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Press Regulation and Exemplary Damages

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The Regulator

A regulator will be established by Royal Charter (a formal document granted by the Queen, on the advice of ministers, used to establish the terms of a body). In order to placate those who were seeking a true statutory underpinning for the Regulator, the Charter can only be amended by a two-thirds majority in both Houses of Parliament. This entrenchment will be enshrined in an amendment to the Enterprise and Regulatory Reform Bill.

The Regulator will have jurisdiction over newspapers, magazines and websites “containing news-related material” (whatever that means), but crucially there will be no strict compulsion to sign up to the Regulator’s rules. Amongst the Regulator’s powers will be the right to ensure that publications issue prominent apologies to victims of press misconduct, and the ability to issue fines of up to £1 million where the law is breached.

The deal has been hailed in some circles as a clever political compromise as it promises a regulator with powerful enforcement measures yet avoids the statutory regulation so vociferously opposed by the press.

Exemplary Damages

However, one aspect has generated particular controversy. It is proposed that the Crime and Courts Bill be amended to introduce the possibility of exemplary damages (a special type of damages designed to be punitive in nature, rather than simply reflecting the loss suffered by the claimant) for libel and breach of privacy. Exemplary damages will generally only be payable where a publisher is found to have broken the law in an especially reckless and outrageous manner, and are more likely to be awarded if the publisher has chosen to remain outside the ambit of the new Regulator. This concept (designed to incentivise sign-up to the Regulator) was endorsed by Lord Justice Leveson in his original report, who was keen to avoid a scenario where newspapers felt it was worth taking the hit of basic damages in order to access the “commercial benefits” of publishing stories in breach of privacy.

This proposal has been met with great concern by sections of the press, with Associated Newspapers apparently preparing to contest it on the grounds that it is incompatible with Article 10 (freedom of expression) and Article 14 (discrimination) of the European Convention on Human Rights.

The battle lines are already being drawn. The objectors will need to overcome the following issues.

Firstly, the European Court of Human Rights has dealt with several cases featuring exemplary damages (which are part of the legal system in the UK, Ireland and Cyprus) without unfavourable comment. Exemplary damages are also well established in jurisdictions that tend to emphasise the importance of free speech (such as the United States), and even there they have not been held to violate freedom of expression in principle.

Secondly, an attempt to establish that exemplary damages are discriminatory (because they are awarded based on the defendant’s lack of membership of a voluntary group) fails to take account of the Leveson law’s proposed wording. As Hugh Tomlinson QC (Chair of Hacked Off) points out, membership of the Regulator does not automatically preclude exemplary damages, nor correspondingly does non-membership guarantee their award. Whether or not exemplary damages are awarded depends largely on the conduct of the publisher, and whether it has shown a “deliberate or reckless disregard of an outrageous nature for the claimant’s rights”.

Leveson has had to walk a tightrope addressing issues of press freedom and the protection of privacy. It will not be mandatory to sign up to the new Regulator, but the potential for punitive damages should incentivise membership. Newspapers are entitled not to join – as long as they are prepared to abide by the law in the way that they report the news. These crucial interests appear to be finely balanced in the political compromise. However, the lawyers may yet have the last word…

This article was written by Paul Herbert, Partner, Media with assistance from Alex Barker.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 020 7404 0606 and ask for your usual Goodman Derrick contact.