Memorandum submitted by Press Standards Board
1. The newspaper and magazine publishing industry welcomes much of this inquiry. The development of a judge-made privacy law and the use of "no win, no fee" arrangements in privacy and libel cases are having a profound adverse impact across our industry both in terms of press freedom and commercially.
2. The inquiry takes place at a time of serious commercial distress within the industry, as it faces the impact of global recession alongside massive structural change arising from the digital revolution. The Select Committee has an opportunity to be of great assistance to the industry, which is a vital part of the UK's creative economy, by tackling these key issues and recommending constructive change. We are pleased to put forward suggestions on these points in this short cross-industry submission, and would welcome the opportunity to give oral evidence on them.
3. However, the industry is surprised that the Select Committee finds it necessary to review yet again the effectiveness of the self regulatory system. An inquiry in 2003 rejected statutory controls and upheld the principle of self regulation; while one as recently as 2007 branded a privacy law "impossible" to draft and costly to use, and also rejected the idea of fines being imposed by the Press Complaints Commission [PCC] as impossible without the sort of statutory backing which would be a "very dangerous interference with the freedom of the press". Nothing since then has changed to undermine those findings. Indeed, the system has in fact continued to evolve in a way which is of increasing benefit to ordinary members of the public.
The success story of self regulation
4. The industry is fully committed to effective self regulation through the editors' Code of Practice and the jurisdiction of the independent PCC, with its majority of lay members. There is no doubt that - as previous inquiries of this Committee have concluded - standards of reporting have been raised markedly since the PCC and the Code were established in 1991. Change has been incremental; but on very many issues - including the treatment of children and the sick, harassment, intrusion into grief, the protection of personal privacy in key areas such as health and victims of sexual assault, and the unacceptable use of subterfuge - it has been very significant.
5. As importantly, self regulation has inculcated within our industry a culture of correcting inaccuracies and other breaches of the Code speedily and effectively. Complaints statistics from the PCC show more complaints than ever being resolved, and in record time. But very many complaints never reach the Commission: instead they are sorted out by publishers to the satisfaction of the complainant without the need for the intervention of the PCC. This is a substantial - and hidden - success of self regulation.
6. The PCC itself has proved to be an efficient and accessible regulator. Numbers of complaints - a sign not of declining press standards, but of ever increasing public awareness of the PCC - have grown steadily over the years, as has the Commission's record in resolving them. The latest statistics show that over 80% of possible breaches of the Code were resolved.
7. Furthermore, the system has shown that it has the ability to adapt not just to the public's expectations - as happened in the wake of the death of Diana, Princess of Wales - but crucially to changes in technology. In 2007, the PCC's remit was extended by the industry to include on-line audio-visual material in a speedy and flexible manner that would have been impossible under any form of statutory system.
8. The Code, too, has evolved over time, and there are now regular reviews of it, involving consultation not just with the industry but with the public. Recent changes have included new rules on the use of digital material, such as e mail, and on suicide reporting.
9. Self regulation is, of course, also about more than the PCC, and the industry has consistently demonstrated its ability to act co-operatively to raise standards and deal with emerging issues. For instance, in the autumn of 2008, the industry responded to concerns raised by the Information Commissioner concerning possible breaches of the Data Protection Act with an unprecedented cross-industry education and information campaign aimed at bringing home to every journalist the importance of observing this vital legislation. An electronic copy is enclosed with this submission.
Industry funding and compliance with the PCC
10. One symbol of the industry's commitment to effective self regulation is the substantial investment that it has made in the PCC. Since it was established in 1991, the industry has invested close to £30 million in the work of the Commission through the Press Standards Board of Finance [PressBof].
11. Registration fees are paid across the industry - from national, regional and magazine publishers throughout the UK - and although the levy is voluntary, compliance has always been extremely high.
12. In such a complex and large industry, it has been inevitable that there have been occasions on which publishers have withdrawn temporarily from the system, often as a result of wider newspaper industry issues. In 1994, Mirror Group Newspapers - under different ownership to now - withdrew temporarily from PressBof following a dispute with the PCC. It returned when the dispute was resolved, but pulled out again for a short time when it left the Newspaper Publishers Association [NPA]. Such events do occur, but they have - over nearly two decades - been extremely rare and manageable.
13. Currently, Northern and Shell - publishers of Express Newspapers and OK! Magazine - are not contributing to the system. It would, of course, be of great concern to the industry if a major publisher such as this were permanently to withdraw from the system, but PressBof is actively engaged in seeking a solution to the issue. Discussions are ongoing and we will update the Select Committee with any important developments. In the meantime PressBof's investment in the PCC is unaffected; and for the present, the PCC continues to deal with complaints against Northern and Shell titles, meaning that the Commission's service to the public is also unaffected.
The PCC and the law
14. The complaints conciliation and adjudication system under the Code of Practice administered by the PCC has never been intended to mimic or supplant the law. The Code itself deals with areas of basic journalistic ethics - accuracy, privacy, protection of the vulnerable - but it does not cover some civil or criminal offences where complainants may have legal redress. These include copyright, breach of confidence, incitement to racial hatred and libel.
15. People with a grievance against a newspaper or magazine may therefore have alternative methods of redress available to them, although it is worth underlining at this point that the PCC does not impose a legal waiver on people with a complaint: they can - although few do - pursue a complaint through the PCC then through the Courts, or vice versa. If complainants are seeking injunctive relief or damages, then clearly legal redress is essential; if they are seeking speedy and amicable resolution of a complaint, the PCC's service is tailor-made and free.
16. Although the Human Rights Act has increased the scope of potential redress in privacy cases, this is nothing new. Complainants have made decisions about whether to use the PCC for serious accuracy complaints, or sue for libel, ever since the Commission was established in 1991. Just as the Advertising Standards Authority is merely one route for people with a grievance against an advertisement (as they can also complain to the OFT or even undertake litigation), the PCC is part of a tapestry of potential solutions to a press complaint: it does not seek to monopolise territory in which the Courts and other regulators also have a role to play.
17. The key difference between the law and the PCC is that the Commission's service is entirely free. It is also private and quick. This is why over 4,500 people used the PCC last year, compared to the very small numbers who took proceedings in Court.
The McCanns, the press and the PCC
18. It is against this background that the atypical and tragic case of the McCanns needs to be viewed.
19. In part because of the international nature of their case, the McCanns used lawyers to assist them throughout their ordeal; but this inevitably impacted on the manner in which grievances against the press - abroad as well as in the UK - were pursued. In some areas where no legal redress was easily or swiftly possible (such as harassment - where the PCC has an excellent record) the Commission was able to assist, as the PCC's submission will detail.
20. As far as a number of stories in one particular group of newspapers was concerned, the McCanns had to make a judgement about the nature of the redress they sought. It is arguable that, had the McCanns made use of the PCC's services earlier to complain about inaccurate reporting, this problem would not have arisen. However, it seems that some form of compensation was understandably important to them because of the financing of the Madeleine McCann fund - it should be remembered that they regarded the media as "important partners" in the search for Madeleine, according to their press spokesman, Clarence Mitchell - and they therefore had a strong motivation to pursue a libel action.
21. To imply that this indicates a weakness in the self regulatory system is fundamentally to misunderstand its nature. The PCC is at heart a complaints resolution and adjudication process which meets the needs of the overwhelming majority of people with a grievance against a newspaper or magazine: it is not a substitute for the law, but sits alongside it.
Fines and compensation
22. The PCC has no power to levy fines or provide compensation for complainants in the way the law does, for a very good reason. The PCC is absolutely free to use. Importing money into the system would mean that it became populated by lawyers (on both sides of the argument) - as the Select Committee itself recognised in 2007 - and would therefore no longer be so accessible. While a tiny handful of complainants might benefit, the vast majority would lose out.
23. Moreover, the majority of complainants who go to the PCC actively choose some form of conciliation - preferring to get their complaint remedied by a correction, apology or published letter rather than some form of compensation.
24. Importantly, the introduction of fines and compensation into the system could lead to the breakdown of the successful consensus on which the PCC - and the change in newspaper and magazine culture which the Code of Practice has engendered - is based. There is a real concern that some publishers could leave the system, possibly to the extent of threatening its very survival. Other publications, as happens in France (where there is a privacy law), may make the commercial judgement that a fine is worth paying if a story sells enough copies: that would be the abnegation of self regulation.
"No win, no fee" arrangements
25. The PCC and self regulation work well, and it is difficult to discern any grounds for its fundamental tenets to be questioned. But of far more significance to the industry at this time is the issue of so-called "no win, no fee" cost arrangements in litigation, which are having a serious impact on press freedom.
26. Partly as a result of these Conditional Fees Arrangements [CFAs] and "after the event" [ATE] insurance policies, costs in freedom of expression cases - libel and privacy - are now running out of control, with extremely damaging consequences across the print and broadcast media.
27. CFAs are having a serious commercial impact on all publishers - who sometimes face bills running into millions of pounds to defend even fairly straightforward cases - and, even more importantly, a profound chilling effect on investigative journalism. This point is recognised at the most senior levels of the judiciary. Lord Hoffmann has said that "freedom of expression may be seriously inhibited in defamation actions conducted under CFAs" while Lord Justice Brooke has said that "the obvious unfairness of such a system is bound to have a chilling effect on a newspaper exercising its right to freedom of expression and lead to the dangers of self imposed restraints on publication". Justice Secretary Jack Straw has denounced costs as "scandalous", while even the UN Human Rights Commission has called on the Government to limit "the requirement that defendants reimburse a plaintiff's lawyer's fees and costs regardless of scale, including Conditional Fee Arrangements and so-called 'success fees', especially insofar as these may have forced defendant publications to settle without airing valid defences" because of the potential impact on freedom of expression.
28. Publishers defending actions are now in a hopeless situation. The problem of cost is most damaging for local and regional newspapers, in common with other small publishers and individuals who often cannot afford to fight legal actions which could put their business or livelihood in jeopardy. The regional and local press is particularly vulnerable to the chilling effects of the CFA regime under which newspapers can in effect be held to ransom. The threat of CFA inflated costs of litigation can deter publication or force settlement of actions, even though the claims might have little merit. Thus right across the media, cases are being settled where there is no editorial reason to do so.
29. The ATE insurance system attendant on the CFA regime has also created particular problems for the regional and local press. In practice, no allowance is made even for where newspaper editors and publishers feel that a valid complaint has been made and have sought to resolve the matter as soon as reasonably practicable on receipt of the complaint. At the behest of their solicitor, the claimant will often have already incurred the liability to pay an ATE premium - but which the claimant will not actually pay - even before the letter of complaint has been sent to the newspaper. The newspaper therefore becomes liable to pay a substantial sum, which has been incurred by another who will not be actually liable to pay it, before the newspaper knows the precise substance of the legal complaint, regardless of the merits of the claim and irrespective of a swift resolution, which renders any such insurance and insurance premium completely unnecessary.
30. The industry is currently in discussion with the Government about how to deal with the iniquities of the current system. Action is needed on a number of fronts - on which the Media Lawyers Association is providing you with further details - including introducing mandatory cost capping in freedom of expression cases, establishing maximum or fixed recoverable hourly rates and abolishing success fees. We would welcome the Select Committee's support in these discussions.
31. The other major issue for our industry is the way in which the Human Rights Act has been used to introduce a judge-made privacy law into the UK.
32. At the time the Human Rights Bill was before Parliament, publishers raised consistent warnings that the legislation could be used in this way, without Parliament ever having had a chance to examine and debate the extremely deleterious consequences of any privacy law for freedom of expression. It was in order to prevent this that the Government moved to amend the legislation through what became Section 12 of the Human Rights Act 1998. This sought to protect freedom of expression and self regulation. As the then Home Secretary, the Rt Hon Jack Straw, made clear at the time:
"The Government have always made clear our support for effective self-regulation as administered by the Press Complaints Commission under its code of practice. We have also said that we have no plans to introduce legislation creating a general law of privacy. On the question of prior restraint, our intention, as I said in the House on 16 February, is that the thresholds that the new clause sets will mean that interlocutory injunctions should be granted ex parte only in the most exceptional of circumstances. Similarly, on self-regulation, the new clause provides an important safeguard by emphasising the right to freedom of expression. Our intention is that that should underline the consequent need to preserve self-regulation. That effect is reinforced by highlighting in the amendment the significance of any relevant privacy code, which plainly includes the code operated by the PCC ... I have explained the effect that we want to achieve with our new clause. If, for any reason, it does not work as we envisage, and press freedom appears at risk, we shall certainly want to look again at the issue."
33. While Parliament, in passing Section 12 of the Act, appears to have been clear that it did not intend a privacy law to be developed, the judiciary seems to have taken the opposite point of view. In a series of landmark cases - outlined in a lecture given by Paul Dacre at the Society of Editors in November 2008 - a judge-made privacy law is being developed (particularly through the rulings of one judge who handles a disproportionate number of cases) which is now extremely damaging to press freedom.
34. The situation is now so serious that the warning given by former Master of the Rolls, Lord Woolf, in the case of Garry Flitcroft should be underlined:
"The courts must not ignore the fact that if newspapers do not publish information which the public are interested in, there will be fewer newspapers published, which will not be in the public interest."
35. Any form of privacy law is damaging to freedom of expression because of the way in which it potentially hands power to those who wish to gag newspapers and magazines on matters of public interest. A judge-made law is even more damaging because of the uncertain manner in which it is formulated by case-law, and often - as noted above - by a single judge: publications have no certainty on which to base judgements, as they do with the jurisprudence crafted under the PCC Code, and can face often protracted and costly legal proceedings, fuelled by "no win no fee" arrangements.
36. Furthermore, any form of privacy law is - ultimately - for the rich and famous who are prepared for the spotlight (and cost) of high profile Court proceedings.
37. In view of the serious problems arising from the legislation - and the manner in which crucial undertakings to the industry have failed to protect freedom of expression - it is now time for a serious review of the operation of Section 12 of the Act. For instance, Section 12 (4) could be amended to take account of situations where there is a reasonably held belief that the material in question is in the public interest - as opposed to a judge deciding whether the material is, or is not, in the public interest.
38. There are many fundamental legal and commercial issues currently affecting the newspaper and magazine publishing industry - caught in the vice-like grip of a severe recession in advertising and massive structural change in the market.
39. However, the answers are not to be found in unnecessary reform of the self regulatory system. The PCC works well, and the Code of Practice has raised standards. To concentrate on one, atypical episode, which was always inevitably heading in the direction of litigation, would be a great mistake.
40. Instead, the Select Committee has an opportunity to help our industry - a crucial part of the UK's creative economy - with recommendations on reform of conditional fees and of the Human Rights Act to reverse the extremely serious damage they are doing both to freedom of expression and to the long-term commercial future of the press which is now facing unprecedented challenges.
 Speech at the Society of Editors, Bristol, 10th November 2008
 King v Telegraph Group Ltd  WLR 2282 (para 99)
 Daily Mail, 23rd September 2008
 For more detail see http://daccessdds.un.org/doc/UNDOC/GEN/G08/433/42/PDF/G0843342.pdf?OpenElement
 Hansard, 2nd July 1998, col 541
 Included in the Appendix
 11th March 2002