Arbitration and local papers
by Hugh Tomlinson QC
Representatives of the local and regional press continue to express concern about the key Leveson recommendation that a self-regulator must offer an “arbitration service”. The purpose of this recommendation is to provide “access to justice” for complainants whilst reducing the burden of legal costs for publishers.
This proposal has proved attractive to national newspaper publishers but not to the representatives of their regional and local counterparts. As I have pointed out before on Inforrm, the concerns which have been expressed are based on a number of misunderstandings and misconceptions. But, as the evidence given to the House of Commons Culture, Media and Sport Select Committee last week (see Parliament TV) illustrates, they are proving remarkably persistent.
In this post I want to deal with three issues which were raised in evidence before the Committee and which were subsequently uncritically repeated in the press on the basis that they gave rise to serious issues about the viability of the Leveson recommendations. This is, as I will try to show, not correct.
Arbitration and “Group Complaints”
The first is the suggestion – made in the course of evidence to the Committee – is that under this system editors would face greater pressure from lobby groups to publish their press releases under the threat of expensive arbitration claims. For example, Ashley Highfield, chief executive of Johnston Press, said that small local papers could be forced out of business if the new system resulted in vexatious complaints:
“Or that paper would decide not to go anywhere near certain stories that have lobbying bodies that would jump on them with no fear of having to pay for any arbitration.”
This is a misunderstanding based on a failure properly to distinguish between the complaints and the arbitration processes. The proposed arbitration service only covers civil claims for example relating to libel or invasion of privacy. Such claims cannot be made by lobby groups on behalf of anyone or on behalf of any cause. If this was tried then it would be a vexatious claim and the lobby group could be the subject of an adverse costs order by the arbitrator. The Leveson Report is explicit about this (see Recommendation 22).
A “Flood of Claims”
A persistent concern expressed by representatives of the local and regional press is the fear that the arbitration system would result in a “flood of claims”, fuelled by “claims farmers” or “ambulance chasing lawyers”. For example, David Newell, director of the Newspaper Society said the possibility of winning compensation through an arbitration service would result in many complaints which would otherwise be dealt with swiftly and fairly through the complaints service being “dressed up as legal claims”. He said that:
“Because the arbitration service will be free at the point of entry, it is almost inevitable that people will tick the box and say they want a case dealt with by way of arbitration. There will be heavy cost burden not only to administer the arbitration scheme but to handle each individual case.”
This argument has never been backed by evidence. The argument is sometimes based on a confusion between complaints (of Standards Code breaches) and arbitration claims (which require a cause of action recognised by law). Many “code complaints” (for example, non-defamatory accuracy complaints) do not give rise to legal claims.
More generally, there are at least three other points which can be made:
In short, the arbitration system is likely to provide more protection to the press than the present court-based system of civil litigation and is not going to generate huge numbers of claims where none exist at present.
Article 6 and the “sifting of claims”
A persistent criticism of the Leveson arbitration scheme is that it would make it expensive to deal with frivolous and vexatious cases because these would have to be dealt with by an arbitrator (paid for by the respondent publisher). Thus, Mr Newell told the Committee that a provision in the Leveson Royal Charter allowing frivolous or vexatious cases to be struck out would not protect the industry because there would still have to be a hearing or process to comply with a complainant’s right to a fair trial under Article 6 of the European Convention on Human Rights. It would cost a newspaper up to £1,000 simply to establish that a complaint was frivolous.
I have already dealt with this point in a March 2013 Inforrm post. In that post I set out the stages envisaged in the “self-regulator’s arbitration” system. It is, perhaps, worth repeating them here:
- Stage 1: The claimant writes to the publisher about a breach of his or her legal rights. The complaint is considered internally by the publisher. If the publisher offers acceptable redress then that is the end of the process. If not, then, Stage 2:
- Stage 2: The claimant writes to the “arbitral service” and says that s/he wants to make a legal complaint. There is a “first sift”: a member of staff (or a staff member of an outsourced arbitration service) decides whether the complaint appears to be within the rules of the service (which it would not be if, for example, it was an “accuracy” complaint which was plainly not defamatory) or whether the claim is manifestly misconceived. If, on first sift, the claim appears to be valid, the claimant is sent a copy of an arbitration agreement to sign and a claim form to fill in (with explanatory notes).
- Stage 3: The claimant returns the signed arbitration agreement and completed claim form. The claim form is then put before an arbitrator who decides how to proceed. This is, in effect, a “second sift”. The arbitrator may decide that the claim appears to be “frivolous and vexatious” and invite the claimant to make written representations as to why it should not be struck out with costs. The arbitrator may decide (taking on his or her”inquisitorial function”) that the claim needs reformulating or supporting by further evidence. On the other hand, the arbitrator may decide that the claim calls for a defence and will then send it to the newspaper so that it can produce a defence.
- Stage 4: The arbitrator will, in the light of the claim and the defence decide how to proceed. S/he may require witness statements or disclosure of documents. S/he may decide to make an interim decision (for example, on meaning) – on paper or at a hearing.
- Stage 5; Final determination. When all appropriate steps have been taken, the arbitrator will make a final determination – either on paper after inviting representations or at a hearing with witnesses. S/he may to decide to have the hearing in public if that is appropriate.
The issue raised by Mr Newell concerns “Stage 2″ – the “first sift”. The press have received legal advice that an initial sift is not compliant with Article 6 and is, therefore, unacceptable as a means of satisfactorily disposing of manifestly unfounded claims. The first point is correct. The second is not.
On the first point, a first sift carried out by an employee of the self-regulator would, indeed, not comply with Article 6: the employee would not be an “independent and impartial tribunal” and the decision not to accept the claim into the arbitration service would not comply with the basic requirements of a “fair hearing”. It would not be a “final determination” of the claim. In fact, it would not be part of the arbitration process at all because it would take place before the arbitration agreement was signed. This means that there would be no bar to the claimant seeking to bring his or her claim in the courts.
But none of this would matter in practice. The purpose of the “first sift” would be to get rid of the obviously frivolous and misconceived claims at the outset. If, to take an example, from a recent PCC Adjudication, a person sought to bring a claim in the arbitration system based on a payment by a newspaper to a relative of a convicted criminal, this could be dismissed on the “first sift” as giving rise to no cause of action known to the law. Although it would not be a binding determination it would send a clear message to a complainant. If the claimant then sought to bring a claim in the courts it would be struck out (with costs) as disclosing no reasonable grounds for bringing the claim.
The purpose of the “first sift” would be to ensure that obviously misconceived claims were not accepted into the system. If a strict standard is applied then it is highly unlikely that a claimant would be able to bring a successful court claim after a “first sift refusal”.
If a borderline claim passed the “first sift” then it would, indeed, have to be dealt with by an independent arbitrator in accordance with Article 6. If, however, the claim was, on analysis “frivolous and vexatious” the arbitrator would have the power to make an award of costs against the claimant. This could include the costs of paying the arbitrator. It might well cost the newspaper £1,000 to have a frivolous claim dismissed but this is a sum which it could recover from the claimant. It would be in no worse position than a newspaper which is faced with a frivolous and vexatious claim in the courts.
The Design of the Arbitration System
A final point which the local and regional press should bear in mind is that the design of the arbitral system is a matter for those who set up the self-regulator. The Royal Charter [pdf] only sets out a set of very general requirements for an arbitration system. The self-regulator must provide an arbitral process which
a) complies with the Arbitration Act 1996 (“the Act”);
b) provides suitable powers for the arbitrator to ensure the process operates fairlyand quickly, and on an inquisitorial basis (so far as possible);
c) contains transparent arrangements for claims to be struck out, for legitimate reasons (including on frivolous or vexatious grounds);
d) directs appropriate pre-publication matters to the courts;
e) operates under the principle that arbitration should be free for complainants to use;
f) ensures that the parties should each bear their own costs, subject to a successful complainant’s costs being recoverable (having regard to section 60 of the Act and any applicable caps on recoverable costs); and
g) overall, is inexpensive for all parties
Subject to these requirements – and the overall judgment of the Recognition Panel as to “the effectiveness, fairness and objectivity of standards,independence and transparency of enforcement and compliance, credible powers and remedies, reliable funding and effective accountability” (Charter, Schedule 2, para 1), – the self-regulator can set the arbitration rules. These can include, for example, provisions as to time limits, when strike out should be considered and the costs payable when claims are struck out. The concerns of the local and regional press can be taken into account when the rule are drawn up.
In short, although the representatives of the local and regional press express concerns about the “Leveson arbitration system” these are not ones which, on analysis, are soundly based. The press is not going to be flooded with unmeritorious arbitration claims by lobby groups, or anyone else. The arbitration service can refuse to accept obviously bad claim and ones which, on analysis are frivolous and vexatious can be dismissed with costs. The proposed arbitration system is a workable and practical solution to the problem of access to justice. If it is properly administered such a scheme will save costs for newspapers and would provide quicker and more effective remedies for claimants. It is an essential element of a new self-regulatory regime.
Hugh Tomlinson QC is the Chair of Hacked Off.