Press regulation: what you need to know about “Section 40”

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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6 thoughts on “Press regulation: what you need to know about “Section 40””

  1. Thank you for that. I hope that the likes of Hugh Grant and John Cleese read it and moderate their bile!

  2. I have to take issue with the logic of your conclusion. There is no need to wait “until there is a recognised regulatory scheme with a functioning arbitration service” before implementing s40, for the simple reason that s40 has no effect unless such a regulator exists. The legislation has built in the necessary delay and it would not be at all “irresponsible” to take the parliamentary step now so that the legislation is in place if and when a regulator is approved.

    Moreover, your criticism of the lack of clarity over the meaning of “relevant publisher” – which I don’t share – applies equally to s39 (introducing aggravated damages) and yet the SoS saw no problem in implementing that section last year and received no criticism for acting irresponsibly when he did so.

    I further challenge both the evidence and the logic behind your suggestion that “the failure of an approved regulator to have … members was not envisaged” by parliament. The whole point of s40 is, as you say, to create a carrot and a stick for publishers to join an approved regulator. There is no evidence to suggest that parliament wanted to delay dangling the legislative carrot or waving the associated stick until after the publisher donkeys had done what was wanted of them (ie joined an approved regulator) and it would have been utterly illogical for parliament to have intended that.

    It is abundantly clear that, for so long as s40 continues not to be brought into effect, the giants of the press have made it clear that they will not join an approved regulator. I accept that some people consider that an “approved” regulator is not a desirable regulator (although that is not my view). But there is no case to be made that the SoS needs to wait for the press to join an approved regulator before he activates the (by then redundant) encouragements that Leveson wanted and parliament legislated for.

  3. Dire drafting indeed. The entire clause was introduced at the ‘ping-pong’ stage of the legislation. Had it gone through the committee stages in the Commons and Lords I doubt it would have past muster.

    The DCMS consulted with groups like English PEN over the definition of ‘relevant publisher’ too, but the concerns about uncertainty were only half heeded.

  4. A failure to have almost no members would be a bad thing for club intended to be very exclusive, but a bad thing, surely, for an industry-wide regulatory body. I suggest “almost no” -> “more than a small number of”.

  5. I must say the “cost shifting” issue strikes me as very nasty indeed. The Courts do of course have the power to deprive a successful party of some or all of their costs if the Court considers that the party’s conduct in the litigation justifies it. This is not confined to media cases of course.

    In libel cases about the meaning of words some sort of arbitration is often likely to be cheaper, provided the parties involved are reasonable. If that is suggested by either party and rejected, then costs sanctions are highly appropriate.

    Beyond that, I am very troubled by a regulator taking the place of the Court. I have dealt with several cases where a claimant has felt strongly that a publication ought not to have been permitted, and where that claimant felt genuine anguish, but where my clients were (I felt) on legally solid ground. Each time the Court has upheld the right to publish. I am nervous that a regulator might take a different view, and I have dealt with a number of cases involving professional regulators which do not give me cause for comfort.

    Replacing the Courts with a regulator (which is what section 40 provides) will – de facto – amount to a change in the law.

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