My Lords, I beg to move that this House agrees with Commons Amendment 11. With this I shall speak also to Commons Amendments 12 to 19, 38, 46 and 131, and to the government
Amendments 17D, 17H and 131BA to those amendments. This group of amendments, together with a new clause which your Lordships’ House has already added to the Enterprise and Regulatory Reform Bill, implement legislative parts of the Leveson cross-party agreement. Clearly these have been the source of much interest over the last week, since the Prime Minister announced last Monday that he had reached agreement with the Deputy Prime Minister and the Leader of the Opposition on proposals for a royal charter. As part of that agreement, the three parties also agreed proposals and exemplary damages and costs that are designed to incentivise publishers to join the new regulatory framework. These proposals are the subject of this group of Commons amendments.
I will first explain the key features of the Commons amendments. Commons Amendments 11 to 15 relate to exemplary damages, which are already available under the common law. They are, however, very rarely awarded, as they are reserved for the most serious cases. They are designed to punish, and only where there is no alternative. That general position will not change, although the new scheme for relevant publishers will change the position for them in relation to certain types of cases relating to the media, namely cases for defamation, misuse of private information, breach of confidence, malicious falsehood and harassment, as specified in Amendment 19.
Commons Amendment 11 incentivises publishers to join the regulator by making it clear that a court may contemplate awarding exemplary damages only in cases where a publisher has not joined the regulator, with very limited exceptions. This is on the basis that a publisher joining the regulator will face the prospect of regulatory fines of up to £1 million. However, subsection (3) of the new clause also provides that if a court is persuaded that a regulated publisher has acted in a way that would lead the court to award exemplary damages but for their membership of the regulator, and the regulator has acted manifestly irrationally in its approach to sanctioning that conduct, the court may exceptionally make an award for exemplary damages in that case. I know that this is one of the points on which my noble friend Lord Lucas has sought clarification in his Amendment 11A. I hope that he will agree that this is a very limited and clear exception to that rule, being available only when a court concludes that the regulator has acted in a manner that is manifestly irrational—a very high bar.
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Further, this is a necessary safeguard for victims to ensure that the press self-regulator sanctions in an appropriate and meaningful way and is not tempted to give the press an easy ride. Exemplary damages would be awarded only in the most serious of cases. This is in line with both the Leveson report and the report of the 1997 Law Commission. The test for the award of exemplary damages would be where the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights. That conduct is such that the court should punish the defendant for it, and other remedies would not be adequate to punish that conduct.
The new clauses inserted into the Bill by Commons Amendments 12 to 15 contain provisions designed to ensure that new systems work effectively in practice. Commons Amendment 12 sets out factors that the court must take into account in deciding whether an award of exemplary damages is appropriate, with the overall context of considering all the circumstances of the case. The core factors are whether,
“membership of an approved regulator was available to the defendant”,
at the time of the event giving rise to the claim, and, if so, what reasons the defendant had for not being a member. Commons Amendment 13 sets out matters to which the court must have regard in deciding what amount of exemplary damages is appropriate. The key principles governing the court’s considerations are that the amount should be no more,
“than the minimum needed to punish the defendant for the conduct complained of”,
and that it should,
“be proportionate to the seriousness of”,
that conduct. Commons Amendments 14 and 15 ensure that these provisions will operate effectively in cases involving more than one claimant or more than one defendant.
For completeness, I should also mention Amendments 16 and 38. Amendment 16 implements recommendation 71 in Lord Justice Leveson’s report, and confirms that in cases under the new system, aggravated damages should be awarded only to compensate for mental distress and should have no punitive element. Amendment 38 provides that the provision on exemplary damages will come into force one year after the date on which a body is established by royal charter. This will be a powerful incentive to the press to establish a new regulator on a timely basis so that they will have the opportunity of becoming regulated.
I now turn to the provisions relating to cost in subsection (1) of Amendment 17, which will be subject to government Amendments 17D and 17H. This new clause is designed to give effect to Lord Justice Leveson’s recommendation that the award of costs in media torts should be another tool to encourage publishers to join the regulator. The effect is that there would be a clear presumption that where a claimant took a publisher inside the regulator to court, even if the claimant was successful in their case, the normal rule that their costs would be met by a losing publisher would not apply. In other words, a defendant publisher who had joined the regulator should only pay the claimant’s costs in limited circumstances.
The new clause also establishes a second presumption: that a defendant publisher who does not join the regulator should always pay the claimant’s costs, again, subject to the exceptions in limited circumstances. Those limited circumstances are subject to government Amendment 17D, where the issue could not have been resolved at arbitration, even if the publisher had been a member of a regulator, or if it were just and equitable for the defendant publisher not to pay the cost.
Government Amendments 17D and 17H make two technical amendments to the new clause on costs. The first refers to subsection (2)(a) of the costs clause. The
intention of this provision is to allow for costs to be awarded against a regulated publisher only if the claim is not capable of being resolved through the regulator’s arbitration scheme. However, to achieve this, the word “not” must be inserted into the condition of subsection (2)(a), to avoid the opposite being the case. Amendment 17D simply corrects this drafting error.
In addition, we have concluded that subsection (4) of the costs clause is unnecessary. It defines what could be resolved by an arbitration service established by a regulator by reference to whether,
“the claim could have been referred”,
to such an arbitrator. In fact, the reason an arbitrator might not be capable of dealing with a claim might not be clear until after the referral has taken place, so we concluded that the definition was unduly restrictive and was not needed. Amendment 17H strikes out the subsection.
The application of these provisions on exemplary damages and costs turn on the definition of “relevant publisher” in Commons Amendments 18 and 131. As I indicated, we want to ensure that the new provisions act as the incentive that Lord Justice Leveson intended. At the same time, we do not want to draw in too broad a range of publishers. Our aim has been to capture the main elements of the press, as well as what I find it helpful to refer to as “press-like” activity online.
Lord Justice Leveson said that, ideally, a regulatory body,
“would attract membership from all news and periodical publishers, including news publishers online. It is important for the credibility of the system, as well as for the promotion of high standards of journalism and the protection of individual rights, that the body should have the widest possible membership among news providers”.
He also said:
“This is not meant to be prescriptive at the very small end of the market: I would not necessarily expect very small publishers to join the body”.
Commons Amendment 18 therefore provides a definition of “relevant publisher” that captures national newspapers and their online editions, local and regional newspapers and their online editions, online-only edited press-like content providers, and gossip and lifestyle magazines.
The new provisions act as the key incentive for joining the new press regulator. The regulator provides a number of protections from both exemplary damages and costs clauses, so it is important that the definition equates to the publications that we expect to be part of the regulator. Those inside the regulator will be expected to comply with the industry-standard clause and will be exposed to a £1 million fine, a complaints conciliation service and a new, free arbitral arm for the processing of civil legal claims. However, these provisions are equally designed to protect people who are not intended to be in the new press regulator.
In the past week, I have seen some concerns voiced regarding the extent to which bloggers or tweeters may be caught by this definition. I will return to this point in a moment. Lord Justice Leveson distinguished between the often grass-roots, small-scale activity of individual bloggers’ sites and social networking, and those activities
that have developed over time into more sophisticated, multi-authored and edited news-related businesses. He referred to:
“a number of news blogs—the Huffington Post is an early, high profile example of one, which has developed over the years into something much more like an online newspaper—which specifically aim to bring a range of news stories and views on those stories to their readers”.
This is an important distinction. Leveson is describing a press-like operation online. In order to future-proof our regulatory approach, we need to keep up with changes in technology. Any regulatory system that seeks to cover news publishers cannot ignore the fact that the print forms of press are facing real economic challenges, both structural and cyclical, and that distribution methods are moving increasingly online. Reforms to press regulatory systems must take account of the increasing online presence of the national news publishers, as well as press-like news publishers who operate solely online.
In future, the digital world is likely to be the principal method of distribution for much of our news, and our regulatory system must reflect this. It is important because the public have different expectations about different kinds of media, and in taking a regulatory approach we should take seriously those public expectations. Clearly, the online version of the national press, its regional counterpart or an online yet press-like news site, carry very different public expectations when compared with a small-scale blog—or, for that matter, a tweet. Our definition of “relevant publisher” seeks to make this differentiation. It does so by employing an interlocking series of tests, all of which must be met before the threshold of the definition is reached. They are, first, whether the publication publishes news-related material; secondly, whether it is written by different authors; thirdly, whether it is to any extent subject to editorial control; and, fourthly, whether it is published in the course of a business. The definition is therefore intended to protect small-scale bloggers while capturing the more sophisticated, press-like online material that Leveson described.
Equally, the definition of “relevant publisher” is not intended to capture the news aggregation services of operations such as Yahoo! or MSN. Nor is it intended to capture social networking sites where individuals post user-generated material. Nor is it aimed at sites that simply moderate the comments of others, or aggregate a series of blogs without any active consideration of the content, such as the blog-hosting services WordPress and Tumblr. I also clarify that, contrary to some recent reporting, the definition is equally not aimed at covering individual journalists. The definition of “relevant publisher” is aimed at organisations that employ or otherwise commission journalistic content, and, even then, only to the extent that these organisations operate in line with the four interlocking tests that I outlined.
I recognise that people have been seeking clarification on how the legislation could apply to small-scale bloggers, and how the interlocking tests work. This is reflected in some of the amendments before us, and includes the suggestion that there may be a case for making an express exemption in respect of small-scale blogs in the new schedule inserted by Commons Amendment 131.
To allow a period of reflection in advance of the next round of ping-pong in another place after the Easter Recess, the Government have tabled manuscript Amendment 131BA in recognition of the concerns over Amendment 131. As part of this, my right honourable friend the Secretary of State for Culture, Media and Sport has agreed that her officials will collate and engage with any issues that are raised before submitting a view on how the test will operate and whether there is a need for a further amendment. I hope it is clear to noble Lords that when this is next considered by the other place, the Government may come forward with an alternative amendment, or invite the other place not to agree this amendment. However, for now, I invite the House to make this change.
Finally, on “relevant publishers” and in addition to the four tests, I draw the attention of the House also to the new schedule that will be inserted by Amendment 131, which outlines specific exclusions from the definition of “relevant publisher”. In referring to Lord Justice Leveson’s view of the membership of a future press regulator, we have provided exclusions for a range of otherwise unrelated activities that might have been caught unintentionally. To that end, we have provided a specific exclusion for broadcasters who broadcast news-related material in connection with broadcasting activities authorised under their broadcasting licence, special interest titles, scientific or academic journals, public bodies and charities, company news publications and book publishers.
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Clearly, getting the balance of incentives is also very important. It is important that we draw the right line between the publishers intended to be caught and those who are left outside. I am confident that the Government have drawn the line in the right place and I have set out my reason for that today. Through the cross-party talks, we have agreed a set of proposals that will create a tough new system of press self-regulation. We are, I believe, striking the right balance through these amendments, which enable the implementation of this system but which, equally, do not compromise freedom of expression. They form a crucial part of the new regime for press regulation as Lord Justice Leveson set out and which, as politicians, we have a collective duty to implement. I will wait to hear what noble Lords have to say about their amendments, particularly in the light of manuscript Amendment 131BA, and respond to them when I wind up this debate. For now, I commend these Commons amendments to the House.