The Chartered Institute of Journalists’ response to the Government’s proposals on: Costs protection in defamation and privacy claims
The Chartered Institute of Journalists (CIoJ) is the world’s oldest professional association of journalists and operates under a Charter granted in 1890 by HM Queen Victoria. This charter compels us to look after the good interests of all aspects of journalism.
We represent staff and freelance journalists across all sectors of the media including local and national newspapers, periodicals, broadcasting and electronic publishing.
Background observations and summary of impact
The proposals, as laid out in the government’s consultation paper, have to be interpreted in the context of the current hostile media law environment for British publishers and journalists. This environment has been made worse by the many recommendations of the Leveson Inquiry, recent legislation, and the all party Royal Charter plan poised to be forced on a newspaper industry without its agreement or consent.
This Charter has been largely drafted and manipulated in its content by the secretive lobbying company Hacked Off. An organisation that is heavily influenced by slighted actors, idealistic media academics and media lawyers, some of whom have profited hugely from the multiple legal actions arising from the phone hacking scandal.
In the last few decades everything related to defamation and privacy claims has increasing spiraled out of control. So much so that actions increasingly resemble a wild west feel of roll your dice and take your chances. The claimant feeling empowered through CFAs, while UK media lawyers siphon grotesque profits from media law litigation.
The 100% uplift fee bonuses coupled with After The Event Insurance premiums in conditional free agreements have brought shame on the reputation of the country.
It is difficult to pinpoint whether the exorbitant defamation claims made against publishers came before publisher’s inclination to sensationalise stories to maximize profit, but in reality it doesn’t really matter. The end result was that each element of the equation sought to accentuate the other: publishers chasing higher profits to cover litigation, and claimants seeking higher damages to deter publication.
As the defamation environment became increasing feral, successive governments failed to deal with the problem despite repeated warnings and pleas from the newspaper, media industries and journalist organizations.
At their inception, some saw the creation of CFAs and ATE insurances as a natural leveler. An element that might make publishers think twice before running a story for fear that more people could now afford to action a defamation claim. In the feral defamation litigation market this may well have been a valid claim, but if there is a genuine move to clean up this area of media law (and the Institute thinks there should be) they should be reformed immediately.
There was no reason why the government should not have immediately implemented the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (the LASPO Act) to reform CFAs and to make the ATE insurance premium no longer recoverable from the losing party in respect of media law litigation.
By refusing to do so, the vast majority of media publishers and journalists continue to suffer the gross inequality of excessive financial punishment (through the exorbitant costs of media law insurance), and defending actions with the burden of proof. It is these underlying factors of injustice and self censorship which impacts greatly in investigative journalism – largely recognised as ‘the chilling effect.’
This is not the only recent action taken by government that has failed to make an impact on the defamation area of media law.
The Defamation Act 2013 failed to address the problem of the burden of proof being entirely on media defendants, an exceptional anomaly in the law of negligence. This unequal and illiberal burden has been extended to privacy actions, which are now being defined in the widely embracing phrase ‘misuse of private information’. The defendant now has to justify the ‘public interest’ in any such cases.
The Institute is sceptical whether the much heralded ‘liberal’ reforms in the Act will make any difference to the fact that England and Wales has the most oppressive media law regime against the interests of journalism and freedom of expression in the western world.
Consider the lack of action above, which leaves a mess, with the proposals as they stand now, and you have the potential for an even bigger mess.
The all party Royal Charter, taken in context of the Crime and Courts Act 2013, blackmails publishers into paying for an arbitration process that is cost draining whether they win or lose, or, face even greater sanctions in court. It is ludicrous to argue that this untried and inappropriate method of legal ‘carrot and stick’ regime can be considered as enhancing freedom of expression.
The proposed arbitration system is untried, under-researched and wholly inappropriate for constitutionally vital freedom of speech disputes that go to the heart of democratic accountability and civil liberty.
The legislation, which proposes exemplary/punitive damages, looks increasingly likely to be, incompatible with the European Court of Human Rights (ECHR).
The Leveson Inquiry failed to properly research and consult on the wide range of alternatives. Dispute resolution, mediation, conciliation and restorative justice conferencing are recourses that promise true cost limiting routes of settlement, apology, and restitution. None have been considered.
The Institute wants to engage in an empirically informed and imaginative debate about media law reform in terms of criminological and tort malfeasance definition, genuine independent regulation and access to justice provisions which are free of cost penalism. A system that actually strips out the current damages regime that is disproportionate and oppressive and puts the UK at odds with the European civil law system as well as in juxtaposition with our common law cousin the USA.
A. Scope: rule 44.19
Paragraphs 21 & 22. Question 1: Do you agree with the scope of the protection? If not, what should it cover?
No. See below.
21 (e) (e) harassment, where the defendant is a news publisher. The Protection of Harassment Act 1997 should never have been used against media publishers. Assurances in Parliament that it would not be used proved hollow. The state should never be in a position to legally construct media conduct and publication as a criminal offence and civil wrong of harassment or stalking.
It is now not uncommon for claimants to pursue media defendants for both libel and malicious falsehood – setting up a double jeopardy. English law should limit pursuance to an either, or.
22. Costs protection in a claimant biased legal arena of contestation and adversarial litigation, where the burden of proof entirely rests with media defendants seems radically unfair.
Also, section 40 of the Crime and Courts Act 2013 is incompatible with the Human Rights Act and its substitution for an equitable legal costs regime by applying the penalty of full jeopardy for exemplary/punitive damages by refusing to comply with an oppressive Royal Charter regime of regulation, is a clear infringement of Article 10 Freedom of Expression and will generate adverse rulings against the UK at the European Court of Human Rights.
B. Process: rules 44.20–23
Paragraphs 23 to 28. Question 2: Do you agree with this process? If not, how should it be improved?
No. Because the burden of proof in most media law litigation (libel and privacy) is weighted unfairly on the defendant. Existing disincentives for vexatious actions based on failing claimants paying for the media defendants’ costs should remain whatever the status of the claimant. In the proposals, claimants of ‘modest means’ will still be able to launch unsuccessful actions against media defendants and rack up costs that will not be recoverable. Why shift the financial penalties from claimant to defendant when the dice on burden of proof are already loaded in favor of the claimant? While it is accepted that the burden of proof is on the claimant in relation to actions for malicious falsehood and harassment, such litigation is so rare that their inclusion in the legal costs protection debate is somewhat irrelevant.
Dividing claimants between modest means, mid group and substantial means sets up a class system for justice based on wealth, or lack of it. In any case, for the most part
the only category of party paying for the system will be media defendants, but as their ability to subsidize claimants’ litigation is diminishing in a declining economic context, most will recourse to self-censorial settlement. This will have a consequential chilling effect on freedom of expression
C. C. Means
(i) Modest means – full costs protection (‘nil net liability’): rule 44.22
Paragraphs 29 to 34.
Question 3: Do you agree with the approach of allowing full costs protection for those of modest means, partial (capped) protection for those in the ‘mid’ group, and no costs protection for those with substantial means? If not, what alternative regime should be adopted?
Question 4: Should there be any further clarification of the level of means for each group? If so, what levels of means would be appropriate?
Question 5: Do you agree that the test of ‘severe financial hardship’ is the right test to exclude the very wealthy – whether individuals or bodies (including, for example, national newspapers that report a loss)? If not, what is the appropriate test?
Question 6: Do you agree that a party in the ‘mid’ group should pay a ‘reasonable amount’? If not, what is the appropriate test?
No to questions 3 to 6. All of these provisions empower a dysfunctional system of injustice for media defendants. The costs of which are borne by the media, the outcome of which we have mentioned earlier in this document.
Question 8: What evidence do you have on the legal costs for claimants and defendants in defamation cases? We would be particularly interested in information on the average level of costs for each party and how this varies across cases.
Question 9: What evidence do you have on the financial means of claimants and defendants in defamation cases?
In answer to the above questions we would cite the spectre of the multi-millionaire super-model Naomi Campbell using no win, no fee CFA and ATE arrangements to secure a mere £3,500 in damages for breach of privacy/ confidentiality, but burdening Mirror Group Newspapers with legal costs of nearly £1 million quite rightly attracted the approbation of the European Court of Human Rights in MGN LIMITED v. THE UNITED KINGDOM – 39401/04  ECHR 919 (9 June 2011) The costs regime was condemned as a breach of Article 10 Freedom of Expression.
The failure of the UK Government to act over this ruling led to the Court ordering the British state to pay damages and costs totaling 286,700 Euros in MGN LIMITED v. THE UNITED KINGDOM – 39401/04  ECHR 993 (12 June 2012). This is a humiliating indictment of the failure of the British executive and legislature to show respect and understanding for freedom of expression and the freedom of the media in a democratic society.
In addition to consideration of the above we would urge the government to take full notice of any data and information available from the Newspaper Society, Society of Editors, and The Media Lawyers Association.
Question 10: What impact do you think the proposals will have on businesses? We would be particularly interested to understand the impact the proposals may have on Small and Medium sized Enterprises and Micro businesses, as both claimants and defendants.
The answer to Question 10 is that the impact will be disastrous. See earlier assessment of the cumulative impact in the context of recent legislation and the imposition of the all party agreed Royal Charter on press regulation.
These provisions multiply the jeopardy in media law disputes. They will substantially increase insurance premiums. They will divide media rights and routes for adjudication setting up one legal regime for mainstream print and online publishers, another for broadcasters, and another for ‘micro-publishers.’
Media freedom risks being suffocated and smashed by a claimant cheap but defendant expensive system of administrative compensation. Publishers start at the race for justice yoked by financial menaces.
The government is seeking to plunge media freedom litigation into the dustbin of non-jury, secretive, unaccountable, office justice, that will only serve the libel, privacy, and malicious falsehood ambulance chasers of the legal profession.
Print and online publishers may well find they have to shelve any investment plans in digital media expansion and saving jobs to pay for a nightmare doubling, tripling (perhaps more) of media legal and compliance services. In the absence of any credible research on the true impact of these reforms we are leaping into the unknown.
The proposals would do particularly serious damage to the local press, and inhibit it from fulfilling its duty to hold local centres of power to account
Every perspective and angle sets up a vista of discrimination and a confused, dysfunctional system of law and regulation. This will in future years cause more humiliating rulings at Strasbourg. The English legal system will emerge as the most notorious country in the world for privatized legal gagging and the bankrupting of freedom of the press and media.
The Defamation Act 2013, the Crime and Courts Act, the all Party Royal Charter on regulation of the Press, and costs protection in defamation and privacy claims provisions promise a perfect storm of chilling effect. Causing self-censorship, media litigation and compensation on a scale equivalent to the whiplash injury claiming insurance scandal, and will more than likely bring about the death of investigative journalism in this country.
The British media could easily descend into a dark age of insipid and uncritical, press release and publicists’ cheer leading propaganda.
More, sections 34 to 44 of the Crime and Courts Act 2013 ‘Publishers of news-related material: damages and costs’ seeks to set up an additional chilling effect of punitive damages for media publishers not willing to be subjected to Royal Charter regulation of the press.
But the English legal system continues to operate awards of damages (usually up to a threshold of £250,000 and sometimes exceeding this level in settlements) which are by far in excess of anything in proportion to the emotional damage experienced by claimants and still not properly quantified in terms of actual material loss.
English media law damages are far in excess of either civil or criminal media law rulings in continental civil law jurisdictions such as France. English media lawyers charge costs well over one hundred times those charged by their colleagues in European jurisdictions. [See Comparative Study of Costs of Defamation Proceedings Across Europe, Oxford University 2009 (http://pcmlp.socleg.ox.ac.uk/research/project/comparative-study-costs-defamation-proceedings-across-europe)]
It is hard to imagine anything more punitive than the above examples but should courts find a way then the following case could well become key to proceedings:
The MGN v UK rulings are not the first time Britain’s oppressive media laws have been challenged by the court in Strasbourg. TOLSTOY MILOSLAVSKY v. THE UNITED KINGDOM – 18139/91 – Chamber Judgment  ECHR 25 (13 July 1995) condemned the ludicrous award of £1.5 in libel damages as not “necessary in a democratic society” and a violation of rights under Article 10.
D. Additional provisions
Confidentiality: rule 44.26(3)
Paragraphs 35 to 41.
Question 11: Do you agree with the proposed additional provisions? If not, how should they be improved?
Question 12: Should there be any specific provision in the rules concerning which party should pay the costs of an application for costs protection? If so, what should the provision be?
Questions 11 and 12 relate to a situation where the proposed costs protection system is in place with media litigation being subject to a largely claimant friendly and biased qualified one way costs shifting (QOCS) regime. It would seem that these additional provisions offer a methodology of fairness and adjustment should the system be abused as under paragraph 37 rule 44.27.
Maintaining confidentiality in relation to a party’s statement of assets would appear to be contrary to the interests of open justice. If ‘means’ are to be engaged in the justice process of media law litigation, then open scrutiny about such declarations and claims to the hierarchy of means status, is essential.
Question 13: Should the Pre-Action Protocol for Defamation be amended to take account of these new provisions? If so, how?
Question 13 raises an issue that is very difficult to resolve. Pre-Action Protocols for Defamation were designed to control legal costs indulgency. Subscribing to the myth of the impoverished media claimant victim and absolving a class of claimants from the legal costs responsibility of suing in a tort without even the burden of proof renders the Pre-Action Protocol somewhat meaningless.
Question 14: Do you have any comments on how the drafting of the rules might be improved?
We have said, in our introduction, that the Institute wishes to engage in an informed and imaginative debate on media law reform. As a start, we would offer the following as a start for debate.
The rules need to be deracinated and reduced to a basic framework of conditional fee agreements limited to obtaining a fixed proportion of damages won, where the damages are capped at £10,000 for the existing presumption of emotional damage.
The proper methodology for media civil wrongs would be a specialist High Court level infrastructure of litigated forum devoid of excessive CFAs and ATE insurance style policies. No win, no fee lawyers should only collect fees from a maximum of 25% of damages and libel damages.
For those dreadful libels causing proven financial and/or material damage, courts could have discretion to award ‘special’ additional damages to claimants as in the case with bodies that trade for profit in the new Defamation Act 2013.
Exemplary damages to be reserved for libels proven to be actuated by malice and reckless disregard for the truth to a maximum of no more than a further £10,000.
The burden of proof should be reconsidered to give more parity with all other forms of negligence. Finally all such processes should adhere to the open justice doctrine. Arbitration no doubt serves an excellent purpose in the construction industry. The bricks and mortar of freedom of expression need full exposure to the elements.