National newspapers and some politicians have repeatedly misrepresented the effects of "section 40" of the Crime and Courts Act 2013, one of the elements of legislation underpinning the Leveson system of independent press regulation.To support better understanding of this provision, Hacked Off has produced the guide below which explains how the legislation works.

MEDIA BRIEFING:

Leveson & Section 40, the facts

Leveson/regulationThe Leveson Inquiry was a public inquiry held in 2011 – 2012, which found that newspapers were not effectively regulating themselves. It found that members of the public were being exposed to inaccuracies, intrusions and other abuses as a result. He recommended that in future, press regulators should meet a fixed set of criteria.The Leveson criteria ban political interference in regulation, limit the involvement of the industry itself, and require than any regulator is equipped with the powers it needs to regulate effectively and in the interests of the public.These criteria help to ensure that newspapers are not marking their own homework when it comes to handling complaints from the public.Most newspapers in the UK are either:

• In IPSO, which is not Leveson-compliant, and is a complaints-handler run by newspapers & politicians
• In IMPRESS, which is a Leveson-compliant regulator

Or, they have their own internal complaints processes.The Leveson model and the only regulator to meet the criteria, IMPRESS, are not operated by the “Government”. The model is overseen by the Press Recognition Panel, which is entirely independent of politicians and the newspaper industry. It operates according to criteria set by Leveson, not “the state”.Unlike Ofcom, the Leveson model is, therefore, not “state” or “government” regulation. It is independent regulation.IPSO is run by a politician, and also has a politician on the board of its rule-setting body the “RFC”. Its standards are written by newspaper editors. It is not “independent” either of politicians, or of the press.Section 40Section 40 is a costs-shifting mechanism which applies to media claims brought against newspaper publishers.One criterion which Leveson said that regulators must meet is that they offer low-cost arbitration to resolve legal claims. Leveson’s vision was that, by resolving media claims in this way, the public and the press would both have access to justice and be able to resolve any disputes quickly and cheaply.The wealthy would not be able to threaten expensive actions against the press. Equally, the public would now also be able to assert their legal rights against powerful newspaper publishers.Section 40 would complement the arbitration offering, and work on the following basis:

• If the newspaper is independently regulated (by IMPRESS, or a by a new body), yet a claimant refused to use the arbitration system on offer, then section 40 would direct claimant costs against the claimant, win or lose.
• If the newspaper is not independently regulated, and therefore not offering low-cost arbitration, then the newspaper would have to cover the claimants’ costs, unless the judge deemed this inappropriate in the circumstances.

Section 40 itself is a balanced measure intended to protect the rights of both parties. Objections to the measure tend to stem from a more fundamental belief that newspapers should not be independently regulated under any circumstances.Here is the legislation itself (colour added to highlight key points):

40 (Crime and Courts Act 2013), Awards of costs

(1) This section applies where—

(a) a relevant claim is made against a person (“the defendant”),

(b) the defendant was a relevant publisher at the material time, and

(c) the claim is related to the publication of news-related material.

(2) If the defendant was a member of an approved regulator at the time when the claim was commenced (or was unable to be a member at that time for reasons beyond the defendant's control or it would have been unreasonable in the circumstances for the defendant to have been a member at that time), the court must not award costs against the defendant unless satisfied that—

This is the key part which protects regulated publishers from paying claimants costs.

(a) the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator, or

(b) it is just and equitable in all the circumstances of the case to award costs against the defendant.

(3) If the defendant was not a member of an approved regulator at the time when the claim was commenced (but would have been able to be a member at that time and it would have been reasonable in the circumstances for the defendant to have been a member at that time), the court must award costs against the defendant unless satisfied that—

This is the part which requires unregulated publishers to cover claimant costs.

(a) the issues raised by the claim could not have been resolved by using an arbitration scheme of the approved regulator (had the defendant been a member), or

(b) it is just and equitable in all the circumstances of the case to make a different award of costs or make no award of costs.

This part is important, because it means that if the law is being abused in anyway, the Judge may award costs differently.

(4) The Secretary of State must take steps to put in place arrangements for protecting the position in costs of parties to relevant claims who have entered into agreements under section 58 of the Courts and Legal Services Act 1990.

(5) This section is not to be read as limiting any power to make rules of court.

(6) This section does not apply until such time as a body is first recognised as an approved regulator.