29th April 2016
The “section 40” is a provision in the Crime and Courts Act 2013. It will be put into effect when John Whittingdale, the Secretary of State, decides.
Some have contended that the delay in implementing the provision is for no good reason. A few go further and suggest the delay can be attributed to the alleged hold the London press have over Whittingdale by reason of not publishing information about his private life.
As I set out over at the Financial Times website today, I believe the better explanation is that the legislation is a dreadful dogs dinner, and that no responsible Secretary of State would implement it – at lest in present circumstances.
Section 40 is controversial. Hacked Off and its allies demand that it be implemented without delay – see here and here. Alternatively, the media campaigners at 89UP warn that it will have a profound chilling effect.
Section 40 has now become a totem in the debate about press freedom.
In my view, section 40’s problems come down to what it actually says.
Section 40(1) tells you what it covers – in effect it means claims for media torts (mainly libel or privacy) against “relevant publishers” (mainly news organisations).
Sections 40(2) and (3) then deal with who pays for the costs of such cases. Both seek to alter the usual position that “costs follow the event” – ie the loser in a claim pays the winner’s costs.
Section 40(2) tells you that the news publishers should not generally have to pay legal costs in respect of those claims as long as they are members of an “approved regulator” with an arbitration scheme. This provision does not apply, however, if it would be unreasonable for such a scheme to be used or that it is ” is just and equitable in all the circumstances of the case” for such a costs order not to be made.
This provision is a “carrot” – it is to provide an incentive for publishers to join an “approved regulator”.
The real problem is with section 40(3). This is the “stick”.
Section 40(3) tells you that the news publishers should generally have to pay legal costs – including those of the claimant – in respect of those media tort claims if they are not members of an “approved regulator” with an arbitration scheme. In effect, as long a claim is arguable, the publisher will have to pay both side’s costs, even if the publisher wins at court.
As with section 40(2), this provision does not apply, however, if it would be unreasonable for such a scheme to be used or that it is ” is just and equitable in all the circumstances of the case” for such a costs order not to be made.
And again, this provision is to provide an incentive for publishers to join an “approved regulator”.
One key issue with this is that (a) there is no approved regulator yet and (b) the one regulator which is likely to get approval – IMPRESS – has hardly any members. Most publishers are members or IPSO – which does not want recognition – or (like the Financial Times, Guardian, and Private Eye) do not want to be members of any external scheme at all.
This means the vast majority of the UK news media will be under section 40(3) costs risks once IMPRESS becomes approved.
For me the worry is not that section 40(3) will have a certain impact but that it will be uncertain. It is a dire piece of drafting.
As I set out over at the Financial Times:
To take four examples:
– What is “a relevant publisher”? (The schedule to the Act on exceptions to this definition is not clear.)
– When would it “have been reasonable in the circumstances for the defendant to have been a member [of a scheme] at that time”?
– What does it mean that “the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator”?
– And, most importantly, when will it be “just and equitable in all the circumstances of the case to make a different award of costs or make no award of costs”?
On the last point alone, one can imagine judges routinely disregarding the general rule and awarding costs as they do now, as that would be “just and equitable in all the circumstances”.
If section 40(3) takes effect, there would be immediate and expensive uncertainty. So hedged is it with qualifications and exceptions that litigation is inevitable. The Leveson report called for a system that was “fair, quick and inexpensive”. What this provides is anything but.
In other words – section 40(3) will create far more problems that it solves, with the real prospect of expensive and lengthy litigation as each loophole and technicality is explored.
If section 40 is be implemented at all – and when it was enacted, the failure of an approved regulator to have almost no members was not envisaged – then it should only be once an approved regulator with an arbitration scheme is up and running.
As I conclude at the Financial Times:
Looking at the detail, rather than just the totemic significance, reveals it as a worrying and unstable provision. The secretary of state is quite right to delay bringing section 40 into effect, at least until there is a recognised regulatory scheme with a functioning arbitration service. To bring it in earlier, would be so irresponsible that no responsible politician should do it.
One does not need to look for lurid explanations for the hold the media supposedly have over a cabinet minister to explain why section 40 should not be implemented lightly. It is not a dominatrix in a relationship but the devil in the detail which provides the explanation for why it should be delayed, if not repealed altogether. It is simply a bad provision.
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