My Lords, this group of amendments is designed to incorporate in legislation a series of safeguards regarding extended collective
licensing. The Government have publicly committed to many of these safeguards in some form or other. I thank my noble friend for his continued positive engagement with ensuring ECL is a fair system. The Government share those aims, and I seek to reassure my noble friend that we have met them.
As there are a large number of amendments in this group, I will respond to them by reference to a set of themes. Amendments 84AFA, 84AFB, 84AGA, 84AGB, 84AGC and 84AGD are essentially consequential in nature, and so I will not deal with them directly. Amendments 84AEB, 84AEC, 84AED, 84AEE and 84AEF seek to provide clear safeguards against an unwanted extension of the scope of collective licensing, and to define the characteristics of a body which can be authorised to operate ECL schemes.
The need for safeguards is absolutely beyond dispute. A working group which includes creators of photographic, audiovisual, literary and musical works is helping us to develop these safeguards into draft regulations. I gave commitments during Grand Committee on some of the issues the working group would be asked to consider, such as those raised by Amendment 84AED. The Government will consult on these draft regulations before asking Parliament to approve them. The Government feel that regulations can more easily be adapted to keep safeguards effective in the light of market changes. Such adaptability ensures that the scheme continues to protect creators’ interests. Regulations can also more easily be adapted to emerging best practice; this better prevents abuses. The Government’s approach will still allow for a comparable level of safeguards to those found in primary legislation in other jurisdictions.
My noble friend Lord Clement-Jones raised the issue of the Nordic protections which are in primary legislation, a topic also alluded to by my noble friend Lady Buscombe. The UK proposals include similar safeguards, such as the right to opt out and a test of representation, and a different legislative route that has been used to provide future-proofing. However, not all Nordic ECL provision is for specific uses. For example, the Danish Act includes provision for a “general” ECL. Some vital safeguards are on the face of the Bill: the right to opt out and the requirement that ECL can be authorised only for specific types of works and rights. Applications to operate ECL would be authorised only on the basis of significant, demonstrable support for collective management in relation to the specific licence. This would need to include evidence that the applicant—a significantly representative licensing body—has the consent of its members to apply for the authorisation.
My noble friend Lord Clement-Jones raised the issue of ECL. If I have him correctly, he described ECL as potentially dangerous and questioned the description of it as voluntary. Noble Lords have queried our description of our proposals as voluntary, but they are voluntary because the Government will have no power to impose ECL on a sector. This is not compulsory collective licensing; it will be for a relevant licensing body which will require the explicit consent of its members to choose whether to apply. For non-member rights holders, I accept that ECL, where it
applies, shifts collective management from opt-in to opt-out. This is why the Government are committed to a series of safeguards to ensure ECL is authorised only when there is a demonstrable case for it, and to make sure that rights holders have the opportunity to exercise their opt-out.
In relation to the advertisement of ECL schemes prior to authorisation, the Government have proposed that an application should be publicised to allow comments from interested parties before a decision is taken. The Government do not propose that new regulations should be laid in relation to each proposed authorisation. With regard to Amendment 84AEF, I confirm that authorisations will apply specifically and solely to the licensing scheme which was the basis of the application.
In relation to Amendments 84AEE and 84AEG, the Secretary of State will decide whether to grant or reject an application and to set the conditions of any authorisation. We therefore consider it appropriate to provide in the regulations that the Secretary of State should also have the power to revoke an authorisation, should that prove necessary. The Government believe that this may be a more efficient process than a referral to the Copyright Tribunal. Following discussions with the working group, I can confirm that the Government intend to make ECL authorisations subject to renewal.
I turn now to the question of the opt-out, and I hope that my subsequent comments on the subject of exclusive licensees will be helpful to my noble friend Lord Clement-Jones. Amendment 84AF focuses on the right to opt out of ECL schemes. In Grand Committee, I made a commitment that the working group on extended collective licensing would be asked to consider whether the right to opt out should be extended to exclusive licensees and their representatives. The Government take the opt-out protection seriously. If it becomes clear that an extension of the provisions to cover exclusive licensees and representatives is necessary, the Government will act on that basis. However, I do not want to pre-empt the work of the working group, given my Grand Committee commitment.
I know that my noble friend Lord Clement-Jones also has concerns regarding due diligence in relation to opt-out. I can confirm that the Government’s intention is that the burden of proof should favour the party seeking to opt out. That seems to us the right and fair thing to do.
My noble friend Lord Clement-Jones raised his concern that the opt-out would be too burdensome for rights holders. However, the responses to the consultation make it clear that rights holders expect to be able to opt out entire collections of work or individual works quickly and with minimal or no cost. It will be the responsibility of the collecting society to operate opt-out schemes which meet the needs of effective rights holders. They will need to demonstrate how they intend to do this when they apply to operate an ECL scheme.
On Amendment 84AEH, the Government believe that licensing bodies rather than users, who may be individuals or small businesses, should accept and process opt-outs. Licensing bodies will be required to
publicise any ECL scheme before it comes into effect, giving rights holders every opportunity to opt out in advance.
Subsection (b) of the amendment presents some practical difficulties. “Reasons to believe”, for example, could prove to be a very subjective judgment. It would seem more practical for licensing bodies to address issues of exploitation that the “author would oppose” on a scheme-by-scheme basis through, for example, licence conditions.
On fair treatment and remuneration for non-members, I reiterate my support for the principle. However, I do not feel that it would be appropriate to give non-members of licensing bodies recourse to the Copyright Tribunal that members do not have. I also feel that it is unlikely to be cost-effective.
Codes of practice will require fair treatment for non-members, and ECL will not be authorised unless a suitable code is shown to be in place. If a dispute fell within the scope of a code, a non-member would be able to use the licensing body’s complaints procedure, with appeals going to an independent ombudsman. The Secretary of State would have the power to revoke an ECL authorisation if a code was not complied with. This is in addition to the proposed wider backstop powers and code review system, which includes the ability to impose other sanctions.
Amendment 84AGE would mandate that the regulations provide for a creator’s moral rights to have been assumed to have been asserted. I am happy to confirm that the orphan works regulations will indeed provide for this.
In relation to ECL, the principle is that the licence conditions applicable to the use of member’s works would also apply to the works of non-members. Amendment 84AGE would, however, also remove references to other safeguards. These include the various rights and obligations once a work ceases to be orphan, and the right to withdraw from an ECL scheme once it is up and running. The fact that these matters are specifically referenced in the Bill is an indication of their importance.
My noble friend Lord Clement-Jones and others have made some valuable points, but I can reassure the House that the Government understand the importance of getting the detail right. Fixing the detail in regulations will allow for expert input from the working group, further consultation and parliamentary scrutiny via the affirmative procedure, and will help the Government to keep safeguards up to date and effective. While I appreciate the intention of these amendments, I am concerned that they would hinder us in getting the detail right now and in the future. I therefore ask my noble friend to withdraw his amendment.