My Lords, I am extremely grateful to all noble Lords who have contributed to what has been a very thoughtful debate. I should perhaps start with the intervention by the noble Lord, Lord Black, because I am not sure whether it was the case for the defence or a warning of battles to come. He said that Lord Justice Leveson was as immune from being criticised as Florence Nightingale. I would have thought that the lady would have got a fair old battering from the noble Lord, Lord Black, if his speech was anything to go by.
Looking round the Chamber and listening to the contributions, and following this debate right through, I have never been in any doubt that many of the politicians in this Parliament would literally lay down their lives for the freedom of the press. It is not the case, as has been suggested in some of the very newspapers over which the noble Lord, Lord Black, has influence, that this is some Orwellian plot against the freedom of the press. As my noble friend Lord Phillips said, if by chance we saw what follows as an attack on the freedom of the press, I believe that the people who would be most likely to leap to the defence of the press would be not some of the media barons but noble Lords in this Chamber tonight and Members in the other place.
Although it was a well thought out and well delivered critique, I regret a little bit that nowhere in the remarks of the noble Lord, Lord Black, was there any apology. There was no recognition of the law-breaking on an industrial scale, no understanding of how deeply wounded the victims of press intrusion have been and no recognition of the deep disgust of the general public, which is reflected in the opinion polls that we have seen. I understand the message that was delivered. He asked me to pause. I genuinely ask the noble Lord, Lord Black, to pause and think whether he could not go back to those with whom he has immense influence and say, “Rather than trying to wreck this, couldn’t we see if we could make it work?”. To my mind, the prize is a great one—a free press, but a free press operating to the highest standards of ethics and one that is law-abiding. I believe that that is within our grasp if we can work together on this.
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I tend to agree with the noble Baroness, Lady Kennedy, that where the proposals that I have put forward tonight are not completely Leveson, that is where we have really thought hard to see where we can underpin the free press. I went into some detail about exemplary damages, which are going to apply in very extreme cases, as a number of noble Lords have made clear. We are quite confident that, as drafted, these provisions are compatible with human rights legislation. I think that it was my noble friend Lord Phillips who pointed out just how narrowly they would be drawn.
A number of points were made and I will try to cover them all. The noble Lord, Lord Lucas, asked whether we were trying to regulate the New York Times or Le Monde. No, but equally nothing would prevent them from joining if they saw an advantage in doing so. Of course, international publishers can still be susceptible to defamation torts in the UK; they are not exempt. The noble Lord, Lord Soley, asked about the review of this legislation. It will, as normal legislation, be subject to post-legislative review three to five years after Royal Assent. I take the point that we are, in a way, taking a trip into the unknown here. I am sure that the warnings and concerns that have been expressed around this House will mean that Parliament will continue to keep a very close eye on how this works out in practice. It is more likely to work well if we can work together on it, on both sides of the industry, so that we can make this work.
A number of noble Lords mentioned trying to future-proof this. I was involved in the Communications Bill with the noble Lord, Lord Puttnam, 10 years ago, when we were trying to future-proof that. In the modern world it is extremely difficult, but we want to keep a close eye on how this develops. Certainly, the legislation, as it is boxed at the moment, is on the news scene as we have it at the moment. We will have to see how much the changes that take place will need these issues to be revisited.
The noble Lord, Lord Skidelsky, asked about the ability of people to sue using conditional fee agreements. This will remain. What is in the LASPO is that the success fees will come from the awards made to those who have sued and will not be in addition. This was part of the Jackson recommendations to prevent what were seen as inflationary trends in this part of legislation. It is also true that we expect there to be fewer court cases, as the new regulator will resolve issues free of charge to claimants.
The noble Lord, Lord Phillips, asked whether there were any examples in legislation where the quantum damage was judged, as it were, on the ability of the defendant. I think that most magistrates tend to work on that principle, but I am told that there are instances in the Data Protection Act where this also applies. The points made by the noble Lords, Lord Inglewood and Lord Allan, about the impact on digital provision on the internet are well made. The noble Lord, Lord Allan, picked up the point about “press-like”. I intentionally clung to that line to try not to get carried too far forward by this legislation and I think that it is one that will be taken up.
On the point that the noble Lord, Lord Inglewood, made, I agree that the regulatory framework for content including TV, TV-like and TV news will need to respond to the challenges of convergence that the Lords committee inquiry has been investigating and will be reporting on. I also agree that, because of this, we should now be looking to make sure that where possible the regulatory framework has the flexibility to adapt to these new challenges. However, there are considerations against which this must be balanced, such as allowing for certainty in the market and avoiding unnecessary and burdensome regulation. The communications review has been considering this challenge and how to strike the balance, and these issues will be addressed in the communications White Paper.
A number of the points that have been raised in relation to the amendments need clarification. I will stick closely to the text because what I am saying has been agreed and looked at by lawyers in a way that perhaps not all politicians’ speeches are. The noble Lords, Lord Lucas, Lord Skidelsky and Lord Stevenson, have spoken to a number of amendments. I touched on Amendment 11A in the name of my noble friend Lord Lucas in the opening debate and I made clear the narrow nature of what we are doing.
Amendment 17C would remove one of the exceptions to the general rule that a regulated publisher defendant does not pay the claimant’s costs. This is where the issue raised by the claim could not have been resolved by using the arbitration scheme of the regulator. Amendment 17D clarifies the original drafting error in this provision. In such a situation, it would not be fair to have a presumption that a particular party should or should not pay the costs, and the general rules on costs should apply. The cross-party agreement has established that an appropriate rule here is for the exception to apply.
Amendment 17G contains the general rule that an unregulated publisher will pay the claimant’s cost. It removes the first exception to that general rule, which is that it does not apply where the issue in the claim could not have been dealt with in arbitration had the publisher been a member of the regulator. Again, in such a situation, it would not be fair to have a presumption that a particular party should or should not pay the costs, and the general rule on costs should apply. The cross-party agreement has therefore established that the appropriate rule here is for the exception to apply.
In Amendment 18C, my noble friend is seeking clarification about the position of online publishers. The definition of a relevant publisher, as it stands, carefully captures those publications that we believe Lord Justice Leveson intended to be incentivised to join a regulator—namely, the press and sophisticated press-like online activity—and excludes those that he considered should fall outside the scheme, such as small-scale bloggers. This is what lies behind subsections (3) and (4) of our definition of relevant publisher. In striking out these subsections, the effect of my noble friend’s amendment would be to incentivise websites that operate a moderator function or which collate material but do not themselves post it, such as Twitter, Facebook, Yahoo and WordPress. These are not websites
that Lord Justice Leveson intended to incentivise and I believe that it would be inappropriate for a regulatory system to do so.
As my noble friend has indicated, Amendment 19A is an attempt to address concerns among small publishers about the potential financial burden of the new system. However, as proposed by Lord Justice Leveson and reflected in the recognition criteria, the new system allows for varying terms of membership between different classes of publisher. It is, therefore, for the industry to determine a varying system of fees which is fair and proportionate and which allows the self-regulator to fulfil that role effectively.
Finally, my noble friend has tabled a number of amendments to Commons Amendment 131, which lists exclusions from the definition of relevant publisher. In Amendment 131C, my noble friend introduces a new exemption from the definition, with the intention to exempt all local and regional online and traditional print titles from the entire scheme of recognition and incentives. The proposed royal charter already sets out to deal with the particular interests of the local and regional press. An outright exemption, such as is proposed here, would allow publishers of local news, read and relied on by many people, to be wholly removed from the new regime being established under the Leveson proposals. While the Leveson report accepted the particular needs of the local and regional press, it did not recommend that these publishers be removed wholesale from the recognition regime.
With Amendment 131D, my noble friend would exclude non-charitable campaigning organisations that publish material that is incidental to the organisation’s aims and objectives. The Government’s definition of a relevant publisher already excludes charitable organisations, which will represent the vast majority of campaigning organisations. A “non-charitable campaigning organisation” would have, first, to be run as a business and, secondly, to be publishing news, opinion or information about current affairs before it would be caught by the Government’s current proposed definition. The concept of a non-charitable organisation is a very broad one and could cover a wide variety of websites or magazines that publish news.
In Amendment 131E, my noble friend seeks to extend the list of exclusions to include small and medium-sized publishers as defined in the Companies Act 2006. We are working on an alternative way of addressing the concern through government Amendment 131BA.
Lastly, my noble friend has indicated that, in contrast to his other amendments, Amendment 131B is more than probing. This amendment would create a significant loophole in the scheme proposed by Lord Justice Leveson. A publisher’s focus may be on events in a country other than the United Kingdom, but that does not change the fact that, in the process of reporting and commenting on such overseas events, people with a connection to those overseas events may be defamed, harassed or otherwise have their rights breached here in the United Kingdom. Provided that the publisher in question is able to join the regulatory scheme if he or she wishes to do so, there is no good reason why the costs and exemplary damages incentive should not apply to that publisher if he or she is sued under English law and in this jurisdiction.
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As for the second limb of Amendment 131B, there are two existing protections for those publishers refused membership of a regulator on unreasonable grounds. First, under the recognition criteria in the royal charter, membership must,
“be open to all publishers on fair, reasonable and non-discriminatory terms”,
thereby guarding against such an event. Secondly, if such a circumstance should still arise and a publication face a claim for exemplary damages, there is a requirement within the new clause for a court to take into account,
“whether membership of an approved regulator was available to the defendant at the material time”,
which would protect such a publisher.
I turn to the amendments proposed by the noble Lord, Lord Skidelsky. Amendments 17A and 17F would have the effect of extending the protection of the costs clause to any publisher against which a claim is made. These amendments would extend the ambit of the cost provisions in Amendment 17 beyond those agreed by the three main parties. We have been clear that we wish to cover within a self-regulatory regime those publishers that properly qualify as news publishers. Any attempt to broaden this could lead to unintended consequences, even though the noble Lord’s aim is to encourage the use of low-cost arbitration schemes, which I agree is laudable. Given the terms of the agreement last week, we do not consider these amendments are appropriate.
Amendment 18A removes the words “whether or not” before,
“carrying on with a view to profit”,
in the definition of a “relevant publisher”. This would have the effect of introducing doubt in relation to which publishers are in fact covered because many publishers, particularly traditional print media publishers of newspapers, do not make a profit. The exemption in paragraph 6 of the exclusions schedule already exempts public bodies and charities publishing news-related material in connection with the carrying out of their functions. This is narrower than the breadth of the exemption that is sought here, which, as indicated, could exempt mainstream newspapers.
Amendment 18B seeks to limit the definition of relevant publisher to businesses with a turnover of more than five times the threshold for VAT; that is, £385,000, which is five times the annual threshold of £77,000. I hope that the noble Lord will withdraw this amendment, given the Government’s manuscript Amendment 131BA.
Amendment 131A proposes an amendment to the broadcasting definition to make clear that it is only when broadcasters publish news-related material in the course of their broadcasting function that they fall within the exemption. However, this point is already covered adequately by the operation of the existing provisions. The existing schedule refers to news publications in connection with licensed broadcasting activity, and needs to be read alongside Amendment 18(6), which provides that a broadcaster gets an exemption only in so far as its publication is in its capacity as a broadcaster. So if a broadcaster established a separate
news publishing service, not linked to its broadcasting, it would not benefit from the exemption. I think that was the clarification the noble Lord was seeking.
Concern has been expressed that the wording of Amendment 11B would not capture the situation in which a regulated publisher had deliberately concealed information from the regulator, as in that situation the regulator could not be said to have acted in a “manifestly irrational” way, as it would have been unaware of the true picture. We believe that this is not a matter that needs to be provided for in the provisions regarding exemplary damages, nor should it be. It is properly a matter for the regulator’s procedures and we do not think that there will be a problem in practice, for the following reasons.
Where the court becomes aware of new facts that were concealed from the regulator, we believe that it will be open to the court to highlight these in its judgment, and for the regulator to reopen its investigation of the case and reconsider any penalties that it has imposed, or any failure to do so. There is nothing in the provisions relating to the royal charter that would prevent a case being reopened by the regulator in this way, and indeed nothing to stop a victim from bringing those new facts to the attention of the regulator regardless of the court’s intervention.
In any event, there will be a number of very strong incentives on publishers not to conceal information from the regulator. Requirements of a new regulatory system established on a contractual basis are likely to include the need for members to be bound by the terms of their membership to disclose whatever information is reasonably necessary for the regulator to fulfil its functions, and contractual terms preventing non-co-operation or the withholding of information can be built in. Concealing of information could also reflect the failure of governance standards on the part of the publisher, which can be the subject of penalties by the regulator.
Any such behaviour would also raise questions of criminal liability. A publisher who dishonestly keeps secret information that he is contractually bound to give to the regulator, or to a claimant in the context of arbitration, in order to avoid a sanction or paying damages could be guilty of committing a crime under the Fraud Act 2006. That is equally so where the publisher makes a false representation. We believe that it is appropriate and in accordance with Lord Justice Leveson’s recommendations for the powers of the regulator to control any attempt by publishers to conceal information to be established through the contractual terms governing the operation of the new regulatory system. We do not consider that anything needs to be added to this clause to enable that to occur.
Amendment 11C is unnecessary. It seeks to ensure that the new statutory test is not limited by the existing common-law test where exemplary damages are awarded if the defendant effectively balances the advantage to be gained by committing a wrongful act against the likely compensation that he or she would have to pay to the claimant, and decided that it was worth doing. The point of this common-law test was to show the defendant that “tort does not pay”. However, the
common-law test is entirely displaced in all “relevant claims” against “relevant publishers” as a result of Commons Amendment 11(4)(b), which makes clear that where Amendment 11 applies, exemplary damages can be awarded “only under this section”. Therefore, exemplary damages cannot be awarded against a relevant publisher in common law and so the “outrageous disregard” test in Commons Amendment 11(6) is the only test that can apply, and there is no need for the amendment.
Amendment 11D would add a subsection to Amendment 11. Amendment 15A makes a consequential change to Amendment 15. This would mean that both regulated and unregulated publishers could be vicariously liable for any exemplary damages awarded against one of their employees. It is well established that a publisher can be vicarious liable in common law to pay compensation for the acts of its employees. That position will not be changed by the Commons amendments. The position is different in relation to exemplary damages. Claims for such damages are very rare; cases in which they are sought for the act of an individual journalist even more so. In fact, we are aware of no cases at all in which exemplary damages have been awarded against a publisher found vicariously liable for the conduct of a journalist.
I understand the spirit in which the amendment is proposed. However, the cross-party talks and the Commons agreed a specific approach to exemplary damages—that exemplary damages would not be available in relation to regulated publishers as an incentive to their joining a voluntary self-regulator. There is one exception to that rule set out elsewhere in the clause—that the court may award exemplary damages against a publisher who has joined a regulator if, in the court’s view, the regulator acted manifestly irrationally in its imposition of a penalty. This amendment would introduce a second exception by allowing that publishers, whether regulated or not, could be held vicariously liable for exemplary damages awarded against journalists. That would go beyond the terms of the cross-party agreement. However, I should be clear about a number of points that I hope will give some reassurance. First, the liability of individual journalists at common law remains as it is now. Secondly, as far as we are aware, a publisher has never been held vicariously liable for an exemplary damages award against a journalist. Thirdly, the new regulator would have the power to fine publishers both for connivance in such activity and for ignorance of it. We think, on the merits, that the approach of the Commons amendment is the right one.
Amendment 12A, if accepted, would mean that in deciding whether to award exemplary damages the court would have to reach a value judgment as to whether the defendant’s reasons for not joining the regulator were themselves objectively reasonable. We do not believe that this would be practicable or appropriate.
Amendment 13A would require the court to take account of the defendant’s means in deciding the amount of exemplary damages to award. Courts can already take means into account and there is no need for the amendment.
Amendments 17B and 17E make two changes to Amendment 17(2) which relate to the costs incentive. First, the amendment excludes relevant publishers
which are unable to join a regulator, or which have objectively valid reasons for not joining the regulator, from the costs incentive. Secondly, it imposes an additional requirement on the availability of the first exception to the rule. That exception provides that if arbitration under an approved regulatory scheme has not resolved the case, then the ordinary rules on costs apply rather than the general rule that the defendant does not pay the claimant’s costs at all. The amendment adds a requirement to this exception that the defendant was a participating member of the arbitration scheme itself and not just a member of the regulator. This is inappropriate because it presumes that participation in the arbitration scheme will be an optional extra for members of the regulator. This will not be the case and therefore the amendment is not required. I think that that is another clarification that the noble Lord, Lord Stevenson, asked for.
I turn to Amendment 17J, tabled by the noble Lord, Lord Skidelsky. I can confirm that we do not intend to implement Sections 44 and 46 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 for publication and privacy cases until the new costs protection regime has been introduced. The position is clearly set out in a Written Ministerial Statement of 12 December 2012. The LASPO Act 2012 (Commencement No. 5 and Saving Provision) Order 2013, made on 19 January 2013, made the necessary provision excluding the publication and privacy proceedings from the coming into force of Sections 44 and 46 on 1 April.
We have asked the Civil Justice Council for advice on costs protection and it will report by the end of this month with its recommendations, following which provision for costs protection will be taken forward later in the year. I reiterate that costs protection is a better way forward than allowing the recoverability of “after the event” insurance premiums to continue. Costs protection allows meritorious cases to be pursued at proportionate cost; “after the event” insurance allows cases to be pursued but only at substantially increased cost. In taking this course we are following the recommendations of both Lord Justice Leveson and Lord Justice Jackson before him that access to justice in publication and privacy cases must be at proportionate cost.
In respect of Amendment 19B noble Lords will be aware that the agreement reached at the end of the cross-party talks was that the Freedom of Information Act should not be extended to an independent regulatory body. The talks did, however, agree that further consideration should be given to whether the recognition panel ought to be covered by the Act. The Government’s recent response following post-legislative scrutiny of the Freedom of Information Act reiterates their commitment to extend the Act to a range of bodies performing functions of a public nature using the order-making power in the Act. We are happy to designate the recognition panel using an order under the Freedom of Information Act once the body exists and we are clear about the nature of its functions rather than using primary legislation at this stage. As one who is a very strong believer in the Freedom of Information Act, I hope that the House will accept the assurance that this will be carried out.
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In respect of Amendments 19C and 19E, tabled by the noble Lord, Lord Skidelsky, the Government have already announced their intention to consult on the broad range of data protection-related proposals in Lord Justice Leveson’s report. Both these provisions will be included in this.
Amendments 38A and 38B change the timing for commencement of the provisions on exemplary and aggravated damages and provide for these to come into effect immediately upon the sealing of the royal charter. That would immediately put all relevant publishers at risk of an exemplary damages award, whether or not they wished to become regulated. This is because these amendments allow no time at all for the press to present proposals for a regulatory body to the recognition body for approval. The Government do not believe that this represents a reasonable or practical approach and cannot support this amendment.
I turn to Amendment 131F in the name of the noble Lord, Lord Stevenson, which introduces a new exemption from the definition of “relevant publisher” for small blogs. This amendment would have the effect of introducing doubt in relation to which publishers are in fact covered because many publishers, particularly traditional print media publishers of newspapers, do not make a profit and have no expectation of doing so. Concepts of turnover and profit are therefore difficult elements to incorporate into a publisher test without excluding genuine online news publishers operating a business. I hope that the noble Lord will accept that the Government’s manuscript Amendment 131BA deals with his point, at least for now. As I have indicated, this amendment is without prejudice to further consideration of the issue of small blogs before the Bill goes to the Commons.
I return to the Government’s proposals. When Lord Justice Leveson published his recommendations in November, after his extensive inquiry into the culture, ethics and practice of the press, he extolled politicians from all sides to work together to find cross-party agreement on their implementation. We have in front of us a set of proposals central to delivering Lord Justice Leveson’s vision of a voluntary, incentive-based and self-regulatory system for the press, with that crucial cross-party agreement. I believe that the exemplary damages and costs clauses create a credible and watertight incentive system, providing a strong incentive for relevant publishers to design and become members of a press self-regulatory body, as intended by Lord Justice Leveson.
We have a set of provisions that implements Lord Justice Leveson’s recommendations, that strikes the right balance between a tough system of incentive-based self-regulation and protecting this country’s cherished freedom of expression, and that draws the right line between publishers that are in the scheme and those that are out of it. As politicians, we have a duty to act in response to the press scandals of the past and to Lord Justice Leveson’s recommended solutions. This is our opportunity to do so.
I commend the Commons amendments to the House together with the three government amendments and invite the noble Lords, Lord Lucas, Lord Skidelsky
and Lord Stevenson, not to press their amendments. I believe that this will be the best way forward. I realise that that is a very detailed reply and that noble Lords will wish to study it.