By Brian CathcartThis is the second part of a response to the government consultation. More will follow. We will welcome your comments, and if you wish to register your views with the government, click here.The idea that ‘much has changed’ is employed in the consultation document to justify the Government’s interference in the Leveson/Royal Charter reform process approved by Parliament. Because ‘much has changed’, it is implied, circumstances now prevail that those responsible for the measures of 2012-13 could not have foreseen, and ministers are therefore free to take matters in their own hands. The consultation document presents the public with a number of examples of supposed change, which include in brief:

• That after more than three years, most of the industry still refuses to participate in recognised regulation.
• That incentives associated with exemplary damages have come into force.
• That the industry is under pressure.
• That the 2013 measures were adopted without proper consultation with the press industry.

(A) Limited industry ‘buy-in’

The consultation document states that ‘the system does not have buy-in from the industry, which is crucial for a voluntary self-regulatory system’. As an argument to alter or depart from the measures agreed by Parliament in 2013 this is wholly without merit, for four reasons.(1) Lack of ‘buy in’ was recognised as a possibility from the outset. It was foreseen in the Leveson Report, the cross-party agreement and the measures approved by Parliament in 2013. This is evident, for example, from the testimony of the then Culture Secretary, Maria Miller, to the CMS select committee on 16 April 2013:

Q: ’You would accept that so far the reaction of the press, at almost every level, has been wholly negative? There is not much sign at the moment that they think these are very attractive incentives that will persuade them to join up.’A: ’Look, obviously it is early days. We are still in the process of putting in place the incentives that we need. We believe that the approach that we have taken is strong. It is the right way forward. It is very much in the spirit of what Lord Justice Leveson is proposing and we do think that it will provide a material improvement in the self-regulation of this country. It is something that we are actively working on now and looking to implement.’ (Q367).

It is clear from this exchange that a ‘wholly negative’ press response was not unexpected and also that incentives were recognised as integral to success. There is abundant evidence that this was the accepted view, indeed the ‘wholly negative’ attitude of national newspapers was a matter of public record at the time the minister spoke. In explaining that the purpose of the incentives was to change this view she expressed Government policy, founded on cross-party agreement.Well before April 2013 the possibility that the corporate press might respond to the reforms in a variety of ways, including a ‘wholly negative’ one, was recognised and fully addressed. The Leveson Report discusses this at length (Report, Part K, Chapter 8). And as explained above, under the cross-party agreement the extent of industry buy-in was seen as sufficiently important that the chartered body, the PRP, was specifically tasked to monitor it and report to Parliament.No case can be made, therefore, that the possibility of limited industry buy-in to recognised regulation in the absence of the Section 40 incentives was not foreseen in 2013.(2) The failure of many news publishers to join a recognised regulator demonstrates the need for the incentives in Section 40. In the absence of those incentives most of the press industry, without rational justification (see below), has refused to do what Parliament and the country asked of it. The ‘strong approach’ promised in 2013 is overdue.Further, the Leveson Report and the cross-party agreement clearly envisaged the possibility that there might come a time, if the incentives had been tried and proved insufficient to induce news publishers to join recognised regulators, when matters would have to be reviewed and it would fall to Parliament once again to take action for the protection of citizens from abuse resulting from low ethical standards in the press. As the Leveson Report and the PRP state of recognition report make clear, that time could only be considered to have arrived when the incentives in Section 40 are seen to have been tried and to have failed.(3) The lapse of time since March 2013 cannot be used as an argument in favour of departing from Parliament’s decision, as it is in the consultation document. It was inevitable that the necessarily complex appointments processes for the PRP (which are integral to its independence) would take time. The same is true of the process of recognition itself. What Parliament could not have foreseen were the delays deliberately caused by the corporate newspapers. Their actions in 2013 (which included an attempt to secure a Royal Charter of their own and to judicially review the rejection of that) delayed the sealing of the Royal Charter by six months. More recently, their repeated interventions at the PRP, threatening judicial review, resulted in the recognition of Impress was delayed by a number of months. In other words, the point where Section 40 was supposed to take effect would have arrived at least a year earlier but for the activities of the press themselves. To suggest that this delay justifies abandoning or altering Section 40 is to surrender to cynical delaying tactics.(4) Any suggestion that limited ‘buy-in’ justifies or even helps to justify altering or abandoning changes approved by Parliament equates to an acceptance that the corporate press has a right of veto. Nowhere is there any record in the deliberations of 2011-2013 that such an extraordinary notion was entertained by anyone outside the corporate press itself. This is not surprising. That the same companies which, in the words of the Leveson Report, ‘wreaked havoc with the lives of innocent people’ might enjoy the power to veto reforms recommended by the inquiry and endorsed by all parties in Parliament is unconscionable.

(B) Exemplary damages

The suggestion was made in speech by the previous Culture Secretary, and is repeated in the consultation document, that the provisions of the Crime and Courts Act relating to exemplary damages alone might prove sufficient incentive to news publishers to join a recognised regulator, and it would be right to wait and see their effects before commencing Section 40. This is manifestly incorrect.While it was recognised in 2012-13 that giving members of recognised regulators effective immunity from the risk of exemplary damages (and exposing unregulated news publishers to a new risk of exemplary damages in privacy actions where they did not already operate) might provide an additional incentive, it should have been obvious to all that this would have at most a marginal effect. This is because awards of exemplary damages in media cases have been exceptionally rare – they have not been awarded on a single occasion since 1993. There are no grounds to believe that the courts will change their views on this, not least because the Crime and Courts Act itself set the bar for such awards extremely high. Under Section 34 (6) a judge must be satisfied not only that a news publisher has shown a ‘deliberate or reckless regard’ for a claimant’s rights, but also that that disregard must be ‘of an outrageous nature’. It follows that such awards, if they ever occur in the future, will never be more than exceptional occurrences.Where a penalty is never or very rarely imposed, immunity from it (or a new exposure to the risk of it) will have very limited impact as an incentive. No serious claim can therefore be made that the entry into force of the exemplary damages provisions constitutes a significant change, let alone one capable of justifying overriding Parliament’s will as expressed in 2013.

(C) ‘Pressures on the industry’

The consultation document notes that one of the reasons given by the previous Secretary of State in 2015 for his failure to commence Section 40 was ‘pressures on the industry’. He gave no explanation of what these pressures were, though he referred to two factors which could be construed as such.The first was the continued publication of some local council newspapers in competition with the commercial press. This, as he explained, was being addressed. The second was social media and the online distribution of news, referred to briefly.There can be no doubt that the advance of online news distribution represents a substantial long-term challenge to traditional newspaper businesses, but this matter and its implications cannot be said to have arisen since 2013. They were thoroughly aired before Sir Brian Leveson, who noted in his report: ‘The Inquiry has been told by a large number of witnesses that the economic environment in which newspapers operate is challenging’ (Part F, Chapter 7, 2:6) (our emphasis). Social media were also familiar by 2013. Neither, therefore, represents a new ‘pressure on the industry’, both were familiar to Parliament in 2013, and so neither could be said to constitute a ‘change’ necessitating the overturning of Parliament’s will.Further, the then Secretary of State cannot have been referring to pressures affecting the general financial health of the industry, for as he himself noted in the same speech in late 2015:‘I was glad to hear that those who have written the obituary of print media have been proved wrong. Although declining circulation and migrating advertising have led to closures and job losses, Enders recently reported that the industry is still profitable, innovation and online growth are helping to stabilise the top line, and new enterprises are emerging.’The picture remains one of general profitability. In mid-2016, according to Enders Analysis (the same source cited in the speech), the latest combined yearly operating profits of the nine leading newspaper groups stood at £380m.It is important to note here the scale and range of support that the newspaper companies receive from the public purse, above and beyond the ‘significant and special rights’ which, as the Leveson Report noted, they also enjoy (Exec Summary, para 6). Among the financial benefits are:- A statutory duty on local councils to place notices in the local paper on planning, licensing, and traffic orders, calculated in 2015 to be worth at least £40-45m per year to the industry.- A two-year business rate cut in the 2016 Budget, specifically designed to help the local press.- In 2015-16 the Government placed advertising worth £5.5m in the leading national papers alone.- The Government recently brokered an arrangement under which the BBC will spend £8m annually commissioning reporting from local news providers.On a far bigger scale, newspapers remain zero-rated for VAT – a subsidy calculated by the Reuters Institute in 2011 to be worth £594m to the industry annually. That is considerably more than the combined profits of the leading industry companies. Government, Parliament and the taxpayers are already very generous in their support for the newspaper industry, and no case to the contrary can be made.Finally in this context, a clear distinction must be made between profits and standards. Even if it were the case that newspaper publishers had fallen on hard times, that could never be a justification for government action which helped or enabled them to operate with low standards. (By analogy, if the food industry was in difficulty no responsible government would assist it by allowing hygiene standards to fall, since that would be to put the interests of the industry before those of the public.) As Sir Brian Leveson found, it is overwhelmingly ordinary citizens who suffer the consequences of low journalistic standards. The state has no business facilitating such suffering.

(D) ‘Little consultation’

The consultation document states that ‘some parts of the press . . . argue that there was little discussion with publishers when the self-regulatory framework and associated incentives were created’. This is untrue, and given the industry’s knowledge of what occurred it can only be a deliberate untruth.At the Leveson Inquiry, where all of the evidence was heard that led to the creation of the new regulatory framework, the views of the press and of journalists were heard exhaustively, and in public. A generous majority of the 337 witnesses who testified were journalists, former journalists, employees or representatives of press companies or of the Press Complaints Commission (PCC). Further, all of the leading press companies enjoyed the privileged status of ‘core participants’ and so were in a strong position to support their witnesses. They were each represented by counsel and solicitors at the Inquiry.Not only individuals, but newspapers, newspaper companies and newspaper industry groups also made substantial written submissions, while several distinguished former journalists acted as advisers to the judge (all of them endorsing all of the recommendations). Throughout the proceedings, moreover, newspapers asserted their views in print and online with the manifest intention of influencing public opinion and policy, and they continued to enjoy access to government ministers.After the publication of the Leveson Report, and in the period of cross-party discussion, the press were fully consulted. As the then Culture Secretary told the Culture, Media and Sport select committee in April 2013, the Royal Charter was (our emphasis):

‘the result of nearly four months of discussion with victims’ representatives, expert advice, discussion with the industry and negotiation between the three main political parties’.

At the same committee session, the then Minister for Government Policy, Oliver Letwin, explained that the contacts with the industry during this period had been so intensive they attracted criticism:

‘Perhaps it would help if I were to explain that throughout this process there have been all sorts of people who have complained vigorously that the Secretary of State and I spent an enormous amount of time both directly and with our officials talking to the press, collectively through their representatives and bilaterally and multilaterally. We were accused of various terrible malfeasances as a result of our intensive discussions with the press. Why did we have those discussions with the press? Precisely because we wanted to set up a system under which it would be possible for the press to seek recognition but that at the same time achieves the thrust of what Lord Justice Leveson was trying to achieve.’ (Q401).

Most strikingly, the leading press negotiator of the time, Paul Vickers, spoke in February 2013 of ‘intensive talks involving the newspaper and magazine industry and all three main political parties’. There can be no doubt that any assertion of a lack of consultation with the press in 2012-13 is false.The press have often complained in particular that they were not invited to a meeting on the evening of Sunday March 17, 2013 in the office of the Leader of the Opposition. There was no reason why they should have been, as Mr Letwin and Ms Miller confirmed to the CMS select committee. The terms of the cross-party agreement had already been settled before this meeting took place, so it was no longer open to negotiation. The purpose of the meeting was rather to honour commitments given under oath at the Leveson Inquiry by all three party leaders that they would consult victims of press abuse before taking action. Hacked Off was invited to represent those victims, with their full consent, and it expressed approval for the cross-party agreement. A press presence at such a meeting would have been superfluous, and would have changed nothing.In any event, at the meeting, Mr Letwin made representations on behalf of the press in relation to a request that the commencement date of the exemplary damages provisions be set as later (in fact to be one year after the Recognition Panel was established) than the anticipated commencement of the costs provisions. This was agreed at that meeting.That the claim of exclusion from this meeting continues to be repeated is proof of the dishonesty of those who make it.END OF PART 2Click here for a guide on how to respond to the consultation.