Chapter 4: Other Proposals Submitted to the Inquiry 1. Introduction

Chapter 4: Other Proposals Submitted to the Inquiry 1. Introduction

¶1.1 Chapter 2 above described the proposal that has been put to the Inquiry by Lord Black, as Chairman of PressBof, on behalf of the industry. There have been some 45 other proposals for complete or partial regulatory regimes submitted to the Inquiry and many more submissions with ideas and comments on the way forward. I am very grateful to all those who have taken the time and gone to considerable trouble to offer their assistance to the Inquiry in this way. Whilst some of these proposals are complete in themselves, I intend to consider all the elements of a regulatory regime that have been put forward, rather than to describe each model as presented. All of the submissions are part of the evidential record of the Inquiry and can be seen in their entirety on the website. Rather than looking at each individual proposal for an entire answer it is more useful to look at the range of proposals made each of the issues covered, by way of building up a complete picture of the ideas that have been submitted.

2. A new regulatory body

¶2.1 All the proposals submitted have made two basic assumptions. First, that the Press Complaints Commission (PCC) as currently constituted is not delivering adequate regulation of press standards and, second, that some form of new regulatory body is required. The first of those assumptions is important only in that it reinforces the conclusion I have already reached¹¹ Part K, Chapter 2 that leaving the current system unchanged is not a credible option.

¶2.2 The second assumption, that a new press regulatory body is required, is more interesting and requires some examination. All those submitting proposals for the future envisage the establishment of a new body with responsibilities for press standards. These proposed bodies obviously differ significantly in their scope, authority and powers, but no one has suggested that press standards could be supported adequately though changes to the general law or through strengthening law enforcement. Neither has anyone suggested that improvements in internal governance in the press would, of themselves, be sufficient guarantee of adequate standards.

¶2.3 This does not mean that the creation of a new press standards body is the only possible answer to the problems with press standards identified in this Report. It does, however, mean that I have not received evidence on potential alternative approaches.

3. Functions and structures

¶3.1 A variety of functions for a new press standards body to cover have been put forward. Essentially they fall into the categories below.

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¶Setting standards

¶3.2 By 'setting standards' I broadly mean the establishment of a code of practice that sets the minimum standards to which relevant organisations are expected to adhere and against which their conduct should be judged. Three different approaches have been adopted to standards setting. The first is that contained in the industry proposal, namely that the setting of standards should be essentially a matter for the industry, albeit with some lay input, and that it should sit outside of any body with responsibility for enforcing the standards. This position is put forward by Lord Black and supported by all publishers or editors who have commented on the issue. It is also the position supported by Lord Prescott's working group.²² p8, para 9, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-working-group-led-by- Lord-Prescott.pdf

¶3.3 The second proposition is that standards setting should be the responsibility of an independent regulatory body that is also responsible for enforcement of the standards. This is the position put forward by the Campaign for Press and Broadcasting Freedom (CPBF),³³ p15, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/03/Submission-by-Campaign-for-Press-and- Broadcasting-Freedom1.pdf the Co-ordinating Committee on Media Reform,⁴⁴ p11, para 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Coordinating- Committee-for-Media-Reform.pdf Ofcom,⁵⁵ p102, lines 1-9, Ed Richards and Colette Bowe, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Transcript-of-Morning-Hearing-12-July-2012.pdf the Media Regulation Round Table⁶⁶ p3, para 6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf and Professor Roy Greenslade.⁷⁷ p14, para 12, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- K Greenslade-of-City-University.pdf

¶3.4 The third proposition, only explicitly put forward by Max Mosley,⁸⁸ p1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Max-Mosley.pdf is that there should be separate independent bodies which set the standards and enforce them. This would allow for statutory enforcement of press standards without the standards themselves being set by a statutory body. A joint submission on behalf of the Core Participant Victims (CPVs) argues for separate mechanisms for rule making, adjudication and investigations, but is not specific in terms of whether this means separate bodies.⁹⁹ p1, para 7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Joint-Submission-by-Core-Participant- Victims1.pdf

¶Promotion and enforcement of standards

¶3.5 Where the issue is addressed specifically, all the proposals submitted envisage a new press standards body having a broad regulatory role involving the promotion and enforcement of standards. This is often described as requiring investigative powers.

¶Complaints handling

¶3.6 All the proposals submitted envisage that some part of their proposed regulatory structure would have the responsibility to hear complaints about breaches of a press standards code. In most cases the proposals are not specific about the degree of relationship between the more general standards enforcement role and the complaints handling role. In the case of the industry proposal, it is quite clear that it is envisaged that both are done by the same body, albeit by different parts of that body. The British and Irish Ombudsman Association was clear that a true ombudsman, dealing with complaints, would be separate both from the body that set the standards and the body that enforced standards more generally (although they made no comments on whether those two roles should be separate).¹⁰¹⁰ p10, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-British-and-Irish-Ombudsman- Association.pdf

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¶Championing freedom of expression

¶3.7 Some proposals explicitly recommend a role for the press standards body in acting as a champion for freedom of expression or the freedom of the press.¹¹¹¹ p11, para 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Coordinating- Committee-for-Media-Reform.pdf; p2 http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Sumission- from-Jeremy-Hunt-MP.pdf The National Union of Journalists (NUJ) says that the primary duty of a new press standards body should be to ensure the freedom of the press from both the state and editors and owners.¹²¹² pp3-7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Michelle-Stanistreet-on- behalf-of-the-National-Union-of-Journalists.pdf The Media Regulation Roundtable sets out two objectives for their proposed new Media Standards Authority, one of which is:¹³¹³ p3, para 5, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf

"To promote and protect the right of the media to publish information on public interest matters and the right of the public to receive it by promoting and protecting public interest journalism in all its forms and by protecting and encouraging high standards of ethical and responsible journalism."

¶Adjudication of civil claims

¶3.8 Adjudication of civil claims is considered as essential in a number of proposals. Specifically, Early Resolution, the Alternative Libel Project and Max Mosley build their proposals around the provision of dispute resolution procedures. The Early Resolution proposal suggests a statutory basis for the regulator and the adjudication process, ensuring that all relevant claims are dealt with though this means.¹⁴¹⁴ pp8-9, para 6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Early-Resolution.pdf Similarly, Mr Mosley proposes a structure based around a statutory tribunal with authority over all printed press, its agencies and the internet.¹⁵¹⁵ p1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Max-Mosley.pdf By contrast the Alternative Libel Project and the Media Regulation Roundtable suggest that access to a cheap, fast and fair way of resolving defamation claims would be a strong incentive to publishers to join a voluntary regulation system.¹⁶¹⁶ p4, para 1.12, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Alternative-Libel- Project-English-PEN-and-Index-on-Censorship.pdf; pp3-4, para 6, http://www.levesoninquiry.org.uk/wp-content/ uploads/2012/07/Submission-by-Media-Regulation-Round-Table.pdf K The CPVs argue that the regime should oversee issues covering libel, privacy and harassment (as well as broader standards concerning accuracy, publishing and information gathering) but do not present any specific proposals as to how that should be done.¹⁷¹⁷ p2, para 7, point 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Joint-Submission-by-Core- Participant-Victims1.pdf

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¶Pre-publication functions

¶3.9 Few of the proposals address the question of whether the press standards body should have any functions prior to publication. Early Resolution recommends that the issue of advisory 'desist notices', to deter actual or threatened media misconduct, is an important function.¹⁸¹⁸ p12, 9.1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Early-Resolution.pdf The Media Regulation Roundtable proposes a specific role for the media standards body of providing pre-publication advice, including being able to request a publisher to demonstrate evidence of an appropriate public interest prior to publication of material that invades an individual's privacy.¹⁹¹⁹ pp3-4, para 6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf This approach was strongly criticised by Sir Charles Gray of Early Resolution,²⁰²⁰ pp44-46, lines 22-11, Sir Charles Gray, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript- of-Afternoon-Hearing-12-July-2012.pdf who argued that involvement of a standards body prior to publication in that way would constitute an interference with the freedom of the press.

¶Roles for other bodies

¶3.10 George Eustice MP, in his proposal, suggested additional roles for bodies other than the proposed press standards body. Specifically, he suggests that Ofcom should have a role in ensuring adequate governance within press organisations. He does not suggest that Ofcom should have any role in dealing with disputes about individual news stories,²¹²¹ pp5-6, para 2, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-George-Eustice-MP. pdf but does suggest a right of appeal to the Information Commissioner in respect of privacy cases. He proposes that this right to appeal should apply in respect of all media, irrespective of whether they were participants in any system of voluntary regulation.²²²² p6, para 4, ibid This is perhaps best considered in relation to the suggestions for reform of the Data Protection Act elsewhere in the Report.²³²³ Part H K

¶3.11 A different approach was put forward by the Media Standards Trust (MST) and the communications consultant Tim Suter. Both proposed a system based around a statutory oversight body that would have the role of approving self-regulatory bodies. Under this approach the focus is not on the functions of the self-regulatory body itself, but the minimum requirements that such a self-regulatory body should have to meet. Under the MST model the oversight body would only approve bodies that meet: (a) minimum commitments within a code of practice; (b) basic requirements of a contract of membership, including sanctions; (c) adequate independence; and

¶(d) adequate governance arrangements with regard to proportionality, accountability, consistence, transparency and targeting.²⁴²⁴ pp89-90, para 6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards- Trust.pdf

¶3.12 Under Mr Suter's proposal the oversight body (which in his case is the Ofcom Content Board) would have to satisfy themselves as to:²⁵²⁵ pp3-4, para 17, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Tim-Suter-of- Perspective-Associates.pdf

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¶(a) governance arrangements guaranteeing independence from both Government and industry; (b) adequate regulatory scope, industry coverage and powers; and (c) adequate operational and funding arrangements.

¶3.13 The oversight body would establish basic rules around independence and effectiveness but the rest would be for the self-regulatory body, which would have at least the standards setting and complaints roles otherwise described.

¶3.14 Under this approach the oversight body would have significant powers to determine the regulatory framework, but no regulatory powers over press organisations themselves. The effect of an oversight body withholding its approval from a self-regulatory body, or of a press organisation refusing to join an approved self-regulatory body, is a key point under these proposals and is considered later in this chapter.

4. Should coverage be voluntary or mandatory?

¶4.1 The proposals submitted to the Inquiry are split on whether compliance with press standards that go beyond the existing criminal and civil law should be voluntary or mandatory. Those arguing that regulation or adherence to standards should be voluntary offer four reasons as to why. First, there is an argument that any form of mandatory regulation of press standards is an infringement of the freedom of the press. Lord Prescott warns that a mandatory system risks turning into, or being perceived as, a state licensing system.²⁶²⁶ p6, para 7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-working-group-led-by- Lord-Prescott.pdf Paul Dacre said that he feared any Parliamentary involvement would be the 'thin end of the wedge'.²⁷²⁷ p5, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf Similarly, Lord Hunt has expressed strong reservations about the risks to freedom of the press should any measure relating to regulation of the press come before Parliament.²⁸²⁸ p64 line 23 – p66 line 4, Lord Hunt, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/01/Transcript- of-Afternoon-Hearing-31-January-2012.pdf; pp5-7, paras 14-18, http://www.levesoninquiry.org.uk/wp-content/ uploads/2012/07/Submission-by-Lord-Hunt-of-Wirral.pdf Lord Black argues that any form of statutory intervention would inevitably undermine the "constitutional principle" of independence.²⁹²⁹ pp11-12, lines 20-3, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-9-July-2012.pdf; pp13-14, para 2, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Submission-by-Lord-Black-of-Brentwood1.pdf K Ed Richards was clear that a licensing regime, such as that which Ofcom operates in respect of broadcasting, would not be an appropriate model for the press because:³⁰³⁰ pp95, lines 9-11, Ed Richards and Colette Bowe, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Transcript-of-Morning-Hearing-12-July-2012.pdf

"freedom of expression works in a different way, and a more unqualified way, for the press."

¶The Media Regulation Roundtable asserts that compulsory regulation would have to be backed by compulsory registration and that this might be difficult to justify under Article 10(2) of the ECHR.³¹³¹ pp17-18, para 58, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media- Regulation-Round-Table.pdf Hugh Tomlinson QC said that regulation of the print media could, in some circumstances be compatible with the ECHR, particularly if limited, for example, to a set of mandatory standards for publications with a large circulation, but that general regulation which might amount to a licensing regime would not.³²³² p39, lines 1-13, Hugh Tomlinson QC, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-13-July-20121.pdf

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¶4.2 Second, it is argued that the effectiveness of a standards regime depends on the active support of the participants, that a mandatory scheme would not have the support of those compelled to comply and consequently would not be as effective as a voluntary system could be.³³³³ p13, lines 9-15, Lord Black p13/9-15, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-9-July-2012.pdf Mr Richards pointed out that for self-regulation to be effective it requires 'genuinely willing participants' in the enterprise. The point was also made by Ofcom that self-regulation is most likely to be effective where there is a strong alignment between the industry interest and the public interest,³⁴³⁴ p7, para 3.1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Ofcom.pdf leading to the conclusion that active support could best be secured by the right range of incentives within a self-regulatory system. The Media Regulation Roundtable argued that a voluntary system would be designed to obtain the fullest cooperation of the media; as a result, it would be more likely to command support and be effective in practice.³⁵³⁵ p19, para 64, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf

¶4.3 Third, it is argued that there are numerous practical difficulties with making a system mandatory. Any mandatory system would require some form of legislation; it is argued that this would make the resultant system inflexible and unable to move to react to changes in the market or in technology.³⁶³⁶ pp13-14, paras 39-40, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Lord-Hunt- of-Wirral.pdf As an example, Lord Black points out that the broadcasting complaints regime is governed by the Communications Act 2003, which doesn't even mention the internet.³⁷³⁷ p19, para 24, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Lord-Black-of- Brentwood1.pdf

¶4.4 Finally, issues have been raised about for whom any such regulation or standards would be mandatory. Specifically there are concerns about the ability of legislation to identify relevant online providers in a world where anyone might contribute to news and current affairs discussion online, via Twitter or blogs, alongside big news providers (including newspaper websites).³⁸³⁸ p6, para 7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-working-group-led-by- Lord-Prescott.pdf There are obvious difficulties about seeking to apply regulation to providers of internet services that are not based in the UK.³⁹³⁹ pp18-19, paras 61-63, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media- Regulation-Round-Table.pdf Equally there might be a risk of any providers moving out of the UK in order to avoid mandatory standards regulation.⁴⁰⁴⁰ p13, lines 3-8, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of-Morning- K Hearing-9-July-2012.pdf

¶4.5 Generally, even where there is strong support for a voluntary system, those proposing such systems are keen for all news providers, particularly all national newspapers, to be part of the system. Lord Hunt said that the industry's proposed voluntary scheme would be 'fatally undermined' if a big fish, such as Northern and Shell, were to escape the net.⁴¹⁴¹ pp1-2, lines 14-14, Lord Hunt, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-10-July-2012.pdf; p14, para 42, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Submission-by-Lord-Hunt-of-Wirral.pdf Accordingly, all of the proposals that rely on voluntary membership of a press standards body also stress the need for appropriate incentives to ensure universal membership of relevant news organisations. The range of incentives proposed is considered in more detail in below.⁴²⁴² section 5

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¶4.6 By contrast, those arguing for a mandatory standards regime simply point to the failure of the voluntary self-regulatory approach over the last century and, in particular, the difficulty of ensuring that all relevant publications comply with any voluntary regime. Separate issues are also raised about the ability to require both claimants and defendants to use an alternative dispute resolution mechanism. However, whilst the rationale for making some form of standards regulation compulsory is common to a number of proposals, the concept of what might be made compulsory differs widely between them. Whether some form of mandatory standards regulation amounts to a form of licensing will depend heavily on the consequences of non-compliance. The following paragraphs briefly outline both the mandatory elements of proposals and the proposed consequences of non-compliance.

¶4.7 The CPVs argue that all newspapers and magazines should fall within the jurisdiction of the regulatory regime and comply with the requirements of adverse adjudications or investigations.⁴³⁴³ p2, para 7.5, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Joint-Submission-by-Core-Participant- Victims1.pdf This appears to be an argument for compulsory coverage by implication, rather than specifically stated as such.

¶4.8 Sir Louis Blom-Cooper QC recommends mandatory coverage for a Standards Commission that would adjudicate on complaints as well as having investigatory powers and a role to promote freedom of expression. However, the only sanction underpinning the mandatory standards would be its own publication of its critical verdicts.⁴⁴⁴⁴ pp15-16, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/First-Submission-by-Sir-Louis-Blom- Cooper-QC.pdf This is a proposal that enhances transparency around the standards applied by the press but would not be regulation in any usual sense.

¶4.9 The Campaign for Press and Broadcasting Freedom (CPBF) outlines proposals for a body that would have the power to adjudicate on breaches of its code of ethics and order the wording and placement of publication of apologies and retractions. This would be enforceable by a court and the CPBF suggest that, where a publication is outside of UK jurisdiction, then distribution could be suspended until 'the matter is resolved'.⁴⁵⁴⁵ pp4-6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-The-Campaign-for-Press- and-Broadcasting-Freedom.pdf This approach limits the mandatory nature of regulation to the publication of apologies and retractions, but is silent on what might happen if a publication refused to comply with a direction or a court order enforcing it. In a submission on behalf of the Labour Party, Harriet Harman QC MP makes a similar suggestion, emphasising that the important element is the ability of the body to enforce its decisions across all newspapers. In Ms Harman's model the courts would be able to fine the newspapers if they failed to comply with an order of the body.⁴⁶⁴⁶ pp4-5, para 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Harriet-Harman-QC- K MP-on-behalf-of-the-Labour-Party1.pdf

¶4.10 Mr Eustice challenges the idea that statutory regulation of any sort would have a chilling effect on freedom of expression, pointing to the substantial statutory regulation of broadcasting, whilst underlining that broadcasting is home to 'some of the best investigative journalism in Britain'.⁴⁷⁴⁷ p2, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-George-Eustice-MP.pdf The statutory provision he envisages is a role for Ofcom in overseeing governance standards in the press, with no involvement in day to day disputes on individual stories, and a role for the Information Commissioner in providing redress for individuals in relation to breaches of privacy. He does not set out what the consequences might be for a press organisation which refused to comply with either element of statutory regulation.⁴⁸⁴⁸ pp5-6, paras 2 and 4, ibid

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¶4.11 Early Resolution propose a system of mandatory regulation that requires media disputes that would otherwise have gone to the courts to be subject to a statutory dispute resolution scheme.⁴⁹⁴⁹ pp8-9, paras 6.1-6.4, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Early- Resolution.pdf Although not spelt out, the decisions of the dispute resolution body would be enforceable by the courts. Mr Mosley proposes a similar scheme, but with the proposed tribunal having powers to investigate and adjudicate on any breach of the rules established by an independent Press Commission. The decisions of the tribunal would be able to be appealed to the High Court and decisions of the tribunal would be enforced by the High Court.⁵⁰⁵⁰ pp3-4, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Max-Mosley.pdf

¶4.12 The NUJ proposes a statutory regulatory body with jurisdiction over all publications of a certain size and their associated websites. Various options are suggested for the size trigger. The regulatory body would have the power to impose fines for breaches of standards as well as to order the publication of corrections and apologies in respect of the publications over which it had jurisdiction.⁵¹⁵¹ pp10-11, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Michelle-Stanistreet-on- behalf-of-the-National-Union-of-Journalists.pdf The NUJ does not elaborate on the consequences of failure to comply with an order of the body.

¶4.13 Professor Greenslade concludes that there has to be some form of compulsion for the larger publishers but he would rely on a system of incentives for smaller and online publications.⁵²⁵² pp37-38, lines 12-8, Professor Roy Greenslade, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Transcript-of-Morning-Hearing-12-July-2012.pdf K The body would adjudicate on complaints and be able to order publication of an adjudication.⁵³⁵³ pp12-14, para 10, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- Greenslade-of-City-University.pdf Professor Greenslade does not elaborate on what the consequences would be of a larger publisher failing to comply with an order from the body.

¶4.14 As already mentioned, Mr Suter and the MST each propose a statutory requirement that media organisations should belong to an approved self-regulatory body. Under the MST proposal the statute would apply only to big media companies, and would require internal governance standards in individual companies and membership of an approved self regulatory body.⁵⁴⁵⁴ p72, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf Failure to do either could result in a fine enforced, if necessary, by the courts.⁵⁵⁵⁵ p81, ibid The powers of the self-regulatory body in respect of breaches of standards would be a matter for the body itself; this would be by agreement with its members, as long as it could satisfy the backstop regulator that it was sufficiently robust.

¶4.15 Under Mr Suter's proposal there would be a general authorisation regime, which would allow anyone to publish but would require them to do so in a way which met any regulatory requirements set down. Ofcom would define the characteristics of media services that should be regulated, including with reference to the size of the undertaking. Those services falling with the definition would have to join an approved self-regulatory body. The Ofcom Content Board would then be responsible for approving self-regulatory bodies, in line with the regulatory outcomes set out by Ofcom.⁵⁶⁵⁶ p2, paras 8-9, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Tim-Suter-of- Perspective-Associates.pdf As with the MST proposal, the self-regulatory bodies would be free to define their own codes and sanctions, but would need to satisfy the Content Board that they had adequate governance arrangements, scope, coverage and powers in order to be approved. Any organisation falling within the characteristics defined by Ofcom but refusing to join a relevant self-regulatory body would be regulated directly by Ofcom, using the self-regulatory code considered by the Content Board to be most appropriate.⁵⁷⁵⁷ p5, paras 21-22, ibid Mr Suter does not say so in terms, but the ultimate sanction in a general authorisation regime is withdrawal of authorisation to carry out the regulated activity.

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5. Incentives for membership

¶5.1 As described above,⁵⁸⁵⁸ paragraph 4.5 where compliance with press standards is proposed as a voluntary matter there is considerable desire to craft incentives that would encourage publishers to join a voluntary standards organisation. A number of potential incentives have been set out in the proposals submitted to the Inquiry and they are considered here.

¶Kitemarking

¶5.2 Kitemarking is the most straightforward of the incentives proposed. The issuing of a kitemark would rest solely with the regulatory body and no cooperation from outside the industry is required. A kitemark would stand as a symbol of the quality of a publication in terms of its adherence to the professional and ethical standards set out in the code of practice. The commercial value of the kitemark would be wholly dependent on the extent to which the purchasing or reading public were aware of its existence, and of what it meant, and the extent to which that affected purchasing decisions. Essentially a kitemark has no value unless a product carrying it succeeds better in the market than a competing product without it.

¶5.3 Mr Dacre suggested that a kitemark would be effective. It would signal to the public which publications had signed up to self regulation and as such would provide an incentive not only to newspapers but also to internet news providers to join the system.⁵⁹⁵⁹ p7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf K The Media Regulation Roundtable suggested that a kitemark might be of particular value to smaller publishers and bloggers.⁶⁰⁶⁰ p21, para 72, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf Lord Hunt told the Inquiry that he thought publishers would carry a kitemark with pride. He accepted that there would always be some publications which might take equal pride in not carrying the badge and signalling themselves as outside the system, but he felt that it was important to make adherence to the new regime more visible.⁶¹⁶¹ pp19-21, lines 17-7, Lord Hunt, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-10-July-2012.pdf

¶5.4 I suspect that, while a kitemark might be seen as a benefit by some publishers, it is unlikely to have a significant impact in persuading publishers who do not otherwise want to join a self-regulatory standards regime to do so.

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¶VAT zero-rating

¶5.5 An idea which was much discussed during the early months of the Inquiry was the possibility of removing the VAT zero-rating for publications that were not members of a self-regulatory scheme. Given the currency this idea gained, it has been considered in depth and it is important that that the issues are set out. The essential background is that printed material is zero-rated for VAT purposes, that is to say, no VAT is charged or payable. It is an important point that this is not an exemption from VAT. The proposition is that a newspaper that is not signed up to a self-regulatory standards regime should, instead, have VAT levied on it at the standard rate (currently 20% in the UK).

¶5.6 John Evans, Deputy Director in the Solicitor's Office at HM Revenues and Customs (HMRC), with responsibility for advising on legal issues relating to VAT, has provided the Inquiry with expert evidence relating to this proposal.⁶²⁶² http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/HMRC-submission-by-John-Evans.pdf He explains that VAT is a European tax, and that one of the intentions of the EU VAT Directive 2006/112/EC is to ensure that the application of VAT does not distort competition, whether at national or community level.⁶³⁶³ p2, paras 5-6, ibid VAT is a tax on the final consumer, not the business. The effect of standard rating newspapers supplied by publishers outside the self-regulatory system would, in fact, be an increase in price for the consumers, or a squeeze on profit margins for the publishers, depending on how the publisher chose to manage his pricing.⁶⁴⁶⁴ p4, para 10, ibid Either would have an impact on competition; indeed, that would be the point of the proposals, since the aim is to provide a strong commercial incentive on the publisher to join the self-regulatory regime.

¶5.7 The UK does not generally have the ability to determine which products are subject to VAT and which are not. There is no general discretion available to Member States to apply or dis-apply VAT to a particular product or service. Under the Directive, and pending full harmonisation of VAT, Member States have been permitted to, amongst other things, maintain some zero-rates.⁶⁵⁶⁵ p4, paras 11-12, ibid The zero-rate applied to printed matter (including newspapers and magazines) is one of those. The UK does have discretion to remove those zero-rates and apply VAT at the standard rate to those products or services.⁶⁶⁶⁶ p5, para 14, ibid However, once a zero-rate has been withdrawn it cannot be reinstated.⁶⁷⁶⁷ p11, para 30, ibid K

¶5.8 All UK application of VAT must be consistent with the principle of fiscal neutrality, which precludes treating similar goods differently for VAT purposes.⁶⁸⁶⁸ p7,para 18 ibid It follows that in order to implement the proposal described above, one would have to be confident that a newspaper published by a publisher within the self-regulatory regime and a newspaper published by a publisher outside the self-regulatory regime were not 'similar goods'.⁶⁹⁶⁹ para 5.5 Mr Evans drew the attention of the Inquiry to a judgment of the Court of Justice of the European Union (CJEU)⁷⁰⁷⁰ The Rank Group plc (Joined Cases C 259/10 and C260/10) in which the court had been very clear that different legal regimes or different systems for control and regulation were of no relevance when assessing whether or not supplies of products or services were similar.⁷¹⁷¹ p9, para 23, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/HMRC-submission-by-John-Evans.pdf Mr Evans also drew the attention of the Inquiry to a further decision⁷²⁷² Fischer v Finanzamt Donaueschingen (Case C-283/95) in which the CJEU had concluded that similar services could not be treated differently for VAT purposes simply because one was lawful and the other was not.⁷³⁷³ p9, para 24, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/HMRC-submission-by-John-Evans.pdf

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¶5.9 Mr Evans told the Inquiry that, in the view of HMRC, the supply of newspapers was likely to be similar whether supplied by a member or by a non member of a self-regulating body. HMRC therefore considered that a challenge against the proposed change, either through the UK courts or by the EU commission, would be highly likely to be successful.⁷⁴⁷⁴ p10-11, para 29, ibid

¶5.10 It is worth bearing in mind the provision noted at above,⁷⁵⁷⁵ para 5.7 that once a zero-rate has been removed from a product or service the UK has no discretion to reinstate it. It follows that if the zero-rating were to be removed from newspapers outside of the self-regulatory regime, and that distinction was found by the CJEU to be a breach of fiscal neutrality, the UK would be unable to reinstate zero-rating for those newspapers outside the self-regulatory regime and would therefore be required to withdraw the zero-rating from all newspapers in order to preserve fiscal neutrality.⁷⁶⁷⁶ p11, para 30, ibid

¶5.11 Mr Evans made a number of other points about the proposal. If the proposal were successfully adopted, the decision over whether or not VAT were charged on a newspaper would effectively reside with the self-regulatory body. However, ultimately HMRC must be able to reach its own view on whether those decisions were being reached in a fair way, and HMRC and the Government could become involved in a legal challenge to a decision of the regulatory body. This would effectively give the Government a significant backstop role in decisions of the regulator over who could join or remain a member of the system.⁷⁷⁷⁷ p12, paras 33-34, ibid

¶5.12 There is also a risk that differential VAT treatment of newspapers inside the self-regulatory system could be considered to be a state aid. Unless such aid had been cleared in advance by the European Commission (and the likelihood of getting such clearance would require detailed consideration) the aid, in the form of the difference between the levels of VAT, would have to be paid back to HMRC by the newspaper publishers who had benefited from it.⁷⁸⁷⁸ p12-12, para36-39, ibid Mr Evans also drew the attention of the Inquiry to potential risks that the proposal could constitute a barrier to freedom of establishment under the Treaty on the Functioning of the European Union,⁷⁹⁷⁹ p13, paras 40-42, ibid and that it could constitute an infringement of the right to freedom of expression under the ECHR.⁸⁰⁸⁰ p14, para 43, ibid K Finally Mr Evans noted that there would be a potentially significant compliance cost for small businesses who sell newspapers, some of whom may have to register for VAT where they were not already so registered, and in being able to correctly identify which publications were subject to VAT and which were not.⁸¹⁸¹ p14, para 44, ibid

¶5.13 It is noticeable that very few witnesses have supported this proposal during Module Four of the Inquiry. Professor Greenslade⁸²⁸² p16, para 14, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- Greenslade-of-City-University.pdf and Ofcom⁸³⁸³ p19, para 4.18, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Ofcom.pdf float it as an idea in their submissions, but without any detailed explanations of how it might be possible. Ms Harman,⁸⁴⁸⁴ p3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Harriet-Harman-QC-MP-on- behalf-of-the-Labour-Party1.pdf and the Media Regulation Roundtable⁸⁵⁸⁵ p21, para 73, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf explicitly recognise that there may be insuperable barriers to this in European law. The MST looks at the issue in considerable detail and identifies that the current zero-rating of newspapers for VAT is worth nearly £400m collectively to national newspaper titles⁸⁶⁸⁶ p52, table 3.1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards- Trust.pdf but recognises that, although the removal of VAT zero-rating as an incentive to join a self-regulator scheme is possible in theory, it would require considerable political will and would likely take some years to come into practice.⁸⁷⁸⁷ p54, ibid I see this as a considerable understatement. The political will and the time required to overturn the principle of fiscal neutrality are, in my opinion, incalculable. Put simply, this is not a credible option.

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¶Journalistic accreditation

¶5.14 Mr Dacre first raised the possibility that the provision of press cards to journalists could be restricted only to journalists working for publishers subscribing to the new regulatory body.⁸⁸⁸⁸ p6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf This proposal is one of the four potential incentives to membership of the industry proposal put forward by Lord Black, and is explained in basic terms in Chapter 3 above. The proposal has now been rejected by the UK Press Card Authority (UKPCA).

¶Access to industry services

¶5.15 There are a number of services, where the newspaper publishing industry works together, which, it has been suggested, could be withheld from those who do not join a self-regulatory press standards body. The first is access to Press Association (PA) copy. The PA is a private company, with 27 shareholders, most of whom are national and regional newspaper publishers.⁸⁹⁸⁹ http://www.pressassociation.com/about-us/shareholders.html It is the main multimedia news agency in the UK and Ireland, providing newspapers with access to its news content, as well as images, listings, sport and weather information.⁹⁰⁹⁰ p55, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf K The proposal is that access to PA copy might be denied, or at least supplied on differential terms, to publishers who refuse to comply with a code of practice.⁹¹⁹¹ p6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf

¶5.16 Newspapers, both regionally and nationally rely heavily on PA wire copy for content. It is a fundamental resource, particularly with current business models, and a newspaper denied access to PA services would have to find an alternative source for such material, such as producing its own foreign and national news content, or do without such information.⁹²⁹² p56, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf Mr Dacre argues that denying access to news publishers to the PA service would be a 'crushing blow'.⁹³⁹³ p6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf The MST agrees that this would have a significant impact on publishers outside the system, but argues that restricting it would be undesirable because of its impact on the market.⁹⁴⁹⁴ p56, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf

¶5.17 The second industry service it has been suggested could be denied to those outside a self-regulatory system is coverage within the Audit Bureau of Circulations (ABC) and the National Readership Survey. At present, ABC provides a vast range of media organisations, advertisers, academics and public members with data on circulation and web traffic. The data provided is used by the media owners and advertisers to calculate the value of advertising space. The ABC Board consists of members nominated by the trade bodies of both media owners (the NPA, the PPA, NS) and the advertising industry (Institute of Practitioners in Advertising (IPA) and the Incorporated Society of British Advertisers (ISBA)).⁹⁵⁹⁵ http://www.abc.org.uk/About-us/Who-we-are/ Whilst ABC is the dominant provider of this data, it is open to publishers to find other sources. The National Readership Survey is governed by the IPA, the NPA and the PPA and provides data for the size and nature of the audience reached in relation to over 250 newspapers and magazines.⁹⁶⁹⁶ http://www.nrs.co.uk/index.html

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¶5.18 Professor Greenslade suggests that this would deny such publishers the 'currency' that advertisers use to buy space,⁹⁷⁹⁷ p16, para 14, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- Greenslade-of-City-University.pdf thus having a potentially significant economic impact on them. The MST says that, whilst denial of access to both ABC and NRS figures would be likely to add to the costs of a publication, it seems unlikely to represent an overriding economic incentive for membership of a new regulatory system that may apply further costs to news publishers.⁹⁸⁹⁸ p55, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf

¶5.19 The Media Regulation Roundtable notes that membership of collective commercial partnerships such as participation in industry standards could offer a commercial incentive to join a self-regulatory standards body,⁹⁹⁹⁹ p21, para 72, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- Round-Table.pdf but goes on to comment that, whilst incentives of this kind could be of some commercial value to publishers, they would not be strong enough to guarantee participation.¹⁰⁰¹⁰⁰ p21, para 74, ibid K

¶5.20 The MST further argues that application of these incentives would be undesirable for two reasons. First, that it would concentrate power within the industry, and second that it would provide direct commercial benefits to publishers through their ability to restrict the business practices of existing or potential rivals and could thus be viewed as anticompetitive.¹⁰¹¹⁰¹ p56, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf The question of whether these incentives might give rise to competition law problems is considered above.¹⁰²¹⁰² at paragraph K4.2.22 I agree that this combination of incentives has the potential to make it very inconvenient for a major publisher to sit outside the self-regulatory regime. However, I also agree with the MST that this is essentially an economic calculation and that the extent to which they could actually encourage membership of the regime will depend on the costs of the impact of not being able to access these services together with the costs of compliance with the regime. Quite apart from the legal question of whether incentives such as these might be in breach of competition law, I would also have some concerns about the potential impact on small businesses and bloggers for whom the costs of compliance might be disproportionate. It would also be essential that membership of the self-regulatory regime should be available on fair, reasonable and non-discriminatory terms to all who want to join if there are to be real commercial effects from being outside the regime.

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¶Assistance from the advertising industry

¶5.21 Lord Black suggests that there may be ways in which the advertising industry can help with building incentives for membership of a self-regulatory standards system.¹⁰³¹⁰³ p36, para 69, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Lord-Black-of- Brentwood1.pdf Ms Harman suggests two specific ways in which this might be done, first by requiring publishers who are not members of the system to pay a levy on adverts carried and secondly by advertisers agreeing to withhold advertising from publications that are not members.¹⁰⁴¹⁰⁴ p3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Harriet-Harman-QC-MP-on- K behalf-of-the-Labour-Party1.pdf The latter is also hinted at by Mr Dacre.¹⁰⁵¹⁰⁵ p8, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf The levy concept has not been the subject of elaboration in evidence by anyone and, as such, is difficult to consider here. The concept that advertisers might withhold advertisements from non-member publications would require high levels of commitment from advertisers who, themselves, have nothing to gain from higher standards in the newspaper industry. The Inquiry has not been presented with any evidence to suggest that advertisers are ready to engage, or even contemplating engaging, in discussions around this. Furthermore, it is difficult to see what incentive there would be for the advertiser whose concern is to ensure that its product or the subject of its advertisements reaches the widest possible audience. Although this might be a powerful incentive if it could be put in place, I have seen nothing to suggest that it has any prospect of being adopted and see no reason why it should be.

¶Access to a dispute resolution mechanism

¶5.22 Many of the proposals present access to an alternative dispute resolution mechanism as an incentive to membership of a self-regulatory press standards system. Dispute resolution more generally is covered below. At this stage I am only concerned with its value as an incentive for, if it is to be seen as such, it must be something that is not available to non-members.

¶5.23 The Media Regulation Roundtable proposal largely centres on its proposals for dispute resolution. Under this model, any complaint against a member organisation would go first to mediation by the regulatory body. If a complainant wished to start court proceedings in the case of a complaint of a legal wrong, then the court would stay the proceedings pending adjudication from the regulatory body's tribunal. If mediation was unsuccessful then, where the complaint relates to a legal wrong, it would go to an adjudication process. This would provide a compulsory alternative dispute resolution mechanism that would have to be used by all complainants against members of the body, and all members of the body. If either party was unhappy with the result of the adjudication process they could, by agreement, go to the body's Dispute Resolution Tribunal which would reach a conclusion binding on both parties. If the complainant was not happy with the result of the adjudication process it would still be open to him to pursue his complaint in court.¹⁰⁶¹⁰⁶ pp8-10, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation-Round- Table.pdf

¶5.24 This would serve as an incentive for publishers to join the self-regulatory standards body because it would ensure that all legal challenges against them would go, in the first instance, through a fast, fair and cheap adjudication process, thus hopefully reducing their exposure to expensive and slow court proceedings. As set out, this proposal would not prevent individuals from exercising their right to have a court consider their case; however, they would have to go through an adjudication process first, and the court would be likely to take the result of the adjudication process into account when considering their case.

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¶5.25 Sir Charles Gray (a retired High Court judge whose expertise is in media law) told the Inquiry about Early Resolution, a voluntary service providing dispute resolution in media matters. He made it clear that Early Resolution had not been as effective as they had hoped because, whilst it was very popular with publishers, it was meeting with resistance from claimants, possibly because of the incentives acting on those advising claimants.¹⁰⁷¹⁰⁷ pp39-41, lines 19-19, Sir Charles Gray, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript- of-Afternoon-Hearing-12-July-2012.pdf This is likely to be related to the availability of Conditional Fee Agreements and After the Event Insurance, now substantially affected by Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012: see Part I Chapter 3 above For this reason, Sir Charles had reached the conclusion that a voluntary ADR scheme would not be able to act as an incentive; it would have to be mandatory, and mandatory for everyone, thus excluding the possibility of using such a system as an incentive for membership.¹⁰⁸¹⁰⁸ p35, lines 7-10, Sir Charles Gray, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-12-July-2012.pdf

¶5.26 The Coordinating Committee for Media Reform (CCMR) proposed an approach under which complaints, including enforcement of civil rights, relating to those publishers that have signed up to the scheme would be dealt with through the fast track tribunal system.¹⁰⁹¹⁰⁹ p13, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Coordinating-Committee-for- Media-Reform.pdf Angela Philips accepted that it would be unfair to citizens who would get treated differently depending on who has traduced them, but said it was a necessary price for a significant incentive.¹¹⁰¹¹⁰ pp36-37, lines 14-13, Professor Angela Philips, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/12/ Transcript-of-Morning-Hearing-8-December-20111.pdf

¶5.27 Lord Hunt raised the question of why the industry would agree voluntarily to subject itself to a cheap system of arbitration which would potentially open them up to claims brought by members of the public who could not afford to pursue legal redress. He also asked why wealthy people would submit voluntarily to arbitration if they felt they might be able to intimidate a publisher with threats of a full court hearing.¹¹¹¹¹¹ p38, para 119, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Lord-Hunt-of- K Wirral.pdf

¶5.28 Taking a different view to Lord Hunt in relation to the industry, Mr Dacre suggested that access to swift and cheap resolution of defamation and privacy cases would be a major boon for both the industry and the public, and that it would be a huge incentive for a cost conscious publisher to sign up to a new regulatory system. Mr Dacre did not explain what he had in mind in any more detail but acknowledged that legislation would be required to deliver it.¹¹²¹¹² p6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf Ms Harman suggests that damages might be capped for member organisations or be higher for non-member organisations, but goes on to recognise that it might not be acceptable for a victim to receive less compensation because they were libelled by an organisation belonging to a regulatory regime.

¶5.29 I agree with Ms Harman on this latter point. I do not believe that damages should be assessed at different levels or that the press should be given additional legal protection if they are members of a regulatory system, because any injury suffered by a claimant is no less simply because the title has signed up to a regulatory regime to which it then does not adhere. But it may be that the title would be able to rely on its membership of a regulatory regime as demonstrating adherence to standards of behaviour, on the basis that a title that is not a member would have the rather more difficult burden of proving that it adhered to appropriate standards. The Irish model has this type of provision and they believe that proof would be difficult to achieve.¹¹³¹¹³ p54, lines 8-10, Professor Horgan, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-13-July-20121.pdf In order to establish the incentive, it is also necessary to examine whether and, if so, how, claimants could be mandated or encouraged to use the ADR process.

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¶Benefits in legal proceedings

¶5.30 A number of the proposals put before the Inquiry suggest that a publisher should be able to benefit from some form of preferential treatment in libel proceedings as a result of membership of a self-regulatory forum. In this context, the Irish Defamation Act and its provisions for recognition of the Press Council and Ombudsman are sometimes offered as an example.¹¹⁴¹¹⁴ the Irish Press Council and Ombudsman along with the Defamation Act are considered in Chapter J6.1. Dealing here only with the proposals that have been made for aspects of the scheme to be adopted in the UK, this section looks at the potential for the courts to treat defendants favourably because of voluntary participation in some form of regulation and the extent to which this would form an incentive to membership.

¶5.31 The Alternative Libel Project suggests that membership of a self-regulatory scheme could be incentivised by costs orders made by the courts but offers no detail as to how that might work.¹¹⁵¹¹⁵ p3, para 1.7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Alternative-Libel- Project-English-PEN-and-Index-on-Censorship.pdf K Ofcom also refers to this suggestion, but goes further and suggests that the level of damages might also be affected by whether a self-regulatory complaints handling system has been used.¹¹⁶¹¹⁶ pp18-19, para 4.16, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Ofcom.pdf The Media Regulation Roundtable suggests specifically that additional damages might be awarded against those who are not members of a self-regulatory system and who publish defamatory material in contravention of the code of practice. No such additional damages could be awarded against a member of the system even where they were in contravention of the code.¹¹⁷¹¹⁷ p25, paras 86-87, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media- Regulation-Round-Table.pdf The Media Regulation Roundtable also proposes a form of statutory support for those wishing to bring proceedings against publishers outside of the self-regulatory system, by allowing such proceedings to be brought with conditional fee arrangements. In addition, costs would not normally be recoverable against unsuccessful claimants.¹¹⁸¹¹⁸ p25, para 89, ibid

¶5.32 It is possible to envisage a process by which costs might not be awarded even to a successful defendant where they were not a member of a credible self-regulatory system that offered access to ADR. With appropriate discretion in the court, that could potentially be extended to make the defendant responsible for all costs. It could also potentially extend to consideration of the costs implications of a claimant pursuing a title through the courts when there was a cheaper, faster ADR mechanism available because the publication was in a self-regulatory system which provided such access. Such an approach might be expected to encourage any publisher who felt they were at risk of defamation or privacy actions from those with very deep pockets to be a part of the self-regulatory system.

¶5.33 It is less clear that any differentiation could (or even should) be applied to the level of damages. As identified above, I find it difficult to understand why it could ever be appropriate for the remedy offered by the courts to a victim of defamation or invasion of privacy to be affected by the defendant's membership or otherwise of an industry body. By definition, having succeeded in a claim for damages, the relevant publisher will have failed to meet those standards. Whether a deliberate decision not to participate in a voluntary regulatory mechanism might show disregard for standards (potentially justifying aggravated or exemplary damages) is another matter but I do not see how the compensatory award could be affected.

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¶5.34 Lord Prescott¹¹⁹¹¹⁹ p7, para 8, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-working-group-led-by- Lord-Prescott.pdf and Ofcom¹²⁰¹²⁰ pp18-19, para 4.16, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Ofcom.pdf go further than considering damages and refer in their submissions to the suggestion that access to certain defences in libel or defamation might be available to those who were part of a self-regulatory system. The essence of the proposal is that a defendant would be able to rely on compliance with a self-regulatory system and code of practice as evidence of responsible journalism and that this would constitute a defence. Professor Greenslade goes slightly further and suggests that a publisher standing outside of a self-regulatory system would be regarded as 'failing to favour responsible journalism'.¹²¹¹²¹ p16, para 14, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- Greenslade-of-City-University.pdf

¶5.35 The Media Regulation Roundtable makes specific proposals for a defence of 'regulated publication,' which would allow a defendant to rely on the fact that they had complied with directions or requirements of the self-regulatory authority in relation to the relevant published material. Similarly, it would be a sufficient defence in a privacy claim to demonstrate that the public interest requirements of the code had been complied with.¹²²¹²² p24, para 85, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Regulation- K Round-Table.pdf In relation to the latter, however, it is again difficult to see why, as a matter of legal fairness, such a defence should not also be available to a non-regulated entity that claims to have equal or higher standards with which it complied (even though, in the absence of membership, that fact might be more difficult to prove).

¶New legal rights and remedies against non participants

¶5.36 The Media Regulation Roundtable proposes the introduction of a statutory right of reply or correction, with appropriate prominence. These would be available only in respect of publishers who were not members of the self-regulatory body.¹²³¹²³ pp25-26, paras 88-91, ibid These rights would be enforced by the courts. The effectiveness of the right to reply or correction as an incentive to membership of the self-regulatory body would depend on the relationship between the statutory right and the equivalent provisions in the self-regulatory code. If the statutory right is less onerous than the code provisions then it is unlikely to offer much of an incentive. If, on the other hand, the statutory provision were to be stronger than, or the same as, the code provision there might be some question as to the benefits to the public of the self-regulatory system. It is not entirely straightforward to see why publishers should effectively be able to opt out of a statutory obligation by joining a trade body that does not give equivalent public protection.

¶5.37 That is not the only problem with this idea. The critical features of a right of reply are its immediacy and its ready availability. It is difficult to see how providing a mechanism through the courts will achieve either of these objectives.

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¶Exemption from ATVOD

¶5.38 One final incentive, suggested by the Media Regulation Roundtable,¹²⁴¹²⁴ p21, para 72, ibid is that a press self-regulatory body could take on the statutory responsibilities under the Audio Visual Media Services (AVMS) Directive for regulation of audio visual content published by its members. This would ensure that newspaper websites would be regulated by the self-regulatory body, rather than ATVOD as would now be the case if any of them were to fall to be regulated under the AVMS Directive. This would also be in line with the proposal from Jeremy Hunt MP, then the Secretary of State for Culture, Media and Sport,¹²⁵¹²⁵ p4, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Sumission-from-Jeremy-Hunt-MP.pdf in which he hypothesises a converged news regulator that would both provide self-regulation of the press and take on the statutory role required by the AVMS Directive, to ensure that the minimum standards laid down by the Directive are met.

¶Effectiveness of incentives overall

¶5.39 In any voluntary system of regulation it would be necessary to accept that some of the organisations who fall within the scope of the regulator might choose to sit outside the regulatory regime. If staying outside the regime is not a legal possibility, then it is not a voluntary system. It is common ground that, in order to be effective, any new system of press standards should cover all the national newspapers and at least the main magazines and regional and local newspapers. If publishers are not to be compelled to join then there must be a reason why they would wish to do so. The question that needs to be addressed is whether a sufficient package of incentives can be crafted that makes it strongly in the interest of all publishers to be a part of a voluntary standards system, without actually compelling them to do so. In the absence of a sufficiently strong package of incentives, one must either accept a voluntary standards system that some publishers chose not to be a part of, or find a way of compelling, rather than incentivising, membership.

¶5.40 The possible incentives examined above are a comprehensive list of those that have been put to the Inquiry in evidence. There may well be others, but if there are I have not had them brought to my attention. I am satisfied that in kind, if not necessarily in detail, the list above includes all the obvious possible approaches to incentivisation (and some that are not so obvious).

¶5.41 Of those proposed, I can see merit in kitemarking. There are clear benefits to providing consumers with information, though no evidence has been presented on whether a kitemark would have any effect on readers' buying habits. Some publishers might be keen to demonstrate that they operate to the highest standards. On the other hand, no evidence has been presented to suggest that kitemarking would be anything other than a minor incentive and those least likely to want to join a voluntary press standards body are likely to be the least concerned to demonstrate their adherence to standards.

¶5.42 The concept of a package of commercial benefits from membership would bear further investigation. Any specific proposal would need to be tested against competition law. Even where limiting a commercial benefit to members of a voluntary standards body would be possible legally, it is not axiomatic that it would also be desirable. Any of these proposals would need to be looked at and evaluated in detail; this has not been possible because they have only been presented to the Inquiry in the most general of terms.

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¶5.43 The benefits to publishers of an ADR regime seem obvious, and if individuals could be compelled to use such a regime that would be a powerful incentive. However, it is not possible to deprive individuals of their right to pursue or defend their rights in court and, on its own, any voluntary ADR mechanism is in my view unlikely to prove significantly compelling to publishers. I do not accept that it would be appropriate for differential damages to be awarded depending on the regulatory status of the defendant. However, there does seem to be real potential in constructing a costs regime in relation to privacy and libel cases that would make membership of a voluntary system a significant benefit to any publisher likely to face such challenges. Whether the benefit would be significant enough to encourage all national publishers into a voluntary system is impossible to forecast at this stage. Furthermore, if it is to be fully recognised within the costs regime operated by the courts, it would be highly desirable, if not essential, that the regulator providing the ADR mechanism be formally recognised and, thus, validated.

¶5.44 I am satisfied that there is no realistic prospect of using the VAT zero-rating, or any other method of discrimination based on tax, as an incentive for membership of a press standards body. I conclude that restricting journalistic accreditation to members of a press standards body would be difficult and runs the risk of being a real threat to freedom of expression.

¶5.45 Ultimately, the one incentive that we have heard about that has been demonstrated to be effective is the realistic threat of press standards legislation if an adequate voluntary body with full coverage is not forthcoming. Professor John Horgan, the Irish Press Ombudsman, told the Inquiry that the creation of the Irish Press Council had been under consideration for decades before eventually significant political pressure for statutory regulation of the press made the industry focus:¹²⁶¹²⁶ pp51-52, lines 2-1, Professor John Horgan, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ K Transcript-of-Morning-Hearing-13-July-20121.pdf

"Then in the middle 90s, after the collapse of a big newspaper group, the government set up a commission on the newspaper industry, of which I was a member, and which all major newspaper interests were also represented. The report of that body recommended the establishment of a Press Ombudsman in 1996. But nothing really happened after that. Nobody took ownership of it, and it wasn't developed in any sense. Then after the 2002 general election, the then minister for justice, Michael McDowell, set up an expert group to make recommendations to him. And that expert group reported in 2003, recommending a statutory system of regulation for the press. I think it's fair to say that that lit the fire under the topic in a way that it hadn't been lit before, and the press industry realised that if this eventuality was to be avoided, they would have to come up with something that was credible, authoritative, independent and on all these fronts sufficiently acceptable to government, so the government would not proceed with its plans. They then set up the Press Industry Steering Committee, which negotiated and deliberated for some four years."

¶And in a subsequent exchange he said:¹²⁷¹²⁷ pp55-56, lines 23-18, Professor John Horgan, ibid

"LORD JUSTICE LEVESON: But behind it all, do I gather from what you were saying somewhat earlier, was the threat of statutory regulation? A. Absolutely.

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LORD JUSTICE LEVESON: So in other words, it behoved the press interests to come up with a solution that was less than the club that was being held over them? A. That is absolutely the case. And in fact my membership, or our membership of the Alliance of Independent Press Councils of Europe indicates that in quite a few countries this threat has been the engine which has generated or promoted the successful establishment of press councils of the same kind in many European countries. So even though before this threat was made, there had been moves towards the establishment of something like this, the 1996 report of the commission, which wasn't under such a threat, recommended the establishment of an ombudsman. As I said, it was the real and present danger of that that created the situation in which we found ourselves."

¶5.46 Similarly, Lara Fielden, in her comparative study of international press councils published by the Reuters' Institute, says:¹²⁸¹²⁸ pp21-23, para 2.1, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Reuters-Institute-for-the- K Study-of-Journalism-submission-April-2012.pdf

"While..., the Press Councils considered here adopt many highly distinct approaches to their functions, frameworks, and powers, and while each has been established against a very different historical, political, and cultural backdrop, a common theme emerges in the form of the galvanising effect of the threat of statutory intervention. A recognition of the importance of ethics and accountability, and debates between publishers and journalists, may be significant. However the decisive trigger to the establishing, or reform, of a Press Council is commonly a proposal for statutory regulation that is held to threaten press freedom and results in a determined, pragmatic alternative response from the industry."

¶5.47 This has also been broadly the case in the UK, as demonstrated in Part D, Chapter 1, where I note that there has been a pattern of the press undertaking to make changes when faced with a threat of legislation. The fact that these promises have often not been followed through with meaningful action may demonstrate that, in order to be effective in securing real industry action, the threat must be exceptionally credible; to date, that has not generally been the case in the UK.

¶5.48 Such a threat could be perceived to exist now and I have no doubt that the proposals put before me by Lord Black spring solely from the fear that I might recommend a legislative regulatory solution and that such a recommendation might be accepted by the Government. Indeed, Lord Black described the process of arriving at his proposals as a substantial one, leading to something completely different from anything that has gone before,¹²⁹¹²⁹ pp27-28, lines 14-8, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-9-July-2012.pdf going on to say:¹³⁰¹³⁰ p28, lines 9-12, ibid

"That has only come about, I think, because of the opportunity that this Inquiry has given us to be able to analyse the things that have gone on in the past and see how we can try and rectify them for the future."

¶5.49 Whilst it is no doubt true that the mere existence of this Inquiry has focussed minds, I do not think it is possible to rely on any perceived threat from the Inquiry itself to encourage publishers to join a self-regulatory system. Any such threat would have to be provided by the Government of the day and credibly represent a real intention to legislate quickly should an acceptable industry solution not be forthcoming: that was tried by Sir David Calcutt but the effect was merely to postpone the issue until other more pressing political concerns took their place.

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6. Statutory recognition

¶6.1 Even in an entirely voluntary self-regulatory system it might be considered desirable to have some form of statutory recognition for the purpose of encouraging or rewarding membership of, and compliance with the standards set by, the voluntary body. This is perhaps best illustrated by reference to the Irish Press Council, which is fully independent of Government and membership of which is entirely voluntary. An Irish Press Council could exist in any form, with any structure, but the Defamation Act 2009 in Ireland provides for a defence of fair and reasonable publication,¹³¹¹³¹ s26, Defamation Act 2009 with the courts taking into account the extent to which the publisher has adhered to the standards set by the Press Council or, if the publisher is not a member of the Press Council, equivalent standards.¹³²¹³² pp53-54, lines 16-7, Professor John Horgan, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Transcript-of-Morning-Hearing-13-July-20121.pdf

¶6.2 Recognition of this sort would require the voluntary body to have some statutory existence. In the Irish case, the Defamation Act includes substantial detail on the composition and appointment of the Press Council and the appointment and procedures of the Press Ombudsman, but only a few overarching points about the existence and coverage of the standards code.¹³³¹³³ schedule 2, Defamation Act 2009 It also sets out the process for recognition of the Press Council by the Parliament, once the Minister has satisfied himself that it meets the criteria set out in the Act.¹³⁴¹³⁴ s44, Defamation Act 2009

¶6.3 Lord Black's proposed solution did not include any incentives that would require statutory recognition, but did include the potential to include an 'arbitral arm'. He recognised that the creation of an arbitration system of that sort would require changes to statute but was unclear precisely what sort of changes would be required.¹³⁵¹³⁵ pp54-56, lines 7-21, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-9-July-2012.pdf K Lord Black was emphatic that he did not consider that any other area of statutory relationship was necessary or desirable in order to implement his proposal.¹³⁶¹³⁶ p57, lines 11-20, Lord Black, ibid Mr Dacre said that although the introduction of an arbitral arm would require changes to libel legislation it deserved the fullest support.¹³⁷¹³⁷ p6, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Paul-Dacre1.pdf

¶6.4 Lord Black was strongly of the view that any statutory involvement in press regulation would give rise to concerns about freedom of the press:¹³⁸¹³⁸ p30, lines 18-20, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Morning-Hearing-9-July-2012.pdf

"I've never seen a model of statute proposed which would not in some way invite the state into the regulation of editorial content."

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¶6.5 Other proposals generally did not deal with this issue of statutory recognition explicitly. Lord Prescott states that "some incentives will need statutory support."¹³⁹¹³⁹ p2 and p7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-working-group-led-by- Lord-Prescott.pdf Ofcom sets out a number of potential statutory incentives, including costs in legal cases and a new defence for defamation.¹⁴⁰¹⁴⁰ pp18-19, para 4.16, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Ofcom.pdf The MediaWise Trust,¹⁴¹¹⁴¹ pp14-15, para 3.04, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-MediaWise1. pdf through positive reference to the Irish model, implicitly accepts the need for a statutory basis for such incentives but makes no comment on the desirability or otherwise of it. Similarly, the CCMR¹⁴²¹⁴² p12, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Coordinating-Committee-for- Media-Reform.pdf and Professor Greenslade¹⁴³¹⁴³ p16, para 14, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- Greenslade-of-City-University.pdf implicitly accept a role for the state by promoting the application of VAT zero-rating as an incentive for membership, but do not explicitly comment on the implications of such statutory recognition. The Alternative Libel Project argues for voluntary ADR which is supported by new rules on costs and more consistent and robust case management.¹⁴⁴¹⁴⁴ pp4-5, para 1.14, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Alternative-Libel- Project-English-PEN-and-Index-on-Censorship.pdf They are not precise on whether this would require legislative changes.

¶6.6 Professor Greenslade explicitly accepts that some legislation might be required to construct 'sanctions' for non compliance, without being specific on what that might be. He is clear, though, that this is to be an arms length relationship with statute:¹⁴⁵¹⁴⁵ pp10-11, para 7, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Professor-Roy- Greenslade-of-City-University.pdf

"I would therefore urge that the state's role is restricted to creating a framework at arm's length in order to create a regulator that is both independent of the industry and independent of the state."

¶6.7 He also argues that the judiciary should take into account whether a publisher has signed up to a regulatory system,¹⁴⁶¹⁴⁶ p16, para 14, ibid K but does not propose any statutory basis for that:

"just sticking to the press regulator itself, in my view it is quite clear that you are not going to keep everyone on board, not going to be able to levy sanctions against them, unless there's a method of compulsion. I have tried to devise a way in which this is as far away from state intervention as it can be."¹⁴⁷¹⁴⁷ pp22-23, lines 23-5, Professor Roy Greenslade, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/ Transcript-of-Morning-Hearing-12-July-2012.pdf

¶6.8 Lord Soley suggests that a regulatory body should have the power to take a case to court if necessary.¹⁴⁸¹⁴⁸ pp3-4, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Second-Submission-by-Lord-Soley-of- Hammersmith.pdf It is not clear whether he means in relation to existing criminal or civil law or with respect to any new rules on standards.

¶6.9 Generally, it would appear that there is a divide between those, exemplified by Lord Black, who have concerns that any reference in statute to press standards regulation would be a potential risk to freedom of expression and those who see no immediate problem with legislation that recognises a voluntary self-regulatory regime. It is not, however, clear that the extent to which statutory recognition of a self-regulator would need to, or could, go into detail about the scope, governance and processes of that self-regulator have been fully considered by all of the witnesses.

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7. Statutory provision Statutory underpinning

¶7.1 Many of the proposals submitted to the Inquiry go beyond statutory recognition and advocate some form of statutory underpinning for regulation of press standards. There are a number of different statutory models proposed which I briefly set out and consider here individually. The level of statutory underpinning differs from proposal to proposal. At one end of the spectrum are those that simply use statute to define the characteristics of an otherwise independent and voluntary body. At the other end are models that also use statute to compel compliance. This difference was set out clearly by Mr Suter:¹⁴⁹¹⁴⁹ p48, lines 14-25, Tim Suter, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of-Morning- Hearing-12-July-2012.pdf

"What's the difference between statutory underpinning and state control? By state control I think everybody has set up this dangerous notion that the state would dictate what the press could do, would dictate the standards by which the press had to operate and would form judgments as to what was or was not acceptable. I see statutory underpinning as being further removed from that, or setting a framework within which the regulation happens, but where the regulation itself is carried out by independent bodies dealing directly with the press and the regulated entities."

¶I have essentially used this distinction in considering the models that have been presented to the Inquiry. Models that put the definition and enforcement of standards in the hands of a statutory body are considered below as statutory regulation.¹⁵⁰¹⁵⁰ para 7.20 -7.25

¶The industry position

¶7.2 It is worth starting by considering the industry position on statutory underpinning. Lord Black makes it very clear in his submission that the industry rejects, as a matter of principle, any form of statutory involvement in, or underpinning of, press standards regulation.¹⁵¹¹⁵¹ pp17-20, para 16-27, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Lord-Black- of-Brentwood1.pdf This is not an argument about the strength of regulation but rather about the freedom of the press from state control:¹⁵²¹⁵² p11, lines 21-24, Lord Black, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- K Morning-Hearing-9-July-2012.pdf

"I have always believed – and I believe it is a view across the bulk of the industry – that self-regulation is the guarantor of press freedom and interference (sic) from state control."

¶7.3 Lord Black argued that self-regulation could be tougher than a statutory system and that this meant that statutory control was not needed.¹⁵³¹⁵³ p11-12, ibid He further argued that, as a matter of principle, it was essential that press regulation should be free of statutory intervention.¹⁵⁴¹⁵⁴ pp11-12, lines 20-3, ibid K He raised three specific reasons why a statutory basis for regulation would be inappropriate. The first was speed. He argued that no form of statute could keep pace with a fast moving industry in the way that self-regulation could.¹⁵⁵¹⁵⁵ pp12-13, lines 21-2, ibid I accept the point that the regulations themselves need to be capable of relatively swift amendment, but I am at a loss to see why the overall structure of regulation would need to be affected by change in this way. It is entirely possible to imagine a statutory framework, at a very high level, that would simply require some form of regulation to exist and define the accountability structures, leaving all the material regulation to a separate, possibly self-regulatory, process. This does not seem to me to be a compelling argument in relation to establishing a regulator, still less providing for the recognition of a self-regulatory body, in legislation. I note in passing that other industries also operate in a fast moving environment – for example, broadcasting and telecommunications – where the speed of technological and market change is no less then in the press and media industry, and nonetheless manage to exist perfectly well with statutory regulation frameworks.

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¶7.4 The second reason advanced for avoiding statute was the risk of 'losing coverage from the system'.¹⁵⁶¹⁵⁶ p13, lines 3-5, ibid The argument here is that if publishers did not want to comply with the statutory regulation they might relocate their operations outside the UK in order to place themselves outside of the jurisdiction of the statute. I can accept that this is potentially a valid argument in relation to the economic effect of any compulsory regulation. Clearly, if regulation is to be compulsory then some people may seek to evade it. This may be a simple step for those whose business is primarily online, although I am less convinced that it is a realistic prospect in relation to a printed product which would need to be imported to the UK and distributed on a daily basis. In any event, I cannot see how that is relevant to the impact on the 'coverage of the system'. A publisher wanting to avoid a compulsory system would have to take steps to do so and may or may not be able to achieve that. A publisher wanting to avoid a voluntary self-regulatory system would simply have to put themselves outside it. It is not at all clear how this would achieve greater coverage.

¶7.5 The third reason advanced was that a statutory system would be subject to constant legal challenge.¹⁵⁷¹⁵⁷ p13, lines 9-15, ibid This gets to the heart of the industry's position on any form of statutory underpinning for regulation, or indeed, any proposal other than their own, which is that they will render it ineffective by whatever means possible. This was articulated quite clearly by Lord Black:¹⁵⁸¹⁵⁸ p17, lines 16-21, ibid

"A statutory system which would be forced on a majority of unwilling publishers is likely to become a target to be aimed at rather than something – a framework within which to be worked for the benefit of both the public and the public interest."

¶This is not the attitude of an industry committed to raising standards and acting in the public interest and must be seen as what it is likely to be: an attempt to use the economic and political power of the press to defend their own interests.

¶7.6 It is worth reflecting a little on the evidence that Lord Black gave in respect of his objections to any statutory involvement. Robert Jay QC pointed out that a statute could do exactly what the proposed contract does, both in terms of giving powers to the regulator and by way of imposing limits on what the regulator could do. Lord Black did not dissent but expressed a 'philosophical objection':¹⁵⁹¹⁵⁹ p32, lines 12-20, ibid K

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"I – there is a fundamental objection that I have and I believe that the bulk of the industry has in allowing the state to write the rules of a regulator that governs editorial content. It's not just writing the rules, but presumably producing the style of the system and the type of the system that will be there to enforce it. It's not a circle, I think, that can be squared. It is a fundamental philosophical objection to the role of the state in the content of newspapers and magazines."

¶7.7 In a subsequent exchange he emphasised the point:¹⁶⁰¹⁶⁰ p33, lines 16-21, ibid

"LORD JUSTICE LEVESON: Well, that means there may be a statute which does not create a difference between what the statute could do and what the contract could do. A. The fundamental philosophical objection to it would remain!"

¶and again, later:¹⁶¹¹⁶¹ pp46-47, lines 19-3, ibid

"Q. We've defined our terms according to your lexicon, although, looking at Dr Moore's evidence, he would define the statutory underpin system as equally one of self-regulation because there would still be a significant press component or press representation within such a system. Do you accept that? A. No, I don't – I don't – I don't believe that – statutory underpinning is simply a term of art for a form of statutory control. I don't believe there is a halfway house between them."

¶7.8 It is not clear, though, that Lord Black is entirely consistent in his opposition to statutory involvement. His proposal envisages the possibility of an arbitral arm as part of the regulatory body. This, he acknowledges, would require some form of statute in order to make it compliant with Article 6 ECHR.¹⁶²¹⁶² p54, lines 17-21, ibid Whilst Lord Black was clear that he has no precise proposal for legislation on this issue at present, he was equally clear that his principled objection to statutory control did not apply in this context:¹⁶³¹⁶³ p56, lines 16-21, ibid

"I have no idea exactly how we would manage that, which piece of legislation we could do it in. All I know is it's not immediately on offer. The point of highlighting this here is that the structure of the system would allow it, if at some point Parliament saw fit in order to – saw fit to institute it."

¶7.9 Lord Black was not able to articulate why this from of statutory recognition or underpinning for a form of press regulation was acceptable to the industry whilst any other form of statutory recognition or underpinning, no matter what its form or content, could not be. The only conclusion I can draw is that statute providing for an arbitral system would be in the interests of the press whereas, in their perception at least, statute providing the framework for robust independent regulation would not be.

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¶7.10 Lord Hunt clearly shares Lord Black's principled objection to a high degree. However, it is perhaps not so clear cut. He told the Inquiry that recognition of a code, as in the Irish Defamation Act, would not constitute a statutory regulatory system.¹⁶⁴¹⁶⁴ pp65, lines 3-13, Lord Hunt, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-9-July-2012.pdf

¶View of others

¶7.11 The MST put forward an approach which would place statutory obligations on large news publishers to regulate themselves by providing internal complaints and compliance mechanisms and by joining an external self-regulatory body.¹⁶⁵¹⁶⁵ p72, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf The statute would then establish a 'Backstop Independent Auditor' (BIA) which would oversee compliance with those obligations. The self-regulatory bodies would be responsible for setting their own standards, governance arrangements and funding but the BIA would have to approve them, having regard to a set of issues already set out in para 3.2 above.¹⁶⁶¹⁶⁶ pp89-90, ibid The BIA would have the power to fine a large news organisation that failed to comply with required governance standards¹⁶⁷¹⁶⁷ pp65, lines 3-12, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of-Afternoon-Hearing- 10-July-2012.pdf or to join an approved self-regulatory body.¹⁶⁸¹⁶⁸ p81, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media-Standards-Trust.pdf K Where a self-regulatory body is found to be in breach of required standards, the BIA would have the power to report publicly on the failure, hold public hearings, impose fines and, in extremis, remove the recognition.¹⁶⁹¹⁶⁹ p90, ibid

¶7.12 One specific concern about this proposal is the risk that a body such as the BIA, whether an individual or a corporate entity but one with no track record, limited powers and limited duties, would simply not have the strength and credibility to stand up to the press industry should the need arise. As has been seen throughout the Inquiry, the press is very active and very able when it comes to lobbying for their interests. I have identified in Part H how successive Information Commissioners have been persuaded that they should not concern themselves with the activities of the press. It is only to be expected that the press, if faced with a new regulatory system over which they do not have complete control, will seek to mitigate its impact by whatever means are open to them. Given that this includes the potential use of their megaphone to criticise heavily any organisation, and the individuals who run it, it follows that a high degree of resilience and strength would be required by any organisation required to take on the role.

¶7.13 Mr Suter's proposal shares a number of features with the MST but is closer to statutory regulation, as I have defined it here, than statutory underpinning. In Mr Suter's model, Ofcom would have a statutory duty to establish a set of regulatory outcomes, which would define what activities or media services must be subject to regulation; these could be determined by a number of factors including the size of the organisation and the nature of the services it provides, and could define the outcomes expected as a result.¹⁷⁰¹⁷⁰ p2, para 8-10, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Tim-Suter-of- Perspective-Associates.pdf These outcomes would be rooted in four principles:¹⁷¹¹⁷¹ P2, para 10, ibid

"– respect for privacy; – respect for the truth and fair dealing in reporting;

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– upholding ethical standards of behaviour in news-gathering; – providing information to allow vulnerable audiences to make informed choices."

¶7.14 Under Mr Suter's proposal those services identified by Ofcom would be required to join an authorised self-regulatory body. The authorisation process, and regular auditing, would be carried out by a re-structured Ofcom Content Board.¹⁷²¹⁷² p3, paras 13-16, ibid The requirements to obtain authorisation a self-regulatory body are set out at para 3.3 above and relate to independent governance, scope, powers and funding.¹⁷³¹⁷³ pp3-4, para 17, ibid If an organisation falls to be regulated under Ofcom's framework, but declines to join an authorised body, then it would fall to Ofcom to regulate that organisation against the authorised code considered most appropriate by the Ofcom Content Board.¹⁷⁴¹⁷⁴ p5, paras 21-23, ibid Where Ofcom has deemed that regulation is required and no authorised industry body yet exists to define a code of its own, the Content Board would draw up a relevant code itself.¹⁷⁵¹⁷⁵ p5, para 23, ibid It is this final element of the proposal that makes Mr Suter's approach potentially cross the boundary from statutory underpinning (requiring self-regulation) to statutory regulation where the regulator both sets the standards and enforces them.

¶7.15 Ms Harman considers an approach which would use statute to provide for the independence of a standards body and to give it jurisdiction to enforce its decisions across all newspapers. In this model online news outlets would be able, but not required, to join the system.¹⁷⁶¹⁷⁶ p4, para 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-Harriet-Harman-QC- MP-on-behalf-of-the-Labour-Party1.pdf

¶7.16 Mr Eustice recommends giving Ofcom powers to require adequate governance from newspapers to ensure that they are:¹⁷⁷¹⁷⁷ pp5-6, para 2, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-George-Eustice-MP. pdf

"organised in such a way that allows them to comply with both the Editors' Code and the law."

¶This would not give Ofcom any jurisdiction over standards.¹⁷⁸¹⁷⁸ ibid He also advocates giving a right of appeal to the Information Commissioners' Office in relation to privacy complaints. This would apply to all media, including the internet, and the ICO would be enforcing existing laws.¹⁷⁹¹⁷⁹ p6, para 4. ibid K

¶7.17 Ofcom suggests that statute might be necessary in order to set out the governance standards for a voluntary regulator, including appointment processes, independence and accountability.¹⁸⁰¹⁸⁰ pp13-14, para 4.24-4.30 http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Ofcom. pdf

¶7.18 Sir Charles Gray, on behalf of Early Resolution, argues for the establishment of a statutory independent media regulator and compulsory ADR.¹⁸¹¹⁸¹ p12, para 9.1-9.2, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Early-Resolution. pdf Sir Charles does not specify in detail what the role of the statutory regulator would be or how much should be laid down in statute but his primary concern is that compliance with standards should be statutory, as an essential partner to his proposed mandatory ADR route. He did not express any opinion on by whom standards should be set.¹⁸²¹⁸² pp36-37, lines 5-8, Sir Charles Gray, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-12-July-2012.pdf

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¶7.19 The NUJ put forward a proposal for a statute setting up a new regulator which would be able to take complaints, enforce penalties, carry out investigations and monitor performance. The legislation would define the membership and jurisdiction of the body and how the body was to be funded.¹⁸³¹⁸³ pp8-10, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Michelle-Stanistreet-on- behalf-of-the-National-Union-of-Journalists.pdf The regulator would have a role in, but not control of, drawing up a code of practice.¹⁸⁴¹⁸⁴ pp8-10, ibid The regulator would have statutory jurisdiction over all publications of a certain size and their associated websites,¹⁸⁵¹⁸⁵ pp10-11, ibid as well as statutory power to fine for breaches and to insist on the size and placement of a correction or apology.¹⁸⁶¹⁸⁶ pp10-11, ibid Membership would draw on journalists, the public, newspaper owners and editors and pressure groups.¹⁸⁷¹⁸⁷ pp1-12, ibid

¶7.20 Mr Mosley proposes an independent but non-statutory standards setting body that would have much in common with the current PCC but with a more independent appointments process and a greater proportion of independent membership. The standards body (rather than serving editors as now) would be responsible for setting the standards.¹⁸⁸¹⁸⁸ pp1-2, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Max-Mosley.pdf K There would also be a statutory tribunal with the power to enforce those standards, with compulsory jurisdiction over all of the press, agencies of the press and the internet (where not subject to Ofcom).¹⁸⁹¹⁸⁹ pp2-4, ibid The Tribunal would have statutory powers inter alia to deal with complaints, to require disclosure of information, to award damages, to levy fines, to order a correction (specifying content, location and prominence), prevent publication of a story and order an item to be removed from the internet. The statute would also provide a statutory public interest test in relation to privacy matters, impose a prior notification requirement in relation to publication of private matters and provide that such prior notice is confidential.

¶Statutory regulation

¶7.21 There are some proposals that go beyond a call for statutory underpinning to self-regulation and suggest statutory regulation which is not based around industry ownership of standards or process.

¶7.22 Sir Louis Blom-Cooper QC proposed the establishment of a statutory Commission on the Media.¹⁹⁰¹⁹⁰ p5, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/First-Submission-by-Sir-Louis-Blom-Cooper- QC.pdf Members of the Commission would be appointed by an appointments commission established for the purpose by Parliament. The functions of the Commission would be:¹⁹¹¹⁹¹ pp15-18 ibid

¶(a) to receive and adjudicate on readers' complaints of breaches of the code of ethics; and

¶(b) to carry out public inquiries, with power to subpoena witnesses and require disclosure of evidence, into press activity that has aroused public concern.

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¶Sir Louis does not elaborate on what powers of remedy, redress or sanction this statutory body should have.

¶7.23 The Campaign for Broadcasting and Press Freedom recommend the establishment of a statutory Media Standards and Freedom Council.¹⁹²¹⁹² p5, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/06/Submission-by-The-Campaign-for-Press-and- Broadcasting-Freedom.pdf In the first instance the Council would be appointed by an appointments commission set up by the Ministers. The Council would be made up in the following proportions:

¶(a) media owners and editors – 20% (b) media trade unions – 20% (c) members of the public nominated by civil society organisations – 50% (d) members of the public selected by a process of application – 10%.

¶7.24 The Council would produce a code of ethical standards, adjudicate on complaints about compliance with that code, administer a public right to redress and keep and publish records relating to compliance. The Council would also issue guidance and advice to the media and report annually to Parliament. Where the Council found that standards had been breached it would be able to require a printed clarification, retraction or apology in a corrections page in the publication. The Council would be able to apply to the courts for an order to enforce its ruling where necessary.

¶7.25 The Media Regulation Roundtable proposes a largely statutory, but voluntary, approach. Mr Tomlinson QC explained that in his view self-regulation was not an appropriate tool:¹⁹³¹⁹³ p6, lines 5-14, Hugh Tomlinson QC, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Transcript-of- Afternoon-Hearing-13-July-20121.pdf K

"Well, by "self-regulation" I understand that ultimately, whatever the industry or the body is, it's regulating itself. And it seemed to us that actually there are two interests at play. There's the interests of the media and there's the interests of the public. And unless the regulation is independent of both, you're not going to have true and effective regulation. So I don't myself agree that an independent self-regulation, if that is a meaningful phrase at all, is the proper way to proceed."

¶7.26 Under the Media Regulation Roundtable proposal, a Media Standards Authority would be established by statute, with its governance arrangements set down in legislation.¹⁹⁴¹⁹⁴ pp5-6, paras 8-12, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Submission-by-Media- Regulation-Round-Table.pdf The statute would also impose a duty to uphold the freedom and independence of the press.¹⁹⁵¹⁹⁵ p7, para 13, ibid The Authority would have statutory duties to establish a Code Committee (with a minority of working editors and journalists) to prepare a code of practice. The Authority would also have to establish a system of regulation, including pre publication advice and complaints handling, and to set up dispute resolution tribunals. The Authority would, however, only have jurisdiction over those who chose to join it.¹⁹⁶¹⁹⁶ pp7-8, paras 14-15, ibid

¶Summary

¶7.27 It is clear from the descriptions above that there are many different possible approaches to the use of statute in relation to securing the highest press standards. These approaches range from establishing in statute the characteristics of a self-regulatory body that would have some standing in civil law, through the statutory establishment of a body that would recognise one or more self-regulatory bodies, to the statutory establishment of a body that would define a set of standards to be adhered. Any of these approaches could, but need not be, coupled with a statutory requirement for compliance with a set of standards. There are a different set of questions about the use of statute in relation to improving the handling of civil cases; those are considered in section 13 below. Strong cases have been advanced for each of these different approaches and it seems to me that any of them might have merit. The essential point is that a balance must be struck between the use of statute to deliver independence from industry and the risk that the use of statute might introduce some element of state control of the press which is clearly unacceptable.

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¶7.28 I do not accept that there is any issue of principle preventing, in any circumstance or howsoever framed, the use of legislation in respect of press standards. The question whether any particular statutory provision might give rise to any potential infringement of freedom of expression or the freedom of the press, or even the remotest risk of such an infringement, can only be looked at in the context of the specific provision and any statutory or other protections that could be built in.