Reports that Matter

An Inquiry into the Culture, Practices and Ethics of the Press

The Press Council of Ireland and the Press

Section 52 of 61

The Press Council of Ireland and the Press

Ombudsman

History and background 1.1 The Irish Press Council and Ombudsman system was set up in 2007 as a direct response to the threat of legislation from the Irish Government. The Chair of the Press Council, Daithí

O'Ceallaigh, described the agreement eventually reached between the Government and the industry as:1

"a win-win solution….[where] at least some of the changes in defamation law sought by the industry would be incorporated in a new Act and, in return, the industry would sponsor an independent Press Council and Press Ombudsman along lines broadly acceptable to government."

1.2 In the mid 1990s the Irish Government set up a Commission on the newspaper industry; in

1996, that body recommended the establishment of a Press Ombudsman, but no action was taken.2 Then in 2002, the Minister for Justice, Michael McDowell, set up an expert advisory group which reported in 2003 with a recommendation for a statutory system of regulation for the press.3 The industry set up a steering committee to consider its response; this committee included representatives of all the major newspaper groups in Ireland, including some of those based in the UK, namely News International and Trinity Mirror.4 This group ultimately developed a model for the Press Council, which was to be independent of Government and, in its operations, independent of the industry; this was the model that was adopted for the new Council and Ombudsman in the summer of 2007.

1.3 Professor John Horgan, the Irish Press Ombudsman, explained to the Inquiry his understanding that the Press Council had been established with the quid pro quo that that Government would withdraw its proposals for the statutory regulation of the press.5 At the same time, the Government agreed to use the legislative opportunity provided by the Defamation Bill in

2009 to offer some statutory underpinning for the new Council.6

1.4 Professor Horgan made it clear that the industry considered there to be a very real threat that the Government would legislate for press regulation in the absence of an adequate selfregulatory solution:7

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

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A. Absolutely. 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."

"without the benefit of knowledge of what went on behind closed doors in the four years leading up to the creation of the Press Council, it might be thought that this legislation represents a framework imposed by the state on the private sector. Whereas in fact – and Professor Thomas Mitchell has briefed me extensively on this – by and large the provisions relating to the Press Council that found their place in the Defamation Act were those proposed by the Press Council itself to the government."

There is scope within the Act for the industry collectively to decide not to create a Press Council, and for any individual journal to decide not to participate. However, the Press Council of Ireland, as currently constituted, was established before the Act came into force and all significant publishers of newspapers in Ireland are members of the Council.8

Benefits 1.6 The Act provides a defence of 'fair and reasonable publication' to a defamation action.9 In the case of a statement published in a periodical by a person who at the time of publication was a member of the Press Council, a court in considering whether publication was fair and reasonable may take into account the extent to which the person adhered to the code of standards of the Press Council and abided by determinations of both the Press Ombudsman and the Press Council.10 There was, as yet, no case law on this.11 Professor Horgan clarified that this did not mean that the defence was only available to those who had signed up to the system. The defence was also available, in theory, to other publications if they could satisfy the court that they operated to standards and procedures in no way inferior to those of the

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Council. Similarly, this had not been tested in court and Professor Horgan said:12

"My honest view it that it would be quite difficult for publications that are not members of the Council to satisfy a court that they operate to such standards."

1.7 In order to enact these benefits, the Act makes provision for the Minister, by order, to recognise a body as "the Press Council" for the purposes of the Act. The requirements for recognition are specific and detailed and it is worth setting them out here to show the extent to which the Defamation Act establishes the objectives and the structural independence of the Press Council, the approach to dealing with complaints and the overarching coverage of the code of standards. 1.8 Only one Press Council may be recognised at any one time. Before the Press Council can be recognised the Minister must satisfy himself that it meets the specifications set out in

Schedule 2 to the Act. He can revoke the recognition at any time he considers that the Press

Council fails to meet the specifications in the Schedule.13 So far this power has been used once, in April 2010, to recognise the Press Council of Ireland as 'the Press Council'. 1.9 Schedule 2 of the Act requires that the Press Council should have the principle objectives of:14

"(a) ensuring the protection of freedom of expression of the press, (b) protecting the public interest by ensuring ethical, accurate and truthful reporting by the press, (c) maintaining certain minimum ethical and professional standards among the press, (d) ensuring that the privacy and dignity of the individual is protected."

Interestingly, Professor Horgan told the Inquiry that the primary purpose of the Press Council was:15

"to maintain the rights of the press to freedom of expression, to maintain the independence of the press from the State and State control or regulation and to decide on appeals against decisions or the Press Ombudsman on complaints."

with the primary role of the Press Ombudsman being:16

"to receive and adjudicate on complaints, to raise public awareness of the work of his Office and of the Council, and to encourage and promote the highest ethical standards of journalism in Ireland."

Meanwhile, the website of the Press Council says that the objectives of the Press Council are:17

• "To provide the public with an independent forum for resolving complaints about the press.

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  • To resolve all complaints quickly, fairly and free of charge.
  • To defend the freedom of the press and the freedom of the public to be informed."

1.10 Specific provision is made in the Act about the structure of the Council, the number of members and how many of those members should independently represent the public interest, the interests of owners and publishers, and of journalists.18 The Schedule makes requirements about the independence of the appointments procedures; it requires that the Minister should be satisfied by the independence of the appointments procedure but gives him no role in establishing or operating it.19

1.11 Professor Horgan told the Inquiry that it was clear to the industry when they were formulating their proposals for the Council that:20

"one critical aspect of what the industry proposed to establish, without which no possible measure of Government acceptance or approval would have been available, was independence."

1.12 It is a requirement of the Act that the Press Council should be funded by subscribing journals and should receive no funding from other sources.21

1.13 The Act requires that the Press Council should appoint a body (the Press Ombudsman) to resolve complaints about the conduct of its members. The Press Ombudsman is to have the power to require publication of its own decisions, corrections, retractions and "such other action as the Ombudsman may, in the circumstances, deem appropriate". Decisions of the Ombudsman are to be appealable to the Press Council itself, which is to have similar powers in respect of requiring publication of decisions.22

1.14 The Press Council must have adopted a code of practice with which all members are required to comply; this includes:23

"(a) ethical standards and practices, (b) rules and standards intended to ensure the accuracy of reporting where a person's reputation is likely to be affected, and (c) rules and standards intended to ensure that intimidation and harassment of persons does not occur and that the privacy, integrity and dignity of the person is respected."

The Press Council 1.15 The Council was created by the Press Industry Steering Committee, comprising the publishing trade associations and the NUJ, in accordance with the provisions set out in the Act.

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Appointments 1.16 The Act requires the Press Council to comprise 13 members, of whom seven are independent members representing the public interest, five represent the interest of owners and publishers and one represents the interest of journalists.24 The public interest members are appointed by an independent four-person Appointments Committee, on the basis of public advertisement and interview.25 The Chair of the Council is appointed from within the public interest members, although in practice external applications have also been invited.26 The industry and journalist members are nominated by the various organisations that took part in the steering committee and the Appointments Committee ratifies the nominations. Professor

Horgan explained that there was not an automatic guarantee of appointment for those who were nominated, but he could not readily foresee a situation in which such nominations would not be ratified.27

1.17 The first Appointments Committee was appointed by the Press Industry Steering Committee.

Subsequent appointments to the Committee are made by the Press Council. The appointments are for three years; that first Committee was subsequently re-appointed for a second three year term by the Council in July 2010.28 As of August 2010, the Chair of the Council was also the Chair of the Appointments Committee.29 1.18 The five industry members of the Press Council are current senior editorial executives, although not usually editors. The only serving editor currently on the Council is the editor of a regional publication; he fills the slot effectively reserved for regional newspaper editors.30

Professor Horgan suggested that the absence of serving editors has worked well for the Press

Council, particularly because he thought that there was more change of personnel than might be expected if editors were to hold the seats. The appointments are for a three year term, and can be extended for a second term; however, some four and a half years into the

Council's existence, only one of the original industry representatives is still a member of the

Council.31 1.19 Professor Horgan told the Inquiry that the public interest majority on the Council was essential to the public acceptance of the independence of the model.32 He also regarded the presence of a journalist member on the Council alongside the industry members as essential.33

Structures and Funding 1.20 In line with the requirements of the Defamation Act, the Press Council is wholly funded by the press industry. The finances of both the Press Council and the Press Ombudsman are provided by the Administrative Committee of the Press Council; the Committee is chaired by an independent member of the Council but otherwise consists of representatives of the different types of publications covered, together with the NUJ. Each title covered by the

Council pays a levy based on circulation.34

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1.21 Making a complaint is free to the complainant.35

The Code 1.22 The code was originally drawn up in 2007 by the Steering Committee. There is now a Code Committee, which is chaired by an independent retired journalist and comprises nominees of the industry bodies. Serving editors have the right to be on the Committee but, for the most part, they are represented by deputies or senior executives. The Ombudsman sits on the committee in an ex-officio capacity.36 Any changes to the Code are made in consultation with the Council. The Council can also suggest changes to the Code Committee. There have not, in fact, been any significant changes since the code was originally drafted.37 It may be worth noting that the code would have been available to the Government to see when formulating the terms of the 2009 Defamation Act.

Coverage 1.23 All national newspapers, including all the UK papers that are published in Ireland, and over 90% of regional newspapers, are members of the Press Council. Around 60%, by number, of periodicals are members of the Council, but this would account for considerably more than 60% of circulation as the larger magazines are members.38 Since the creation of the Council no members have left, or threatened to leave, the system.39 Recently a news website has applied for membership and the Council is considering the appropriate criteria for membership of web media.40

Public awareness and satisfaction 1.24 Professor Horgan told the Inquiry that public awareness of the Press Council and Ombudsman was limited. A public awareness campaign had been launched in an attempt to make the services provided by the Ombudsman more widely known.41

Impact of statute on freedom of speech and the public interest 1.25 Professor Horgan did not think that the statutory recognition afforded to the Press Council by the Defamation Act constituted a limitation on the freedom of expression because the limitations in the Act were, by and large, those proposed and endorsed by the industry itself as a necessary balancing of the right to publish against the rights of individuals.42 The belief of the Council in the importance of the freedom of the press is reasserted in the preamble to the Code.43

1.26 In this context it is worth noting that all UK titles that publish in Ireland are members of the Council; they do not appear to allow any principled objections to statutory underpinning of press self-regulation to get in the way of constructive and willing participation in this system.

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1.27 The public interest is not defined in the code, and it is left up to the Council and the Ombudsman to interpret it on a case by case basis. The code does set out a general principle:44

"that the public interest is invoked in relation to a matter capable of affecting the people at large so that they may legitimately be interested in receiving and the press legitimately interested in providing information about it."

The Press Ombudsman 1.28 The Press Ombudsman primarily receives and adjudicates on complaints. The Ombudsman is appointed by the Press Council and reports to the Council on a monthly basis in respect of administrative matters.45 The Ombudsman is independent of the Council in the execution of his functions of investigation and adjudication, but his decisions can be appealed to the

Council by either the complainant or the newspaper if they are dissatisfied.46 Professor Horgan stressed that his contract guarantees his independence from the Council and that the Council had recently agreed to amend its articles of association to give him greater independence. In particular the Ombudsman now has discretion to make decisions on whether someone is a person directly affected, and to rule out vexatious and frivolous complaints.47

Complaints 1.29 Complaints can only be made in respect of publications that are members of the Press Council of Ireland. A complaint can relate to any article that breaches the Code of Practice or to the behaviour of a journalist that breaches the Code.48

1.30 Complainants are expected to go in the first instance to the publisher concerned, and the

Ombudsman will only consider complaints if the complainant has not received a satisfactory reply within two weeks.49 Professor Horgan told the Inquiry that he had:

"got a very severe telling off, which I think in the circumstances was quite justified, from the editor of the newspaper concerned….."

when he had, on one occasion taken a compliant directly at the request of the complainant who had been too fearful to confront the newspaper itself.50

1.31 Complainants are free to take their cases to court in advance of, alongside or after a case is considered by the Ombudsman. The Ombudsman will not consider a case while it is before a court, but will suspend consideration of the complaint until legal proceedings have concluded.51 Professor Horgan could only recall one example of a complainant having taken legal action in respect of a matter which had already been adjudicated by him.52

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Process 1.32 The Ombudsman will generally carry out conciliation and reach conclusions on the basis of documentation alone, although there is also provision for face-to-face mediation, which may be used more often in future.53 All decisions, whether by the Press Ombudsman or, on appeal, by the Press Council, are published to the interested parties and on the Press Council/ Ombudsman website.54 An annual report is published setting out the data and the approach taken to key issues.

Volume and results 1.33 In the four years of its operation the Irish Press Ombudsman has received on average between 340-350 complaints per year. This is roughly analogous, in proportion to population, to the number received by the PCC. There is, however, one striking difference between the outcomes from the Irish Ombudsman and those from the PCC. The Irish Press Ombudsman has reached a decision on nearly 12% of the complaints brought to it over its four year lifetime, which compares to substantially less then 1% of complaints to reach adjudication with the PCC.55 In 2010 and 2011 around two thirds of the decisions of the Press Ombudsman have included a finding that the code was breached, with sufficient remedial action already having been taken by the publisher in up to half of those cases.56 Comparatively few cases are conciliated, with only 19 (6% and 5.5% respectively) conciliated in each of 2010 and 2011.57

Appeals 1.34 Either party to a complaint can appeal the decision of the Press Ombudsman to the Press Council. Professor Horgan told the Inquiry that there were a substantial number of appeals in the early years but that only very few appeals were upheld by the Press Council.58 The figures provided to the Inquiry show that 53% of the decisions taken by the Press Ombudsman have been appealed to the Council over the four years. There was a substantial dip in the level of appeals in 2009, but otherwise the proportion of decisions appealed has been over 50% in every year of the Press Ombudsman's operation. It is not obvious from the figures whether those appeals were by publishers or claimants and Professor Horgan told the Inquiry:59

"Initially quite a substantial number of my decisions would have been appealed, either by newspapers or by complainants, on the grounds that, well, it was free and, you know, why not have a second bite at the cherry?"

Very few of these appeals are upheld, however, with only three appeals having been upheld in four years (although some 12 appeals are described as being still outstanding).60

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Standards 1.35 The Ombudsman deals with individual cases and has no remit to identify or respond to any systemic issues which might become apparent from cases that he considers. Professor Horgan told us this would be a matter for the Press Council, on the basis of its own assessment of the issues before the Ombudsman and the decisions being reached. However, the Press Council does not have the power to conduct own-initiative investigations, and has no specific remit to tackle serious or systemic problems. Some efforts have been made to address systemic issues by, for example, sponsoring seminars on relevant matters.61

Sanctions 1.36 The only sanction available to the Press Ombudsman is the requirement for the newspaper or magazine to publish a decision upholding a complaint.62 Professor Horgan told the Inquiry that all the major newspapers have been the subject of critical adverse findings in one form or another.63 Decisions of the Press Ombudsman also frequently include a correction of inaccurate facts.64 Detailed guidelines have been adopted by the Council in relation to the publication of a decision by the Press Ombudsman. In relation to prominence of publication these guidelines say:65

"(3) Those sections of decisions of the Press Ombudsman upholding a complaint should be published: (a) in full; (b) promptly; (c) on the same page as the original article, or further forward, subject to the exception at (6) below; (d) on the same day of the week as the original publication, (e) with similar prominence; (f) unedited; and (g) without editorial commentary by way of a headline or otherwise. In addition, each should carry, above the headline, a strap-line indicating that it is a decision of the Press Ombudsman. [….] (6) Where a complaint has been upheld in relation to an article published on the front page of a publication, the decision should be published with due prominence on one of the first four editorial pages."

UK titles as members 1.37 Professor Horgan told the Inquiry that UK titles accounted for 30% of membership of the

Council, but were responsible for around 22% of the complaints. These figures have to be viewed with caution, however, as they make no allowance for circulation figures or other differences between titles.66 In respect of the types of complaint that were received about UK titles and Irish titles, Professor Horgan said:67

"There's absolutely no discernable differentiation between the basis of the complaints against indigenous publications and those against UK-based publications."

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Professor Horgan went on to say that he had no complaints at all about the cooperation of any of the publications with the Ombudsman.68

  1. Other models of press regulation: Europe and beyond 2.1 In this section I consider systems of press regulation operated in Europe and elsewhere; whether they are comparable to conditions in the UK and whether there are lessons that might be learnt and applied. It is important to start by noting that, while there may be similarities between systems of press regulation, no two systems are the same and there are important differences. 2.2 While all of those countries in consideration here operate systems of self-regulation, they differ from the PCC in many ways. In some cases, notably Denmark, Sweden, Finland and Germany, there is some form of involvement by government, either through statute or because of financial support; in the case of France, the impact of legislation is very different to the model in the UK and has real impacts upon the functioning of the press in that country. 2.3 Most of the comparative European countries operate a form of self-regulation through a Press Council, but also in some cases a Press Ombudsman (notably in Sweden). Unsurprisingly, the majority of the Press Councils operating in Europe and internationally, have been established solely with the printed press in mind. The development of new media, such as online publications and micro-blogging sites, have created opportunities for Press Councils to review existing frameworks, in order to consider options for incorporating new media platforms into their regulatory structure. This has included consideration of how to encourage membership, as well as how to meet the expectations for new media platforms and additional sources of funding for the system of regulation.69 By way of example, Denmark operates a 'polluter pays' policy for online members who have joined the Press Council. However, this is regarded as a temporary measure, as no official funding mechanism has yet been developed.70 Online and the self-regulatory settlement with online publishers is considered as and where appropriate in this section.

2.4 This section will also look at the composition of the Press Council Boards, as well as sources of funding for the industry; both are important variables. The German Press Council for example is co-funded by the German Government. This system has not led to statutory regulation; neither has it been suggested that the Government exerts a deleterious influence simply because of the public funding. In her extremely well informed evidence to the Inquiry, Lara Fielden, a Visiting Fellow at the Reuters Institute for the Study of Journalism, has suggested that, although many of the European Press Councils profess to focus on the embedding and maintenance of journalistic standards, in practice this role is limited and most Press Councils are reactive and complaints driven instead.71

2.5 I will first consider the Scandinavian countries and thereafter Germany, France and the Netherlands. I will then pass on briefly to review the situation in both the United States and China.

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Denmark, Sweden and Finland 2.6 The press in the Scandinavian countries has been described as a collective press which has historically prided itself on the publication of information to high standards of accuracy, and within the boundaries set by a clear journalistic code. In each of the Scandinavian countries, the respective Press Council has powers to raise monetary contributions and, if an article is found to breach the code, to mandate the publication of the fact of a breach along with an apology. Furthermore, in Denmark, the Press Council additionally has the ability (rarely used) to fine or imprison an editor-in-chief who fails to comply with a publication of a Council adjudication.72 As to the relevance of rights of individuals, the Swedish Code of Standards includes the clause that journalists should:73

"Refrain from publicity which could violate the privacy of individuals, unless the public interest obviously demands public scrutiny".

Ms Fielden explained that the tabloid press in the Scandinavian countries had become increasingly comfortable with reporting on the private lives of politicians and others.74

2.7 Significantly, there are no press laws in place, nor specific legislation relating to the regulation of the printed press, in Denmark, Sweden or Finland. However, contrary to assertions made in evidence and in public over the course of this Inquiry, there are elements of governmental involvement that can be found in the systems of press self-regulation operated in these

Scandinavian countries. For example, and most notably, the Danish Press Council is established in statute, pursuant to the Danish Media Liability Act 1998, albeit that other elements of the system are self-regulatory particularly in terms of handling adjudications, the composition of the Press Council Board and the exercise of Council responsibilities. Under the terms of the

Act, all publications which are in printed circulation more than twice a year, as well as holders of broadcast licences, are subject to regulation by the Danish Press Council. The Council also deals with complaints across all media platforms, including online media, provided (in the case of online publishers) that these organisations are registered with the Council.

2.8 Ms Fielden has explained that registration in Scandinavia is the expectation and is not perceived as a form of licensing.75 Indeed, it is compulsory for any publisher seeking to participate in the self-regulatory system in Denmark, Sweden and Finland. The procedure of registering an editor-in-chief responsible for the publication is representative of the Scandinavian approach to responsible and accurate journalism.

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Denmark 2.9 Any journalist, or individual who imparts news in some way, whether through printed media or online, is protected under the Danish Press Council's professional umbrella. The benefits of membership of the Council include access to privileges in law such as the protection of journalists' sources. This has been the incentive for many online publishers to join the Council on a voluntary basis.76 They have the ability to differentiate themselves from other online media who are not regulated by the Council. Online publishers are expected to contribute to the industry funding of the Press Council if they are affiliates of existing members (such as the online presence of a broadcaster or a printed newspaper). However, purely online-only outlets are not expected to contribute. This is partly due to the non-existence of a funding mechanism and is compensated by the Danish Press Council operating the 'polluter pays' policy, which is applied if an online member breaches the Code.77

2.10 It is noteworthy that, in similar fashion to the PCC, the Danish Press Council does not accept third party complaints and deals with only those individuals who have been directly affected by press misreporting.

2.11 One of the primary roles of the Danish Press Council is the duty to enforce a right of reply (albeit limited to specific factual inaccuracy). This power is enacted in statute under the Danish Media Liability Act 1998, and is procedurally different to the remedy obtainable from the court,78 and applies to both newspapers and broadcasters.79 Save for this and for the penal consequences visited on the editor-in-chief for failure to publish adjudications by the Press Council, there are no other enforceable rights under the Act. Like the Press Councils in Sweden and Finland, the Danish Press Council does not have the power to award compensation or to impose financial penalties.

2.12 Although the Danish Press Council is set up in statute, it is still at a fundamental level self-regulatory and is regarded as such by its members. The eight members of the Council are appointed for their industry expertise. Historically, a member of the Danish Supreme Court has always been appointed as the Chair of the Council and a lawyer has held the position of Vice- Chair. The remainder of the Council consists of industry members, who are either journalists or editorial management, or independent public members; each is equally represented with two positions on the panel.

2.13 Although the system operated in Denmark has its benefits, it has come under parliamentary scrutiny, in particular for the placement of apologies and corrections.80 According to Ms Fielden, publications are:81

"…still, even within this co-regulatory framework, burying publication of an adjudication on sort of page 54".

In her evidence she highlighted the different approach of publications towards 'regulation' and noted the distinction between two media camps: those who are found in breach and are ordered to comply with adjudications by the Danish Press Council; and those who voluntarily choose to comply with regulation in order to benefit from the protections that membership of the Press Council offers.

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Sweden 2.14 In Sweden, the press and press freedom are specifically protected by two of Sweden's four constitutional laws. These function to protect the freedom of speech (Freedom of the Press

Act 1991) and the freedom of the Swedish press (Freedom of the Press Act 1949). These freedoms apply to any individual who has registered for authorisation to publish and can include private individuals such as online bloggers. Both Acts guarantee a ban on censorship, the protection for anonymous sources and the right of public access to documents held by

Swedish authorities.82

2.15 Press standards in Sweden are upheld through the Swedish Press Council. Membership is voluntary and not backed by legislation, unlike in Denmark. Newspapers and print publications are authorised to publish as members of either the Swedish Newspaper Publishers'

Association, the Magazine Publishers' Association, the Swedish Union of Journalists, or the

National Press Club. There are no restrictions on who can apply for a licence through the

Swedish Press Council. These organisations collectively finance the system of self-regulation, and also set the Code of Ethics for the printed media (and broadcasting) in Sweden.

2.16 In Sweden, the editor-in-chief of a print publication is legally responsible for all content published by that title and is answerable to the Press Council Board. There are a total of

18 members of the Press Council Board. In similar fashion to Denmark, the Chair and three

Vice-Chairs are members of the Swedish Supreme Court. The remaining members are representatives from the four associations responsible for funding the Press Council, as well as three representatives of the general public who are without affiliation to the press. This composition of the Board is seen as a way of underpinning the independence of the system of self-regulation in a country that has historically esteemed the freedom of the press and sought to protect it in law.83

2.17 Sweden also operates a Press Ombudsman whose role is to investigate complaints, provide information and advice to the public and contribute to the development of press standards.

Both the Press Council and the Ombudsman deal with the online versions of printed newspapers and magazines. The Press Ombudsman is the first point of contact for any complainant who has a personal interest in press misreporting or who has been directly affected by it.

As such, third party complaints are not accepted by the Swedish Ombudsman. The Press

Ombudsman does not act as a mediator but rather makes decisions on whether a complaint can be accepted and passed to the Council for adjudication. If the Press Ombudsman decides a complaint does not warrant formal criticism of the title in question, the complainant can appeal directly to the Press Council. There are also no restrictions to prevent a complainant from taking the grievance to court after it has been considered by the Press Ombudsman and the Press Council.

2.18 The Press Ombudsman is appointed by a special committee which consists of the Chief

Parliamentary Ombudsman, the Chair of the Swedish Bar Association and the Chair of the

National Press Club. The length of time taken for an adjudication by the Press Council can be a further six or seven months after the Ombudsman has considered a submitted complaint Advisory note provided by the British Embassy in Sweden

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(which can last itself three to four months). The remedy for such complaints is the right to reply or the publication of a correction.

2.19 In contrast to the UK and Denmark, however, the Swedish Press Council operates a system whereby titles are expected to contribute towards costs after a breach of the code. Whereas only online operators in Denmark are ordered to pay a levy towards the funding of the Council if they are in breach of the code, in Sweden, anyone who breaches the code is required to pay a 'penalty' towards the fund. It is estimated that this form of 'polluter pays' policy contributes approximately 20% of the Press Council's funding.84

Finland 2.20 Finland's printed press is regulated by The Council for Mass Media (CMM), established by publishers and journalists in 1968. It is the main body responsible for the self-regulation of Finland's printed press and broadcasters. It is also the only self-regulatory system in the Scandinavian countries that encompasses all media platforms, including online journalism. Under Finnish Law, the freedom of speech is protected through the Exercise of Freedom of Expression in Mass Media Act 2003.85 Through this Act, publications are obliged to provide a public right of reply as well as the duty to correct factual inaccuracies. In similar requirements to Sweden, each publication must nominate an editor who holds the responsibility for all the published content of that publication.

2.21 The CMM is responsible for issuing Guidelines for Journalists, which establishes professional conduct guidelines across cross-media platforms. Membership to the CMM is voluntary, although it is perhaps noteworthy that journalists who have affiliated membership to the Council commit themselves to advancing and upholding the principles set out in the Guidelines for Journalists. Dr Riitta Ollila, a member of the CMM has argued that the Council:86

"…does not act as a mediator between editors and audience but as a master of the code making remarks on the press of their errors."

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Germany 2.25 It has been argued by some commentators that the German Press Council operates the purest form of press self-regulation in Europe. In Germany, the press are regulated only by the press and are only subject to restrictions within the German Basic Law (Grundgesetz). The

Press Council was established in 1956 and consists of members from industry organisations and the press trade unions. The Council has 28 industry members and the Chairmanship of the Council rotates between the representatives of the different industry organisations. Press behaviour and standards are set out in the German Press Code, first developed by the Press

Council in 1973, which provides guidelines under which journalists should operate. In 2009, the Press Council expanded their remit to include online newspapers. The Press Council relies on Government funding for its operations (although there is a stipulation that the funding should not exceed 49% of the Press Council's total revenue).88 Other than providing monetary support to the Council, the Government has no powers or influence over the day-to-day operations of the Council.

2.26 Any member of the general public may make a complaint directly to the Council. Complainants do not have to waive their rights to initiate legal proceedings if they submit a complaint to the

Press Council. If the Press Council Board supports a public complaint, then the newspaper in question is expected to publish the Press Council's ruling. This public reprimand is a voluntary undertaking by the title in breach, rather than an order dictated by law or mandated as a condition of membership of the Council. Ms Fielden has noted that some 90% of German publishers have signed up to the voluntary undertaking, although one major publisher, the

Bauer Media Group,89 has not renewed its declaration.90 Whilst the Press Council can request that these reprimands are published, as with the PCC, it cannot determine the prominence given to the publication of the decision.

2.27 The authority of the German Press Council has not gone unchallenged, particularly in response to the publication of public reprimands. The newspaper Bild, the best-selling German tabloid, has questioned decisions made by the Press Council. By way of example, a published

Press Council ruling on 29 November 2007 was printed by the paper in question not as an adjudication but, rather, as a criticism of that adjudication.91 The problem of compliance is ongoing and has led to delays in the publication of apologies. This has led to the reputation of the German Press Council being discredited and has damaged the public perception of its general credibility as a self-regulating body.

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2.28 The approach of the German press is perhaps more aggressive than that in Scandinavia, although it may appear tame in comparison to standards in the UK. Its behaviour has been described best as a "balancing act".92 Significantly, there is a culture in the German press (notably absent from the UK press) of titles publicly holding each other to account. In this respect, Bildblog is an example of an online media watchdog, which was originally established to examine the coverage by the Bild newspaper.93 Bild has also been criticised by its readers, notably for its coverage in 2010 of a number of deaths at a music festival in Duisburg.94 The title was accused of exaggerating reports of the deaths and came under intense scrutiny from the public and industry members alike. The German Press Council received a large number of complaints from readers, via traditional methods such as letters to the editor, as well as micro-blogging through channels such as Twitter. It has been argued that this event, and the resultant response, has led journalists to reflect on their standards of reporting for the future.

France 2.29 The system of press regulation in France is different to the countries so far outlined. In place of a Press Council, the press in France are regulated by the existing body of French law. Trade unions and professional associations, such as the Syndicat National des Journalistes and the Association des Journalistes Républicains Francais, are responsible for maintaining standards of journalism across the printed press. As a consequence, the development of a code of standards applicable to the industry has been problematic. Instead, both the Unions and professional associations have encouraged the appointment of ombudsmen at some newspaper titles. The first appeared in 1994 at Le Monde, although this has not been popular across the majority of the printed press.

2.30 The Direction du Départment des Médias et des Industries Culturelles,95 is responsible for the development of Government policy in relation to the media and plurality. It is also responsible for providing financial support to parts of the media, most of which is directed towards the printed press.

2.31 Efforts at creating a Press Council in France have been unsuccessful. The most recent attempt in 2006 led to the establishment of the Association de prefiguration d'un Conseil de press,96 led by a group of French journalists, although it is unclear how far their efforts have led.97 It is likely that this is a consequence of lack of industry support.

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2.32 The corollary to the informal systems of self-regulation in France is the application of civil and criminal law. Although the freedom of the press and the freedom of speech are both constitutional principles, uniquely in Europe, privacy laws, in particular Article 9 of the

Civil Code,98 are also applicable to the press. Intrusions into privacy, including the taking of photographs of individuals in a public place, are prohibited. Article 9 guarantees the protection of the citizen's private life, from which the right to one's image emanates. The Civil

Code, however, is fluid in definition in relation to individuals who have a public profile and, in particular, those who hold public office. Under the constitutional guarantees of freedom of speech, French law allows for the publication of information on individuals in public office, as a consequence of their occupation or status. They are presumed to waive rights over the publication of their image, on condition that it is used to inform and not for commercial gain.

In French civil law, an individual who feels that their image has been misused can request court action to prevent the attack (through detention, seizure of property, banning the publication, or public denunciation) or seek damages in compensation. In criminal law, invasion of one's privacy is punishable by a prison term of up to 12 months and a fine of up to €45,000.

2.33 Historically, the French press has been reluctant to publish stories on the private lives of individuals. Perhaps the most famous example of this phenomenon was the refusal of the French press to publish stories about the extramarital affairs of the former President,

François Mitterrand. Suffice to say that nothing was printed about President Mitterrand's second family, and it was only shortly before his death that the press revealed the facts.

There has been a historical willingness to interpret privacy law broadly (and some may argue too broadly) and it has been argued that French privacy law is used to suppress information.

However, increasingly French newspapers and, particularly, celebrity gossip magazines are challenging this traditional reluctance to publish content that may be regarded as private and such stories are increasingly the norm in France. The recent publication of the photographs of the Duchess of Cambridge may be part of this trend.99

Netherlands 2.34 Freedom of speech is set out in Article 7 of the Constitution of the Netherlands. The

Constitution also states that the Government has a duty to enable the media to freely exercise their profession without any form of undue influence or interference. This is realised through the Dutch Media Act 2008. Although the Act regulates only public broadcasters and cable operators in the Netherlands, it also ensures that newspapers and internet publications have rights to operate independently and free from Government interference.100 101

2.35 The Netherlands has operated a system of self-regulation for the last 50 years. The Netherlands

Union of Journalists founded the prototype of a Dutch Press Council in 1948; this functioned originally as a disciplinary body, before being reconstituted as the Raad van Tucht, the

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Netherlands Press Council (NPC), in 1960.102 This Council describes journalism in the country as a completely free profession, where any individual can be considered a journalist and is not required to be professionally registered as such.

2.36 The NPC does not accept third party complaints. Complaints are only accepted from those who have a direct interest and are affected by the issue and must also be related to a specific breach of the Code. It must concern the journalistic practice of either a professional journalist or someone who, on a regular basis and for remuneration, collaborates on the editorial content of a mass medium. The Council can only pass judgment and is unable to impose sanctions on titles in breach of appropriate journalistic practice. In the Netherlands, and much like the UK, a complainant's route to seeking compensation is through civil litigation.

2.37 The fundamental difference between the system of press self-regulation operated in the Netherlands through the NPC and the PCC lies in the prominence accorded to publication of adjudications against titles in breach of the Netherlands guidelines for journalism. The adjudication summaries published by the NPC name and shame journalists who have breached terms on accuracy, or have been found to have crossed the limits of what it is acceptable to publish. These adjudications are published in full on the Press Council's website, as well as in the Dutch union of journalists' newspaper, which is widely read by people working in the industry. The decisions are also widely circulated through national news agencies and to other media organisations. This very public naming of titles in breach of the code is seen as a deterrent for poor journalistic behaviour.

2.38 Although the NPC cannot force a title to publish a correction, the majority of the media will respect such a request from the Council and will comply. Some titles have decided not to publish the verdicts of complaints against them, such as De Telegraaf (the largest newspaper in the country) and NOVA, a current affairs programme on television, who announced that they would no longer cooperate with the NPC. Despite this, 80% of the NPC members have indicated that they would publish adjudications involving their titles.

2.39 The Chair of the Dutch Press Council has historically been appointed from the Dutch Judiciary. The Chair is assisted by three Vice-Chairs, who are also drawn from the law. The remaining members of the Council comprise 13 industry members (including journalists) and 13 lay members.103 In recent years, steps have been taken to improve the effectiveness of the Council, including an internal review of systems and functions. Changes have included the appointment of five 'public members' drawn from the Dutch public at large.104 In order to implement improvements, the NPC has applied for additional financial support from the Dutch Government and has pushed for the adoption of a similar funding mechanism to that used in Germany. The review of systems and functions conducted by the NPC also considered other self regulatory models, including the PCC. 2.40 Before concluding this summary of the approach of other European countries, it is worth adding that, in her evidence, Ms Fielden observed that Press Councils in Europe are now making concerted efforts to prove to readers that they are concerned with maintaining standards. She gave the example of a judgment by the Swedish Press Council, which ordered the publication of a decision, which the newspaper title ran on the front page of its publication, as a way of setting the bar:105

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"…a Swedish paper that had got something very wrong had been censured by the Press Council and ordered to publish the Press Council decision, off its own bat published it on the front page, and the reason it did that was to say, 'This is our compact with you, the reader. We are different. We aspire to very high standards. When we get it wrong, we will tell you that we've got it wrong, very visibly so.'"

The United States 2.41 In some countries there are no systems of press regulation. The prime and only statutory structure of the United States print newspaper industry is the First Amendment to the

American Constitution, adopted in 1791.106 The First Amendment to the Constitution reads:107

"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."

The First Amendment protects both the freedom of speech and the freedom of the press, although there remain certain statutory limitations relating to defamation and privacy,108 as well as certain forms of state censorship, which exempt some areas of free speech from the protections of the First Amendment.109

2.42 By way of example, there are restrictions in both Federal and State law in relation to obscene images (which may be defined to cover material which would not be considered to offend obscenity laws in the UK); there is no equivalent to Page 3. Many US states seek to build on the existing Federal law and place restrictions on the possession, dissemination and sale of obscene material in public places, in particular those where minors may be present such as schools and libraries.

2.43 The Federal Communications Commission (FCC) is responsible for the regulation of broadcasting across the fifty states and on an international scale.110 The remit of the FCC does not, however, include the regulation of the print media.

China 2.44 Some witnesses have suggested that any introduction of statute in relation to press standards is tantamount to placing the press under state control. It may be of some benefit to turn very briefly to look at China and the regulation of print media in that country, if only to provide an example of the sort of statutory control of the press that gives rise to these concerns and identify the key features of that regulation to demonstrate how widely and dramatically it differs from the type of underpinning statute that has been proposed by witnesses to the Inquiry.

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2.45 Chinese publications are required under law to abide by a strict registration criteria as well as to undergo a process of continual government approval, exercised by the General Administration of Press and Publications (GAPP). Individual publications are held accountable to the government by official sponsors, defined as a 'managing institution', which must be an institution recognised by the Chinese Communist Party or the government.111 The managing institution is responsible for the exercise of control over the publication and content published by it. Specifically, the managing institution should limit any negative coverage of the Chinese Government and the Chinese Communist Party. There are, by definition and in fact, no free or independent media outlets in China.

2.46 The regulation of the Chinese media by the government is not limited only to the domestic market. Indeed, the Chinese Government seeks to control the content of Chinese language newspapers published abroad. The Epoch Times is a Chinese newspaper founded in 2000 operated from the UK; it provides an interesting perspective on the reach of Chinese press regulation.112 Their submission to the Inquiry suggests that the influence of the Chinese Communist Party extends to the Chinese language print media in the UK and that this influence is exercised through the Chinese Embassy. They have said that the Embassy seeks to influence media outlets targeted at the Chinese community and has sought to discourage its circulation. The Director of the English edition, Sek Halu, has suggested that a number of retailers and supermarkets have refused to stock the Epoch Times because of its critical view of the CCP.113

  1. Reviews of press regulation: Australia and New Zealand 3.1 The development of new media and, in particular, the convergence of delivery platforms for content, has challenged existing models of press regulation, causing some regulators to review the extant regulatory frameworks to consider how best to respond to this changing environment and how new forms of content delivery might be incorporated into existing regulatory structures.

3.2 In Australia, the structures and functions of the existing Australian Press Council have recently been considered as part of a wider review of press standards, in the context of the Independent Media Inquiry, otherwise known as the Finkelstein Inquiry. The Finkelstein Inquiry has fed into the wider Convergence Review, being conducted by the Australian Government, of regulation across media platforms in Australia and broader media policy. In New Zealand, the Law Commission has looked specifically at the privileges and benefits accorded to traditional media and have considered how these might be applied to new media.

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Australian Independent Media Inquiry: the Finkelstein Report 3.3 The Independent Media Inquiry was established by the Australian Government on 14

September 2011. A former Justice of the Federal Court of Australia, Mr Ray Finkelstein QC, was appointed to conduct the Inquiry. The Independent Media Inquiry invited submissions from any person with an interest in the issue and held public hearings in Melbourne, Sydney and Perth during November and December 2011. In parallel to these hearings, the Chair of the Inquiry also invited selected individuals, organisations, trade associations and other interested parties to make formal submissions. Responses were received from a range of parties, including serving editors of Australia's major media outlets, former editors with experience of the news media industry, the current Chair of the Australian Press Council (as well as former Chairs), and academics specialising in media and regulation.

3.4 The timing of the Independent Media Inquiry has overlapped with the establishment of this

Inquiry. Although the former was not set up in response to any allegations of wrongdoing at

News Limited (the Australian subsidiary of News Corp), or to investigate any press misconduct, it was nevertheless indirectly provoked by the allegations of phone hacking and corrupt payments at News International that led to this Inquiry.114

3.5 The Terms of Reference for the Independent Media Inquiry focussed on the efficacy of existing codes of conduct governing media practice in Australia, particularly the likely impact on these of the growing convergence of print media and digital and online platforms. Mr Finkelstein was also required to investigate:115

"The impact of this technological change on the business model that has supported the investment by traditional media organisations in quality journalism and the production of news, and how such activities can be supported, and diversity enhanced, in the changed media environment; ways of substantially strengthening the independence and effectiveness of the Australian Press Council, including in relation to online publications, and with particular reference to the handling of complaints; and any related issues pertaining to the ability of the media to operate according to regulations and codes of practice, and in the public interest."

3.6 The Independent Media Inquiry concluded its review and reported to the Australian

Government on 28 February 2012. Mr Finkelstein recommended that the current Australian

Press Council (APC) should be replaced by an independent body, the News Media Council

(NMC).116 The role of the NMC would be to ensure that Australian news media operated in a more accountable manner to those who were the subject of press reporting, as well as to the general public at large. To enable the NMC to exercise this function, Mr Finkelstein argued that the NMC should have strengthened remedial powers to deal with complaints about the press. These proposed powers would be significantly greater than those available to the existing APC. Mr Finkelstein also proposed that the NMC should have powers to enforce a right of reply, the withdrawal of an article from further circulation, and the publication of apologies and Council adjudications (including the ability to control the size and prominence of these publications). These remedial powers are, according to Mr Finkelstein, necessary to preserve the integrity of the press.

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3.7 The NMC would also be responsible for setting journalistic standards, in consultation with the industry, and to handle complaints across all media platforms (specifically print, online, radio and television). Mr Finkelstein proposed a greater level of funding from the Government for the body which would replace the current levy system. He argued that this would remove a current burden on the print industry but would also address the issue of the independence of the NMC from the industry.

3.8 Perhaps more significantly, and indeed a change of greater significance, Mr Finkelstein also proposed that a legal requirement should be established to grant powers to the NMC to take legal action against any media outlet that refused to comply with the requirements set by the NMC. By way of example, if a publication refused to publish an adjudication issued by the NMC, the Council or the complainant would have the right to apply for a court order compelling compliance from the publication. Any failure by the publication to comply with the court order would be subject to existing legal processes. It is this particular aspect of Mr Finkelstein's proposals that has been the subject of considerable and heated media criticism.

3.9 In his concluding remarks, Mr Finkelstein drew comparisons between his review and this Inquiry. He acknowledged that, although the Independent Media Inquiry was not established in response to phone hacking in Australia, they shared the historical experience of a Press Council that had limited powers as a self-regulatory body and was unable to fully bring the press to account in the public eye. Mr Finkelstein has also speculated, in relation to this Inquiry, that:117

"Looking at the matter from afar, it would not be surprising if statutory regulation were top of the list."

Public and Industry Response to the Finkelstein Report 3.10 It would be an understatement to observe that Mr Finkelstein's recommendations have not gone unchallenged by the Australian press. Rather, the Report has led to a wide-ranging and, at times, heated debate as to the nature of press freedom in Australia.118 News Limited's Chief Executive, Kim Williams, called the Independent Media Inquiry's report "too draconian" and argued that there was little value in replacing the existing Australian Press Council (APC) with the NMC as proposed by Mr Finkelstein.119 Mr Williams went further and, speaking at the Pacific Area Newspaper Publishers' Association forum in Sydney, suggested that the Independent Media Inquiry was established by the minority Australian Labor Party Government primarily to attack News Limited, as a direct response to the coverage the Government was receiving in his company's newspapers.120

3.11 Bob Cronin, group editor-in-chief of West Australian Newspapers, also expressed his opposition to Mr Finkelstein's proposals. He heavily criticised the element of increased oversight of the new Council, as well as the powers of a Government-appointed regulator to control what the media was able to publish. He argued that the proposals were:121

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"…the most outrageous assault on our democracy in the history of the media."

3.12 A different perspective was provided by the Chair of the current APC, Professor Julian Disney, who has continued to argue for the improvement of resources available to the APC to ensure that it was able to fulfil its complaints-handling responsibilities. He stated that:122

"…resources are hopelessly inadequate and they were even before our number of complaints doubled so it is really just to carry out the responsibilities that we are meant to have and that people expect us to do."

3.13 In this respect, Professor Disney agreed with many of the central recommendations of Mr

Finkelstein's report which, he suggested, clearly identified the fundamental flaws in the current system of complaints handling through the APC. However, Professor Disney has strongly disagreed with the two particular elements of Mr Finkelstein's proposals.123 He also drew attention to the absence of any coverage by local newspapers of the APC's opinions of

Mr Finkelstein's report.124 He stated that no Sydney or Melbourne paper had reported the views of the APC, despite the body being the main focus of the report, or their response to the proposals. He argued that this was a striking example of the lack of balanced coverage that existed in the Australian press.

3.14 Some commentators have chosen not to focus on the detail of the proposals but have instead considered how the recommendations might be applied in practice, particularly as that Mr

Finkelstein concluded the NMC should not be established by statute. Echoing the views of a number of Australian commentators, the former financial journalist Jim Parker, who currently writes for the respected Australian media blog, The Failed Estate,125 argued that, without a statutory backdrop, the powers of the proposed NMC would be without effect.126

Australian Convergence Review 3.15 The Convergence Review was established in early 2011 by the Australian Government to examine the current system of media regulation in the light of the challenges posed by the conversion of services and the proliferation of media platforms. Specifically, the Convergence

Review sought to establish whether a single model could be applied across the media.

3.16 This review was led by the Convergence Review Committee, chaired by Glen Boreham, former

Managing Director of IBM Australia and New Zealand.127 The Committee was also tasked with looking at how the recommendations of Mr Finkelstein's Independent Media Inquiry might be incorporated into media regulation.128 The Committee reported to the Minister for

Broadband, Communications and the Digital Economy, Senator Stephen Conroy, on 30 March

3.17 The Convergence Review Committee recommended that any media title, regardless of the platform on which their content was delivered, should be subjected to certain restrictions by a single regulator.129 In this respect, the Committee proposed that the licensing of broadcasting services should cease, and the regulation of the media should be undertaken by a single statutory body which would replace the existing Australian Communications and Media Authority (ACMA). The new regulator would be responsible for any media enterprise, across all platforms, defined as 'content service enterprises'; this means organisations that:130

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"…have control over the professional content they deliver; have a large number of Australian users of that content; and have a high level of revenue derived from supply that professional content to Australians."

3.18 In this regard, the Convergence Review recommended that thresholds should be defined in relation to the annual revenue of a concern, as well as the number of readers (or 'hits') any media title attracts within the Australian market.131 By setting these thresholds, Australia's 15 largest media companies would be subject to regulation by the new body. Ms Fielden noted in her evidence to the Inquiry that online operator, Google, would be exempt from this definition, despite the company's reach within the Australian media market. This was due to the stipulation that saw Google's revenue understood in terms of professionally produced material, rather than as a content service enterprise.132

3.19 The Committee's proposals did not, however, take forward the recommendation of the Independent Media Inquiry to establish the new News Media Council. Rather, it proposed an industry-led body for maintaining news standards across all media and communications, in the stead of the Government-appointed regulator proposed by Mr Finkelstein. This was in addition to the recommendation for a statutory regulator to replace the ACMA.

3.20 At the time of writing, the Australian Government was still considering the recommendations of both Committees. However, whatever the eventual Government response, it will no doubt alter the regulatory landscape of Australia in relation to the convergence of print, broadcast and online media.

Public and Industry Response to the Convergence Review 3.21 There has been a mixed response from the industry to the recommendations of the Convergence Review. Although these recommendations have not generated the same levels of controversy and debate as those put forward by Mr Finkelstein, a number of commentators saw the proposals as part of a continued, and in some cases deliberate, erosion of the freedom of the press.133 In her evidence, Ms Fielden drew the attention of the Inquiry to the response of some parts of the Australian press, which have argued that the Convergence Review was purposefully established in order to regulate the fifteen companies which would fall under the definition of 'content service enterprises', and has been otherwise unconcerned with other areas of media regulation that ought to have been considered more fully by the review. Ms Fielden disputed the validity of this assessment of the Convergence Review.134

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3.22 Ms Fielden also told the Inquiry of the recent changes implemented to improve the function and practice of the Australian Press Council (APC), introduced in response both to the

Convergence Review and the allegations of wrongdoing, in particular the allegations of phone hacking that led to the establishment of this Inquiry. She said that the Council had actively responded to the calls for reform of press regulation, and had proactively sought to consult the Australian public in order to determine how best to hold the press to account. This had led the APC consciously to shift its focus of activity to the maintenance and improvement of press standards, ensuring the fair balance of the Journalists' Code and the mediation of complaints.

The APC had appointed an advisory board tasked with monitoring the coverage by news media of issues which were likely to give rise to a substantial number of complaints.135

New Zealand Law Commission Review 3.23 The New Zealand Law Commission Review examined the legal and regulatory environment in which the media operated in New Zealand and, specifically, the privileges that existed for print media and whether these should be extended to their online equivalents. Such privileges included legal rights to the protection of sources and others relating to court proceedings.

The Review tried to set a framework which defined who should benefit from these privileges and how. The Terms of Reference were to examine the following questions:136

"how to define 'news media' for the purposes of the law; whether, and to what extent, the jurisdiction of the Broadcasting Standards Authority and/or the Press Council should be extended to cover currently unregulated news media and, if so, what legislative changes would be required to achieve this end, and; whether the existing criminal and civil remedies for wrongs such as defamation, harassment, breach of confidence and privacy are effective in the new media environment and, if not, whether alternative remedies may be available."

3.24 The New Zealand Law Commission provided a list of preliminary proposals, published in

December 2011, and has since invited submissions in relation to these proposals. The proposals included the suggestion for a statutory definition of 'news media' (to include new media), specifically for the purposes of defining which publications should be entitled to the rights of the legal privileges and exemptions. The Review also proposed the establishment of a new independent regulator, responsible for all news media, regardless of the format or delivery platform. In relation to the existing civil remedies for victims of mistreatment by the press or other media, the Review proposed the creation of a Communications Tribunal, which would handle complaints in the context of the changing publishing environment.

3.25 The Law Commission's preliminary Report was published to encourage wider public debate, as well as to generate feedback on the scale and scope of initial solutions. By way of example, the Law Commission produced two options, for consideration by the public and stakeholders, as to whether membership of the new body should be enforced by statute or remain voluntary. The consultation period ran from December 2011 to March 2012.137 The paper and accompanying proposals are currently being considered by the New Zealand Government which, similarly to the Australian Convergence Review, is due to report in Autumn 2012.138

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Concluding remarks 3.26 The alternative models of press regulation, as well as the other recent international reviews, have provided helpful examples of the different possible solutions for this Inquiry to consider. It is possible, however, to argue that there has been no compelling evidence to demonstrate that any of these models, or combinations of them, would function better than any others.

3.27 It is clear, however, that all the structures considered in this Chapter are embedded in the social, cultural and historical functions of the media in each country, and are not necessarily ideal structures to apply to the UK. It is also worth noting how many countries are currently considering the impact of the evolution of digital platforms, as we have seen in Scandinavia and further afield in Australia and New Zealand. This development of online media content, as well as methods of delivery, has brought the regulation of print media into a whole new context. Although some of the practices revealed by the Inquiry may not be faced by other countries, the overarching questions being addressed are not unique; but neither is it possible to pretend that any other system, inquiry or review has successfully developed an ideal solution to the problems being faced.

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Techniques of Regulation 1.1 Part K, Chapter 1 sets out the criteria that I consider need to be met by any 'new more

effective regulatory regime'. Chapters 2-4 look at specific proposals that have been made for a new approach to regulation of press standards, and Chapter 5 looks at the way that other countries deal with press standards. This Chapter starts from a rather different position and looks at the theoretical framework for regulation. This does not purport to be a definitive text on the theory of regulation; rather it is a brief look at the different ways in which regulation can be achieved and the circumstances that are conducive to different approaches to regulation being effective.

  1. Regulatory options 2.1 The Terms of Reference talk about making recommendations for a new and more effective

policy and regulatory regime and that it precisely what this Report aims to do. There has been a lot of talk in the media and elsewhere about the regulation of the press versus self-regulation of the press as though that were a binary choice. That is not an interpretation that I accept. It seems to me that there is a wide spectrum of action that can be undertaken, and that, far from a binary option there is a continuum from no regulation at all, through to full statutory regulation: a solution can be accessed at any one of a number of points on that range. This chapter considers, from a theoretical perspective, the various policy and regulatory tools that are available for use and looks at the pros and cons of each, though I must reiterate that this is a partial review of the options, not a thorough analysis.

2.2 At the opening of the Inquiry a number of briefing sessions were held that dealt with the

factual background against which the issues under consideration by the Inquiry should be seen. At one of those briefings Donald McCrae, an expert in regulatory theory, introduced a model for thinking about regulatory propositions.1 Specifically, he categorised the potential approaches to changing behaviour under four headings: engage, enable, encourage and exemplify. At the same time the Inquiry heard from a number of regulators about different regulatory regimes and about the different regulatory regimes for the press and the media in other countries.

2.3 This Chapter starts by considering different ways of securing behavioural outcomes, drawing

on examples where that is helpful. This is a technical consideration of potential models and how they might operate.

2.4 The Department for Business Innovation and Skills (BIS) sets out general principles of regulation,

which requires that any regulation and enforcement framework should be capable of being implemented in a fashion which is demonstrably proportionate, accountable, consistent, transparent, and targeted.2

2.5 There are various ways of categorising regulatory models. One way of doing so is to look at the level of external intervention. This can be cut at almost any level of specificity but we K 1 Donald McCrae presentation, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Donald-Macrae1.ppt BIS, Principles of Regulation, http://www.bis.gov.uk/policies/bre/principles-of-regulation have identified four levels which we go on to consider in more detail, namely no regulation, self-regulation, co-regulation and, finally, statutory regulation.

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No regulation 2.6 This concept needs some clarification. For most people 'no regulation' would mean no specific regulation or laws relating to the press. However at present the media are bound by the law as it applies to the rest of us. This includes many laws that could impact on the sorts of behaviour in the press that have been complained of in evidence to the Inquiry, such as Regulation of Investigatory Powers Act 2000 (RIPA), under which the prosecutions for phone hacking have been made, the Bribery Act 2010, the Fraud Act 2006, the Protection from Harassment Act 1997 etc. Critically, the Human Rights Act 1998 provides rights both to a private life and to freedom of expression. There are additional laws relating to press reporting on criminal cases. The media are also subject to the Data Protection Act 1998, although there is a specific public interest protection under section 32 for processing data with a view to publication for journalistic purposes.

2.7 So the concept of 'no regulation' should not necessarily be considered to mean that journalists would be able to operate unfettered by legal constraints.

Pros and cons 2.8 The principles of better regulation dictate that regulation should be 'proportionate' – i.e. no more than is required to achieve the policy objective. Clearly if it is possible to deliver the desired outcome in the absence of any regulation then no regulation should be introduced. In practice this means that 'no regulation' is an appropriate response when the market is capable of delivering the required outcome without intervention. The very fact that this Inquiry had to be established, in the wake of discoveries of serious wrongdoing and criminality, in at least one national newspaper, is sufficient demonstration that the market alone will not provide public protection from criminal acts which Parliament and the public have regarded with abhorrence, and which even those responsible for committing them have not sought to justify in this Inquiry.

2.9 Furthermore, the law has to be accessible for if there is limited prospect of detecting criminal behaviour or being able to afford civil proceedings, to that extent, there is no sanction (or, in the absence of ethical standards) disincentive to comply with the law when to do otherwise has potential advantages. Thus, if there is a good prospect of being able, say, to intercept mobile phone communications without being caught (because of the care taken to avoid alerting the victim and, in the absence of a victim, law enforcement will not be engaged) and the advantages to be obtained from listening to intercepted messages are sufficiently beneficial, the fact that others in the market do not engage in that behaviour will not necessarily prevent it.

Self regulation 2.10 There are many different self-regulatory tools. This section considers self regulation in the purest sense, where activity is entirely voluntary, where there is no constraint or oversight from outside of those self-regulating as to the standards that are set or monitoring or enforcement of compliance with them. There are a number of tools that could potentially fall K within the definition of self-regulation.

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Internal governance 2.11 The first is referred to as 'internal governance'; these are the methods that organisations use

to establish their own cultures and control behaviour within their own organisations. What happens inside a company is a matter of culture, example, practice and control, and these internal governance practices and procedures are likely to have the most significant impact on the ethical standards applied by their employees and contractors.

2.12 The Inquiry has been provided with extensive evidence from newspapers about systems that

they have in place to ensure compliance with ethical standards. Internal governance is likely to be very effective in circumstances where it is genuinely in the interest of the organisation to secure compliance with the standards. It is less likely to be effective if there are competing incentives (for example if the financial benefits of breaching the standards are significant). To be effective, internal governance systems must be consistent, must be seen to be enforced and must be seen to be exemplified throughout the organisation.

2.13 The Inquiry has also seen evidence3 of many excellent systems of internal governance in

place in both national and regional newspapers. It is noticeable that the formal governance arrangements in the News of the World, prior to its closure, were effectively the same as those for other titles in the News International Group, which are themselves similar to the best examples of internal governance arrangements that we have seen. I draw two lessons from this. First, internal governance can have an important role to play but, second, formal internal governance procedures are not in themselves sufficient. It should also be noted that, whereas the detail of day to day governance processes are very much a matter for companies individually, governance is not itself a purely self-regulatory matter as some elements of corporate governance are dictated by company law, or stock market listing requirements. The extent to which these rules impact on companies running newspapers is, of course, affected by the different ownership structures which they enjoy.

Industry standards 2.14 The second purely self-regulatory tool is industry standards. With a purely self-regulatory

industry standards model there is no compulsion for anyone to be a member, no oversight from outside the membership of the standards set or enforcement procedures, and no fallback either where relevant bodies are not members or where the self regulatory standards are not enforced. This is the model currently in place with the Press Complaints Commission.

2.15 It is worth noting that many professional bodies often regarded as 'self-regulatory' (such as

the General Medical Council, the Solicitors' Regulatory Authority etc) are not self-regulatory at all. Their powers spring from legislation that restricts the practice of the profession and gives the bodies the right to prevent those who fall sufficiently short of professional standards from practising the profession. Similarly, whilst the Royal Institute of British Architects (RIBA), which was suggested as a model of self-regulation4 at one of the seminars held by the Inquiry, is a self regulatory body and architects do not have to belong to it, they do have to be registered with the Architects Registration Board (ARB) in order to use the term architect and the ARB issues a code of professional practice and can take action against those who fail to comply. For that reason, these models of professional regulation are not considered here.

2.16 There are many examples of industry groups who have come together to agree codes of K practice that all are willing to adhere to. These codes are likely to require members to follow 3 Part C, Chapter 2 http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Presentation-by-Eve-Salomon-PDF-23.4KB1.pdf particular courses of action; in the context of this report this is most relevant where the action is aimed at consumer protection. Such bodies may produce a kitemark or similar badge which is intended to represent to the public that the members who are able to display the kitemark adhere to an appropriately high standard of behaviour in the course of their work, whatever that may be.

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2.17 It is generally accepted that industry self-regulation is often more flexible and less costly for both business and consumers than direct government involvement. There are two principal reasons for this. Industry experts can be expected better to understand their own processes and capabilities and also have better insight into consumer needs and responses to their particular products or services than an outside or external regulator would. Self-regulation also allows industry to adapt and react to technological and market change, and consumer behaviour, at a speed that formal regulation can rarely match. If effective, this should result in better outcomes for both consumers and the industry.

2.18 However, for self-regulation to be effective there needs to be an appropriate alignment of incentives to make it so. In practice these incentives tend to be the existence of a market need, and the absence of legal rules or regulation to address that need, coupled with a fear that the imposition of such rules would have a damaging effect on industry players. Ofcom research has found that most self-regulatory schemes have been established, at least in part, in response to a perceived threat of state intervention.5 The PCC, established in the wake of the Calcutt Report in 1990, as the now notorious 'last drink in the last chance saloon' is no exception.

2.19 For incentives to align, more is needed than simply the existence of a problem and a threat of state intervention. Self-regulation is more likely to be effective in those markets where:6 This obligation of confidence is owed by the Inquiry team to any recipient of the letter and by that recipient to me, as Chairman of the Inquiry: see para. 14(1) of the Inquiry Rules 2006

(a) "companies recognise that their future viability depends not only on their relationship with their current customers and shareholders, but also they operate in a environment where they have to act responsibly within the societies in which they operate; and; (b) companies recognise and acknowledge the identified problems which may cause harm or market failure that impede citizens or consumers; and; (c) companies, individually and collectively, acknowledge the need to reduce the identified harm or market failure, since this will improve the ability of those companies to determine the interests of citizens or consumers and, potentially, society as a whole."

A fourth criterion could be added:

(d) addressing the perceived harm is not in direct conflict with providing the desired service to the companies' consumers."

2.20 It is worth exploring this concept a little further. Most self regulatory regimes are aimed at dealing with the impact that the relevant organisations have on those who use their services, or at least where the consumers of their services would be expected to disapprove of the impact concerned. Examples include Association of British Travel Agents (ABTA) or other kite mark institutions, whose aim is to provide a guarantee of quality to consumers. It is in the interests of all members of a kitemark group to ensure that the standards promised by the

K 5 http://stakeholders.ofcom.org.uk/binaries/consultations/coregulation/summary/condoc.pdf para 2.24, http://stakeholders.ofcom.org.uk/binaries/consultations/coregulation/summary/condoc.pdf

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mark are upheld consistently because failure to do so will damage consumer trust in their own product.

2.21 A different example is the Internet Watch Foundation (IWF) where Internet Service Providers

(ISPs) co-operate not only because the majority of their customers do not themselves want to be exposed to images of child abuse, but also because it is very much in their interests not to be seen to be providing access to such images to those who do want to see them.

2.22 The potential for successful self regulation is reduced where the harm complained of is to a

third party and does not obviously damage the interests of the companies concerned or their consumers. Obvious examples of this would be the use of child labour, or casual dumping of waste leading to environmental damage. Such activities might lead to higher profits and cheaper products, so pleasing both producers and consumers. The fact that they have a wider social cost that is not generally considered acceptable may be sufficient to prevent this type of behaviour but, equally, it may not be if the relevant company believes that it can achieve its ends (albeit causing the harm) in secret and without being detected.

2.23 It might be argued that public concern over the wider social costs would be enough to lead

to a successful self regulatory outcome, but the continued sale in the UK of products that are made by child labour, or the production of which leads to environmental degradation in its country of production, whilst strict laws in the UK prevent such things from happening here, is testament to the difficulty of achieving pure self-regulatory outcomes that might be in the wider public interest, when direct consumer interests do not align with the wider public interest.

2.24 A less extreme example might be online copyright infringement. The growth of the internet

has led to widespread habits of sharing music and film (and increasingly books and magazines) online through informal, unlawful, channels rather than buying them from legitimate sites. This is breach of copyright and deprives the creators and the creative industries of the legitimate revenue that they need to reinvest in the production of new content. The Government looked for self-regulation among ISPs to find ways of preventing internet users from engaging in these unlawful activities. However, the harm does not affect ISPs, and providing a solution was likely to be unpopular with their consumers who are precisely the people engaging in, and (in their eyes) benefiting from, the unlawful behaviour. In the absence of a self regulatory solution, Parliament passed legislation requiring action from ISPs because they believed the wider public interest required a solution to be put in place even though neither the service providers nor their consumers had any incentive to co-operate.

2.25 The relevance of this final point to the situation with the press is obvious. The Inquiry has

heard evidence that the PCC is good at some things, such as mediation, and not at all effective in relation to others.7 Similarly we have heard evidence from editors8 that the continued purchase of newspapers by the public is proof that the public is satisfied with the standards that obtain. We have also heard substantial evidence of the harm that newspaper behaviour has done to many individuals: these include some who have put themselves in the public eye deliberately, some who are there incidentally because of a famous friend or relative, some who find themselves well known because of terrible things that happen to them and yet others who become the subject of media interest purely by freakish chance. None of this is about harm done to readers, that is to say the people whose purchasing decisions apparently tell the editors that they are making the right call; it is all about harm to third parties who

K have no voice in that transaction.7 p3, http://www.levesoninquiry.org.uk/wp-content/uploads/2012/07/Witness-Statement-of-Professor-Susan-Mendus.pdf Part J, Chapter 4 Part F, Chapter 6

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2.26 The Inquiry has had representations from members of the public complaining more generally about the content of newspapers; the complaints include a diverse range of press activities such as the sexual objectification of women, the vilification of migrants and the abuse of the disabled.9 These cases also raise questions of a wider public interest than purely what any given portion of the public might like to read about and therefore whether consumers are getting fair treatment. Harm of this sort is less susceptible to effective self-regulation than harm as part of the producer/consumer contract.

2.27 Ofcom also argues that self regulation is more likely to be effective where citizens or consumers and all other individuals share common views as to the merits of regulating the activities of companies to achieve a particular social objective. The vigorous debate that has raged over these issues as the Inquiry has gone about its business suggests that this criterion is not met in relation to press regulation, in particular as it applies to privacy.

2.28 Finally, self-regulation will be more able to succeed in a market environment with active participation by the industry. In those circumstances, cohesiveness is most likely to administer effective self-regulation as industry participants are more likely to commit financial resources, consult with stakeholders and monitor the effectiveness of self-regulation. This, at least in part, does appear to be the case in relation to the press, with the market having been able to sustain the existing funding mechanism for the PCC (through PressBoF) since its creation in 1990.

2.29 Self-regulatory industry bodies tend to have few sanctions other than expulsion from the body. Levels of monitoring of compliance and enforcement vary. There are various options as to how compliance could be monitored. One option is simply rely on members to comply with the relevant standards. A second would be to require self declaration of compliance and a third would be to have independent verification of compliance and/or enforcement mechanisms. The PCC runs a reactive approach, relying for the most part on members to police their own compliance, with a reactive, complaints-based, enforcement mechanism and an Independent Review which can consider appeals concerned with the PCC process (but not on the substance or merits of the complaint or the adjudication).

User regulation 2.30 A further form of self-regulation is regulation by the user community. Many online services are seen to be self-policing. An obvious example is Ebay, in which users rate the service they have had from members either as buyers or sellers in order to enable users to buy and sell with trust. Similarly the operators of other online sites invite users to self-police by reporting breaches of terms and conditions, with the service provider which then takes action when notified. This mechanism can work well where it is in the interests of users to provide feedback on inappropriate behaviour, and where there are quick and simple mechanisms to do so. It is thus a relatively good tool in some online environments but less likely to be effective in the physical world.

Co-regulation 2.31 Co-regulation means any form of self-regulation with some sort of external, independent, incentives, oversight or form of backstop. There are many different ways in which the backstop can be provided and they will have different impacts. These can include recognition K Part F, Chapter 6, Section 8 of a self-regulatory body by Government, law or a statutory regulator; approval of codes by

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Government or a statutory regulator; and compulsory membership or funding arrangements.

Variations on each of these models exist in different sectors in the UK and elsewhere and the model is almost infinitely variable. The basic variations are explored.

Recognition of self regulation/regulatory backstop 2.32 The circumstances in which incentives might align to make self regulation effective are described above. A further incentive for co-operation with self-regulation can be provided in the form of recognition by the courts or a regulator of the process of self-regulation.

2.33 The Advertising Standards Agency (ASA) is an example of co-regulation, where the agency act as the regulator in relation to both print and broadcasting advertising. In the case of print advertising, the Office of Fair Trading (OFT) has statutory powers to deal with misleading advertising and in the case of broadcast advertising, Ofcom has statutory powers through its licensing regime. However, both statutory regulators recognise the role of the ASA and only take action in relation to advertising issues when referred to them by the ASA. Specifically, the

Control of Misleading Advertisements Regulations 1988 require the OFT, before considering a complaint about the misleading nature of an advertisement to satisfy itself that 'such established means as the Director may consider appropriate' have been used and have not dealt adequately with the complaint and that he should have regard to the desirability of encouraging the control, by self-regulatory bodies, of advertisements. The ASA does not, therefore, have statutory recognition itself, but the statute sets the framework within which the ASA can be given the space by the OFT to operate.

2.34 This sort of approach has many advantages. First, it brings all the advantages of self regulation

(efficient regulation, speed of response, flexibility in the light of social and technological change). Second, it provides an incentive for industry to comply with the standards and rulings of the self-regulatory body since the alternative is to face a regulatory process with the regulator. Third, it provides an incentive for industry players to ensure that the self-regulatory body is credible, since the regulator can only accept the rulings of the self-regulatory body if that body deals satisfactorily with complaints. Finally, it provides a backstop in the case of those parts of the industry which might chose not to comply with the standards or rulings of the self-regulatory body but who are, none the less, subject to the law and to the jurisdiction of the regulator.

2.35 On the other hand, this approach does require the basic ground rules to be set in legislation.

It requires the existence of a regulator capable of acting as a backstop and it leaves open the possibility of conflict between the regulator and any self-regulatory body over what standards should apply, within the legislative framework. A basic framework approach of this sort could allow for two or more self-regulatory bodies running different codes or standards as long as the regulator was content to recognise both, but it would also allow the regulator to favour one self-regulatory body over another.

2.36 In practice, it may be felt that it is easier to arrive at an ASA model where a strong industry self-regulatory body already exists, but requires some legislative underpinning in order to ensure appropriate standards are set and maintained without exception across the industry, than in the case where a new self-regulatory body would have to be called into being. In the absence of a credible self-regulatory body, the regulator might have to develop codes and K standards itself, in order to provide appropriate predictability, consistency and transparency in the market. In the online copyright infringement example mentioned above, the legislation requires Ofcom to seek to approve an industry code, but provides that in the absence of an appropriate industry code Ofcom should impose a code of its own that meets the requirements of the statute. In that model, a structure which appears, on the face of it, to provide a co-regulatory approach in practice (depending on the circumstances) can end up delivering a statutory regulatory outcome.

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2.37 It is possible to imagine a lighter touch regime than the ASA version. For example, the courts could be required or encouraged to consider compliance with the standards of a self regulatory body as a sufficient defence against a relevant complaint. For example, if a regulatory body established a process for considering the existence of a public interest before engaging in activity that might otherwise constitute a breach of privacy then the courts might consider that compliance with that process demonstrated (at least prima facie) sufficient grounds to give rise to reasonable view that the public interest was engaged and the intrusion was legitimate.

2.38 On the one hand, a co-regulatory model can encompass anything that could be done under self-regulation whilst adding an element of compulsion to make effective enforcement possible. On the other hand, it can encompass anything that could be done by a statutory regulator but put relevant decision making in the hands of those closest to the industry, and rigorously separate from Government, to seek to gain the benefits of self-regulation without losing the benefits of statutory backing. This is a model that is much in use in the UK. Most professional regulation is co-regulation by this definition where the practice of the profession (law, medicine, architecture etc) is protected by law and the professional bodies that, police it do so with the statutory backing that allows them to rescind or refuse a license to practise. Advertising is a well known example of successful co-regulation. Others include ATVOD, PhonePayPlus and the ACAS Code of Practice on Disciplinary and Grievance Procedures.

Statutory regulation 2.39 In this Report a reference to statutory regulation means a system where the scope and coverage of the regulation is set by statute. Again, there is a broad spectrum. At one end is the situation where the full detail of the regulation (in fact, law) is set by statute with enforcement by the police or otherwise through the courts. At the next level, is the regime where most of the detail of the regulation is set by statute, but with a regulator acting primarily as an enforcement body: many consumer protection regulations, with OFT regulating, fall into this category. Then there is the case where the regulator is established by statute and given objectives to meet, along with the tools with which to do so, leaving the regulator to set the detail of the regulations, to make regulatory decisions and then to enforce them: most sectoral regulators such as Ofcom, Ofgem, and Ofwat fall into this category. In some models the regulations set by the regulator might themselves need to be approved by Parliament. In others the regulator is free to manage the regulatory regime without external oversight but subject to appeal though an appropriate judicial body.

2.40 Statutory regulation, with the legitimacy of Parliamentary debate and approval, represents the will of the people to impose certain standards of behaviour. Statutory regulation is primarily used to address circumstances where horizontal law is insufficiently precise to deliver the outcomes required and, where the nature of the problem to be resolved is such that the operation of the market is not likely to deliver the solution. This is the case, for example, where there is a high degree of concentration within an industry, leading to the possibility of anti-competitive behaviour with negative impacts for consumers. It is also unlikely that the market alone will provide appropriate consumer protection where companies take a short- K term view of the factors influencing their viability and are focused predominantly on the interest of their current customers and shareholders.

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2.41 Statutory regulation is an effective way of dealing with issues relating to the impact on third parties of activities outside the commercial relationship involved. Legislation can be used to require parties to take into account broader social or public interest issues that would not otherwise form a part of their commercial consideration of their interest. To express that in more economic language, this is where external costs arising from the activities of the companies are borne predominantly by sections of the society other than by the customers of those companies and the companies themselves.

  1. Regulatory tools 3.1 The previous section considers different ways in which regulation can be delivered. This section aims to consider the types of tools that can be used. Most of these tools could form part of any regulatory tool kit whether it was self-regulatory, co-regulatory or statutory regulation.

3.2 The purpose of regulation is to deliver an outcome that society wants. However, regulation is not the only way to influence or change behaviour. I thus turn to the categorisation identified by Mr McCrae of the different ways in which changes to behaviour can be encouraged and influenced, namely: enabling, engaging, exemplifying and encouraging.

Figure K6.1

  • Remove barriers

Approach evolves • Give information as attitudes and • Provide facilities behaviours change • Provide viable alternatives over time • Educate/train/provide skills

  • Provide capacity Enable
  • Tax system • Community action
  • Expenditure – grants • Co-production
  • Reward schemes • Deliberative fora
  • Recognition/ Encourage Catalyse Engage • Personal contacts/ social pressure – Is the package enough enthusiasts to break a habit and league tables kick start change?
  • Media campaigns/
  • Penalties, fines & opinion formers enforcement action • Use Networks

Exemplify • Leading by example • Achieving consistency in policies

Source: Donald McCrae, slide 3, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/

Donald-Macrae1.ppt

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Enable 3.3 This includes removing barriers (of whatever sort) to the desired behaviour, giving information and providing viable alternatives, including through capacity building, skills, training and facilities. Two different aspects of press culture have been raised with the Inquiry: on the one hand, there is behaviour that breaks the law or is, in some other way, in breach of recognised, accepted standards (which, in shorthand, I refer to as unethical), and on the other hand, there is concern that the press is not sufficiently engaged in genuine investigative work. The Inquiry has not heard any evidence to suggest that there are barriers preventing lawful or ethical behaviour, as opposed to pressures encouraging unethical behaviour. The Inquiry has, however, heard arguments10 that there are barriers in place that make it difficult for the press to pursue legitimate investigatory journalism, in particular current libel laws, the new Bribery Act and uncertainty over the interpretation of the public interest.

3.4 There is no doubt that newspapers are largely operating in an increasingly challenging economic environment, with the need to compete with 24 hour news and the internet. Newspapers are now required not only to fill their printed pages on a daily (or weekly) basis but also to provide constantly updated content on websites and they do this with reduced numbers of journalists. In this context, issues around resourcing and training of journalists are clearly highly relevant.

Engage 3.5 Another route to changing behaviour is to leverage the enthusiasm and commitment of interested parties. This involves community action, media, opinion formers and using networks. There is clearly substantial interest from MPs, the public, academics and pressure groups in the issues of press culture and ethics.

3.6 The Inquiry has seen no evidence of a lack of engagement on the part of those outside of the media. On the other hand the partial approach to reporting in the press either the extent (or even the existence) of problems with press ethics has been exemplified by reporting of the phone-hacking scandal from the very beginning. It is widely, and rightly, recognised that there would not have been the public concentration on these issues of press culture and ethics had not an investigative journalist, (Nick Davies), with a support of national newspaper (The Guardian), not pursued phone-hacking determinedly. On the other side of the scale, the rest of the press, together with the PCC, were keen to paint the Mulcaire case as that of one rogue reporter.11

3.7 The nature of the problems identified by the Inquiry suggest that the tools of engagement, whilst potentially complementary, are unlikely to be sufficient by themselves to change behaviour.10 s17(3) of the Inquiries Act 2005 p21, lines 14-21, Nick Davies, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Transcript-of- Afternoon-Hearing-29-November-2011.pdf p2, Alan Rusbridger, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/11/Alan-Rushbridger.pdf

K 11 It is also possible to point to the way in which the Inquiry has been reported, in particular relating to the different arguments for alternatives to improved self regulation along the lines proposed by PressBoF. The press is, of course, entitled to be partisan but the extent to which there has been any balanced discussion or analysis of the arguments is, at least, open to debate

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Exemplify 3.8 Exemplification includes leading by example and achieving consistency in policies. The Inquiry has heard many references to examples of excellent journalism and adherence to excellent ethical standards within the British press. The Inquiry has, however, heard fewer instances of use of such examples of excellence within the industry to promote ethical behaviour.

The PCC receives complaints and, unless mediated, produces adjudications on them which lead to reminders to papers and journalists of the nature of the code and the production of additional guidance on good behaviour.

3.9 The Inquiry has been told of many examples of excellent investigative journalism, ethically conducted, being lauded within the industry: examples include Thalidomide, phone hacking and MPs expenses. However, on the other hand there appears to be no particular censure for unethical behaviour: for example, even after the decision of Eady J awarding damages for breach of privacy to Max Mosley, in which the activities of the chief reporter were heavily criticised, the News of the World (NoTW) put that story forward for the title of scoop of the year.12 The NoTW did not win (the Times won the title that year) but the story suggests that

NoTW did not expect accuracy or ethical standards to be a material factor in deciding the winner. Again, the nature of the problems the Inquiry has heard suggest that, whilst best practice will certainly have a role to play, it is unlikely to be sufficient to address all concerns.

Encourage 3.10 In the context of this list of mechanisms to change behaviour, 'encourage' includes all regulatory measures, including through the tax system, transparency requirements, penalties and enforcement measures and positive approaches such as reward schemes and targeted grants.

3.11 Some of these tools are rewards for good behaviour, others sanctions for bad. Some might be seen to work both ways. Public money can be provided either to fully fund activity seen as desirable (e.g. the BBC) or in other ways. Examples from the broadcasting sector include Channel 4, which is publicly owned, and has historically been funded both by its own commercial income and by subsidies levied from other public service broadcasters and other terrestrial broadcasters who have access to spectrum to broadcast and in return have to meet public service broadcasting requirements.

3.12 There is less tradition of the state funding the press, though many local authorities publish newsletters which are distributed to the local population and which contain council news, sometimes other local news and advertising. All books and newspapers are exempt from VAT, whilst online publications are not. In addition Royal Mail operates a specific tariff (presstream) for distribution of newspapers and magazines.

3.13 Governments can provide public money for grants to encourage all sorts of behaviour, from grants for film production to the car scrappage payments, from the solar power feed-in tariff to help with starting up small businesses. Grants and other payments can be used to encourage behaviour change by citizens, consumers or businesses of any size.

K pp55-56, lines 15-1, Colin Myler, http://www.levesoninquiry.org.uk/wp-content/uploads/2011/12/Transcript-of- Afternoon-Hearing-14-December-2011.pdf

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3.14 Newspapers and magazines are substantial recipients of public subsidies in some countries. In France, for example, the press received €20m in subsidies in 2008,13 with all forms of aid to the press estimated at €1.2bn.14 These subsidies take the form of direct payments for technological improvements, subsidised travel for reporters, reduced mailing rates for newspapers, tax advantages etc. Some subsidies are direct grants, others are repayable loans. In addition a new scheme was started in 2010 to provide free newspapers to young people (one free copy a week; distribution is also paid for by the Government); this is an attempt to persuade the new generation to develop the habit of reading newspapers.

3.15 Sweden also provides direct subsidies to the press (around €61m in 2009),15 as do Denmark (around €44m in 2008)16 and Norway (around €35-40m in 2005)17 both directly and in the form of tax exemptions.

3.16 The tax system is one way of incentivising desired behaviour. In general, in recent decades UK Governments have taken the view that the corporate tax system should by used in this way only to address horizontal market failures, e.g. in relation to R&D. There are exceptions (the tax relief for film is one example) but these are not widespread and there is little appetite to increase them. The Inquiry has heard suggestions that the VAT exemption could be used as a mechanism to encourage compliance with a self-regulatory approach to standards, but there are overwhelming legal problems with that idea.18

3.17 Also under the 'encourage' heading is the wide range of more direct regulatory steps that could be taken. These are addressed below.

Transparency 3.18 Transparency is valuable in a situation where consumers or others need information to take relevant decisions. This could work in two ways. It can take the form of transparency of action (e.g. requiring all stories to run under the byline of a real person; requiring transparency on the sources of quotes, requiring transparency on the method by which any story has been obtained). It can also take the form of transparency of compliance (e.g. requiring visible corrections, publishing accuracy league tables, publishing data on compliance with regulatory standards).

3.19 The advantage of transparency as a tool is that it enhances the effectiveness of the market by reducing information asymmetry and putting consumers in the position of being able to take a judgment on issues that they might otherwise not be aware of. Transparency should not in itself add significantly to regulatory cost, nor does it necessarily require any particular change to the standards set, the point is simply to ensure that compliance, or the lack of it, is visible.

3.20 However, the difficulty of relying on self-regulation, where the harm or costs to be avoided fall to third parties who are not a part of the commercial transaction to be regulated, was identified earlier. Transparency has some advantages in this respect by bringing those external costs to the attention of consumers, but it does not actually address the situation where the consumers have no direct interest in the external costs or harm.

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Complaint Resolution 3.21 Complaint Resolution allows for those, whether consumers or third parties, who consider themselves to have been harmed by an action to seek some form of restitution or redress.

There are various models of complaint resolution. Most start with the complainant putting their case to the company concerned. If the company fails to resolve the complaint to the satisfaction of the complainant then the matter is classed as a dispute and there could be an independent body that would seek to resolve the dispute.

3.22 Currently the PCC acts as a quasi independent dispute resolution body in respect of complaints about press conduct and content, but only where the publisher is a funding member of

PressBoF. There is no independent dispute resolution mechanism for those publications which chose not to be a part of the PCC.

3.23 One widely used model for complaint resolution is the Ombudsman model. Ombudsmen can exist under statute or under voluntary agreement, and they will vary in how they operate and their powers. The Financial Services Ombudsman is a statutory body which has powers to resolve disputes between financial services companies and their customers in respect of a wide variety of products. The role of the ombudsman falls into two parts: first mediation to seek an agreed outcome and second, mediation having failed, determination of the dispute and imposition of a remedy. In the case of the FS Ombudsman the resolution is binding if the consumer accepts it but they can choose to go to court if they wish to.

3.24 More generally Ombudsmen provide remedies which are fair and reasonable in all the circumstances, and are not necessarily bound by a strict interpretation of the law or precedent. In the public sector and in some private schemes their recommendations are not binding but met with nearly total compliance. This is secured by a variety of means whether by law, by contract, by publicity, by a regulator or by the moral force and the standing of the Ombudsman. There is no appeal against Ombudsman decisions, other than Judicial

Review (where applicable) or where schemes (like the Pensions Ombudsman) have an appeal procedure in place.

Incentives 3.25 Many types of incentives are available. The possibility of tax incentives has been considered earlier but tax is a very blunt instrument for changing behaviour. Generally rewards can come in terms of specific benefits or preferential treatment although it is difficult to consider this in the abstract. A number of specific suggestions have been made to the Inquiry in respect of the sorts of incentives that could be used, including: coverage in the ABC circulation figures;

advertisers boycotting publications outside the regulatory regime; enhanced weight being given to public interest arguments in relation to unlawful behaviour; alternative dispute mechanisms to deal cheaply and quickly with libel and defamation cases (as well as other standards breaches) without going to court; and access to pre-publication, public interest advice that could be relied upon in retrospect.

3.26 Some of these would be purely self-regulatory and would rely on the goodwill of parties outside the press (e.g. the advertising industry), some might require legislative change to deliver and others might require the involvement of the courts (which means changes to the law). All of the incentives that have been proposed to the Inquiry are considered fully in Part K K, Chapter 4.

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Penalties 3.27 Penalties for failure to comply can include dissuasive penalties to attempt to prevent non-compliant behaviour occurring (or recurring) and remedial penalties to provide redress and make good the wrong, once the contravention has occurred. Generically, dissuasive penalties can include fines, removal of privileges/rights either as a punishment in its own right or to make it impossible for the perpetrator to repeat the offence (e.g. imprisonment, removal of a licence), additional checks and constraints on behaviour and public disclosure. Remedial penalties can include payment of compensation, and other acts of restitution such as an apology.

3.28 In the press context the Inquiry has heard suggestions for a range of potential penalties in both the dissuasive and remedial categories: these include fines, a regime for requiring journalists to hold a press card, temporary prevention of publication, and publication of corrections with equal prominence to the offending article.

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conclusions and recommendations for future regulation of the press 1. Introduction 1.1 Earlier parts of this Report have set out in considerable detail the systems currently in place which seek to address press standards in an attempt to support high quality journalism while at the same time protecting the rights and interests of individuals. This has included examining the formal systems in place within individual titles, the informal culture and practices within titles (and across the press) and the industry agreed standards as embodied in the Editors'

Code of Practice which form the standard for the Press Complaints Commission (PCC) when giving advice or handling complaints. Throughout, I have drawn conclusions on the adequacy and effectiveness of those systems. 1.2 It is important to make the point, yet again, that I recognise that most of the press, most of the time, do meet the high standards that the UK public is entitled to expect. I have explored good practice in the Report,1 looking both at the generic importance of a free press and at examples of good practice across the industry. However, when looking at whether the standards regime in place is adequate, it is important that the analysis takes account not only of what happens most of the time but also, and critically, what the regime allows to happen some of the time. And there can be no doubt that, on occasion, there has been a significant failure of standards within and across parts of the national press. To some extent, these significant failures have been conceded by everyone: I have concluded, however, that they are more widespread than has been universally acknowledged. 1.3 That these failures have included breach of civil rights on a substantial scale is made evident by the civil claims that have already been settled by the News of the World (NoTW) in respect of phone hacking. The reports of the Information Commissioner in 2006 provided prima facie evidence of criminal breach of data protection legislation on behalf of journalists across a number of areas of the national press. And, of course, the police are still investigating a substantial number of suspected criminal offences, not just at the NoTW, but elsewhere in

News International (NI) and in some other titles.2 Arrests have been made covering unlawful interception of communications and payments to public officials. Some suspects have been charged, in particular in relation to conspiracy to intercept communications without lawful authority. I can obviously make no comment on these cases and do not pre judge any of them.

It is, however, appropriate to observe that the fact that such a significant police investigation has resulted in so many arrests and charges so far, at least gives rise to a legitimate cause for concern. 1.4 The criticisms that can be levied against the press on the basis of the evidence that this

Inquiry has heard are set out elsewhere in this Report.3 My conclusions on the effectiveness of the PCC as an industry self-regulator have been dealt with earlier.4 It is abundantly clear from this that current systems of both internal governance in some parts of the press, and industry self-regulation of the press, have not worked and are not working.

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Can the PCC continue to act as regulator? 1.5 In Chapter 1 above, I set out the criteria that I consider need to be met for a regulatory regime to be considered effective. The system operated by the PCC falls short of these criteria on a number of key points. First, it has lost credibility with the public, with politicians and with the press itself. This is not just a view that I have reached, but is shared by Lord Black in his own submission to this Inquiry5 on what the future regulatory regime should look like. On top of that, the departure of Northern and Shell from the system has shown that it is not able to deliver complete coverage, even of the major national newspaper groups.

1.6 The PCC lacks the independence that is critical to building public confidence in a regulator. It has been dominated by the industry, both through the influence of the Press Board of Finance (PressBoF), particularly in relation to appointing the Chair and the press members of the Commission, and through the presence of serving editors in both the Code Committee and on the Commission itself.

1.7 The Editors' Code, whilst widely considered both within and outside the industry as being a good code, provides a set of general requirements. These often contain a measure of uncertainty over how and when they might apply. The development of the Code over the years has achieved a great deal. It can, however, be improved to provide a constructive ethical and legal framework within which journalists should work. In any event, compliance with, and enforcement of, the Code has been inadequate and intermittent.

1.8 The structures and practices of the PCC have constrained it to acting as a mediator in respect of complaints, rather than having any enforcement role that is consistent and effective. The failure to identify any code breaches where a mediated settlement could be reached, or to provide meaningful statistics in relation to complaints brought and how they were resolved, means that there is no authoritative picture of just how often breaches have occurred and where they have occurred. The manifest failures of the PCC to take any steps to address the reports from the Information Commissioner and the discredited investigations and conclusions by the PCC into phone hacking (since abandoned), demonstrate that the PCC, despite calling itself a regulator and referring to self-regulation of the industry, has not acted as regulator of standards as opposed to a reactive case-handler.

1.9 The remedies available to the PCC have proved an inadequate deterrent to breach. Whilst the industry have shouldered the full cost of operation of the PCC, the PCC has not been provided with the funding that it would have needed to act as a credible regulator.

1.10 It is clear, therefore, that continuation of the status quo is not a credible option, and no one has suggested that it is.

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  1. Options put forward

The industry proposal 2.1 The inability of the PCC to fulfil the required role has been recognised and accepted by the

industry, which has put forward its own proposal for the future in the form of a submission from Lord Black, as the Chairman of PressBoF. That proposal is described6 and analysed7 earlier. As I have already said, that proposal does represent a significant improvement on the PCC as currently constituted and I recognise, and am grateful for, the efforts that have gone into constructing what is intended to be a new, more independent and more effective model. However, unfortunately, although it would represent an improvement on the status quo, and aspects of the framework could be built on, I conclude that the extent of industry control within the proposed system is a fundamental flaw.

2.2 First, the proposal does not have the clear support of any larger proportion of the industry

than the current system. If the PCC is inadequate, at least in part, because a major national newspaper group sits outside it, then Lord Black's proposal must also be inadequate. Northern and Shell has not said explicitly that it would not join the organisation if it was to be established, but its evidence to the Inquiry is sufficiently negative to give a strong steer that that is the case. Certainly, there must be a substantial doubt as to the ability of this proposal to command full industry support and cooperation, and there is no sufficient mechanism for the critical goal of full participation by all.

2.3 Second, the system as proposed provides no long term stability. This has two features. The

first is that a five year contract would bind members into the club for that period, but there is no guarantee that the system would continue to operate beyond the first five year term. The second feature is that it provides no assurance that the level at which standards or safeguards would be set would meet the level rightly expected by the public. Or that, once set, they would remain at that level. Thus, the proposal does not provide sufficient long term stability, durability or guarantee. That is not to say that contracts between the regulator and the regulated entity have no role to play in a future model; it is simply the case that they do not, on their own, provide sufficient assurance of long term effectiveness.

2.4 Third, and of critical significance, the model presented by Lord Black fails to offer genuine

independence from the industry. The industry, primarily through the Industry Funding Body (IFB), would have substantial influence over the appointment of the Chair of the Trust, as well as having 'responsibility' for the Code and having to approve any changes in the regulations. The continuation of the Code Committee with a majority of serving editors, acting in more than an advisory role, does not allow for independent setting of standards.

2.5 A new system must have an independent and effective enforcement and compliance mechanism.

As I have already said, I endorse the approach to internal company governance proposed by Lord Black. In particular, I support the proposal that complaints should be dealt with in the first instance by publishers and the requirements for an annual return on compliance to the regulator, and a named senior individual within each title with responsibility for compliance and standards. These are real innovations and are welcome. However, the proposal still has serving editors on the body making decisions on complaints, and this does not provide the required degree of independence of enforcement. The proposal for a standards and compliance arm, with both its ongoing monitoring role and its ability to carry out investigations, is welcome, although in practice, as currently set out by Lord Black, it could be so drawn out and so hedged

K about with appeals that I doubt it could ever be used effectively.

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2.6 A new system must have the ability to offer meaningful remedies to those who have been harmed. This proposal does not offer any significant improvement on the current PCC approach in this regard. It must also be able to apply effective sanctions to those who continue to breach standards: although real movement has been made in that direction, through the proposals on investigations and the power to fine, there are serious concerns about it resulting from procedural complexity that is greater and more extensive (thereby causing significant delay) than is necessary even when having full regard to the vital requirements of fairness. The improved transparency is to be welcomed, but it is not sufficient.

2.7 Finally, an effective regulatory system must be adequately financed and have sufficient independence from its funding body to operate independently. It is impossible for me to take a view on what constitutes adequate funding given the early stage of development of the proposal. What is clear, however, is that the IFB has sole discretion to decide on the funding and this cannot give the regulator sufficient independence to carry out its role properly.

Other proposals 2.8 Many proposals, with various degrees of detail, were put forward by interested parties and I would like to express my gratitude to all of them for the efforts that they made. These proposals are examined in detail elsewhere.8 It is fair to say that, whilst there are many excellent and helpful ideas contained within those proposals (a number of which I am happy to adopt), there are none that, on their own, sufficiently meet all the criteria that I set down.

2.9 If I am not to adopt a proposal that has been put in front of the Inquiry I must instead construct one myself. In section 4 below, I look at what a satisfactory system must contain, but first I address the question of coverage.

  1. A new system must include everyone 3.1 A new system must be effective, and one of the key criteria of effectiveness is that it should include all major publishers of news (if not all publishers of newspapers and magazines). This has been an almost universal view from the witnesses who have given evidence to the Inquiry in relation to future regulation; they have been clear that any new system should cover all news publishers, and that compliance with it should not be a matter of choice. There has been a striking level of agreement between commentators, the industry and politicians as to the desirability of all newspapers being covered by a regulatory regime, although not everyone has explained how they would deliver such comprehensive coverage. The Prime Minister, the Rt Hon David Cameron MP, said:9

"What we actually have to deliver is that it is compulsory and has all those things that I said [i.e. independence, penalties, compulsion, toughness, public confidence and all the rest of it]".

3.2 The Deputy Prime Minister, the Rt Hon Nick Clegg MP, stopped short of explicitly calling for compulsion, but was clear that the system should include everybody:10

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"…it's hopeless if we end up, as has been the case recently in parts of Canada, for instance, where just great swathes of the media have just opted out of the regulatory system altogether. You have to have buy-in from everybody."

3.3 The Rt Hon Ed Miliband MP set out a number of criteria for a new body, including complete coverage of the newspapers:11

"A new body should have: a) clear independence from those it regulates and freedom from political interference; b) proper investigative powers; c) an ability to enforce corrections; d) a system that is focused on the needs of the public which is accessible for all and not available only to the rich; e) a system that applies to all newspapers." (emphasis added)

3.4 The Joint Committee on Privacy and Injunctions considered the role that should be played by regulation and said:12

"It is essential that membership of the reformed media regulator extends to all major newspaper publishers. It should no longer be possible for a title unilaterally to opt out of regulation with no sanction forthcoming."

3.5 The Core Participant Victims argued that all newspapers and magazines should fall within the jurisdiction of the regulatory regime and comply with the requirements of adverse adjudications or investigations.13

3.6 The current PCC Chair, Lord Hunt, said that a new system would not be perceived to be effective, and indeed that the credibility of the new system would have been fatally undermined, if a

'big fish' were not a part of it; he recognised that Northern and Shell qualified as a 'big fish' for these purposes.14,15 Alan Rusbridger, The importance of a free press, seminar 6 October 2011, http://www.levesoninquiry.org.uk/wp- content/uploads/2011/11/Alan-Rushbridger.pdf

3.7 A previous PCC Chair, Sir Christopher Meyer told the Inquiry:16

"No system of self-regulation can survive the wilful refusal of a major player to take part. There may be a case for back-stop law or regulation making membership of the PCC compulsory."

3.8 A number of commentators have pointed out that the Lord Chief Justice, in his speech last year, argued for a self-regulatory system. He did, as do I, but he also insisted that any new self-regulatory system should cover the whole industry:17

"The new PCC – that is the new body currently in my contemplation in any new system of self-regulation – must be all inclusive. You might perhaps be willing to discount a news sheet circulated to about 25 people, but any national or regional paper would

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have to be included. In short any new PCC would require to have whatever authority is given to it over the entire newspaper industry, not on a self-selecting number of newspapers."

3.9 From within the industry there has similarly been general agreement that any system should be comprehensive in its coverage. Thus, Paul Dacre, Editor-in-Chief of Associated Newspapers, and editor of the Daily Mail, in his presentation to a seminar at the very beginning of the Inquiry, said:18

"…there's one area where Parliament can help the press. Some way must be found to compel all newspaper owners to fund and participate in self-regulation. God knows the industry fought hard enough to prevent it, but the Express group's decision to leave the PCC was a body blow to the commission. How can you have self-regulation when a major newspaper group unilaterally withdraws from it?"

Whilst he has subsequently resiled from advocating statutory intervention to achieve the goal of comprehensive coverage, his view that all newspapers and magazines should be covered by the new regulatory system was repeated in a submission to the Inquiry in July:19

"I also believe absolutely that one of the main responsibilities of the new regulatory system should be to ensure that the Editors' Code is followed both in spirit and the letter by all newspapers, magazines and, importantly, their Online versions."

3.10 This is consistent with the approach taken by Viscount Rothermere, the current owner of the Daily Maily & General Trust, who told the Inquiry:20

"I would certainly agree that in order for self-regulation to work, I think that you would have to have all members of the industry support it, yes. Or the defined industry support it, whatever that definition was."

3.11 Joint owner of Independent Print Limited, Evgeny Lebedev, told the Inquiry, "I think everybody in the industry has to be part of this new future body in order for it to work."21 Similarly, Aidan Barclay, Chairman of the Telegraph Media Group said, "I think it does need to include everybody."22 James Murdoch, former Chief Executive of NI, from a slightly different perspective, said, "I also think it's difficult to allow an industry in and of itself to control itself on a voluntary basis, given the concerns that we obviously all have."23

3.12 It is worth noting two other, albeit contrasting, political opinions. The Rt Hon Kenneth Clarke QC MP said:24

"I believe we do need a new regulator- one with substantially more power and independence than the PCC, which failed in its previous incarnation, and no longer commands the confidence of the public."

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He went on to say that he agreed with Lord Hunt that participation of all the big players is highly desirable if the new system is to have meaning and said that a very difficult question that goes to the heart of the effectiveness of a new body is how you ensure membership of all powerful media voices.25

3.13 By contrast, the Rt Hon Michael Gove MP was very cautious about any system of regulation, expressing the concern that regulation does not always deliver the outcomes desired, but might nonetheless result in a curtailing of freedoms. He said that he was not necessarily advocating a free-for-all, but he was clearly entirely untroubled by the thought of some, or all, of the press existing outside of a system of standards regulation.26 3.14 So, with the exception of Mr Gove (although, if present press reports are correct, there are others), the very strong view expressed to the Inquiry by politicians in Government and

Opposition, from the victims of press abuse, from press regulators and from those at the head of the industry itself, was that any new system of regulation should cover all significant news publishers, and I entirely agree.

I therefore recommend that a new system of regulation should not be considered sufficiently effective if it does not cover all significant news publishers. The challenge, then, is to find a way of achieving that result.

3.15 The first task is to look at the suggestions made by all those quoted above as to how they would achieve full coverage of a new system. Mr Cameron was reluctant to reach for statute to compel regulation of press standards, but did not rule it out:27

"I think as we go at this, we have to understand the real concern there is about statutory regulation. That doesn't mean you rule it out, but it means try and make everything that can be independent work before you reach for that lever. But, of course, if you had to undertake it, the more undertakings, the more safeguards would obviously be better. That would be my view."

3.16 Mr Clegg identified a possible role for legislation in "creating incentives or cajoling all parts of the media to be part of a new regulatory environment."28 He did not define 'cajoling', but was clear that participation in the regulatory system should not be a matter of choice. He also suggested that there could be a role for a statutory backstop co-regulator,29 but did not develop the idea in detail. 3.17 Mr Miliband did not explain how his vision for a new form of press regulation should be delivered, but the Rt Hon Harriet Harman MP, on behalf of the Labour Party, proposed

'statutory support' for a new regulatory body both in providing for its independence and to give it "the power to enforce its decisions across all newspapers."30

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3.18 The Joint Committee on Privacy and Injunctions recommended that the industry should adopt the proposals then being promoted by Lord Hunt (which subsequently formed the basis of Lord Black's proposals to the Inquiry) and that a standing commission comprised of both Houses of Parliament should be established to scrutinise the process of reform.31 However, the Committee was clear that this might not be sufficient and concluded:32 p3, ibid

"However, should the industry fail to establish an independent regulator which commands public confidence, the Government should seriously consider establishing some form of statutory oversight. This could involve giving Ofcom or another body overall statutory responsibility for press regulation, the day-to-day running of which it could then devolve to a self-regulatory body, in a similar manner to the arrangements for regulating broadcast advertising."

3.19 The Core Participant Victims considered that:34

"a statutory mechanism could be established to ensure that [their recommended requirements] are met by the new regime whilst guaranteeing that the regulator could not be misused by politicians to interfere with media's legitimate right to freedom of expression."

3.20 The Lord Chief Justice stopped short of saying from where the 'new PCC' should derive its authority or how his requirement that it "must be all inclusive" could or should be met. The outcome could be delivered by agreement (as I would also wish) but his language clearly points to a scheme which permits no exceptions; such an arrangement would have to be mandated or required in some way.

3.21 Lord Hunt was very clear that he did not regard it as appropriate to use legislation to secure full participation in a regulatory regime. However, he did not offer any means of doing so, other than a general reference to the incentives suggested as part of Lord Black's proposal. Sir Christopher accepted that there might be a case for backstop law or regulation making membership of the PCC compulsory.35

3.22 As mentioned above, Mr Dacre has pulled back from advocating statutory intervention to achieve the goal of comprehensive coverage, but he has not offered any alternative mechanism for achieving it other than the incentives already referred to in Lord Black's proposal. Viscount Rothermere did not address the question of how one would obtain the support of all members of the industry, or what should be done in the absence of such support.

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3.23 Mr Lebedev said that self-regulation was preferable to statutory regulation, but that he was:36

"not averse to statutory backstop, because I think there needs to be a way of making sure that everyone in the industry is part of this regulation, regulatory body, signed up to it, and that includes online as well."

3.24 Mr Barclay urged caution in relation to statutory provision but said:37

"I certainly support the notion that everybody should be included and should be somehow obliged to be included."

But he went on to say "I don't understand how we solve the problem."38

3.25 James Murdoch said that providing a solution was "above his pay-grade", but suggested that:39

"it may be a question of a stronger enshrining of speech rights on the one hand, coupled with a stronger set of consequences and either a self-regulating body or a statutory body that includes the press but also individuals that are not part of the working press today."

3.26 Mr Clarke did not offer a particular prescription but said:40

"I am not convinced, though, that a statutory underpinning of some kind would amount to state control of the press. You have pointed out the statutory duty of the Lord Chancellor to uphold the independence of the judiciary. I would note as well that press organisations have a legal obligation to register with Companies House and HM Revenue and Customs as businesses; this doesn't appear to me to amount to political interference in their work. This is not my endorsement necessarily for a statutory backing, but simply an observation that it would not be the freedom of expression Armageddon some commentators would have you believe. I am attracted to the idea of contracts, with the possibility (hopefully never used) of civil litigation if the contracts are broken."

3.27 So, in summary, whilst there is limited enthusiasm for statutory provision to ensure comprehensive coverage of a regulatory regime, there is widespread recognition that statute may be the only way of delivering this goal. Those who shy away from statute have found nothing of substance to offer as an alternative means of ensuring that their own objective of all industry buy-in can be achieved. A number of incentives to membership of a regulatory system have been put forward. These have been analysed elsewhere41 and I have concluded that only a few of them are capable of having some effect, and those are included in my recommendations below. I hope, and believe, that these incentives will send a powerful message to publishers that it is in their own interests to be a part of a system such as the one that I am recommending, but it cannot be guaranteed that they will all agree.

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3.28 I am firmly of the view that the goal here is voluntary independent self-regulation, and I set out below my own prescription for what that must look like in order for it to deliver what the public wants, and is entitled to want, in respect of independence and respect for individual rights and interests. I believe that the model that I set out has real and significant benefits for the public and for the press.

3.29 However, I must also recognise the risk that some publishers would choose to stay outside such a system, or even that the industry might not be able to secure agreement to establish such a system. Much as I hope this is not the case, as described earlier,42 the history of concerns about press behaviour, and the press and Government response to those concerns, has demonstrated that the industry has only ever offered what could be described as small incremental improvements to its system of self-regulation, even though its model (as modified) has been shown, time after time, not to be sufficient to address public concerns. Indeed, it is highly relevant that the most significant argument advanced for allowing self-regulation a further 'last chance' is that, in truth, the PCC never was a regulator (even though that is precisely what it was intended and purported to be). Whatever might now be said, it was intended to be sufficiently robust to address the problems identified by Sir David Calcutt QC.

3.30 There is evidence, therefore, that, left to itself, the press response to public concern this time would, in reality, be little different: although there are some new ideas, a full analysis of Lord Black's proposal may, indeed, support that conclusion. As I have said, I very much hope that this time the industry and the Government will rise to the challenge and create a genuinely effective system of independent self-regulation, but I would be failing in my duty to the public if I did not address the consequences if that were not to happen.

3.31 It is likely that, were the industry to fail to deliver what is needed, the Government would face entirely appropriate pressure from the public, who would be entitled to demand that some action be taken to ensure that the press is accountable and that there was an acceptable answer to the question "Who guards the guardians?" Indeed, it is clear that there have been two opinion polls published recently that suggest quite a strong public demand for effective action in this area.43

3.32 There are a number of options which I set out in the next Chapter. I readily accept that there may be many different views on which would be the most appropriate, and I do not intend to make a firm recommendation on this matter as an answer is not needed unless or until the industry fail to deliver effective independent self-regulation. Furthermore, if I make a recommendation in this area, press attention will move from the detailed proposal that I make to the industry and focus on this recommendation alone.

3.33 Having said that, it would equally be wrong if I did not make it clear that, if some or all of the industry are not willing to participate in effective independent regulation, my own concluded view is to reject the notion that they should escape regulation altogether. I cannot, and will not, recommend another last chance saloon for the press.

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3.34 With some measure of regret, therefore, I am driven to conclude that the Government should be ready to consider the need for a statutory backstop regulator being established, to ensure, at the least, that the press are subject to regulation that would require the fullest compliance with the criminal and civil law, if not also to ensure consequences equivalent to those that would flow from an independent self-regulatory system.44

3.35 I repeat, again, that I do not, at the moment, recommend any statutory backstop and to assert that I do will be to distort this Report and the clear recommendations that I do make. I hope that the industry will be able to see the value of what I have proposed and come together to participate in it. If they do, nothing further would be necessary. Further, I do not suggest that a backstop regulator should be the starting point for any discussion of the way forward and, in particular, for the legislation that I do propose. But, having said that, I have equally no doubt that there needs to be clarity and that it should not be possible for the industry (and, in particular, those who have a powerful voice in the industry), either in whole or in part, to choose not to engage with independent regulation.

  1. Voluntary independent self-regulation 4.1 I now turn to what is required in order to build a genuinely effective independent self-regulatory system. Lord Black talked of his model as 'independently-led self regulation'.45 Professor

Baroness O'Neill, Professor of Philosophy at the University of Cambridge, commented that:46

"I've noticed a lot of misuse of the phrase "independent regulation" for what is actually self-interested regulation. So what we need first to do is to get away from that…"

This identifies the problem rather well. What is required is independent self-regulation. By far the best solution to press standards would be a body, established and organised by the industry, which would provide genuinely independent and effective regulation of its members and would be durable. If such a body were to be established, and were to command the support of all key players in the market, there would be no need for further intervention, although I believe that there would remain a need for some further support in relation to ensuring that independence and providing incentives for membership.

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4.2 It is important to be clear about what I mean by 'genuinely independent and effective regulation'. My criteria for an effective regulatory regime set the broad framework. What I will do now is set out at a level of detail the minimum criteria that I believe it would be necessary to have in place in order to deliver against that broad framework.

4.3 In summary, I envisage that the industry should come together to create, and adequately fund, an independent regulatory body, headed by an independent Board, that would: set standards, both by way of a code and covering governance and compliance; hear individual complaints against its members about breach of its standards and order appropriate redress; take an active role in promoting high standards, including having the power to investigate serious or systemic breaches and impose appropriate sanctions; and provide a fair, quick and inexpensive arbitration service to deal with any civil complaints about its members' publications. Figure K7.1 below provides an illustrative structure, but this is not intended to be prescriptive in terms of organisation.

Figure K7.1: illustrative functions of an independent body

Independent Board with a majority of people independent of the press

Complaints Handling Standards Enforcement Arbitration Service Decisions on individual Independent investigations of Fair, quick and inexpensive complaints serious and systemic problems

4.4 It is important both to note and to underline that these functions are not dissimilar to the basic structural framework proposed by Lord Black on behalf of the industry.

Independent governance 4.5 Independence of the regulatory body is absolutely critical. I recommend that an independent self-regulatory body should be governed by an independent Board. In order to ensure the independence of the body it is essential to ensure that the Chair and members of the Board are appointed in a genuinely open, transparent and independent way, without any influence from industry or Government.

4.6 Further, in order to ensure the independence of the body, the Chair of the Board should be clearly and demonstrably independent of the press. By that I mean that he or she should have no current, or recent, affiliation with any particular press organisation. He or she should certainly be committed to freedom of expression and freedom of speech, but that must be matched by a commitment to uphold the rights of others and to the need to provide an appropriate balance in a democratic society in precisely the way that Articles 8 and 10 of the K European Convention on Human Rights (ECHR) identify that balance. The Chair of the Board should also be independent of any political party.

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4.7 The independence of the appointment process is important and by no means trivial. There are a number of specific criteria which I believe should be met in relation to the Chair of the

Board.

I recommend that, first, the appointment should be made by an appointment panel. The selection of that panel must itself be conducted in an appropriately independent way and must, itself, be independent of the industry and of Government.

Without being prescriptive, it could include distinguished public servants with experience of senior independent appointments such as the Commissioner for Public Appointments and the Chair of the Judicial Appointments Commission.

4.8 The body (and the Chair that leads it) will have the task of setting and enforcing standards in the press, specifically balancing the interests of freedom of speech and the interests of individuals; there are not many more important balances to be struck. In order to ensure that the full complexity of the task is taken into account by the appointment panel, it is essential that the appointment panel should be capable of balancing the public interest in freedom of speech and the protection of privacy and should be free of political influence.

I recommend that the appointment panel:

(a) should be appointed in an independent, fair and open way; (b) should contain a substantial majority of members who are demonstrably independent of the press; (c) should include at least one person with a current understanding and experience of the press; (d) should include no more than one current editor of a publication that could be a member of the body.

4.9 I do not intend to say more about the appointing panel. It is critically important that the industry, in a fair and open way, get together to identify independently minded people in whom the public can have confidence to make up the appointing panel. It will then be the task of that body to find and appoint a Chair who demonstrably meets the criteria of fair minded and balanced independence to which I have referred. In doing so, the industry will be committing itself to organising independent regulation.

4.10 Of equal importance is the fact that the Board itself must be independent of the press, but sufficiently expert to ensure that regulatory decisions are appropriate, proportionate and practical.

I recommend that the appointment of the Board should also be an independent process, and the composition of the Board should include people with relevant expertise. The requirement for independence means that there should be no serving editors on the Board.

As with the appointment panel, it is essential that the Board should be capable of balancing the public interest in freedom of speech and the protection of privacy and should be free of political influence.

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I recommend that the members of the Board should be appointed by the same appointment panel that appoints the Chair, together with the Chair (once appointed), and should:

(a) be appointed by a fair and open process; (b) comprise a majority of people who are independent of the press; (c) include a sufficient number of people with experience of the industry who may include former editors and senior or academic journalists; (d) not include any serving editor; and (e) not include any serving member of the House of Commons or any member of the Government.

Membership 4.11 Ideally the body would attract membership from all news and periodical publishers, including news publishers online. It is important for the credibility of the system, as well as for the promotion of high standards of journalism and the protection of individual rights, that the body should have the widest possible membership among news providers. Clearly this will be unlikely to include broadcasters who are already covered by the Broadcasting Code. It has been accepted that, although I am very anxious that it remain voluntary, it must involve all the major players in the industry, that is to say, all national newspaper publishers and their online activities, and as many regional and local newspaper publishers, and magazine publishers, as possible. This is not meant to be prescriptive at the very small end of the market: I would not necessarily expect very small publishers to join the body, though it should be open to them to do so on appropriate terms. Having said that, however, I have no doubt that there would be advantages in doing so. Ideally it would also include those who provide news and comment online to UK audiences.47

4.12 I recognise that most blogs have very different processes, audiences and business models to most newspapers, and that consequently it may be difficult to establish one set of requirements, for example in respect of internal governance, annual reporting or membership fees, that is appropriate for all different types of publisher. It is important, however, that all types of publishers should be able to join such a body, and to do so on terms that are not manifestly inappropriate for their business model.

4.13 I therefore recommend that membership of the body should be open to all publishers

on fair, reasonable and non discriminatory terms, including making membership potentially available on different terms for different types of publisher.

Funding 4.14 The industry, through Lord Black, has made a principled point that the industry should fund self-regulation without requiring input from the public purse. Certainly, I agree that any industry established independent regulatory body must be funded by its members. There are, however, some important points to be made about funding. The body will only be able to do what it is funded to do. If it is to be genuinely independent in operational and strategic terms, it must have both some certainty and some influence over the level of its funding across a reasonable period. Practice in the industry has been for an industry body (PressBoF) to set, and levy, the membership fees for self-regulation. In my opinion there is no need for such a body to exist at all: it would be perfectly possible for the regulator to set its own fees and collect them directly from its members, taking account of the financial position of the industry. Equally, however, there is not necessarily any problem of principle with an industry body acting as a coordinator.

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4.15 However the fees are set and collected, the Board should establish the budget that it requires in order to carry out its functions effectively, and fees should be levied accordingly. As I have identified earlier, two issues arise in relation to independence of funding. One is the absolute level of funding, and the other is security of funding over a reasonable planning period. Both are important if the regulator is not to be at risk of being effectively held to ransom by its funding members.

4.16 I recognise that it is not appropriate that the regulator should have a blank cheque, anymore than that the industry should have a strangle-hold on the regulator's budget. In practice, if the regulator is too expensive, publishers will not join.

I recommend that funding for the system should be settled in agreement between the industry and the Board, taking into account the cost of fulfilling the obligations of the regulator and the commercial pressures on the industry (which are not as great for a number of the larger publishers as they are for the smaller, regional press). There should be an indicative budget that the Board certifies is adequate for the purpose. Funding settlements should cover a four or five year period and should be negotiated well in advance.

4.17 I recognise that the start-up costs of such a body may be significant and those putting together such a proposal may need to look for sources of funding to help to cover some of those costs. In this context I do not believe it to be unreasonable for some public funding to be made available to facilitate the establishment of a satisfactory, genuinely independent, press regulatory body.

Standards code 4.18 The new regulatory regime must have a standards code. The current Editors' Code has been widely praised by those in the industry. It has been developed by the industry over the last two decades and has adapted to take account of new concerns and issues that have arisen. I have made no attempt during the course of this Inquiry to conduct a full scale evaluation of the Code of Practice. My role is to make recommendations for an effective and independent structure for setting and enforcing standards, not to set those standards. That is properly a role for the independent regulatory body, in consultation with the industry and with the wider public. Where comments on, or criticisms of, the Code have been made in evidence

I have reflected them in this report, but that should not be read as an analysis of the Code.

4.19 However, there are a few general points I would like to make about the contents of the Code.

First, if the Code is to provide an ethical framework for editors and journalists to work within, then it is important that it should set the ethical and legal context within which it applies, and seek to provide some positive depiction of ethical journalism. Second, it is important that the

Code should be clear and practical. Clauses that are either impossible to comply with (as the

Inquiry has been told is the case with clause 1(iii) relating to the separation of opinion and fact) or that are not entirely clear as to their intention and effect, will serve only to bring the K Code itself into disrepute and disuse.

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4.20 Both of these points (along with some of the academic comment that was offered to the Inquiry) suggest that the current Code would benefit from a thorough review, with the aim of developing a clearer statement of the standards expected of editors and journalists. Thus, if, for example, the present formulation relating to the separation of opinion and fact does not work, a reconsideration of the wrong being targeted might lead to that concern being addressed in a different way. In structural terms, whilst it is of course essential that editors should take pride in their Code, and that it should be thoroughly grounded in real world current experience of the industry, it cannot be right that the standards to which the industry are to be held are set without independent oversight.

4.21 In order for the new regulatory regime to have the independence required to secure public trust and confidence, it is essential that it should be the regulator who approves a code of standards to which members must adhere. The Board could well be advised by a Code Committee including serving editors and journalists, but with independent members as well: indeed, I can see no reason why the Code Committee in the amended form as proposed by Lord Black should not be constituted as a formal advisory body to the Board.

I recommend that the standards code must ultimately be the responsibility of, and adopted by, the Board advised by a Code Committee which may comprise both independent members of the Board and serving editors.

4.22 As a further step to secure public confidence, it appears to me that it would be valuable if the Board was to satisfy itself that the proposed Code had been subjected to public consultation, albeit on the basis that the Code Committee would then analyse the result of any consultation and provide the Board with the benefit of its experience on issues that might have arisen. Thus the Code would command the confidence of both the public and the industry.

4.23 As I have said above, I have no particular desire to comment on the actual content of the Code. It is both important and appropriate, however, that I make some recommendations about the scope and coverage of the Code. The Code will be the document that articulates the nature of the boundaries between journalism, its subjects and its readers. As such it is essential that it fully reflects the interests of all three.

I therefore recommend that the Code must take into account the importance of freedom of speech, the interests of the public (including the public interest in detecting or exposing crime or serious impropriety, protecting public health and safety and preventing the public from being seriously misled) and the rights of individuals.

Specifically, it must cover standards providing for:

(a) conduct, especially in relation to the treatment of other people in the process of obtaining material;

(b) appropriate respect for privacy where there is no sufficient public interest justification for breach; and

(c) accuracy, and the need to avoid misrepresentation.

4.24 The Code must set out a clear picture of how good journalism serves the public interest and the implications that has for journalistic behaviour. The Inquiry has heard that different editors have different views on what constitutes the public interest, and that may well be the case. The Code will have to take a sufficiently broad approach to encompass the different views and different perspectives of different types of journalism. However, the regulator, K when applying the Code, will have to adopt a consistent interpretation of the public interest.

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If an editor can create his own definition of the public interest without any constraint then the standards will be meaningless. The regulator, alongside the Code, must provide guidance on the interpretation of the public interest that justifies what otherwise would constitute a breach of the Code and must do so in the context of the different provisions of the Code so that the greater the public interest, the easier it will be to justify what might otherwise be considered as contrary to standards of propriety. That guidance should be available for editors and journalists to use when making day-to-day decisions, and should also be the basis of decisions taken on complaints about breach of the Code.

Organisational requirements 4.25 The concerns about press standards that the Inquiry has heard about give rise to equivalent concerns about governance, across some parts of the press, in relation to internal procedures for dealing with complaints and ensuring legal and standards compliance. An effective new regulatory regime should address these internal governance issues. It is important that the companies should take responsibility for their own compliance with the standards that they sign up to. I do not expect the regulator necessarily to define the governance processes that member companies should adopt, though it may choose to set principles. However:

I do recommend that the Board should require of those who subscribe, appropriate internal governance processes, transparency on what governance processes they have in place, and notice, of any failures in compliance, together with details of steps taken to deal with failures in compliance.

4.26 Publishers should have adequate (and timely) processes in place for dealing with complaints from readers and members of the public about breach of standards. It is absurd that complainants should be encouraged to take their complaints to a regulatory body instead of the company concerned seeking, in the first instance, to deal with the complaint themselves.

Taking a complaint to the regulator should be the last step, not the first.

I recommend that the Board should require all those who subscribe to have an adequate and speedy complaint handling mechanism; it should encourage those who wish to complain to do so through that mechanism and should not receive complaints directly unless or until the internal complaints system has been engaged without the complaint being resolved in an appropriate time.

4.27 It is already generally accepted that the editor of a newspaper is ultimately responsible for all that happens within it. That must be true, and it must be accepted and acted on at a practical level. Editors must, as a matter of course, accept personal responsibility, not only for every word printed in their paper but also for the methods by which information is gathered, the judgments made about intrusion into private matters and the culture that operates in their newsrooms.

4.28 I note that the proposals put forward by Lord Black cover very similar ground in relation to internal governance and accountability. The proposals he makes in respect of the requirement for an effective in-house complaint system, an annual compliance return to the regulator and having a nominated senior individual with responsibility for compliance, are entirely consistent with my recommendations here. As for the complications of compliance for small newspapers, there is no reason why this responsibility should not either be officially delegated K to someone with other duties (provided that, in this context, they are required demonstrably to act independently of management) or, alternatively, a group of papers could combine to make a single appointment: I am not seeking to be dogmatic as to how the aim is achieved.

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Powers Complaints 4.29 In order to be effective the regulatory body must have appropriate powers. There are two different aspects to the powers that the body should have: first, it needs to have the right powers to deal appropriately with individual complaints about breach of the code; and second, it needs to have the right powers to deal with serious or systemic standards failure.

4.30 Looking first at dealing with complaints:

I recommend that the Board should have the power to hear and decide on complaints about breach of the standards code by those who subscribe. The Board should have the power (but not necessarily in all cases, depending on the circumstances, the duty) to hear complaints whoever they come from, whether personally and directly affected by the alleged breach, or a representative group affected by the alleged breach, or a third party seeking to ensure accuracy of published information. In the case of third party complaints the views of the party most closely involved should be taken into account.

The Board will need to have the discretion not to look into complaints if they feel that the complaint is without justification, is an attempt to argue a point of opinion rather than a code breach or is simply an attempt to lobby, but they should, as a matter of principle, have the power to take up any complaint that is brought to them.

4.31 I recommend that decisions on complaints should be the ultimate responsibility of the Board, advised by complaints handling officials to whom appropriate delegations may be made.

It is not for me to make specific organisational recommendations about how the body should be structured or the mechanism whereby disputes might be capable of resolution. There is, however, no reason why the Board should not establish a small complaints committee to deal with complaints in the first instance.

4.32 Having said that, it is necessary to add that it is absolutely clear to me that it is unacceptable to have serving editors playing any role in determining the outcome of individual complaints.

I recommend that serving editors should not be members of any Committee advising the Board on complaints and any such Committee should have a composition broadly reflecting that of the main Board, with a majority of people who are independent of the press.

Whatever arrangements are put in place for the practical handling of complaints, ultimately decisions must be a matter for the Board.

4.33 I recommend that it should continue to be the case that complainants are able to bring complaints free of charge.

This is one of the best features of the existing PCC system, which is carried over to Lord Black's proposal for the future.

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Standards 4.34 Turning now to serious and systemic concerns, it is essential that the body should have the power to act as a regulator.

Consequently, I recommend that the Board, being an independent self-regulatory body should have authority to examine issues on its own initiative and have sufficient powers to carry out investigations both into suspected serious or systemic breaches of the code and failures to comply with directions of the Board. Those who subscribe must be required to cooperate with any such investigation.

Again, it is unnecessary for me to make detailed recommendations on structures, but those carrying out investigations must have sufficient relevant experience and expertise and be demonstrably independent of the press. Lord Black's proposal meets many of the requirements set down here, but I have already made clear my concerns that this aspect of Lord Black's proposal is so weighed down with process that it is difficult to see how the investigative powers could ever be used successfully. The new regulatory body must be able to undertake investigations when and where it thinks appropriate, and to rely on the cooperation of members. The investigation process must be simple and credible and, while I recognise the need for a level of reconsideration (whether by appeal or otherwise), this should be only at significant stages in order to ensure that the process can be operated effectively: ultimately, any decision is ultimately amenable to judicial review.

4.35 The new regulatory body should, as the PCC currently does, act on behalf of individuals to ask the press to stay away when requested to do so, and may choose to provide an advisory service to editors in relation to consideration of the public interest in taking particular actions.

Remedies and sanctions 4.36 In the same way as with powers, this section breaks down in to two parts: the first relates to the remedies that the regulator can award to individuals in relation to breaches of standards that have affected them, and the second relates to the sanctions that the regulator should be able to impose in relation to breaches of standards.

I recommend that the Board should have both the power and a duty to ensure that all breaches of the standards code that it considers are recorded as such and that proper data is kept that records the extent to which complaints have been made and their outcome; this information should be made available to the public in a way that allows understanding of the compliance record of each title.

4.37 In the first case of complaints:

I recommend that the Board should have the power to direct appropriate remedial action for breach of standards and the publication of corrections and apologies. Although remedies are essentially about correcting the record for individuals, the power to require a correction and an apology must apply equally in relation to individual standards breaches (which the Board has accepted) and to groups of people (or matters of fact) where there is no single identifiable individual who has

K been affected.

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It should, of course, be the subject of discussion between the complainant and the title but, in the end:

I recommend that the power to direct the nature, extent and placement of apologies should lie with the Board. 4.38 Turning to the second case:

I recommend that the Board should have the power to impose appropriate and proportionate sanctions (including financial sanctions up to 1% of turnover, with a maximum of £1million),48 on any subscriber found to be responsible for serious or systemic breaches of the standards code or governance requirements of the body.

The sanctions that should be available should include power to require publication of corrections, if the breaches relate to accuracy, or apologies if the breaches relate to other provisions of the code. Financial sanctions should be appropriate and proportionate. 4.39 It is important that the existence and use of financial sanctions should be transparent, in order to encourage effective compliance with the system. It is equally important to consider what would happen to any financial penalties levied. In a statutory regulatory system such penalties would be paid into the consolidated fund. This is obviously inappropriate in the case of a self-regulatory body. However, if the body were to be able to draw on fines to meet its ongoing costs there would be an inappropriate incentive on the body to levy fines. The solution proposed by Lord Black is that a ring-fenced enforcement fund should be established, with fines being used only to finance investigations into systemic or significant breaches. This approach seems to me to be an acceptable way of dealing with the issue. 4.40 For the avoidance of doubt:

I recommend that the Board should not have the power to prevent publication of any material, by anyone, at any time although (in its discretion) should be able to offer a service of advice to editors of subscribing publications relating to code compliance which editors, in their discretion, can deploy in civil proceedings arising out of publication.

In that way, there is potentially the opportunity for the regulatory body, should the need arise, to give reasoned opinions on issues brought to them by editors, or by individuals concerned about potential publication of a matter, that might provide explanation and context and thereby assist the court in any subsequent consideration of the matter. 4.41 Any material that generates a greater practical understanding of the approach to decisions made by editors and the constraints under which they are made is likely to help and I have little doubt that, if that context is provided by an independent regulator, it will carry real weight. In that way, it could help to shape the way that the courts apply the law in these cases. Given the often voiced concerns about the willingness of courts to grant injunctive relief, supportive context in this area might help both claimants and publishers better to understand context and be better able to reach a fair and balanced solution to the issue of injunctive relief then being argued. Independent focus on the balance between Articles 8 and 10 can only assist the thinking of all.

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4.42 It is essential for the public confidence in the system that the Board should regularly publish

information on the performance of the regulatory body and on the compliance records of its subscribers. I therefore recommend that the Board should publish an Annual Report identifying:

(a) the body's subscribers, identifying any significant changes in subscriber numbers; (b) the number of complaints it has handled and the outcomes reached, both in aggregate for the all subscribers and individually in relation to each subscriber; (c) a summary of any investigations carried out an the result of them; (d) a report on the adequacy and effectiveness of compliance processes and procedures adopted by subscribers; and (e) information about the extent to which the arbitration service had been used.

Arbitration service 4.43 The high cost and real complexity of civil law and procedure, as it relates to media issues,

has been a theme running through this Inquiry. Both complainants and publishers have complained of how slow and expensive it is to take an issue to court. However, there are a substantial number of disputes every year between individuals and publishers that are about the civil rights of the complainants. Under the current system some of these the subject of legal action, though very few see their way through to a judgment of the court. Some manifest as complaints to the PCC but the complainants are often too unsure of their rights or do not commence proceedings because they are unable to afford (or are too concerned about the potential consequences of) litigation.

4.44 The balance of power between the publishers and complainants in these cases has shifted

over time. At one time publishers could rest secure in the knowledge that only the very rich and very determined would be able to make a challenge in relation to defamation or privacy. Then the introduction of Conditional Fee Agreements (CFAs) and after the event insurance changed the balance and ordinary people were able to make claims. Some high profile claims were made, not least with regard to phone hacking, and many complainants were successful in their actions. But the balance is now moving back, with the new changes to the CFA regime, meaning that individuals will no longer be able to take action without fear of potentially impossibly damaging costs: this problem has been examined in detail and is an area that is very likely to come under further scrutiny.49

4.45 It is self evident that this situation is far from ideal. What is needed is a quick, fair and

inexpensive system for resolving these disputes. Of course, no one can be forced to give up their right to go to court in pursuit, or for the protection, of their rights. However, that does not argue against the need for some arbitral system to be available.

4.46 I recommend that the Board should provide an arbitral process in relation to civil legal

claims against subscribers, drawing on independent legal experts of high reputation and ability on a cost-only basis to the subscribing member: it should not be difficult to provide such expertise, not only from those who have retired from the Bench but also from the most senior ranks of the legal profession. The process should be fair, quick

K and inexpensive, inquisitorial and free for complainants to use (save for a power to make an adverse order for the costs of the arbitrator if proceedings are frivolous or

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vexatious). The arbitrator must have the power to hold hearings where necessary but, equally, to dispense with them where it is not necessary. The process must have a system to allow frivolous or vexatious claims to be struck out at an early stage.

4.47 As acknowledged above, neither publishers nor complainants can be forced to use such a system. However, the regulator should offer publishers the right to use the system and, equally, all complainants should be encouraged to use it as well. I consider below how use of the provision of an arbitration service could be incentivised by way of costs advantages both for potential claimants and for publishers along with the wider benefits that it could bring. Mechanisms for appeal to the courts (by way of review rather than rehearing) would have to be acknowledged.

4.48 It is worth repeating that the ideal outcome is a satisfactory independent regulatory body, established by the industry, that is able to secure the voluntary support and membership of the entire industry and thus able to command the support of the public. I have set out here the minimum requirements for a 'satisfactory independent regulatory body'. I recognise that, whilst this has much in common with the model proposed by the industry, there are substantive differences between what I am recommending and the model put forward by Lord Black. The main differences are in the extent of the independence of the body from the industry, first in the appointments process, second in the role of serving editors and third in the allocation of funding. In terms of organisational structure and the contractual framework, there is no reason why Lord Black's model should not be capable of adaptation to meet the requirements set down here if the industry were able to support such a move, and if the other, more substantive, changes around independence and effectiveness were made.

  1. Encouraging membership 5.1 If parts of the industry were to come together to set up a body meeting the requirements set out above, the question must remain as to whether a sufficient proportion of the industry would join the body to make it an effective industry regulator. A great number of possible incentives for membership of an industry regulatory body have been put forward to the Inquiry. They have been looked at earlier.50 Naturally I hope that the desire to be able to use a kitemark signifying compliance with high standards would be an important incentive to membership, but realistically I recognise that those most eager to use a standards kitemark are likely to be those already meeting high standards. The power of a kitemark to draw in those less concerned by standards is unclear. I have already made clear my view of some of the other potential incentives to membership.51 In practice, it seems to me that there are three areas where it might be possible to craft a relatively significant benefit for publishers who choose to sign up to a satisfactory independent regulatory body.

5.2 The first relates to data protection. I have already set out a number of recommendations for changes that I think should be made to the data protection regime to enhance the ability of the Information Commissioner's Office (ICO) to perform its functions in relation to the press.52 These include making it simpler for the ICO to use its existing powers to investigate cases of possible breaches of the legal requirements of the data protection regime, as well as taking a more focused approach to the promotion of standards of good practice in relation to handling of personal data within press organisations.

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I recommend that in any reconsideration of the powers of the Information Commissioner (or replacement body), power is given to that body to determine that membership of a satisfactory regulatory body, which required appropriate governance and transparency standards from its members in relation to compliance with data protection legislation and good practice, should be taken into account when considering whether it is necessary or proportionate to take any steps in relation to a subscriber to that body.

5.3 This is not to suggest that a different level of data protection regulation would apply to a

publisher who was a member of a regulatory body as opposed to one who was not. On the contrary, the law would, naturally, apply in exactly the same way to both. The difference would be in the approach that it would be appropriate for the Information Commissioner to take to audit when, on the one hand, he sees an operation that has signed up to high standards of privacy and data protection and which operates effective and transparent governance, whereas on the other hand he has no information about that company's approach to data protection other than what he can find out by asking.

5.4 Second, the area where a substantive benefit might be derived from membership of a

regulatory body is costs in relation to the resolution of disputes. I have said already that I consider that it is essential that a regulatory body should offer and fair, quick and inexpensive arbitral system to deal with media disputes. Such a system should be of benefit to all who use it, cutting out a large amount of time, effort and expenditure currently engaged in litigation. It is not, of course, possible to deprive anyone, claimant or defendant, of their right to have their case heard by a court. But it is possible for the court to take account of whether either party has taken all possible steps to resolve the issue in a less expensive way.

5.5 I recommend that it should be open to any subscriber to a recognised regulatory body

to rely on the fact of their membership and on the opportunity it provides for the claimant to use a fair, fast and inexpensive arbitration service. It could request the court to encourage the use of that system of arbitration and, equally, to have regard to the availability of the arbitration system when considering claims for costs incurred by a claimant who could have used the arbitration service. On the issue of costs, it should equally be open to a claimant to rely on failure by a newspaper to subscribe to the regulator thereby depriving him or her of access to a fair, fast and inexpensive arbitration service. Where that is the case, in the exercise of its discretion, the court could take the view that, even where the defendant is successful, absent unreasonable or vexatious conduct on the part of the claimant, it would be inappropriate for the claimant to be expected to pay the costs incurred in defending the action.

5.6 At one extreme, when the court concluded that it was entirely reasonable for a claimant

(although unsuccessful) to bring the claim, it might be possible for the court to go further and order that the claimant's costs should be met by the defendant: the justification would be that although the claimant has not been successful, by not being a member of an industry regulator, the defendant had forced the claimant to use the expensive court system whereas an effective arbitral mechanism could have resolved the issue without the expenditure on costs at all.53

5.7 This does not need to work only one way and should not. Where a publisher is a member of an industry body, and therefore does offer access to an arbitration system, the claimant K can obviously nonetheless choose to take the publisher to court instead: Article 6 demands nothing less. In this case, however, it would be open to the court to take the view that the claimant had deliberately chosen to take the high cost route of litigation and could refuse to award costs if the claimant were successful. Whether it could go further and permit the judge to exercise a discretion to require a claimant to meet the costs of the defendant is, perhaps, another matter: I do not express a view about it. 5.8 This approach could have the effect of providing a strong incentive to publishers to join an independent regulatory body. I acknowledge that this may be largely an economic calculation, and that that calculation will be different for each title, depending on the extent to which it expects to face litigation and the costs it might incur in the course of that litigation. There are no publicly available figures that would enable me to say with confidence what the potential benefit to the industry is here, not least because that benefit would also depend on the cost of the regulator, the cost of the arbitral regime and any impact the existence of that regime might have on the number of cases being brought. I do, however, expect this to provide a genuine economic benefit to membership of a body. 5.9 Finally, I believe that it would be appropriate for it to be open to a court to award aggravated or exemplary damages against an unsuccessful defendant who has not only failed to demonstrate a proactive commitment to high journalistic standards but also deprived a complainant of access to fast, fair and inexpensive arbitral mechanism by refusing to join an independent regulatory body: this would require a change to the law which I have addressed earlier.54

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  1. Giving effect to the incentives 6.1 I will say again, because it cannot be said too often, that the ideal outcome from my perspective is a satisfactory self organised but independent regulatory body, established by the industry, that is able to secure the voluntary support and membership of the entire industry and thus able to command the support of the public. In order to achieve that, it is necessary both to have a satisfactory independent regulatory body established by the industry, and that it should secure support from the entire industry. The incentives described in Section 4 above aim to build that support. However, as described above they suffer from a significant flaw.

That flaw is the word 'satisfactory' which I have used so far to describe an independent regulatory system that meets the requirements set out above.

6.2 The incentives described above rely on action being taken by the courts, and by the ICO, on the basis of a company's membership of a body. This can only be possible if the courts and the

ICO have a way of determining whether they should consider that a body that the company is a member of is 'satisfactory' – in other words, how can the courts tell the difference between a properly constituted independent regulatory body meeting all the requirements set down in Section 4 and a body that fails to meet some or all of those requirements but nonetheless holds itself out as doing so?

6.3 The only solution to this is a recognition process of some kind for the independent regulatory body. This brings me to 'statutory underpinning'. There has been a lot of discussion, both within and outside the Inquiry, of statutory underpinning, its merits and its dangers. Close to home, there is an example of statutory underpinning in the Irish Press Council, which has been accepted without demur by several UK newspaper publishers, notably including Northern and Shell. In that case, there is a statute which sets out the requirements that must be met for a Press Council to be recognised by the Parliament, with members of the recognised Press K

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Council then being able to use that membership as a demonstration that they achieve certain standards when defending themselves in defamation litigation. Something similar (although not at all identical) is required in this country.

6.4 Suffice to say, in order to meet the public concern that the organisation by the press of its regulation is by a body which is independent of the press, independent of Parliament and independent of the Government, that fulfils the legitimate requirements of such a body and can provide, by way of benefit to its subscribers, recognition of involvement in the maintenance of high standards of journalism:

I recommend that the law must identify those legitimate requirements and provide a mechanism to recognise and certify that a new body meets them.

6.5 I recommend that the responsibility for recognition and certification of a regulator

shall rest with a recognition body. In its capacity as the recognition body, it will not be involved in regulation of any subscriber.

Once recognised, the regulatory body would have no further interaction with the state, or with the body that recognised it, other than to ensure that it continues to meet the requirements for recognition.

In practice, I recommend that the requirements for recognition should be those set out in Section 4 above.

If that were the case then bodies (like the ICO) would be able to be sure that any member of a recognised regulatory body would be required to meet basic governance requirements and would be following a Code that covered respect for privacy. The courts would be able to be sure that any member of a recognised regulatory body had ascribed to standards that met specified and acceptable criteria and was a member of a quick, fair and inexpensive arbitral scheme that anyone could use when seeking redress from them.

6.6 The majority, though not all, of the national press has made it very clear that they regard statutory underpinning as unnecessary and dangerous. Some have gone further and indicated that they would find it unacceptable. In some cases, these same companies are quite happy to participate in a statutorily recognised system in Ireland. The Inquiry has heard evidence from all three major political parties that statutory underpinning is an option.

6.7 The main argument that has been made against statutory underpinning or recognition is that any legislation touching on press standards provides the thin end of the wedge for political interference in the press. There is a countervailing argument that any such legislation could also be used to provide, for the first time, statutory protection for the freedom of the press from Government interference. I explore this idea further below.

Recognition process 6.8 Recognition requires a recognition process, and body to carry out that process. The legislation setting out the requirements for recognition would also have to set out both the process and who would be responsible for carrying it out. I will start with the recognition body.

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The recognition body 6.9 The role of the recognition body is essentially an objective one. Its task would be simply to check that the statutory requirements have been met by the body applying for recognition. Having said that, it is also one that requires a degree of expertise in order to assess that the criteria have been met. The role would consist of: (a) approving the independence of appointment processes (if the approach above is adopted); (b) checking whether bodies applying for recognition meet the statutory criteria on application; (c) periodically reviewing that recognised bodies continue to meet the statutory criteria;

and (d) in specifically defined circumstances, carrying out any ad hoc reviews that a recognised body continues to meet the statutory criteria should the need arise. 6.10 As regards (c) and (d) above:

I recommend that the operation of any certified body should be reviewed by the recognition body after two years and thereafter at three yearly intervals.

The purpose of review is solely to ensure that the requirements for recognition continue to be satisfied. The circumstances in which an ad hoc review might be necessary could perfectly properly be defined restrictively. 6.11 As for who should fulfil this function, two fundamental options exist for the role of recognition body. One is to create a new body to undertake the role, and the second is to give the role to an existing body. 6.12 A new body would have this one role and this one role only. This gives rise to an immediate difficulty. The recognition body has a significant on going role and it is not one that could be done easily by an ad hoc body. Equally it is an intermittent role, at best, and a standing body would have little or nothing to do most of the time. Its decisions will be potentially controversial and open to challenge by judicial review. If, for example, PressBoF was to come forward with its current proposal and seek recognition, the recognition body would have to refuse, because the current proposal as drafted does not meet the requirements set out above, and the implications of refusing an application by a body with the support of the vast majority of the publishing industry are significant. The recognition body would need to be able to demonstrate that its processes were sound, that its approach was objective and that its decision was grounded in evidence and was taken correctly. All this means that in order to do the job properly the body must be capable of running a demonstrably competent, expert and objective process. 6.13 A new body with a single role would by definition be inexperienced, and might be in a weak position, vulnerable to press influence. The intermittent but ongoing nature of the role make it poorly suited to a standalone, specially appointed individual or body. The body carrying out this work must have the power to reach the correct decisions without being overly pressured by the press. This also argues against a sole purpose individual or body which would be very vulnerable to the sorts of antagonistic campaigns that the press are capable of mounting when they perceive themselves to be under threat. One way of dealing with that would be to support an independent individual, or panel, appointed to carry out the recognition task K within an established body.

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6.14 This leaves the option of giving the role to an existing body or using an existing body to

support a new, independent, post. Options that I considered are: Parliament, the courts and Ofcom. Parliament is, in many ways, an obvious option. The Irish Defamation Act adopts this model, with Parliament approving an order for recognition that is made by the Minister. However, one of the fundamental requirements for the regulatory body is independence from the Government. Any Parliamentary process would be likely to be perceived by the industry, and possibly by the public, as Government interference in the independence of the press. Certainly it is not obvious to me that the Government, or Parliament, have any particular qualification for this role that would outweigh the negative connotations of an independent regulatory body having to seek the approval of the Government. Indeed, it is worse than that because there may need to be some measure of negotiation as the industry seeks to resolve the challenges that are involved in creating a body that satisfies the criteria that I have described. The idea of the industry negotiating either with Parliament or the Government does raise what I readily perceive to be significant issues of independence.

6.15 The courts have the requisite strength to undertake the role. However, I repeat the point that

I have just made: the nature of the recognition process, which has nothing to do with issues relating to editorial content, is such that what is required is an inquisitorial consideration of whether the criteria have been met, possibly involving discussion with the body about any changes which might be required in order to meet the criteria: there is no satisfactory mechanism by which the courts could fulfil that role.

6.16 Ofcom has the requisite standing and expertise. However, Ofcom's role in content regulation

in relation to broadcasting is likely to be seen by some as a very significant objection to them carrying out this recognition role. This is primarily a presentational issue rather than a substantive one. The recognition role requires a judgment to be made only that the proposal satisfies the statutory requirements. For the most part, these will only touch on governance issues. The only exception is that the recognition body would be required to determine whether the standards code met the statutory requirements, but as set out in Section 4 above, these requirements specify only that particular subjects should be covered but do not lay down any particular requirements on how they should be covered.

6.17 I recognise that there is a risk that this process could involve a degree of subjective

interpretation of concepts such as taking account of the rights of individuals. However, in reality, I have no doubt that Ofcom would consult and issue guidance on how such concepts should be interpreted. The decision making process would have to be transparent and, as I have indicated, it would be subject to judicial oversight by way of appeal or review.

6.18 Ofcom is a statutory regulator and its Chair is appointed by the Government. However, it

is also an independent regulator and its independence is accepted by the broadcasting, telecommunications and postal services industries that it regulates. In both telecommunications and postal services, there is a European requirement for independent regulation, which Ofcom meets. It is worth noting that, although its role in broadcasting content regulation has been much talked of, Ofcom carries out a wide range of regulatory functions, including competition regulation in communications markets. It has experience of the sort of role proposed here in the many co-regulatory systems where Ofcom must approve or recognise the industry established regulator. It is also worth noting that Ofcom has two general duties:

  • to further the interests of citizens in communications matters; and

K • to further the interests of consumers in communications markets.55

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6.19 Furthermore, in carrying out those general duties Ofcom must seek to reduce regulatory burdens, including having regard to whether the objectives of regulation are being met by effective self-regulation. In other words, although Ofcom is a statutory regulator, it has a statutory bias in favour of self-regulation and a statutory focus on the interests of citizens and consumers. A more specific duty to secure and promote freedom of speech and the freedom of the press in relation to the role of recognising an independent press regulatory body could be added should that be considered desirable. 6.20 The final option is that of some independent person or panel, a Recognition Commissioner or Commission, sitting within an existing body with the expertise and size to provide both the technical and legal support that would be needed. Obviously such a person or panel would need to be appointed in a way sufficiently independent from the industry and from political influence. Three questions arise: what are the necessary characteristics for a Recognition Commissioner; who should appoint them; and what body would provide the administration and expertise to support them. 6.21 I am going to approach the last of these questions first, because the answer has significant implications for the first. In the light of the assessment above, I am inclined to the view that the only body capable of providing an independent Recognition Commissioner with the necessary expertise in this matter is Ofcom. This would mean that Ofcom would provide the Commissioner with the necessary technical, legal and administrative expertise to undertake the necessary process of recognition, but that the decision taken would be that of the Commissioner himself (or the Commission), without any influence or input from the Ofcom Board. 6.22 Thus the Commissioner would need to be an independent person, with experience of being responsible for weighing evidence and taking significant decisions, but need not have specific experience of the press or of regulation. He or she would have to be appointed by another process independent of the press, independent of the Government and independent of the legislature. Again, it could involve those who hold equivalent responsibilities in other areas such as the Commissioner for Public Appointments and the Chairman of the Judicial Appointments Commission. 6.23 There is no single obvious best option for a recognition body. Ofcom is by far the best qualified body for the role, and I do think it is important that the expertise that Ofcom holds is brought to bear on the recognition process. In all the circumstances:

I recommend that the role of recognition body, that is to say, to recognise and certify that any particular body satisfies (and, on review, continues to satisfy) the requirements set out in law should fall on Ofcom. A less attractive alternative (on the basis that any individual will not have the requisite authority or experience and will only be occasionally be required to fulfil these functions) is for the appointment of an independent Recognition Commissioner supported by officials at Ofcom.56

In either case, the decisions could be subject to appeal and would undeniably be liable to judicial review, so that ultimately responsibility would sit with the courts.

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The recognition process 6.24 The intention is that the press and periodical industry should come together, as they have done under Lord Black, and bring forward a proposed body that would meet the requirements for recognition. There are, no doubt, details about the process that would need to be worked out. What I envisage is that the various industry representatives would decide to set up a body capable of recognition. They might want to discuss how they are approaching the task with Ofcom and thus ensure that there is a mutual understanding about an acceptable way forward. Such a discussion could include the proposed appointments process before the key appointments are made, in order to ensure that the requirements are met at the right time. Indeed, I would encourage a continuing dialogue between those establishing a body and Ofcom throughout the process, to ensure that the statutory requirements were fully understood, all the while recognising the very limited role that Ofcom would have.

6.25 Once a body was fully established it would seek recognition from Ofcom, providing evidence of its funding agreement, governance structures and code. Ofcom would test each against the statutory requirements and either approve the body or raise any reasons as to why the requirements are not met. The body would then have the option of amending the proposal in a way which would satisfy the statutory requirements, withdrawing its application, or challenging the decision of Ofcom decision not to recognise it. Figure K7.2 shows how the recognition process applies to the illustrative functions of the independent body shown in figure K7.1. Speaking for myself, assuming that the exercise is undertaken in a way that seeks to fulfil that which I have described, I see no difficulty in recognition being comparatively straightforward.

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Independent Board with a majority of people independent of the press.

Appointed in accordance with statutory criteria, by a process approved in advance by Ofcom.

Membership is open to all publishers on fair, reasonable and non-discriminatory terms. Funding is agreed between the Board and members on a transparent, medium term basis, approved by Ofcom, and is adequate to deliver functions.

Standards Code adopted by the Board, following consultation, and advised by editors. Covering: • conduct • respect for privacy • accuracy.

Complaints Handling Standards Enforcement Arbitration Service Decisions on individual Independent investigations of Fair, quick and inexpensive. complaints. Decisions may serious and systemic problems. be taken by sub-committee, Agreement to use the but with appeal to the Board. Will cover internal governance arbitration service is standards and serious and condition of membership. All breaches of the code to systemic code breaches. be recorded. Remedies to Non-members may face include publication of Sanctions to include disadvantageous costs corrections and apologies. appropriate and proportionate awards and aggravated or

financial sanctions. exemplary damages in court.

6.26 It is necessary to address the question of how many bodies Ofcom could recognise. My starting point is that only one regulatory body should be recognised at any one time. There are good reasons for this. A single49regulatory body would mean a common set of standards across the industry, ensuring that individuals knew what was expected of the press, where to go to if they had a problem and would not need to deal with multiple regulatory bodies if they had a problem that crossed many titles. A single regulatory body would have oversight of the whole industry (or at least as much of it as had joined the body) and would be able to take a view on standards across the industry, including pan title investigations into systemic issues. There is no risk of inconsistent decisions by different regulators effectively considering the same material. In Ireland, the Minister is only permitted to recognise one Press Council and the Inquiry has not been made aware of that causing any problems, either at the point at which the Press Council was recognised or subsequently. K

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6.27 However, there are potential difficulties with this approach. The UK press is not particularly homogenous: the evidence given to the Inquiry as to why some publishers currently sit outside the PCC suggests that the whole industry may find it difficult to work together.

The evidence provided by editors in relation to the proposals from Lord Black show some differences in approach to regulation: the Guardian, The Independent and the Financial Times have reservations about the approach to regulation taken by PressBoF, the regional press are anxious not to find themselves paying for the sins of the nationals and online providers see themselves having little or nothing in common with the majority of the printed press.

In Ireland, the single industry body had been formed before the Government shaped the legislation, and the legislation was shaped to fit the body. There is no equivalent industry body in existence in the UK now, and, assuming that this solution found favour with the

Government, there is no guarantee that one would emerge in the few months between publication of the Report and the introduction of legislation. 6.28 It is, therefore, conceivable that Ofcom might face multiple bids for the role of regulator.

The legislation would have to have some way of dealing with that eventuality, even if it were considered to be relatively remote. The alternatives are to provide Ofcom with some means of selecting a single regulatory body to recognise, or giving it the power to recognise more than one regulatory body. The obvious, and fair, approach to choosing between competing bids would be for the recognition body to set a date by which bids should be received and hold some form of 'beauty contest' to see which of the bids was preferable. An alternative solution would be to add a new requirement that the regulatory body had to have membership of over 50% of the relevant industry. Another approach would simply be for the recognition body to recognise the first compliant body put before it. 6.29 All of these options have significant disadvantages. A 'beauty parade' would lead to Ofcom having to identify criteria on which it would select and apply subjective judgments over and above the application of the statutory requirements approved by Parliament. This would move the role of recognition along the line from a mostly technical one to a wholly subjective one.

This would be likely to give rise to significant concerns about the nature of the recognition process and the degree of interference from Ofcom as it made its choice between potential regulatory bodies. 6.30 An approach which required a minimum level of industry membership would be objective.

However, too high a level might be too difficult for any industry grouping to achieve. Any proportion over 50% would make it possible for a few of the major publishers between them to ensure that the only proposal going forward was one led by them, irrespective of whether they actually had the support of the majority of the rest of the industry. It is questionable as to whether it would be helpful to put this much power in the hands of any of the large players. 6.31 Requiring the recognition body to recognise the first compliant bid would be an objective test. However, it is undoubtedly true that an individual organisation could run a spoiler bid, designed solely according to their own lights, more quickly than the majority of the industry would be able to reach agreement on a genuine agreed independent regulatory body. Such an event may be unlikely, but it is a contingency that must be guarded against. 6.32 There are also advantages to allowing more than one regulatory body. Different parts of the industry might want to apply different standards. As long as the standards offered meet the requirements set out above, there is no obvious reason to require the whole of the industry K to coalesce around the standards acceptable to those who wish to do the least. If parts of the industry wanted to aspire to higher standards it is difficult to see why they should not be encouraged to do that.

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6.33 The problems associated with multiple bodies are fragmentation of standards and the response. This is not necessarily a substantive concern. Anyone complaining to multiple titles will be complaining about different articles, and consequently the complaints will themselves be different and even a single regulatory body would have to deal with them differently. If the standards are voluntary it is difficult to see any principled reason why, as long as they meet the statutory criteria, it should be a matter of concern if they are different. There is no obvious reason why someone should not be entitled, for example, to pursue an apology from the Guardian when it purports to meet higher standards, which it would not expect to receive from a local newspaper or blog in relation to the same story. 6.34 The other concern identified is about the difficulty of conducting systemic investigations across the industry if there is more than one regulator. This undoubtedly could be an issue and it is possible to imagine issues that would warrant a pan industry investigation. One possible solution to this problem would be to make it a criterion for recognition that the body would agree procedures and cooperate with any other recognised regulatory body in relation to complaints or systemic investigations that cover titles across regulator boundaries: they might even agree a common appeals mechanism to ensure consistency of approach. 6.35 A concern raised about having a single regulator is that some organisations might find that that single recognised regulator simply was not set up to accommodate their particular business: the standards might be onerous but irrelevant, the fees might be too high, the governance requirements might be too burdensome and bureaucratic for a small publisher. This would be important if meaningful incentives were in place to encourage membership, as the organisations for which the single regulatory body was not appropriate would be forced to choose between forgoing the benefits of membership or submitting themselves to inappropriate regulation. Neither can be desirable. If multiple bodies were permitted there would be at least the theoretical possibility that they could collectively set up their own compliant body more geared towards their business model. Alternatively, or as well, the criteria for recognition could be strengthened to explicitly require the body to offer variable membership categories, with appropriate governance requirements and fee structures. 6.36 On the other side of the coin is the cost: I am not in a position to challenge Lord Black's view as to the cost of the proposals by PressBoF but I am sure that multiple regulators would duplicate cost and thus increase it for an industry that, at least in some of its manifestations, is suffering financial hardship. In the circumstances, I have no doubt that it would be ideal if the press came together to form an independent regulatory body, that would meet all of the requirements that I have set down here, and that would garner the support of all key publishers. 6.37 In the circumstances, I would strongly urge that it is in the best interests of the industry and the public that a single regulatory body should establish a single set of standards on which the public can rely. Failure to do so would be a sad indictment of the inability of the press to put commercial interest to one side, in order to come together in the public interest to create a system of independent regulation that would protect both freedom of expression and the rights of individuals. However, I do recognise that, should that ideal scenario not arise, it would be difficult to find an appropriate basis on which Ofcom could decide which of any competing proposals should be recognised. For this reason:

I recommend that it should be possible for the recognition body to recognise more than one regulatory body, should more than one seek recognition and meet the criteria, but I must emphasise that this is not an outcome I would advocate, and I K would regard it as a failure on the part of the industry should it be necessary for that step to be taken.

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Protection of freedom of the press 6.38 It has been argued that any legislation touching on press regulation would be the beginning of the slippery slope; that any Government would find it easier to amend an existing Act than to bring forward new legislation to shackle the press; that Parliament is itching to control the press and that this would be an opportunity to do so. I do not accept any of these arguments.

If the history of the last 50 years on press regulation tells us anything, it tells us that Parliament wants nothing less than to pass legislation to regulate the press. There may have been the occasional siren voice expressing a contrary view but, in truth, Parliament has managed to avoid many opportunities to do so, despite real (and repeated) public concern about press behaviour and the consequences of failing to deal with it. 6.39 There is no foundation in the suggestion that it is easier to amend an existing Act than to bring in a new one. Any statute only gives Government, or anyone else, the powers that are stated on the face of the legislation. If a statute simply provides for a recognition process for a press regulatory body then it can only be used for that purpose. Any attempt to introduce further legislation of the press would require a new Act of Parliament which could make new provisions or amend an existing Act, but it would need to be a new Act, and go through exactly the same processes that an Act establishing a recognition process would need to do today. 6.40 Having said that, I recognise the concern expressed by many and, in order to address the slippery slope argument, it would be possible to use a statute setting up a recognition process for a regulatory body to also place an explicit duty on the Government to protect the freedom of the press. I have already referred earlier to an example of just this, drawing heavily from s3 of the Constitutional Reform Act 2005, which would look like this:57