Government to lift costs threat to newspapers in libel cases

Hancock: Serious concerns

The government is to repeal “at the earliest opportunity” unimplemented legislation that would have exempted publishers that were members of a recognised press self-regulator from paying the claimant’s legal costs when sued, even if they lost.

Section 40 of the Crime and Courts Act 2013 also provided that newspapers outside a recognised self-regulator would have to pay the claimant’s costs, even if they won in court.

The announcement by culture secretary Matt Hancock came alongside his decision not to press ahead with part 2 of the Leveson inquiry, following a consultation that closed more than a year ago.

Mr Hancock told Parliament yesterday that the consultation exposed “serious concerns that section 40… would exacerbate the problems the press face rather than solve them. Respondents were worried that it would impose further financial burdens, especially on the local press.”

He said: “Only 7% of direct respondents [rather than those who signed petitions] favoured full commencement of section 40. By contrast, 79% favoured full repeal.”

The consultation response reported that a “significant number of lawyers specialising in media law were opposed to commencing section 40 based on the ‘chilling effect’ it would have on the concept of equality before the law”.

It explained: “They argued that it would put the claimant in a position of unparalleled strength, encouraging unmeritorious and vexatious claims without fear of financial retribution.

“Costs were a key aspect for lawyers. Several stated that, as IMPRESS pays £3,000 of successful claimants’ legal fees, despite costs on such issues running into the hundreds of thousands, this could lead to limited input from legal experts.

“It was also claimed that currently, even without section 40, the legal system heavily favours a claimant. Publishers, even when successful, rarely receive enough compensation to cover the costs fully. Several suggested it was untrue that genuine claimants have any difficulty accessing conditional fee agreements.”

The government said that as so few publishers have joined a recognised regulator (IMPRESS is the only one at the moment) and were adamant that they would never do so, “if section 40 were to be commenced they would be vulnerable to spurious legal cases where they would be forced to pay regardless of the merit of the claim – an aspect that a number of respondents to the consultation felt was counter to natural justice and provided enough justification for repeal.

“As such, a large number of consultation responses emphasised concern about the ‘chilling effect’ section 40 would have on investigative journalism… This is a major concern at a time when publishers are under growing financial pressure…

“Furthermore, there now exists a strengthened, independent, self-regulatory system. The majority of traditional publishers (including 95% of national newspapers by circulation) are members of IPSO… The new system is not what was envisaged when the Royal Charter was granted, yet it has led to a raising of standards across the industry, independently of government.”

Matt Tee, chief executive of IPSO (Independent Press Standards Organisation), said: “The decision to repeal section 40 is a hugely significant victory for press self-regulation and an endorsement for the role IPSO has played in helping to restore trust in the industry.

“We are delighted that culture secretary Matt Hancock has recognised the ‘significant steps’ taken by IPSO to demonstrate its independence as a regulator and will make every effort to meet the challenge he posed to us to continue to improve our work.

“Section 40 would have meant a newspaper might risk crippling costs even if it acted in the public interest to expose wrongdoing. This could have been fatal in the case of most local and some national newspapers which could not have survived spurious legal claims.”

However, Christopher Jefferies, patron of pressure group Hacked Off and the Bristol landlord who was libelled by the press after the murder of his tenant Joanna Yeates, said: “The failure to introduce section 40 means that many ordinary people who are victims of press abuse will continue to be denied access to justice, while only the wealthy will be able to take newspapers to court to obtain justice.

“This law was passed by an overwhelming majority of the House of Commons with support across all parties. This decision by the government to ignore that vote shows contempt for parliamentary democracy and puts the interests of press barons above the interests of ordinary people.”

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