the agreement be broken, it is likely that they will remove goods straight away. Safeguards for this process will be included in regulations, stipulating that a bailiff will be required to give notice to the debtor of their intention to use reasonable force to re-enter premises. As I have indicated, these amendments to the 2007 Act will not increase the existing powers of entry available to bailiffs. Rather, they codify in statute existing common law powers.

Commons Amendment 6 removes Clause 26, which was inserted at Third Reading when this House agreed an amendment in the name of the noble Baroness, Lady Meacher, who I see in her place. As I stated then, we believe that the provisions expanding the remit of the Legal Services Ombudsman to include complaints against bailiffs is unnecessary. Existing forms of redress are already available to debtors, including in-house complaints processes run by creditors, bailiff companies and trade associations. Furthermore, under the Government’s reforms, all individuals undertaking enforcement action will be required to have a certificate from the county court to practise. Should a debtor wish to complain about the conduct of an individual, they will be able to complain directly to a judge who may decide whether the certificate should be withdrawn or whether any retraining could be appropriate. Carrying out enforcement work without a certificate will be a criminal offence.

It is also worth remembering that 80% of debt enforced by bailiffs is local government debt, and in these circumstances bailiffs are either directly employed by or contracted to act as agents on behalf of local authorities. In these cases, the debtor can also seek redress from the Local Government Ombudsman if they feel that the local authority has not satisfactorily considered their complaint. The Local Government Ombudsman has taken a particular interest in local authorities’ use and monitoring of private contracted bailiffs. In November last year, they published a focus report, Taking Possession: Councils’ Use of Bailiffs for Local Debt Collection. This is a very helpful report that highlights the need to reform bailiff law, and its recommendations were taken into consideration in the Government’s response to the Transforming Bailiff Action consultation published in January this year.

Of the other 20%, the majority of the debt is enforced on behalf of central government, which includes Her Majesty’s Revenue and Customs, Her Majesty’s Courts and Tribunals Service and the Department for Work and Pensions. Again, bailiffs are either directly employed by, or contracted to act as agents on behalf of, these departments. If the department does not deal with any complaint satisfactorily, then ultimately the individual, through their MP, could complain to the Parliamentary and Health Service Ombudsman.

The only other areas of debt enforcement that private bailiffs enforce are High Court writs and commercial rent arrears recovery. High Court enforcement officers are authorised by the Lord Chancellor through his delegate, therefore any complaints not dealt with satisfactorily by the High Court Enforcement Officers Association can be sent to the Lord Chancellor’s delegate. For commercial rent arrears recovery, there

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is no ombudsman. However, we estimate that this is only 1% of debt collected by bailiffs and only affects business. I should add that we have received very few complaints in this area.

For all these reasons, the Government consider that the introduction of another ombudsman complaints system is unnecessary at best and at worst confusing. As I have previously said, we believe that the underlying causes of most, if not all, complaints will be dealt with by our reforms. Officials are working with the advice sector to consider once more the types of complaints received and will work with them to ensure they are adequately addressed by the regulations. It is our intention to make these regulations available by the summer to take effect by April 2014.

We are also working with external bodies that are involved in developing training programmes for the enforcement industry and know that it is important that the training includes how to deal with situations which involve vulnerable individuals; for example, those with mental capacity issues. The Money Advice Trust and the Royal College of Psychiatrists have already developed and are running mental health training for collection staff, which we will consider for inclusion in the wider bailiffs training framework.

We are looking at existing programmes which include online training, face-to-face modules with preparatory work to be undertaken in advance and possible examinations as well as continuous professional development. The full extent of the training is still being developed. We know that the Institute of Revenues Rating and Valuation has developed a level 2 vocational qualification aimed at the enforcement industry which is achieved through a mix of academic studies and work-based learning delivered over a period of three months. Again, this is something we are exploring further.

Our reforms are a significant step forward, and they must be given time to take effect. We have given a commitment to undertake a review of the reforms one, three and, if necessary, five years after their introduction. We are working with stakeholders to ensure that there is a robust framework in place by which to assess their success and to ensure that we deliver our commitment.

The Government are committed to protecting debtors from aggressive bailiff action. We are clear that intimidating behaviour and the oppressive and underhand tactics practised by some bailiffs are completely unacceptable. Implementing the provisions in the Tribunals, Courts and Enforcement Act 2007 will ensure that we focus on the root causes of bailiff complaints. In the light of this explanation, I ask the House to accept Commons Amendments 5, 6 and 31, and I hope that the noble Baroness, Lady Meacher, will consider not moving her amendment.

Baroness Meacher: My Lords, Amendment 6A relates to an amendment passed in this House to provide for an ombudsman service as a basic minimum of protection for victims of abuse by bailiff services. The lack of an independent regulatory system for bailiffs affects hundreds of thousands of our most vulnerable citizens, and we know that the recent and ongoing welfare benefits legislation will swell the numbers of such victims in the coming years. The purpose of bringing back this

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amendment to the House is to provide an opportunity for the Minister to explain the action taken since our debate. In December, the amendment had strong support from the Conservative Benches. The noble Lord, Lord Lucas, chair of the Enforcement Law Reform Group, said that he did not know one bailiff who would not support the amendment. The noble Lord, Lord Cormack, spoke eloquently about the importance of your Lordships’ House approving such a reform, but the Minister at the time could give no assurances.

Full ombudsman services are provided in health, housing, local government, financial services, legal services, telecommunications, prisons and other sectors, but we know that members of the public are probably more vulnerable to abuse of power by bailiffs than by almost any other cadre of workers. After all, bailiffs cone into our homes to seize our property. Little could be more offensive than that. Yet, in response to our amendment, the Government in the other place have rejected even this most minimal of protections for people who will inevitably include many mentally and physically disabled people who cannot fend for themselves.

I thank the Minister and his officials for a meeting last week when they explained many of the actions taken since our debate in December. I am grateful to the Minister for giving an assurance to this House—I think he gave this assurance—that every individual who is subject to abuse by a bailiff will have access to one or other ombudsman. It is a splintered system, not a complete system, but, if they can find their way through it, every victim will have access to the Local Government Ombudsman, the Parliamentary Ombudsman or the Legal Ombudsman. I hope the Minister will confirm that he said that. I should be grateful if he could make very clear that the Local Government Ombudsman will be able to deal with complaints about private bailiffs as well as in-house bailiffs. As the Minister made clear, the one area that is left out of this is companies. I have concerns about small businesses—perhaps one or two-person businesses—that may get into terrible debt trouble and have very unpleasant experiences. They will have no access to an ombudsman.

In his opening remarks, the Minister referred to training. I do not think he mentioned this, but I should be grateful if he could confirm that there will be a specific module on identifying vulnerability and vulnerable people. I should also be grateful if he could clarify that the training will not only include how to identify a vulnerable person but will be very clear about what the bailiff should do having identified a vulnerable person. It is no good identifying them if the bailiff proceeds to act inappropriately.

In December, I probed a lot about the length, breadth and depth of the training, and I am delighted to hear that there will be training of in the region of three months, including this rather important module. However, I should like to pursue the matter a little further. The Government’s response to the consultation referred to mandatory training. I should like an assurance from the Minister that there will be a set standard that a bailiff is required to meet. I am familiar with training in certain areas where the company simply has to tick a box to say that the bailiff has attended training. I am

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even familiar with security officers who will quite happily get someone else to complete the training for them and somehow or other the box gets ticked. We need an assurance that there will be a standard that bailiffs are required to meet. Will there be any independent verification of meeting those standards?

Finally, will the Minister say something about the work on information for victims that he mentioned at our meeting? We have a splintered and confusing system of ombudsmen for victims in different scenarios. It would be helpful to have on record the work going on with the CAB service, the web and so on to try to make sure that people know that they have access to an independent ombudsman. As the Minister said, the Government will reform the Tribunals, Courts and Enforcement Act 2007 to prevent the use of force against the person. Again, I should be grateful if the Minister could—perhaps he cannot—give some timeframe for that legislation.

In summary, the Government will introduce a certification process with no independent regulation of bailiffs and a rather incomplete and splintered form of ombudsman service. However, we can expect the quality of enforcement services to improve somewhat from a very low base. Of course, one cannot generalise, but we know that some very unpleasant things happen out there. There will be a staged process, to which the Minister referred, of implementation review. I hope the Minister can confirm that the results of those reviews will be made public and, at that stage, perhaps the Government will finally accept the crying need for independent regulation of bailiffs. I await the Minister’s response.

6 pm

Lord Beecham: My Lords, I join the noble Baroness in welcoming the Government’s moves to tighten up the arrangements for bailiffs. Like her, however, I regret that they have failed to take the ultimate step of establishing a clear and relatively straightforward regulatory system. I am slightly puzzled by some aspects of their response to the consultation. For example, in paragraph 18 of their response, the Government say that they will implement Section 64 of the Act and “produce regulations” about the regulation of enforcement agents, which is a somewhat circuitous expression. Nor is it entirely clear where that would be heading.

Equally, the response goes on to say at paragraph 134 that the Government,

“will continue to work with stakeholders from the enforcement and advice sectors in developing the content of the regulations and will also work with HM Courts and Tribunals Service and the judiciary on the court procedure”.

I take it that that means that, ultimately, the Government will produce regulations to be approved by both Houses. Perhaps the noble Lord would be able to confirm that. It is clear, as the Minister has pointed out, that much of the work—or, any rate, the function—of the industry is directed towards recovering sums due to local or central government, hence the involvement of the Local Government Ombudsman. That work is likely to be enhanced considerably as councils seek to recover, if it is economical to do so, the likely shortfall in the collection of council tax now that a significant cut has

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been made in council tax support, and many people will now be called upon to pay council tax who have not hitherto done so, in rather small amounts. That may make collection uneconomic.

Be that as it may, and quite taking the point about the Local Government Ombudsman’s position, would it not be sensible, if we are thinking in terms of sensible regulation without offering competing avenues for this, for the Local Government Ombudsman’s responsibilities to be widened so that he can undertake that regulatory role for the whole system? Why not? Hopefully, local authorities, either singly or collectively, will in any case employ staff directly rather than contract out. It is in the contracting out of the service that we see so many of the problems.

It is interesting that the advice sector did not agree with the not unexpected majority of the enforcement sector and creditors in saying that the existing complaints process was sufficient and did not require any further government intervention. The advice sector thought that the processes,

“have proved to be ineffective or inadequate”.

Given the Government’s propensity to rely on the voluntary sector to make good the damage inflicted upon advice services generally—the withdrawal of legal aid and legal advice, for example—one might have thought that they would pay rather more attention to the advice of the sector in this sensitive area. As the Minister has, in fairness, readily recognised, there have been too many instances of abuse for us to be comfortable with the present position.

Finally, the Government propose a rather curious process of review at one, three and five-year intervals. It is not clear quite what form that would take, but I ask the Minister for an assurance that if it is seen that there is no significant improvement in how the system is working, they will revert to the concept not merely of support, advice and certification but of a proper regulatory system to which people can have ready and inexpensive access.

Lord McNally: My Lords, I will re-emphasise why we are not introducing an independent regulator. The legislative changes that we are making to protect people in debt from aggressive bailiffs together with the new laws and mandatory training and certification scheme, which bailiffs must pass before going into business, will provide enough protection against aggressive bailiffs. Bailiffs who do not follow the rules will be barred from the industry. We will also clarify the complaints process so that debtors know how to seek redress and what the responsibility of creditors and enforcements agents are.

As I have explained, in the process, the appropriate regulator in each of the areas where bailiffs are used will be able to be appealed to. We mentioned this small degree of commercial debt—less than 1%—and I would be happy to receive any representation from either the CBI or the Federation of Small Businesses if they thought that this was a genuine loophole causing a real problem.

Every individual will have access to an appropriate complainant authority. As the noble Baroness pointed out, we have indicated that we are looking for something like a three-month training programme; it will not just be a tick-box exercise. We are looking at other parts of

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the forest, as it were, to see whether there are training modules and practices that we can readily adapt. I confirm that the local government ombudsman will have responsibility for private bailiffs when they are acting for local authorities.

The noble Baroness rightly raised the problems of dealing with people who may have some difficulties with mental capacity. We would hope that in the training will come a clear responsibility to recognise and assess such situations. Where they identify that a vulnerable person is involved, they will refer back to the relevant authority to further instructions and, where necessary, bring in other assistance to deal with the situation.

As I have said, we are developing training that we consider a minimum requirement. We have not yet been able to gauge exactly the length of time that the training would take. However, we are clear that, at a minimum, bailiffs will need to understand the role that they play, the law that governs their powers, the practice of taking control of goods, the fees that they can charge and, as I have said, specific training to deal with vulnerable people.

On whether the system will allow complaints against bailiff firms as well as individuals, most complaints about bailiff companies relate to the fees charged by their bailiffs, the type of goods seized and the ways in which they were seized. All these issues will be dealt with under the new regulations and will be subject to the means of redress. The behaviour of individual bailiffs on the doorstep will be regulated through the certification system. Poor behaviour can be addressed by the removal of a certificate. We are working with the advice sector to identify any complaints that would fall outside the regulation. All bailiffs will have to be certified, and I can confirm that training will be independently accredited.

We will bring forward the regulations by negative resolution. The regulations have already been subject to a full and open consultation. Comments were invited as part of this process and were included with the consultation paper. Officials are currently working with stakeholder groups to refine the regulations, and we plan to make them available by the summer. As set out in the Tribunals, Courts and Enforcement Act 2007, the regulation will be subject to the negative procedure for statutory instruments.

As I said, I believe that what has been put forward in a way is greatly to the credit of the noble Baroness, Lady Meacher, who has championed these ideas through the House. I hope she recognises a victory when she sees one. I certainly hope, as I said before, that the House will agree to Amendments 5, 6 and 31.

Motion agreed.

Motion on Amendment 6

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 6.

Lord Taylor of Holbeach: I move this Motion formally.

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Baroness Meacher: I thank the Minister for his response and say that my amendment to the Motion is not moved.

Amendment 6A not moved.

Motion agreed.

Motion on Amendments 7 to 10

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendments 7 to 10.

Motion agreed.

Motion on Amendment 11

Moved by Lord McNally

That this House do agree with the Commons in their Amendment 11.

11: Insert the following new Clause—

“Awards of exemplary damages

(1) This section applies where—

(a) a relevant claim is made against a person (“the defendant”),

(b) the defendant was a relevant publisher at the material time,

(c) the claim is related to the publication of news-related material, and

(d) the defendant is found liable in respect of the claim.

(2) Exemplary damages may not be awarded against the defendant in respect of the claim if the defendant was a member of an approved regulator at the material time.

(3) But the court may disregard subsection (2) if—

(a) the approved regulator imposed a penalty on the defendant in respect of the defendant’s conduct or decided not to do so,

(b) the court considers, in light of the information available to the approved regulator when imposing the penalty or deciding not to impose one, that the regulator was manifestly irrational in imposing the penalty or deciding not to impose one, and

(c) the court is satisfied that, but for subsection (2), it would have made an award of exemplary damages under this section against the defendant.

(4) Where the court is not prevented from making an award of exemplary damages by subsection (2) (whether because that subsection does not apply or the court is permitted to disregard that subsection as a result of subsection (3)), the court—

(a) may make an award of exemplary damages if it considers it appropriate to do so in all the circumstances of the case, but

(b) may do so only under this section.

(5) Exemplary damages may be awarded under this section only if they are claimed.

(6) Exemplary damages may be awarded under this section only if the court is satisfied that—

(a) the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights,

(b) the conduct is such that the court should punish the defendant for it, and

(c) other remedies would not be adequate to punish that conduct.

(7) Exemplary damages may be awarded under this section whether or not another remedy is granted.

(8) The decision on the question of—

(a) whether exemplary damages are to be awarded under this section, or

(b) the amount of such damages,

must not be left to a jury.”

Lord McNally: My Lords, I beg to move that this House agrees with Commons Amendment 11. With this I shall speak also to Commons Amendments 12 to 19, 38, 46 and 131, and to the government

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Amendments 17D, 17H and 131BA to those amendments. This group of amendments, together with a new clause which your Lordships’ House has already added to the Enterprise and Regulatory Reform Bill, implement legislative parts of the Leveson cross-party agreement. Clearly these have been the source of much interest over the last week, since the Prime Minister announced last Monday that he had reached agreement with the Deputy Prime Minister and the Leader of the Opposition on proposals for a royal charter. As part of that agreement, the three parties also agreed proposals and exemplary damages and costs that are designed to incentivise publishers to join the new regulatory framework. These proposals are the subject of this group of Commons amendments.

I will first explain the key features of the Commons amendments. Commons Amendments 11 to 15 relate to exemplary damages, which are already available under the common law. They are, however, very rarely awarded, as they are reserved for the most serious cases. They are designed to punish, and only where there is no alternative. That general position will not change, although the new scheme for relevant publishers will change the position for them in relation to certain types of cases relating to the media, namely cases for defamation, misuse of private information, breach of confidence, malicious falsehood and harassment, as specified in Amendment 19.

Commons Amendment 11 incentivises publishers to join the regulator by making it clear that a court may contemplate awarding exemplary damages only in cases where a publisher has not joined the regulator, with very limited exceptions. This is on the basis that a publisher joining the regulator will face the prospect of regulatory fines of up to £1 million. However, subsection (3) of the new clause also provides that if a court is persuaded that a regulated publisher has acted in a way that would lead the court to award exemplary damages but for their membership of the regulator, and the regulator has acted manifestly irrationally in its approach to sanctioning that conduct, the court may exceptionally make an award for exemplary damages in that case. I know that this is one of the points on which my noble friend Lord Lucas has sought clarification in his Amendment 11A. I hope that he will agree that this is a very limited and clear exception to that rule, being available only when a court concludes that the regulator has acted in a manner that is manifestly irrational—a very high bar.

6.15 pm

Further, this is a necessary safeguard for victims to ensure that the press self-regulator sanctions in an appropriate and meaningful way and is not tempted to give the press an easy ride. Exemplary damages would be awarded only in the most serious of cases. This is in line with both the Leveson report and the report of the 1997 Law Commission. The test for the award of exemplary damages would be where the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights. That conduct is such that the court should punish the defendant for it, and other remedies would not be adequate to punish that conduct.

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The new clauses inserted into the Bill by Commons Amendments 12 to 15 contain provisions designed to ensure that new systems work effectively in practice. Commons Amendment 12 sets out factors that the court must take into account in deciding whether an award of exemplary damages is appropriate, with the overall context of considering all the circumstances of the case. The core factors are whether,

“membership of an approved regulator was available to the defendant”,

at the time of the event giving rise to the claim, and, if so, what reasons the defendant had for not being a member. Commons Amendment 13 sets out matters to which the court must have regard in deciding what amount of exemplary damages is appropriate. The key principles governing the court’s considerations are that the amount should be no more,

“than the minimum needed to punish the defendant for the conduct complained of”,

and that it should,

“be proportionate to the seriousness of”,

that conduct. Commons Amendments 14 and 15 ensure that these provisions will operate effectively in cases involving more than one claimant or more than one defendant.

For completeness, I should also mention Amendments 16 and 38. Amendment 16 implements recommendation 71 in Lord Justice Leveson’s report, and confirms that in cases under the new system, aggravated damages should be awarded only to compensate for mental distress and should have no punitive element. Amendment 38 provides that the provision on exemplary damages will come into force one year after the date on which a body is established by royal charter. This will be a powerful incentive to the press to establish a new regulator on a timely basis so that they will have the opportunity of becoming regulated.

I now turn to the provisions relating to cost in subsection (1) of Amendment 17, which will be subject to government Amendments 17D and 17H. This new clause is designed to give effect to Lord Justice Leveson’s recommendation that the award of costs in media torts should be another tool to encourage publishers to join the regulator. The effect is that there would be a clear presumption that where a claimant took a publisher inside the regulator to court, even if the claimant was successful in their case, the normal rule that their costs would be met by a losing publisher would not apply. In other words, a defendant publisher who had joined the regulator should only pay the claimant’s costs in limited circumstances.

The new clause also establishes a second presumption: that a defendant publisher who does not join the regulator should always pay the claimant’s costs, again, subject to the exceptions in limited circumstances. Those limited circumstances are subject to government Amendment 17D, where the issue could not have been resolved at arbitration, even if the publisher had been a member of a regulator, or if it were just and equitable for the defendant publisher not to pay the cost.

Government Amendments 17D and 17H make two technical amendments to the new clause on costs. The first refers to subsection (2)(a) of the costs clause. The

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intention of this provision is to allow for costs to be awarded against a regulated publisher only if the claim is not capable of being resolved through the regulator’s arbitration scheme. However, to achieve this, the word “not” must be inserted into the condition of subsection (2)(a), to avoid the opposite being the case. Amendment 17D simply corrects this drafting error.

In addition, we have concluded that subsection (4) of the costs clause is unnecessary. It defines what could be resolved by an arbitration service established by a regulator by reference to whether,

“the claim could have been referred”,

to such an arbitrator. In fact, the reason an arbitrator might not be capable of dealing with a claim might not be clear until after the referral has taken place, so we concluded that the definition was unduly restrictive and was not needed. Amendment 17H strikes out the subsection.

The application of these provisions on exemplary damages and costs turn on the definition of “relevant publisher” in Commons Amendments 18 and 131. As I indicated, we want to ensure that the new provisions act as the incentive that Lord Justice Leveson intended. At the same time, we do not want to draw in too broad a range of publishers. Our aim has been to capture the main elements of the press, as well as what I find it helpful to refer to as “press-like” activity online.

Lord Justice Leveson said that, ideally, a regulatory body,

“would attract membership from all news and periodical publishers, including news publishers online. It is important for the credibility of the system, as well as for the promotion of high standards of journalism and the protection of individual rights, that the body should have the widest possible membership among news providers”.

He also said:

“This is not meant to be prescriptive at the very small end of the market: I would not necessarily expect very small publishers to join the body”.

Commons Amendment 18 therefore provides a definition of “relevant publisher” that captures national newspapers and their online editions, local and regional newspapers and their online editions, online-only edited press-like content providers, and gossip and lifestyle magazines.

The new provisions act as the key incentive for joining the new press regulator. The regulator provides a number of protections from both exemplary damages and costs clauses, so it is important that the definition equates to the publications that we expect to be part of the regulator. Those inside the regulator will be expected to comply with the industry-standard clause and will be exposed to a £1 million fine, a complaints conciliation service and a new, free arbitral arm for the processing of civil legal claims. However, these provisions are equally designed to protect people who are not intended to be in the new press regulator.

In the past week, I have seen some concerns voiced regarding the extent to which bloggers or tweeters may be caught by this definition. I will return to this point in a moment. Lord Justice Leveson distinguished between the often grass-roots, small-scale activity of individual bloggers’ sites and social networking, and those activities

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that have developed over time into more sophisticated, multi-authored and edited news-related businesses. He referred to:

“a number of news blogs—the Huffington Post is an early, high profile example of one, which has developed over the years into something much more like an online newspaper—which specifically aim to bring a range of news stories and views on those stories to their readers”.

This is an important distinction. Leveson is describing a press-like operation online. In order to future-proof our regulatory approach, we need to keep up with changes in technology. Any regulatory system that seeks to cover news publishers cannot ignore the fact that the print forms of press are facing real economic challenges, both structural and cyclical, and that distribution methods are moving increasingly online. Reforms to press regulatory systems must take account of the increasing online presence of the national news publishers, as well as press-like news publishers who operate solely online.

In future, the digital world is likely to be the principal method of distribution for much of our news, and our regulatory system must reflect this. It is important because the public have different expectations about different kinds of media, and in taking a regulatory approach we should take seriously those public expectations. Clearly, the online version of the national press, its regional counterpart or an online yet press-like news site, carry very different public expectations when compared with a small-scale blog—or, for that matter, a tweet. Our definition of “relevant publisher” seeks to make this differentiation. It does so by employing an interlocking series of tests, all of which must be met before the threshold of the definition is reached. They are, first, whether the publication publishes news-related material; secondly, whether it is written by different authors; thirdly, whether it is to any extent subject to editorial control; and, fourthly, whether it is published in the course of a business. The definition is therefore intended to protect small-scale bloggers while capturing the more sophisticated, press-like online material that Leveson described.

Equally, the definition of “relevant publisher” is not intended to capture the news aggregation services of operations such as Yahoo! or MSN. Nor is it intended to capture social networking sites where individuals post user-generated material. Nor is it aimed at sites that simply moderate the comments of others, or aggregate a series of blogs without any active consideration of the content, such as the blog-hosting services WordPress and Tumblr. I also clarify that, contrary to some recent reporting, the definition is equally not aimed at covering individual journalists. The definition of “relevant publisher” is aimed at organisations that employ or otherwise commission journalistic content, and, even then, only to the extent that these organisations operate in line with the four interlocking tests that I outlined.

I recognise that people have been seeking clarification on how the legislation could apply to small-scale bloggers, and how the interlocking tests work. This is reflected in some of the amendments before us, and includes the suggestion that there may be a case for making an express exemption in respect of small-scale blogs in the new schedule inserted by Commons Amendment 131.

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To allow a period of reflection in advance of the next round of ping-pong in another place after the Easter Recess, the Government have tabled manuscript Amendment 131BA in recognition of the concerns over Amendment 131. As part of this, my right honourable friend the Secretary of State for Culture, Media and Sport has agreed that her officials will collate and engage with any issues that are raised before submitting a view on how the test will operate and whether there is a need for a further amendment. I hope it is clear to noble Lords that when this is next considered by the other place, the Government may come forward with an alternative amendment, or invite the other place not to agree this amendment. However, for now, I invite the House to make this change.

Finally, on “relevant publishers” and in addition to the four tests, I draw the attention of the House also to the new schedule that will be inserted by Amendment 131, which outlines specific exclusions from the definition of “relevant publisher”. In referring to Lord Justice Leveson’s view of the membership of a future press regulator, we have provided exclusions for a range of otherwise unrelated activities that might have been caught unintentionally. To that end, we have provided a specific exclusion for broadcasters who broadcast news-related material in connection with broadcasting activities authorised under their broadcasting licence, special interest titles, scientific or academic journals, public bodies and charities, company news publications and book publishers.

6.30 pm

Clearly, getting the balance of incentives is also very important. It is important that we draw the right line between the publishers intended to be caught and those who are left outside. I am confident that the Government have drawn the line in the right place and I have set out my reason for that today. Through the cross-party talks, we have agreed a set of proposals that will create a tough new system of press self-regulation. We are, I believe, striking the right balance through these amendments, which enable the implementation of this system but which, equally, do not compromise freedom of expression. They form a crucial part of the new regime for press regulation as Lord Justice Leveson set out and which, as politicians, we have a collective duty to implement. I will wait to hear what noble Lords have to say about their amendments, particularly in the light of manuscript Amendment 131BA, and respond to them when I wind up this debate. For now, I commend these Commons amendments to the House.

The Deputy Speaker (Lord Brougham and Vaux): My Lords, I now call Amendment 11A. I have to advise the House that if Amendment 11A is agreed to, I cannot call Amendment 11B by reason of pre-emption.

Amendment 11A (as an amendment to Commons Amendment 11)

Moved by Lord Lucas

11A: Line 11, leave out from beginning to “, the” in line 24

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Lord Lucas: In moving Amendment 11A I shall speak also to the other amendments in my name in this group and, indeed, to one that does not appear in the groupings list, Amendment 17G, unless the list has been amended subsequently, as this amendment is clearly part of the same series.

I start by declaring an interest: I run the Good Schools Guide. It seems to me that the Good Schools Guide is clearly going to have register under these clauses. I am not going to address myself to the virtue or otherwise of this approach to press regulation—I am sure that others will do that better than I could. I am going to confine my remarks to, “Well, if the Government are going to do it this way, how could they do it better?”. As far as I understand it, the procedure today is that, as with the other groups, we will deal with everything as a whole. But if we get to the point where we are faced with a widespread disagreement with what the Government are doing and an unwillingness to listen, we have the option of re-debating each of the amendments one by one when we reach their place in the Marshalled List if the noble Lord whose amendment it is chooses to move it.

The crucial thing from my point of view is exactly what the Government intend to do with their manuscript amendment. I was comforted very much by what the noble Lord, Lord McNally, said—that this is essentially a device to make sure that the Commons has Easter to think through exactly how to deal with small bloggers and, given the width of the Commons’ powers, also to make any other necessary changes to these clauses. Therefore, if we are dealing with small amendments and things we think need further thought, that government amendment is enough to enable these to be achieved, and therefore all we need to do is speak to the Government today and, over the next three weeks, good sense will gradually percolate through and result in the Commons—when the Government’s amendment comes back to us—having taken the appropriate action elsewhere within this group. I hope that that is the correct understanding. I am sure that my noble friend will confirm if that is the case.

I start with Amendment 11A. I understand what my noble friend says about the purpose of the lines that I am seeking to take out—they are to deal with circumstances when the regulator has gone doolally—but I think that this is the wrong way to do that. I can see that as a possibility, but by doing it this way the Government are introducing uncertainty into the whole question of whether exemplary damages apply to a publisher. By joining a regulator, you can exempt yourself from exemplary damages. You sign up to the regulator, you do things its way and you are not in danger of exemplary damages. You do not have to get insurance against exemplary damages—which is not exactly going to be cheap—and you know that you have gone down the road that Leveson has recommended.

By introducing this uncertainty, saying that the courts can overturn your exemption, you are inviting every opportunist attacker to have a go at you, to see if he can tip you into exemplary damages. I cannot see that introducing that level of uncertainty, danger and risk in a procedure which is supposed to encourage people to sign up to avoid that risk, is the right way of doing it. If we are worried about the regulator going

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native then we need to provide for that in the charter and provide some way of bringing a regulator back to where they should be. Indeed, I suspect that if we had that then it might well be that Parliament would legislate again anyway. Surely this added uncertainty is not the right way to deal with the problem.

I turn to the next amendments in my group, Amendments 17C and 17G. The object of these paragraphs is effectively to force publishers to use arbitration. I have two objections to that. The first is that there ought to be a real incentive for those who offer the arbitration, for the regulator, to make it good and something that publishers want to use. If there is no such incentive then there is the tendency, as exemplified in Australia for instance, for the arbitrator to start to get really rather eccentric views on what publishers should be doing and to seek to widen its own authority by pushing the boundaries and the rules in ways which I am sure Parliament is not currently envisaging.

It seems to me best in principle that an arbitration, if that is offered, should be offered freely. I am sure that those like me who have had some experience of the uncertainties of the court will go for arbitration first as a matter of course if it is well done—and no reason why it should not be.

Secondly, however, there are many cases in the world of publishing that are seriously complicated things. They can be dealt with by arbitration but actually are far better dealt with by the courts. Surely we want to allow the decision to continue to be made by either side in the argument that a particular case would be better dealt with by a court, with the additional powers and procedures that courts have. I cannot see why we are effectively ruling that out by this particular pattern of penalties.

We come to my amendment to Amendment 18, which is to take out subsections (3) and (4). I think that I am proposing this amendment because I do not understand the wording of those clauses. I understood my noble friend when he addressed this and said that, clearly, he wanted to see the Huffington Post included as a publisher. But it seems to me that subsection (3) removes, at least if not the Huffington Post in the exact way that it operates, many Huffington Post-like potential publishers from the scope of “relevant publisher”. It says:

“A person who is the operator of a website is not to be taken as having editorial or equivalent responsibility for the decision to publish any material on the site, or for content of the material, if the person did not post the material on the site”—

in other words, if the material appeared on that site by another agency.

Well, fine; but suppose the publisher—whatever they be called; “Comment is free” would be a pretty good example—had offered payment to the person who posted that article on the website, or had commissioned it, or had merely given permission for it, as one has to with “Comment is free”. You cannot just post something on that site; you have to get its agreement to posting it. Effectively, in the likes of “Comment is free”, you are creating a newspaper, but it is not made up in the usual way; it is made up of unpaid—although there is no reason why they should not be paid—contributions from outsiders. They may

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well have been moderated, as is allowed in subsection (4), which effectively means edited. Permission has been given and sometimes contributions are sought, in that they might say, “We would like something like that—who shall we ask to make the posting?”. The wording of subsection (3), as it is now, allows some very major businesses to escape this set of clauses entirely. They may not exist at the moment but, if you allow them to exist under this clause, I think that they will get through. That may be my misunderstanding of how the wording operates, but it certainly seems the case to me.

Amendment 19A is my original take on how to deal with the small bloggers problem. Essentially, most publishers of any ambition are going to have to join this regulator, and my noble friend clearly expressed the intention of the Government and Lord Justice Leveson that this should be the case. But a lot of these publishers, particularly at the early stages of their existence, when they are pretty sharp-edged and contentious, do not have much income. They survive on the sheer effort of a few individuals, who may scrape a living through journalism elsewhere, or do something else to keep body and soul together, but are not earning a lot from the publishing enterprise that they have founded. If the regulator charges a large fee for annual membership or charges little bloggers full fees for access to the compulsory arbitration service, we are effectively creating quite a high barrier to entry for new publishers. We are saying that they will have to find £100,000 or £200,000 to deal with those charges before they are allowed to become a publisher.

I am sure that that is not the Government’s intention, but it is one of the reasons why their own amendment does not go far enough, and dealing with this issue is probably a matter for the charter and not for the Bill. But it is important to make sure that we are not in this Bill introducing a barrier to entry for new publishers, who will generally feel obliged to register. Unless there is a very clear moment when they transition from being a small blogger, in the words of the government amendment, to a not small blogger, they will register early for their own protection. But if they face the sort of fees that a vexatious litigant could use to really punish them, just by putting them through the procedures, we will put in place a real barrier. I am sure that my noble friend realises that there are people around the world with whom you can get into severe difficulty if you say what you think about them, such as the Scientologists. That is not an uncommon feature, and we should not create a barrier for entry into such controversial and, in the overall scheme of things, worthwhile activities.

My other amendments, Amendments 131B and following, are slightly further on. I am sure that this is my misreading, but it seems to me that there is nothing in the wording that exempts the New York Times, or Le Monde, from having to register. We are going back to our imperial habits and stretching our net across the world. They are certainly publishers of news on a large scale about the United Kingdom, but they are surely not intended to be caught and have to register just because they choose to report what is going on in these islands, on page 59. If that is the intention, I feel that it is the wrong one.

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The second part of Amendment 131B is really a companion to the limitation of fees and costs for small publishers. If the regulator has to run at a loss on small publishers, subsidising their fees and arbitration costs out of the fees and costs charged to larger publishers, it may decide that it really cannot be bothered and say, “You’re not big enough yet—go away”. If the regulator says that to you at the moment, you are caught, because you cannot join the regulator and, therefore, you are in for exemplary damages, without the option. I do not think that that should be the case.

6.45 pm

My later amendments deal with other ways in which to deal with a small publisher. There have been several representations from the local press that really they should not have to qualify for this. I can see from what my noble friend says that there is really not much hope of getting that exemption. There are questions of whether charitable campaigning organisations should be caught, but it is clear that they come within the definition of publisher, as set out in these clauses. Is that really the Government’s intention? With my last amendment, the Government’s amendment is better, but we need some definition of “small” and I am sure that it is something that they are thinking about.

That is what lies behind my amendments and I am very much looking forward to what the Government say to them when we get through the other fascinating amendments that lie before us. I beg to move.

Lord Soley: My Lords, I shall address this matter fairly briefly. I congratulate the Government on having moved as they have, and the noble Lord on his opening comments.

I want to make two points, but they are quite important ones. What is welcome and what we need to remember when we discuss these issues is that there is a world of difference between an individual who might say something factually incorrect and even insulting as an individual and a very large-scale international organisation such as News International doing the same thing. That is really where this problem has come from. People reacted to Leveson from the press side by saying that it was an attack on 300 years of press freedom, but that is nonsense. Press freedom was about small individuals and small groups fighting for the right to publish their views, and that remained the case until quite late in the 19th century, when the press barons emerged and these large-scale and powerful organisations developed. That is when it became difficult, because you could no longer feel the same about an attack by an organisation such as News International that was factually incorrect and severely intrusive, and that of an individual. That sort of balance needs to be kept in mind.

When I listened to the Minister’s opening comments, I felt that the Government were aware of the difference between the large and small organisation. But it is a problem for the small organisation. I started a blog in, I think, 2003, then came here and converted it to “Lord of the Blog”, and then it became “Lords of the Blog”, which is still operating, and is run by the Hansard Society on behalf of the House. I think that

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it is relevant—and this refers in a way to some of the comments of the noble Lord, Lord Lucas—and we need to be aware of the impact on charitable organisations and the smaller groups.

My second main point is that we need to review the legislation over a period of time. Part of the reason why we need to do that is the rapidly changing technology; it is so fast and so dramatic that it is difficult to keep up with it. I do not believe that all the press will suddenly go out of business because of the internet, but they are under more severe financial pressure because of it. Frankly, good newspapers are likely to survive—and likely to survive also because of their online material. We have to break away from the old culture whereby, if you felt that you could not publish a story, you got someone to put it on the internet and then, lo and behold, it suddenly appeared in News International newspapers, or wherever—and anyone could have put it on. It was easy to get round the rules.

As someone who set up those blogs, I would have welcomed at that time some sort of code that was external to what I was inventing myself. The noble Lord, Lord Lucas, said that you may be threatened by that. He may be right. I do not want to disagree with a great deal of what he said as I have a lot of sympathy with it, but I think he may be overafraid of this. When I started the blog in 2003, I was not concerned about individual attacks on me—any MP gets used to that fairly quickly and takes the rough with the smooth—but I was concerned about attacks on third parties or statements about third parties. We saw a dreadful example of that recently with the challenge to Lord McAlpine. In my view, none of this regulation threatens good investigative journalism. Indeed, I gather that the BBC programme tonight on Boris Johnson will be pretty critical and that is a regulated media outlet, so we should not be too concerned about this issue. However, vast changes are taking place.

To give another example, after the Iraq war, at the request of some Arabs in my then constituency, I set up the Arab-Jewish Forum, which was essentially a conference organising group, but I have recently converted it into a blog organisation for Arabs and Jews in this country, although, inevitably, it will go worldwide. In doing that, I am worried about regulations. A group of Arabs and Jews will regulate it. I will also keep a close eye on it although, as someone of neither Jewish nor Arab heritage, I will be less good at that than the moderating group. It would be good to have guidelines on what to do if something is factually incorrect. Although what we are discussing is not directly relevant to that issue, it underpins it and may indicate a way forward in dealing with the emerging internet communications, which will replace newspapers to a large extent, although not completely, in my view. We will then need constantly to review the legislation.

I carefully followed the speech of the noble Lord, Lord Lucas, in which he raised important issues, with which I have sympathy, and to which I wish to add two comments. First, an organisation may value being a member of a regulatory body as that gives you some guidance, even if it is not a complete code, and a structure within which to work. I ask the Minister to address my next point when he winds up. Secondly, it is very important that we develop a way to review this

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legislation over time given not just the complexity of setting up a regulatory body for the press for the first time but the fact that the technology is changing so fast it is very difficult to keep up with it.

Lord Skidelsky: My Lords, I would like to speak to Amendment 11B and a group of consequential and related amendments, and I am sorry not to have got to my feet quicker. These amendments seek to implement the Leveson report as Lord Justice Leveson provided for—no more and no less. I broadly welcome the Government’s Amendment 11 and the Minister’s explanation of it but would welcome assurance on a number of specific points.

There are three amendments on exemplary damages: Amendments 11C, which provides that the existing common law test does not apply in this case; Amendment 11D, which provides that vicarious liability should apply in this form of exemplary damages; and Amendment 13A, which provides that the court will have regard to the means of a defendant when making any award. It is very important that the law is clear that for exemplary damages to apply, the conduct does not have to be carried out with a view to a profit and with a deliberate disregard of an outrageous nature of the claimant’s rights; in other words, there are two alternative tests and not one. The Government’s amendment is unclear on that matter and I should like clarification on it.

Amendment 17E makes clear that to benefit from costs protection the publisher would have to participate in the self-regulator’s arbitration scheme. Amendment 17J provides that the current hold on the commencement of Sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act in respect of publication proceedings will remain until a way forward is found. In relation to this, there will be cross-party talks in which Liberal Democrats and Conservatives will be able to take different positions. The reason for that is that Sections 44 and 46 of LASPO abolish the recoverability of success fees for the loser and would have disastrous effects on media claimants such as the Dowlers and the McCanns. I look forward to hearing from the Minister what the Government propose to do about the effective elimination of a success fee.

Two further amendments where assurances are sought are Amendments 19C and its consequential Amendment 19D, which concern the inclusion of data protection actions within the definition of publication proceedings. Amendment 19E provides that the Information Commissioner will take into account membership of an approved regulator when considering the exercise of his powers. In both these cases, we understand that the Minister will be bringing these back as part of the post-Leveson data protection consultation. We seek the assurance that decisions on this matter will be subject to cross-party talks in which Conservatives and Liberal Democrats will be able to take different positions.

Amendment 19B would require that the recognition panel which approves the self-regulator is subject to the Freedom of Information Act. No one would expect this body to act in secret. I seek an assurance from the Minister that the relevant special interests would be promulgated in good time for the start of its work.

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Amendment 131A concerns relevant publishers which hold broadcasting licences. We seek assurance that this is not intended to cover the whole publishing activity of such licence holders but only their broadcasting activity. As regards Amendment 11B, which deals with the exemption from immunity of self-regulated newspapers to exemplary damages, I understand that a further amendment is to be agreed to this clause. Therefore, I need say nothing further about it and it can be considered in another place.

Amendments 17A, 17B and 17F would enable bloggers and small publishers who decide to join a self-regulator to obtain the costs protection that they deserve on the basis of it providing a low-cost arbitration service. I understand that this is the subject of continuing cross-party discussion and will also be dealt with in another place. Other noble Lords will have something to say on the position of bloggers and the need for small publishers to be excluded from the definition of relevant publishers. That has already been alluded to. I merely commend my two Amendments 18A and 18B as a contribution to the debate.

Baroness Bonham-Carter of Yarnbury: My Lords, I speak in favour of Amendment 11. We need it because we need the Leveson cross-party agreement on press regulation and because we need a raucous, unfettered press, but one that does not prey on the vulnerable and the innocent. I believe that we have achieved this balance through the proposed royal charter, and we have achieved it with all-party consensus, thanks in part to the persistence of my right honourable friend the Deputy Prime Minister. As part of that, the three parties agreed proposals on exemplary damages and costs designed to provide incentives for publishers to join the independent press regulator, as set out in these amendments.

I have been disappointed, if not surprised, by the response from some sections of the press to the cross-party agreement. In our debate on Monday, my noble friend Lord Fowler referred to that great practitioner of investigative journalism, Sir Harry Evans, and to a speech he made recently in which he abhorred the negative response to the Leveson report, in particular the suggestions that it was an attack on the freedom of the press. The freedom of the press is, as he said,

“too great a cause, too universal a value to a civilised society, to be cheapened as it is in the current debates. Every year upwards of a hundred journalists, broadcasters and photographers die in the name of freedom of the press”.

My great friend, Marie Colvin, was one of them. She died because she so passionately believed in making public the stories of the forgotten. In the case of her last despatch, it was the people of Homs. She knew about state control of the press and experienced it in East Timor, in Chechnya, in Sri Lanka and, finally, in Syria where the state targeted the media centre she was working from and killed her.

The royal charter and its independent press regulator, properly underpinned—to use that very unhappy term—will mean the end of unethical work practices and achieve a proper environment for journalists to ply their important trade. It protects both the freedom of the press and the rights of the individual.

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7 pm

Lord Black of Brentwood: My Lords, I declare an interest as executive director of the Telegraph Media Group and chairman of the Press Standards Board of Finance. I want to speak to Amendments 11 to 19. This group of amendments covers issues that are wide ranging and, as the noble Lord, Lord Lucas, so ably demonstrated, extremely complex. They go to the heart of some fundamental issues of law and justice, impinge on matters which are central to the European Convention on Human Rights and impact on the nature of investigative journalism. To echo some of the comments that were made at the start of business, it cannot be right that they are introduced after barely two hours of debate in another place, at the tail end of a Bill with only a handful of days before the end of the legislative Session, and in a way which does not allow for proper scrutiny.

On the radio last week, the Deputy Prime Minister said that the meeting late last Sunday night to agree on issues of press regulation,

“focused on technical legal definitions of what represented exemplary damages. It dealt with a tiny, tiny piece of the jigsaw ... It was about filling in one piece of the canvas”.

That statement shows how very dangerous this whole issue is because important issues that relate to freedom of speech were treated simply as a,

“tiny piece of the jigsaw”,

agreed not with the industry that is going to be affected by them but with a lobby group, and they are now being pushed through at breakneck speed. The amendments from the other place are wrong in principle and fundamentally flawed. They are almost certainly contrary to European law and so will collapse or be struck down. They deal with problems of an analogue past and are, in the words of the Guardian, “illiterate about the internet”. They are a constitutional nightmare. This late-night legislative fix will end up bringing discredit to us because we should have spent time analysing, scrutinising and amending them.

It has been argued that these issues were examined by the Leveson inquiry and are a key part of the complex system of media regulation he devised. That is not the case, however, and this House has to understand that. These far-reaching proposals have had no analysis or study anywhere and certainly not by Leveson. I understand that criticising Sir Brian Leveson is akin to criticising Florence Nightingale, but his inquiry utterly failed to scrutinise the key legislative issues that arose from it. As the Economist described it this week, aspects of this controversial report were just plain “sloppy”.

Leveson never invited evidence on statutory underpinning or published a draft statute to be examined in detail, and never looked at the massive implications, particularly for the regional press, of the establishment of an arbitration service. Crucially for this group of amendments, he never looked in detail at exemplary damages. He never invited or received submissions. The only reference I can find in the acres of evidence was from Ofcom, which suggested he might look at,

“procedures to give courts power to penalise parties ... in legal cases where the party has not taken account of the complaints-handling process offered by the new body”.

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Ofcom then adds that its,

“experience in fairness and privacy cases has not led us to believe that it is necessary to have such powers. It would inevitably lead to more litigation”.

This is hardly a ringing endorsement.

Noble Lords should also know that Sir Brian devoted just four paragraphs of his 2,000-page report to the issues before us, on the basis that they were “worthy of consideration”. In his report, he says that the matter has been,

“fully discussed by the Law Commission and I see no value in repeating their argument”.

The Law Commission report, which he used as a basis for a finding that exemplary damages were necessary to make his system work, was published in 1997 before the enactment of the Human Rights Act which changed the law in this area. There would have been no point trying to, in his words, “repeat the arguments” as that Law Commission report, which was supported only by a minority of those consulted and was inconsistent with the conclusions of the Supreme Court Procedure Committee chaired by Lord Justice Neill in 1991 recommending abolition of exemplary damages, was shelved at the time and has never been accepted. The proposals it contained on exemplary damages—the same ones we are looking at today in this group—were recently dismissed in the leading textbook on the law relating to damages as,

“a retrograde step, with its inevitable and twin results of allowing the civil law to enter the very different domain of the criminal law and of providing windfalls for claimants which are in truth unmerited”.

Before moving on to some detailed issues, I want to deal with the point that will be made that I am just tilting at windmills and that no one has anything to fear if they are part of an approved regulator. This is the so-called “incentive”, the carrot and stick to provide statutory support to underpin a regulatory system. Regrettably, that argument is a mirage, because the way this legislation is structured means that membership of a regulator is not a complete protection against exemplary damages and costs orders. I am thinking in particular of proposed new subsection (3) of Amendment 11. While the Bill provides that exemplary damages should not generally be awarded against a “relevant publisher” which is a member of an approved regulator, the court can disregard this prohibition and make an award of exemplary damages in strikingly wide circumstances that render the apparent protection of being a member of a regulator entirely illusory. All the court needs to do is to be satisfied either that the regulator when looking at a case behaved “irrationally”— unlike the Minister I do not think that is a very high bar for some judges—or that it would,

“have made an award of exemplary damages ... against the defendant”,

even though it was a member of the regulator.

That is compounded by the new clauses in subsection (2) of Amendment 17 on awards of costs—which are the real issue in cases like this and which could have a far greater impact than damages themselves—which mean that the court can award costs against a member of the regulator where the

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issues could have been resolved by the regulator's expensive arbitration service or it is,

“just and equitable in all the circumstances”

to award costs against the defendant. In other words, there are so many loopholes that membership of the regulatory body might be largely irrelevant.

As structured, the Bill does not provide any form of carrot and stick: in fact, it provides a disincentive to membership because it establishes a system of double jeopardy. A publisher could be part of an approved regulatory structure, for which it will, as the noble Lord, Lord Lucas, said, have to pay a lot of money along with exposure to fines, and then it could still face the prospect of exemplary damages and crippling costs in court. Why on earth should publishers do that and face paying twice? I fear that this Bill makes it less likely that publishers would want to join an approved regulator. Some smaller publishers in the regional and periodical press, in particular, may as well just take their chances and stay outside. If the Government want a new regulator with universal coverage—which is absolutely right—this is a bizarre way of going about it.

I am not a lawyer, but I have the benefit of an opinion from the noble Lord, Lord Pannick, Desmond Browne QC and Anthony White QC, which makes clear that the provisions contained in the amendments to this Bill are likely to be unlawful because they single out for punishment a particular category of defendant rather than a particular kind of conduct. As the opinion states:

“This is particularly objectionable where the category of defendant singled out includes the press. To punish the press for what others may do without punishment is inconsistent with the special importance that both domestic and Strasbourg jurisprudence attaches to freedom of the press”.

Because the proposals will catch many publishers, from individual bloggers to NGOs, they go beyond the recommendations of Leveson. This Bill is not even itself, in the jargon, “Leveson-compliant”.

We could face the absurd situation whereby a newspaper undertook an investigation in conjunction with a programme such as “Dispatches”; this is not unknown. Both could publish the material at the same time on different platforms, one online and the other on television. If there was a legal action on grounds of defamation, the newspaper, whether or not it was a member of an approved regulatory body, could be exposed to crippling costs and damages. However, under the amendments the TV programme that broadcast the same material would be exempt. That is a completely untenable position as a matter not just of law but of fundamental justice.

As the noble Lord, Lord McNally, mentioned, there is a great deal of jurisprudence in English case law which sets out the case against exemplary damages. They have been described as anomalous and indefensible in judgments from, among others, Lord Diplock, Lord Devlin and Lord Reid. Indeed, in one of the most recent cases where this issue involving the media was raised—that of Max Mosley v News Group Newspapers—Mr Justice Eady, who some say is no friend of newspapers, concluded that exemplary damages,

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“could not be said to be either ‘prescribed by law’ or necessary in a democratic society ... There is no pressing social need for this. The ‘chilling effect’ would be obvious”.

That point about the chilling effect is extremely important because these clauses—as the noble Lord, Lord Lucas, rightly said—import a huge amount of uncertainty into the law; and uncertainty is the enemy of investigative journalism. Why should newspapers pursue a story that could leave them exposed to exemplary damages and costs unless they are operating against the background of a law that provides certainty?

The amendments allow for an award against a publisher where conduct is judged to be “outrageous”—as described in subsection (6) of Amendment 11—or

“such that the court should punish the defendant for it”.

Yet legal precedent rules that the use of this test for outrageousness is “far too vague”. Lord Diplock, in a wonderful phrase in one ruling, rejected it as being merely one of,

“a whole gamut of dyslogistical judicial epithets”.

Given that almost all publication of information concerning an individual engages his or her Article 8 rights—those of privacy—the focus of any action will inevitably revolve around whether a defendant's conduct was “of an outrageous nature”—something on which views will differ. Uncertainty and unpredictability in the area of freedom of expression are wholly undesirable.

There are further problems that will chill investigative journalism. First, subsection (4) of Amendment 11 gives the court power to look at a publisher’s “internal compliance procedures” to see whether material was obtained “in an appropriate manner”. That will invite claimants to include in legal cases questions about how information was obtained, with massive repercussions for confidentiality of sources. Journalists and publishers will inevitably be pressed to disclose information about sources in an attempt to avoid crippling financial penalties. It will positively discourage whistleblowing.

Secondly, there is the issue relating to costs in Amendment 17. The Bill turns on its head the principle that generally costs follow results. If these provisions become law, publishers—and this is particularly crucial for the local press—who do not agree to arbitrate a dispute, something which can be very costly, face the prospect that when they are sued in a libel or privacy case, they may have to bear the entire costs even if they are successful. This issue does not affect the traditional media, as is highlighted by the amendments of the noble Lord, Lord Lucas. He made that case extremely well.

The case against exemplary damages and costs orders in English law is overwhelming, and the implications are, as I have tried to set out, disturbing. However, even if this House decides to go down that road, it will face an even stiffer test in Strasbourg, where I am sure this Bill will eventually founder because of its incompatibility with Article 10 on freedom of expression.

I mentioned the case of Max Mosley, which ended up in the European Court where this issue of exemplary damages was considered. The Court concluded that it,

“is satisfied that the threat of ... punitive fines would create a chilling effect which would be felt in the spheres of political reporting and investigative journalism, both of which attract a high level of protection under the Convention”.

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We should take real note of the what the court said about how these measures would impact not on celebrities who have for too long been the focus of this debate but on political reporting.

Furthermore—and this is an important matter for Europe—the Bill discriminates between substantial commercial publishers whose business model allows them to afford membership of an approved regulator and small publishers or bloggers, such as those mentioned by the noble Lord, Lord Lucas, which cannot afford membership or may regard it as unnecessary or undesirable. That discrimination is impossible to justify under Article 10.

Everything about these proposed new clauses is wrong. They were cobbled together late at night over pizza, with no thought for the legal and constitutional issues involved. They exhibit no understanding of the digital world into which all publishers are moving. They are alien to decades of English law, and almost certainly illegal under European law. They would provide a serious blow to investigative journalism. They would disproportionately impact on smaller publishers and, in particular, the regional press. If ever there was a case where this House should have asked the Government and the other place to think long and hard, and to take their time studying the massive implications of what is being proposed, it is this. However, we do not have the ability to do so. I may be a lone voice making these points, and the cross-party deal with Hacked Off on its proposals means that these amendments will inevitably become law. I understand that. However, my noble friend is an honourable man and I ask him simply to pause and think again.

7.15 pm

Baroness Kennedy of The Shaws: My Lords, I support the amendments and welcome the framework agreed by the parties. It is not perfect Leveson, but it is about 80% or 90% Leveson. In fact, the 10% to 20% that is not Leveson is a compromise in favour of the press, and we should be clear about that. It cheers my heart to hear those who have absolutely railed against the Human Rights Act, the European Convention on Human Rights and the court in Strasbourg suddenly praying in aid that great wealth of rights law, now that those people are confronted with the possibility that the press might have to be properly regulated.

First and foremost, only a week ago last Monday night, we created an entrenchment clause to protect the charter from meddling from behind closed doors by politicians, privy counsellors and Ministers. It was a way of using law to protect press freedom; indeed, I hope the Defamation Act will do so, too. The other way in which we can protect press freedom is by returning to high ethical standards. That is what is forgotten by those who hyperventilate about the great horrors of a regulatory system. It beggars belief that the noble Lord, Lord Black, who sat on the PCC for years and was basically hugger-mugger with those who were not really interested in what was happening to the victims of press excesses, now speaks about the “chilling effect” of this regulatory framework.

The costs element in this new arrangement is an important aspect of the Leveson incentives and is at

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the heart of the matter. The problem with the PCC was always that it had no teeth, and one had to find a way of dealing with that. However, as for the business of exemplary damages, perhaps we should make it clear that they would be used only in the most exceptional circumstances where the most egregious conduct took place. Almost invariably, it would go hand in hand with criminality of some kind. The criminality can be dealt with in some ways, but we know that the civil and defamation courts should have at their disposal some way of registering the horror of what happens to victims.

Noble Lords should have in mind circumstances such as when medical information has found its way into the hands of journalists that discloses, for example, that a woman has had an abortion, that someone has had psychiatric treatment, or that someone has a disease such as Huntington’s chorea that will manifest itself at a certain point in their lives. How dare the media expose such information? It is right that the courts should be able to respond appropriately when such things are done. We know that, except in exceptional circumstances, they are going to be dealing only with those who refuse to sign up to being part of this regulatory framework. This hyperventilation about exemplary damages is yet another manifestation of the huffing and puffing that we have seen in the press recently about the Rubicon being crossed and the end of freedom of the press as we have known it for hundreds of years, when the reality is far from that.

This is a moment for this House to reflect on the fact that over the past few months, while Lord Leveson was conducting his hearings and since he reported, there have been regular polls, and every poll conducted with the public showed that they want to see a proper regulatory framework. Indeed, all the polling indicates that the public support Lord Leveson’s report. More recently, as agreement has been reached across parties this week to create the framework that we are discussing tonight, all the polling indicates that the public want something of this sort to happen. So we should welcome it.

I am a human rights lawyer who believes strenuously in the freedom of the press, but I also have seen the horror of the impact on victims. They are not celebrities and the famous, but ordinary people. We in this House have to bear them in mind. That is what this framework seeks to do. I, like others, have concerns. I am worried about who will be given immunity and believe that we still need careful thought about who is covered by the immunities that we are talking about. I, like the noble Lord, Lord Skidelsky, want reassurances about freedom of information applying to these processes. However, we in this House should welcome the fact that somehow we are going to move forward on this and that we are not going to say that it is business as usual. Business as usual is not good enough.

Lord Phillips of Sudbury: My Lords, I declare an interest as having been for a few years a member of the appointments commission of the Press Complaints Commission and for 10 years on the Scott Trust, which owns the Guardian, the Observer and other newspapers.

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I congratulate the three main parties and their leaders on coming to an agreement over what must surely be as difficult a set of issues as one could devise. No one in this House is mindless of the fundamental importance of freedom of the press in all its guises. Having said that, I am afraid that I reject the hypothesis very eloquently put forward by the noble Lord, Lord Black, that anything by way of control of the press is beyond the pale. The measures that the three leaders of the three main parties came to agreement on are profoundly sensible and, I believe, modest, and I think they deserve support.

I do not say that because the British public are expecting it. There are occasions when this House has to stand against the vast majority of the public if in all conscience we believe that they are wrong. We have done that many times in our history. However, I do not think that this is one of those times. This it not the thin end of the wedge, as is constantly said, because we will all be on our guard over the next few years to see whether what we intended comes about, and whether what we did not intend comes about. I have no doubt that the overwhelming sense, in this place and the other place, is such that if our hopes and expectations are not realised, we will do something about it, and that will be to protect the freedom of the press, not to grind away at that freedom.

I will make a couple of quick points. The first is that you could not have a more modest provision of exemplary damages than you have in this Bill. The noble Lord, Lord Black of Brentwood, if I may say so, did not give the full picture. He gave a telling account of the meaning of the word “outrageous”, but not the full context in which that word appears. New subsection (6) in Amendment 11 says:

“Exemplary damages may be awarded under this section only if the court is satisfied that … (a) the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights”.

“Outrageous”, “reckless” or “deliberate” is an extremely high hurdle, and I think that judges can be relied upon to keep it as an extremely high hurdle. I do not share the noble Lord’s misgivings in that regard.

The second issue relating to exemplary damages is as follows. New subsection (2) in Amendment 13, on the amount of damages that can be awarded, is worth quoting in full. It says:

“The court must have regard to these principles”—

the ones mentioned earlier—

“in determining the amount of exemplary damages”.

The first of these limitations is that,

“the amount must not be more than the minimum needed to punish the defendant”—

not the minimum needed to adequately punish the defendant, or to sufficiently punish the defendant, let alone to effectively punish the defendant.

My noble friend Lord McNally might like to take that away and think about that, because it actually rather screws the Bill, if I can use that common phrase. It seems to me that £1 of damages would, on that definition, satisfy that test, because £1 is a punishment, even if it is utterly inadequate and rather laughable. There are no qualifications to that phrase. That is

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another reason why the noble Lord, Lord Black, and the newspapers, are getting overly concerned—let me put that kindly.

Finally, I make a point about the meaning of “publisher”, because the noble Lord, Lord Lucas, and others have mentioned the extent to which this could impinge on smaller publishers rather than the great national newspapers and so on. I am sympathetic up to a point, but I do not like, and I hope the House will not like, the provision in Amendment 18 that is headed “Meaning of ‘relevant publisher’”. Subsection (3) of the new clause says:

“A person who is the operator of a website is not to be taken as having editorial or equivalent responsibility for the decision to publish any material on the site, or for the content of the material”,

and—this is the killer—

“if the person did not post the material on the site”.

In other words, if you are the operator and you did not actually post the offensive, outrageous, et cetera, material, you are free. That is quite inadequate.

If this provision is to be in the Bill, it needs to be expanded. This would allow a publisher or operator of a website to get away in the circumstance where, for example, the person who posted the awful stuff was a subsidiary company or a partner or was paid to put the stuff on the website. If you were a really malicious operator, you could think up a shell company in the Seychelles that could post the most dreadful stuff about a person or a group of people, and under this clause the operator of the website would not be liable. That needs looking at. However, as I say, all in all, I believe that, in this most difficult of circumstances, the Government, aided by the Opposition, have come up with a good set of provisions.

I end by asking my noble friend Lord McNally to tell the House, when he sums up, whether there is another example in our legal set-up where damages are dependent not on the offence but on the nature of the offender. This plays back to what was said by the noble Lord, Lord Black of Brentwood. I am concerned that it is legally unprecedented to punish not according to what you have done but according to who you are. I think that we should know that.

7.30 pm

Lord Inglewood: My Lords, I should like to address a few remarks to my noble friend Lord McNally about the general scheme behind the provisions in the Bill on which he has to some extent helpfully elaborated already. In so doing, I shall go on from where the noble Lord, Lord Soley, left off when talking about changes in the digital world. At the start I declare an interest as chairman of the Cumbrian Newspaper Group, but I am not going to talk about any of those interests at all. However, noble Lords may know that I am also chairman of the Communications Committee of this House. I do not want to breach any confidence, but at one o’clock in the morning this coming Wednesday, the committee will publish a report on digital convergence. A substantial part of that report deals with issues around the topic we are discussing today.

I think I am allowed to say in public that one of the things the committee was very interested in is the phenomenon known as television-like material as defined

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in the European Union audiovisual media services directive. This is material which can be viewed through an internet protocol television set but it is not broadcast and it is not a website. Your Lordships will be aware of this service because my noble friend Lord Dobbs has just had a great hit on Netflix, which is an example of one of these businesses. It is a fast-growing and significant part of the media landscape. In the committee’s view, because of the way that regulation is being proposed for broadcasting, the press and websites, TV-like material falls completely outwith the various definitions and so is not going to be caught. The committee does not think that that is the right way to proceed.

I turn first to the specific provisions of the Crime and Courts Bill and the amendments we are discussing. In addition, looking at the structure of the draft royal charter, it seems that embracing TV-like material of the kind I have described is only going to be possible, in the words of the noble Baroness, Lady Kennedy, if the entrenched law can be amended. Is it wise to start off with a big lacuna in the scheme; that is, before the draft charter has even got on to the statute book?

I am not here to make any further point than to draw the attention of the House to what the committee considers to be a potential problem with the overall scheme of regulation in this area. If the provisions as currently drafted go forward, they will leave a hole through which people may be able to drive and coach and six.

Lord Allan of Hallam: My Lords, I want to make some similar points to those just made by the noble Lord, Lord Inglewood, and in doing so I should like to declare an interest. I work for Facebook, which is a website operator. The points around definition have been made effectively in the scope of the amendments and in the comments of my noble friend Lord Lucas. They exemplify how hard it is to define anything in this area. As the noble Lord, Lord Inglewood, and his committee have found in trying to draw out these definitions, the more one goes into it, the more one finds that in many cases it is an imprecise science. It is hard to define precisely what it is one intends to regulate and does not intend to regulate.

The comments of my noble friend Lord McNally were extremely helpful in clarifying the Government’s intention not to include a wide range of services or individual activities within scope and I picked up on two particular phrases that he used. The first was “press-like” and the clear intention to regulate such services, and the second was “future-proof”, in that these provisions should be future-proofed. Subsection (7) of the proposed new clause set out in Amendment 19 refers to the concept of “News-related material”, but nowhere does it talk about the format of that material. Referring to the point made by the noble Lord, Lord Inglewood, it seems on first reading that “TV-like” and “radio-like” services would be covered. The new schedule set out in Amendment 131 provides an exemption for those who are licensed under the Broadcasting Acts, but again what we see increasingly is the ability to launch services over the internet that are TV-like and radio-like, but where no licence is required. If the legislation is to be future-proofed, it is important to

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understand whether it is the Government’s intention to restrict this to services that we would regard as being press-like today—most people in common parlance would understand that as being primarily the printed word—or if in the future someone launches a video or audio channel that consists primarily of news-related material—the new online TV-type and radio-type services—it is intended that it should be included in the scheme we are debating today. This is an important clarification for the increasing number of businesses and individuals who would like to move into this field of activity and for the increasing number of consumers who would like to receive their news through these new channels rather than the traditional ones.

Lord Stevenson of Balmacara: My Lords, I am grateful to all noble Lords for participating in this debate, which has echoed a number of occasions on which we have been able to touch on these topics in the context of several Bills over recent months. We have not always stood opposite the noble Lord, Lord McNally, although he has been quite strong, particularly as we saw his cherished Defamation Bill begin to slip away from him. However, I think I see it looming in the background, and the noble Lord has cheered up again, which is nice. We also touched on them in the Enterprise and Regulatory Reform Bill, where we did a great deal of work with the excellent amendments tabled by the noble Lord, Lord Skidelsky. They were not moved, but they certainly raised the issues that we are considering today. Of course, we now have the Crime and Courts Bill before us, so there is endless flexibility, and long may that last. I should like particularly to thank the noble Lord, Lord Skidelsky, who has been tireless in tabling amendments that give effect to the detail of the Leveson recommendations and reinforce the fact that the royal charter and its statutory underpinning have been agreed by all three parties in an historic agreement.

We need to recognise that the debate on Leveson has moved on. The most important thing now is to be clear on what the government amendments intend to do and avoid any unnecessary scaremongering. I shall focus on a number of the amendments before us and, like the noble Lord, Lord Skidelsky, I should like the Minister to comment on how he intends to respond to them.

My first strand is on exemplary damages, but I have been sufficiently warned off by the noble Lord, Lord Phillips, even to go down this route. However, there are a couple of points that I would like the Minister to respond to. I understand that a considerable amount of time was spent in the all-party talks on the question of what happens to damages when it transpires that the facts of a case have changed in that the court has facts which were not available to the regulator. Can the Minister help us on this issue as it has happened in recent months? Can he confirm that this is a matter which will be returned to?

Amendment 11C clarifies that the common law gateway for exemplary damages will not apply. Can the Minister confirm that the “for profit” test is not required if the “outrageous” test is met? Amendment 11D makes it clear that a relevant publisher will be vicariously liable for wrongdoing by an employee or a person contracted to work for a publisher which results in

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liability for exemplary damages in accordance with the ordinary common law tests. Can the Minister confirm that further work will be done on this question? It is a key issue that is dealt with succinctly in the amendment tabled by the noble Lord, Lord Skidelsky. Vicarious liability bears on the morality and culture of the press. It is important that the Government should put on the record today that they agree with the noble Lord, Lord Skidelsky, and that they intend to return to this issue in the Commons to the extent that this may be required. The recent history, after all, shows that it matters. We do not want a situation where publishers literally have a get-out-of-jail-free card, and it would be strange if the media were to be in a privileged position in relation to vicarious liability compared with all other interests in this country. Lastly in this group, Amendment 13A is intended to reassure small publishers that, in deciding the amount of exemplary damages, the court will have regard to the means of the defendant. Can the Minister confirm that the Government will return to this issue when it is considered again in the Commons?

The second group of amendments that I would like to look at contains those amendments that are intended to make it clear that to benefit from cost protection the publisher would have to participate in the self-regulator’s arbitral scheme. With regard to Amendment 17E, the Government’s intention is that in order to benefit from cost protection the publisher would not only have to be a member of an approved regulator but would also have to participate in the scheme. There are those who have argued differently. Surely it makes no sense to provide benefits to publishers simply on the basis that they recognise that an arbitration scheme exists. The point here should be that it is the active participation by publishers in the scheme that entitles them to get cost benefits. In any case, as Lord Justice Leveson pointed out, an incentive to join an arbitration scheme is good for all publishers and will help them and the claimants. Can the Minister confirm that this is his understanding of the situation and that the Government stand ready to confirm this position in the other place?

Amendment 17J asks for clarification, as raised by the noble Lord, Lord Skidelsky, about the commencement of Sections 44 and 46 of the LASPO Act 2012, which was taken through the House by the noble Lord, Lord McNally, so he should know his stuff on this. I should be grateful for some confirmation about the issues that arise from that question. Amendment 19B would require that the recognition panel, which approves the self-regulator, is subject to freedom of information. This is an important matter which surely should be brought forward at this stage. After all, it is something that can be dealt with by secondary legislation. No one would surely expect that the recognition body wishes the power to act in secret. This really is important, so will the Minister give us an assurance that the relevant statutory instrument will be brought forward in good time before the regulator starts its work? Amendment 131A concerns relevant publishers which hold broadcasting licences. The drafting here is a little opaque. We seek an assurance from the Minister that a person who holds a broadcasting licence is excluded only in so far as they publish news-related material in

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the course of their broadcasting activities. Can the Minister confirm that this is not intended to cover the whole publishing activity of such licence-holders but only their broadcasting activity?

My Amendment 131F, which was put down earlier and is part of this group, has, I think, been overtaken by events. I refer to the extensive introduction which the Minister gave to Amendment 131BA, which provides for:

“A person who publishes a small-scale blog”.

I think it is meant to be a peg to allow for further discussion and debate for this event to happen in the House of Commons. On the basis of that understanding, for which I am grateful to the Minister, I will not press that amendment when the time comes.

Finally, there has been some talk about dates and the time that all this comes into effect. I should be grateful if the Minister could be very clear about what he understands the implementation date to be.

Lord McNally: My Lords, I am extremely grateful to all noble Lords who have contributed to what has been a very thoughtful debate. I should perhaps start with the intervention by the noble Lord, Lord Black, because I am not sure whether it was the case for the defence or a warning of battles to come. He said that Lord Justice Leveson was as immune from being criticised as Florence Nightingale. I would have thought that the lady would have got a fair old battering from the noble Lord, Lord Black, if his speech was anything to go by.

Looking round the Chamber and listening to the contributions, and following this debate right through, I have never been in any doubt that many of the politicians in this Parliament would literally lay down their lives for the freedom of the press. It is not the case, as has been suggested in some of the very newspapers over which the noble Lord, Lord Black, has influence, that this is some Orwellian plot against the freedom of the press. As my noble friend Lord Phillips said, if by chance we saw what follows as an attack on the freedom of the press, I believe that the people who would be most likely to leap to the defence of the press would be not some of the media barons but noble Lords in this Chamber tonight and Members in the other place.

Although it was a well thought out and well delivered critique, I regret a little bit that nowhere in the remarks of the noble Lord, Lord Black, was there any apology. There was no recognition of the law-breaking on an industrial scale, no understanding of how deeply wounded the victims of press intrusion have been and no recognition of the deep disgust of the general public, which is reflected in the opinion polls that we have seen. I understand the message that was delivered. He asked me to pause. I genuinely ask the noble Lord, Lord Black, to pause and think whether he could not go back to those with whom he has immense influence and say, “Rather than trying to wreck this, couldn’t we see if we could make it work?”. To my mind, the prize is a great one—a free press, but a free press operating to the highest standards of ethics and one that is law-abiding. I believe that that is within our grasp if we can work together on this.

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7.45 pm

I tend to agree with the noble Baroness, Lady Kennedy, that where the proposals that I have put forward tonight are not completely Leveson, that is where we have really thought hard to see where we can underpin the free press. I went into some detail about exemplary damages, which are going to apply in very extreme cases, as a number of noble Lords have made clear. We are quite confident that, as drafted, these provisions are compatible with human rights legislation. I think that it was my noble friend Lord Phillips who pointed out just how narrowly they would be drawn.

A number of points were made and I will try to cover them all. The noble Lord, Lord Lucas, asked whether we were trying to regulate the New York Times or Le Monde. No, but equally nothing would prevent them from joining if they saw an advantage in doing so. Of course, international publishers can still be susceptible to defamation torts in the UK; they are not exempt. The noble Lord, Lord Soley, asked about the review of this legislation. It will, as normal legislation, be subject to post-legislative review three to five years after Royal Assent. I take the point that we are, in a way, taking a trip into the unknown here. I am sure that the warnings and concerns that have been expressed around this House will mean that Parliament will continue to keep a very close eye on how this works out in practice. It is more likely to work well if we can work together on it, on both sides of the industry, so that we can make this work.

A number of noble Lords mentioned trying to future-proof this. I was involved in the Communications Bill with the noble Lord, Lord Puttnam, 10 years ago, when we were trying to future-proof that. In the modern world it is extremely difficult, but we want to keep a close eye on how this develops. Certainly, the legislation, as it is boxed at the moment, is on the news scene as we have it at the moment. We will have to see how much the changes that take place will need these issues to be revisited.

The noble Lord, Lord Skidelsky, asked about the ability of people to sue using conditional fee agreements. This will remain. What is in the LASPO is that the success fees will come from the awards made to those who have sued and will not be in addition. This was part of the Jackson recommendations to prevent what were seen as inflationary trends in this part of legislation. It is also true that we expect there to be fewer court cases, as the new regulator will resolve issues free of charge to claimants.

The noble Lord, Lord Phillips, asked whether there were any examples in legislation where the quantum damage was judged, as it were, on the ability of the defendant. I think that most magistrates tend to work on that principle, but I am told that there are instances in the Data Protection Act where this also applies. The points made by the noble Lords, Lord Inglewood and Lord Allan, about the impact on digital provision on the internet are well made. The noble Lord, Lord Allan, picked up the point about “press-like”. I intentionally clung to that line to try not to get carried too far forward by this legislation and I think that it is one that will be taken up.

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On the point that the noble Lord, Lord Inglewood, made, I agree that the regulatory framework for content including TV, TV-like and TV news will need to respond to the challenges of convergence that the Lords committee inquiry has been investigating and will be reporting on. I also agree that, because of this, we should now be looking to make sure that where possible the regulatory framework has the flexibility to adapt to these new challenges. However, there are considerations against which this must be balanced, such as allowing for certainty in the market and avoiding unnecessary and burdensome regulation. The communications review has been considering this challenge and how to strike the balance, and these issues will be addressed in the communications White Paper.

A number of the points that have been raised in relation to the amendments need clarification. I will stick closely to the text because what I am saying has been agreed and looked at by lawyers in a way that perhaps not all politicians’ speeches are. The noble Lords, Lord Lucas, Lord Skidelsky and Lord Stevenson, have spoken to a number of amendments. I touched on Amendment 11A in the name of my noble friend Lord Lucas in the opening debate and I made clear the narrow nature of what we are doing.

Amendment 17C would remove one of the exceptions to the general rule that a regulated publisher defendant does not pay the claimant’s costs. This is where the issue raised by the claim could not have been resolved by using the arbitration scheme of the regulator. Amendment 17D clarifies the original drafting error in this provision. In such a situation, it would not be fair to have a presumption that a particular party should or should not pay the costs, and the general rules on costs should apply. The cross-party agreement has established that an appropriate rule here is for the exception to apply.

Amendment 17G contains the general rule that an unregulated publisher will pay the claimant’s cost. It removes the first exception to that general rule, which is that it does not apply where the issue in the claim could not have been dealt with in arbitration had the publisher been a member of the regulator. Again, in such a situation, it would not be fair to have a presumption that a particular party should or should not pay the costs, and the general rule on costs should apply. The cross-party agreement has therefore established that the appropriate rule here is for the exception to apply.

In Amendment 18C, my noble friend is seeking clarification about the position of online publishers. The definition of a relevant publisher, as it stands, carefully captures those publications that we believe Lord Justice Leveson intended to be incentivised to join a regulator—namely, the press and sophisticated press-like online activity—and excludes those that he considered should fall outside the scheme, such as small-scale bloggers. This is what lies behind subsections (3) and (4) of our definition of relevant publisher. In striking out these subsections, the effect of my noble friend’s amendment would be to incentivise websites that operate a moderator function or which collate material but do not themselves post it, such as Twitter, Facebook, Yahoo and WordPress. These are not websites

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that Lord Justice Leveson intended to incentivise and I believe that it would be inappropriate for a regulatory system to do so.

As my noble friend has indicated, Amendment 19A is an attempt to address concerns among small publishers about the potential financial burden of the new system. However, as proposed by Lord Justice Leveson and reflected in the recognition criteria, the new system allows for varying terms of membership between different classes of publisher. It is, therefore, for the industry to determine a varying system of fees which is fair and proportionate and which allows the self-regulator to fulfil that role effectively.

Finally, my noble friend has tabled a number of amendments to Commons Amendment 131, which lists exclusions from the definition of relevant publisher. In Amendment 131C, my noble friend introduces a new exemption from the definition, with the intention to exempt all local and regional online and traditional print titles from the entire scheme of recognition and incentives. The proposed royal charter already sets out to deal with the particular interests of the local and regional press. An outright exemption, such as is proposed here, would allow publishers of local news, read and relied on by many people, to be wholly removed from the new regime being established under the Leveson proposals. While the Leveson report accepted the particular needs of the local and regional press, it did not recommend that these publishers be removed wholesale from the recognition regime.

With Amendment 131D, my noble friend would exclude non-charitable campaigning organisations that publish material that is incidental to the organisation’s aims and objectives. The Government’s definition of a relevant publisher already excludes charitable organisations, which will represent the vast majority of campaigning organisations. A “non-charitable campaigning organisation” would have, first, to be run as a business and, secondly, to be publishing news, opinion or information about current affairs before it would be caught by the Government’s current proposed definition. The concept of a non-charitable organisation is a very broad one and could cover a wide variety of websites or magazines that publish news.

In Amendment 131E, my noble friend seeks to extend the list of exclusions to include small and medium-sized publishers as defined in the Companies Act 2006. We are working on an alternative way of addressing the concern through government Amendment 131BA.

Lastly, my noble friend has indicated that, in contrast to his other amendments, Amendment 131B is more than probing. This amendment would create a significant loophole in the scheme proposed by Lord Justice Leveson. A publisher’s focus may be on events in a country other than the United Kingdom, but that does not change the fact that, in the process of reporting and commenting on such overseas events, people with a connection to those overseas events may be defamed, harassed or otherwise have their rights breached here in the United Kingdom. Provided that the publisher in question is able to join the regulatory scheme if he or she wishes to do so, there is no good reason why the costs and exemplary damages incentive should not apply to that publisher if he or she is sued under English law and in this jurisdiction.

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8 pm

As for the second limb of Amendment 131B, there are two existing protections for those publishers refused membership of a regulator on unreasonable grounds. First, under the recognition criteria in the royal charter, membership must,

“be open to all publishers on fair, reasonable and non-discriminatory terms”,

thereby guarding against such an event. Secondly, if such a circumstance should still arise and a publication face a claim for exemplary damages, there is a requirement within the new clause for a court to take into account,

“whether membership of an approved regulator was available to the defendant at the material time”,

which would protect such a publisher.

I turn to the amendments proposed by the noble Lord, Lord Skidelsky. Amendments 17A and 17F would have the effect of extending the protection of the costs clause to any publisher against which a claim is made. These amendments would extend the ambit of the cost provisions in Amendment 17 beyond those agreed by the three main parties. We have been clear that we wish to cover within a self-regulatory regime those publishers that properly qualify as news publishers. Any attempt to broaden this could lead to unintended consequences, even though the noble Lord’s aim is to encourage the use of low-cost arbitration schemes, which I agree is laudable. Given the terms of the agreement last week, we do not consider these amendments are appropriate.

Amendment 18A removes the words “whether or not” before,

“carrying on with a view to profit”,

in the definition of a “relevant publisher”. This would have the effect of introducing doubt in relation to which publishers are in fact covered because many publishers, particularly traditional print media publishers of newspapers, do not make a profit. The exemption in paragraph 6 of the exclusions schedule already exempts public bodies and charities publishing news-related material in connection with the carrying out of their functions. This is narrower than the breadth of the exemption that is sought here, which, as indicated, could exempt mainstream newspapers.

Amendment 18B seeks to limit the definition of relevant publisher to businesses with a turnover of more than five times the threshold for VAT; that is, £385,000, which is five times the annual threshold of £77,000. I hope that the noble Lord will withdraw this amendment, given the Government’s manuscript Amendment 131BA.

Amendment 131A proposes an amendment to the broadcasting definition to make clear that it is only when broadcasters publish news-related material in the course of their broadcasting function that they fall within the exemption. However, this point is already covered adequately by the operation of the existing provisions. The existing schedule refers to news publications in connection with licensed broadcasting activity, and needs to be read alongside Amendment 18(6), which provides that a broadcaster gets an exemption only in so far as its publication is in its capacity as a broadcaster. So if a broadcaster established a separate

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news publishing service, not linked to its broadcasting, it would not benefit from the exemption. I think that was the clarification the noble Lord was seeking.

Concern has been expressed that the wording of Amendment 11B would not capture the situation in which a regulated publisher had deliberately concealed information from the regulator, as in that situation the regulator could not be said to have acted in a “manifestly irrational” way, as it would have been unaware of the true picture. We believe that this is not a matter that needs to be provided for in the provisions regarding exemplary damages, nor should it be. It is properly a matter for the regulator’s procedures and we do not think that there will be a problem in practice, for the following reasons.

Where the court becomes aware of new facts that were concealed from the regulator, we believe that it will be open to the court to highlight these in its judgment, and for the regulator to reopen its investigation of the case and reconsider any penalties that it has imposed, or any failure to do so. There is nothing in the provisions relating to the royal charter that would prevent a case being reopened by the regulator in this way, and indeed nothing to stop a victim from bringing those new facts to the attention of the regulator regardless of the court’s intervention.

In any event, there will be a number of very strong incentives on publishers not to conceal information from the regulator. Requirements of a new regulatory system established on a contractual basis are likely to include the need for members to be bound by the terms of their membership to disclose whatever information is reasonably necessary for the regulator to fulfil its functions, and contractual terms preventing non-co-operation or the withholding of information can be built in. Concealing of information could also reflect the failure of governance standards on the part of the publisher, which can be the subject of penalties by the regulator.

Any such behaviour would also raise questions of criminal liability. A publisher who dishonestly keeps secret information that he is contractually bound to give to the regulator, or to a claimant in the context of arbitration, in order to avoid a sanction or paying damages could be guilty of committing a crime under the Fraud Act 2006. That is equally so where the publisher makes a false representation. We believe that it is appropriate and in accordance with Lord Justice Leveson’s recommendations for the powers of the regulator to control any attempt by publishers to conceal information to be established through the contractual terms governing the operation of the new regulatory system. We do not consider that anything needs to be added to this clause to enable that to occur.

Amendment 11C is unnecessary. It seeks to ensure that the new statutory test is not limited by the existing common-law test where exemplary damages are awarded if the defendant effectively balances the advantage to be gained by committing a wrongful act against the likely compensation that he or she would have to pay to the claimant, and decided that it was worth doing. The point of this common-law test was to show the defendant that “tort does not pay”. However, the

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common-law test is entirely displaced in all “relevant claims” against “relevant publishers” as a result of Commons Amendment 11(4)(b), which makes clear that where Amendment 11 applies, exemplary damages can be awarded “only under this section”. Therefore, exemplary damages cannot be awarded against a relevant publisher in common law and so the “outrageous disregard” test in Commons Amendment 11(6) is the only test that can apply, and there is no need for the amendment.

Amendment 11D would add a subsection to Amendment 11. Amendment 15A makes a consequential change to Amendment 15. This would mean that both regulated and unregulated publishers could be vicariously liable for any exemplary damages awarded against one of their employees. It is well established that a publisher can be vicarious liable in common law to pay compensation for the acts of its employees. That position will not be changed by the Commons amendments. The position is different in relation to exemplary damages. Claims for such damages are very rare; cases in which they are sought for the act of an individual journalist even more so. In fact, we are aware of no cases at all in which exemplary damages have been awarded against a publisher found vicariously liable for the conduct of a journalist.

I understand the spirit in which the amendment is proposed. However, the cross-party talks and the Commons agreed a specific approach to exemplary damages—that exemplary damages would not be available in relation to regulated publishers as an incentive to their joining a voluntary self-regulator. There is one exception to that rule set out elsewhere in the clause—that the court may award exemplary damages against a publisher who has joined a regulator if, in the court’s view, the regulator acted manifestly irrationally in its imposition of a penalty. This amendment would introduce a second exception by allowing that publishers, whether regulated or not, could be held vicariously liable for exemplary damages awarded against journalists. That would go beyond the terms of the cross-party agreement. However, I should be clear about a number of points that I hope will give some reassurance. First, the liability of individual journalists at common law remains as it is now. Secondly, as far as we are aware, a publisher has never been held vicariously liable for an exemplary damages award against a journalist. Thirdly, the new regulator would have the power to fine publishers both for connivance in such activity and for ignorance of it. We think, on the merits, that the approach of the Commons amendment is the right one.

Amendment 12A, if accepted, would mean that in deciding whether to award exemplary damages the court would have to reach a value judgment as to whether the defendant’s reasons for not joining the regulator were themselves objectively reasonable. We do not believe that this would be practicable or appropriate.

Amendment 13A would require the court to take account of the defendant’s means in deciding the amount of exemplary damages to award. Courts can already take means into account and there is no need for the amendment.

Amendments 17B and 17E make two changes to Amendment 17(2) which relate to the costs incentive. First, the amendment excludes relevant publishers

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which are unable to join a regulator, or which have objectively valid reasons for not joining the regulator, from the costs incentive. Secondly, it imposes an additional requirement on the availability of the first exception to the rule. That exception provides that if arbitration under an approved regulatory scheme has not resolved the case, then the ordinary rules on costs apply rather than the general rule that the defendant does not pay the claimant’s costs at all. The amendment adds a requirement to this exception that the defendant was a participating member of the arbitration scheme itself and not just a member of the regulator. This is inappropriate because it presumes that participation in the arbitration scheme will be an optional extra for members of the regulator. This will not be the case and therefore the amendment is not required. I think that that is another clarification that the noble Lord, Lord Stevenson, asked for.

I turn to Amendment 17J, tabled by the noble Lord, Lord Skidelsky. I can confirm that we do not intend to implement Sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 for publication and privacy cases until the new costs protection regime has been introduced. The position is clearly set out in a Written Ministerial Statement of 12 December 2012. The LASPO Act 2012 (Commencement No. 5 and Saving Provision) Order 2013, made on 19 January 2013, made the necessary provision excluding the publication and privacy proceedings from the coming into force of Sections 44 and 46 on 1 April.

We have asked the Civil Justice Council for advice on costs protection and it will report by the end of this month with its recommendations, following which provision for costs protection will be taken forward later in the year. I reiterate that costs protection is a better way forward than allowing the recoverability of “after the event” insurance premiums to continue. Costs protection allows meritorious cases to be pursued at proportionate cost; “after the event” insurance allows cases to be pursued but only at substantially increased cost. In taking this course we are following the recommendations of both Lord Justice Leveson and Lord Justice Jackson before him that access to justice in publication and privacy cases must be at proportionate cost.

In respect of Amendment 19B noble Lords will be aware that the agreement reached at the end of the cross-party talks was that the Freedom of Information Act should not be extended to an independent regulatory body. The talks did, however, agree that further consideration should be given to whether the recognition panel ought to be covered by the Act. The Government’s recent response following post-legislative scrutiny of the Freedom of Information Act reiterates their commitment to extend the Act to a range of bodies performing functions of a public nature using the order-making power in the Act. We are happy to designate the recognition panel using an order under the Freedom of Information Act once the body exists and we are clear about the nature of its functions rather than using primary legislation at this stage. As one who is a very strong believer in the Freedom of Information Act, I hope that the House will accept the assurance that this will be carried out.

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8.15 pm

In respect of Amendments 19C and 19E, tabled by the noble Lord, Lord Skidelsky, the Government have already announced their intention to consult on the broad range of data protection-related proposals in Lord Justice Leveson’s report. Both these provisions will be included in this.

Amendments 38A and 38B change the timing for commencement of the provisions on exemplary and aggravated damages and provide for these to come into effect immediately upon the sealing of the royal charter. That would immediately put all relevant publishers at risk of an exemplary damages award, whether or not they wished to become regulated. This is because these amendments allow no time at all for the press to present proposals for a regulatory body to the recognition body for approval. The Government do not believe that this represents a reasonable or practical approach and cannot support this amendment.

I turn to Amendment 131F in the name of the noble Lord, Lord Stevenson, which introduces a new exemption from the definition of “relevant publisher” for small blogs. This amendment would have the effect of introducing doubt in relation to which publishers are in fact covered because many publishers, particularly traditional print media publishers of newspapers, do not make a profit and have no expectation of doing so. Concepts of turnover and profit are therefore difficult elements to incorporate into a publisher test without excluding genuine online news publishers operating a business. I hope that the noble Lord will accept that the Government’s manuscript Amendment 131BA deals with his point, at least for now. As I have indicated, this amendment is without prejudice to further consideration of the issue of small blogs before the Bill goes to the Commons.

I return to the Government’s proposals. When Lord Justice Leveson published his recommendations in November, after his extensive inquiry into the culture, ethics and practice of the press, he extolled politicians from all sides to work together to find cross-party agreement on their implementation. We have in front of us a set of proposals central to delivering Lord Justice Leveson’s vision of a voluntary, incentive-based and self-regulatory system for the press, with that crucial cross-party agreement. I believe that the exemplary damages and costs clauses create a credible and watertight incentive system, providing a strong incentive for relevant publishers to design and become members of a press self-regulatory body, as intended by Lord Justice Leveson.

We have a set of provisions that implements Lord Justice Leveson’s recommendations, that strikes the right balance between a tough system of incentive-based self-regulation and protecting this country’s cherished freedom of expression, and that draws the right line between publishers that are in the scheme and those that are out of it. As politicians, we have a duty to act in response to the press scandals of the past and to Lord Justice Leveson’s recommended solutions. This is our opportunity to do so.

I commend the Commons amendments to the House together with the three government amendments and invite the noble Lords, Lord Lucas, Lord Skidelsky

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and Lord Stevenson, not to press their amendments. I believe that this will be the best way forward. I realise that that is a very detailed reply and that noble Lords will wish to study it.

Lord Phillips of Sudbury: Before my noble friend sits down, and I congratulate him on the legislative equivalent of a marathon, I ask him whether he sympathises with the view that to have 44 important and often complex amendments put together in one group—the third group today contained 85 amendments —is not conducive to the quality of scrutiny that the Bill deserves. I mean no disrespect to him.

Lord McNally: I appreciate my noble friend’s intervention. At one stage during my speech I began to have sympathy with Chancellors of the Exchequer. In many ways, of course, this is not an ideal situation. On the other hand, if you take into account Baldwin’s cri de coeur against the press—was it in 1932 or 1933?

Lord Skidelsky: 1930.

Lord McNally: God bless you, sir. This is the great value of this House; you ask a question and you get an authoritative answer. Baldwin’s cri de coeur was 80 years ago. I was thinking while the noble Lord, Lord Black, was speaking that it is 20 years since David Mellor warned the press about the last chance saloon, and it is 10 years since I was told from this Dispatch Box that a very minor amendment was the slippery slope to a state-controlled press, so we have not been discussing entirely new and fresh issues.

We have done what we have quite miraculously, I think, because it has needed a leap of faith and a generosity of spirit from all three parties. The Prime Minister, the Deputy Prime Minister and the Leader of the Opposition have come together and given national leadership on an issue that probably would never have got through in any other way. This has its flaws but is still a way forward that has eluded Parliament, as I say, for 80 years.

Lord Skidelsky: Before the Minister sits down, may I have his assurance that, in the cross-party talks that will take place on a number of outstanding issues, Conservative and Liberal Democrat participants will be able to take different, independent positions?

Lord McNally: As one who has had the good fortune to watch the traffic of the cross-party talks, and who has a strong view that my noble and learned friend Lord Wallace of Tankerness is in line not for a knighthood but for a sainthood for his patience in those talks, I assure the noble Lord, Lord Skidelsky, that all three parties have shown a robust individualism in the talks but, thank goodness, have also shown the generosity of spirit that has made agreement possible. If we can get the balance right between clear, vigorous discussions and generosity of spirit, we will get this done. I do not know whether we are getting a fish in the boat or a ship to port but, whatever it is, I recommend it to the House.

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Lord Mackay of Clashfern: Before my noble friend sits down, I have one question. He will remember vividly that the noble Lord, Lord Puttnam, moved an amendment to the Defamation Bill on Report, which this House carried. My noble friend anticipated at Third Reading that that would be dealt with in due course by an agreement that would supersede the amendment. The passage of time has fulfilled his prophecy, and I am sure we are all glad of that. I am assuming that now the Defamation Bill will be able to proceed, as it merits, to Royal Assent by the end of the present Session.

Lord McNally:Noble Lords cannot imagine the tingle in my shoulder blades when I realised that the noble and learned Lord, Lord Mackay, had risen to his feet. I thought, “My God! What question of law is he going to ask me to pronounce on?”. I am very pleased to understand that there is all-party agreement and that after the due process of whatever they do down the other end the Defamation Bill will be returned without the Puttnam amendment, although when the history of this saga is written, it will be said that the Puttnam amendment did its job. I am not so bitter about it, especially since the Bill is coming back without it.

Lord Puttnam: Nothing in the world will delight me more than to see the Defamation Bill passed in its original form.

Lord Lucas: My noble friend has been suspended above his seat for a longer time than the Maharishi Yogi ever achieved. At risk of prolonging that, before my noble friend sits down, will he confirm, in order that he might get his supper this hour rather than next, that the matters that the noble Lord, Lord Stevenson, raised in his speech will be under active consideration in the Commons before this Bill returns to this House?

Lord McNally:I will look at what the noble Lord, Lord Stevenson, raised, but I warn the House against the idea that what is going back to the House of Commons is a reopening of these discussions. We have said what we want to see passed, we have asked noble Lords to withdraw. I have explained. I do not want to mislead the House. The Commons will be able to consider only their amendments that have been amended by this House. For example, if we do not today amend Commons Amendment 14, that amendment will no longer be in play during the next round of ping-pong. We are not sending the Bill back to the Commons for another go. Quite frankly, that would be extremely dangerous. My reply was carefully crafted by many hands far more expert than mine in a way that I hope gives the assurances that were sought in raising the amendments, not least those tabled by the noble Lord, Lord Skidelsky, However, the way that ping-pong works keeps the debate very tight and I do not want to mislead the House that it allows a rerun of negotiations on this. To even suggest that would be a bad mistake.

8.30 pm

Lord Lucas: My Lords, I am very grateful to the Minister for all the time he has taken on my amendments. I would quarrel with him in his interpretation of how ping-pong works. I spent time talking to the clerks at

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this end and in another place before I put down my amendments, and my understanding is that the other place has very wide powers to suggest amendments in lieu; it is not restricted to individual amendments. The Government’s amendment on small bloggers will allow amendments to be made at any other position within this group of amendments. I may be misquoting the clerks—I am quite capable of that—but that was what entered my brain as a result of the conversations I had before I put down my amendments. In particular, I should be sad if the conversations that I started on my Amendment 18C were not to have any result.

My noble friend doubtless remembers what a difficult performance a three-legged race is on school sports day. He has had to indulge in a four-legged race today with his left leg tied to the Labour Party and his right leg tied to the Conservative Party, and he has been finding it extremely difficult. He has provided an excellent illustration of the problem, dealt with by my noble friend the Leader of the House at Questions today, of reading out a pre-prepared speech when what had been said was something completely different. I said in my address to Amendment 18C that I felt that the way in which the Government had drafted this clause would allow large news organisations to create structures that were in no way subject to the Bill. My noble friend did not address that at all in his reply, because it had been pre-prepared and did not allow him to reply to the remarks that I had made. I particularly feel that the Government have not understood the way in which the world is moving on the internet, and have not allowed for the sort of structures that seem to be arising even now, let alone those that will come.

I hope that the Government will take advantage of the freedom that I believe that they have to think through the wording and ensure that they are giving themselves the powers that they wish. To come back to what my noble friend Lord Black of Brentwood said, we are trying to achieve a regulator here that will be participated in, agreed and effective. I am sure that another look at the questions that I have raised with Amendment 11A would consider whether introducing uncertainties in this way in the position of someone who registers is really the best way of getting people to sign up. Other than that, however, I am grateful for the answers that my noble friend has given. I beg leave to withdraw my amendment.

Amendment 11A, as an amendment to Commons Amendment 11, withdrawn.

Amendments 11B to 11D, as amendments to Commons Amendment 11, not moved.

Motion on Amendment 11 agreed.

Motion on Amendment 12

Moved by Lord McNally

That this House do agree with the Commons in their Amendment 12.

Amendment 12A, as an amendment to Commons Amendment 12, not moved.

Motion agreed.

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Motion on Amendment 13

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 13.

Amendment 13A, as an amendment to Commons Amendment 13, not moved.

Motion agreed.

Motion on Amendment 14

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 14.

Motion agreed.

Motion on Amendment 15

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 15.

Amendment 15A, as an amendment to Commons Amendment 15, not moved.

Motion agreed.

Motion on Amendment 16

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 16.

Motion agreed.

Motion on Amendment 17

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 17.

Amendments 17A to 17C, as amendments to Commons Amendment 17, not moved.

Amendment 17D (as an amendment to Commons Amendment 17)

Moved by Lord Taylor of Holbeach

17D: Line 13, after “could” insert “not”

Amendment 17D, as an amendment to Commons Amendment 17, agreed.

Amendments 17E to 17G, as amendments to Commons Amendment 17, not moved.

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Amendment 17H (as an amendment to Commons Amendment 17)

Moved by Lord Taylor of Holbeach

17H: Line 27, leave out subsection (4)

Amendment 17H, as an amendment to Commons Amendment 17, agreed.

Amendments 17J, as an amendment to Commons Amendment 17, not moved.

Motion on Amendment 17, as amended, agreed.

Motion on Amendment 18

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 18.

Amendments 18A to 18C, as amendments to Commons Amendment 18, not moved.

Motion agreed.

Motion on Amendment 19

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 19.

Amendments 19A to 19E, as amendments to Commons Amendment 19, not moved.

Motion agreed.

Motion on Amendment 20

Moved by Lord Taylor of Holbeach

That this House do agree with the Commons in their Amendment 20.