Crime and Courts Bill [HL]

Lord Black of Brentwood Excerpts

Monday 25th March 2013 Lords Chamber

[Lord Black of Brentwood]

My Lords, I declare an interest as executive director of the Telegraph Media Group and chairman of the Press Standards Board of Finance. I want to speak to Amendments 11 to 19. This group of amendments covers issues that are wide ranging and, as the noble Lord, Lord Lucas, so ably demonstrated, extremely complex. They go to the heart of some fundamental issues of law and justice, impinge on matters which are central to the European Convention on Human Rights and impact on the nature of investigative journalism. To echo some of the comments that were made at the start of business, it cannot be right that they are introduced after barely two hours of debate in another place, at the tail end of a Bill with only a handful of days before the end of the legislative Session, and in a way which does not allow for proper scrutiny.

On the radio last week, the Deputy Prime Minister said that the meeting late last Sunday night to agree on issues of press regulation,

“focused on technical legal definitions of what represented exemplary damages. It dealt with a tiny, tiny piece of the jigsaw ... It was about filling in one piece of the canvas”.

That statement shows how very dangerous this whole issue is because important issues that relate to freedom of speech were treated simply as a,

“tiny piece of the jigsaw”,

agreed not with the industry that is going to be affected by them but with a lobby group, and they are now being pushed through at breakneck speed. The amendments from the other place are wrong in principle and fundamentally flawed. They are almost certainly contrary to European law and so will collapse or be struck down. They deal with problems of an analogue past and are, in the words of the Guardian, “illiterate about the internet”. They are a constitutional nightmare. This late-night legislative fix will end up bringing discredit to us because we should have spent time analysing, scrutinising and amending them.

It has been argued that these issues were examined by the Leveson inquiry and are a key part of the complex system of media regulation he devised. That is not the case, however, and this House has to understand that. These far-reaching proposals have had no analysis or study anywhere and certainly not by Leveson. I understand that criticising Sir Brian Leveson is akin to criticising Florence Nightingale, but his inquiry utterly failed to scrutinise the key legislative issues that arose from it. As the Economist described it this week, aspects of this controversial report were just plain “sloppy”.

Leveson never invited evidence on statutory underpinning or published a draft statute to be examined in detail, and never looked at the massive implications, particularly for the regional press, of the establishment of an arbitration service. Crucially for this group of amendments, he never looked in detail at exemplary damages. He never invited or received submissions. The only reference I can find in the acres of evidence was from Ofcom, which suggested he might look at,

“procedures to give courts power to penalise parties ... in legal cases where the party has not taken account of the complaints-handling process offered by the new body”.

Ofcom then adds that its,

“experience in fairness and privacy cases has not led us to believe that it is necessary to have such powers. It would inevitably lead to more litigation”.

This is hardly a ringing endorsement.

Noble Lords should also know that Sir Brian devoted just four paragraphs of his 2,000-page report to the issues before us, on the basis that they were “worthy of consideration”. In his report, he says that the matter has been,

“fully discussed by the Law Commission and I see no value in repeating their argument”.

The Law Commission report, which he used as a basis for a finding that exemplary damages were necessary to make his system work, was published in 1997 before the enactment of the Human Rights Act which changed the law in this area. There would have been no point trying to, in his words, “repeat the arguments” as that Law Commission report, which was supported only by a minority of those consulted and was inconsistent with the conclusions of the Supreme Court Procedure Committee chaired by Lord Justice Neill in 1991 recommending abolition of exemplary damages, was shelved at the time and has never been accepted. The proposals it contained on exemplary damages—the same ones we are looking at today in this group—were recently dismissed in the leading textbook on the law relating to damages as,

“a retrograde step, with its inevitable and twin results of allowing the civil law to enter the very different domain of the criminal law and of providing windfalls for claimants which are in truth unmerited”.

Before moving on to some detailed issues, I want to deal with the point that will be made that I am just tilting at windmills and that no one has anything to fear if they are part of an approved regulator. This is the so-called “incentive”, the carrot and stick to provide statutory support to underpin a regulatory system. Regrettably, that argument is a mirage, because the way this legislation is structured means that membership of a regulator is not a complete protection against exemplary damages and costs orders. I am thinking in particular of proposed new subsection (3) of Amendment 11. While the Bill provides that exemplary damages should not generally be awarded against a “relevant publisher” which is a member of an approved regulator, the court can disregard this prohibition and make an award of exemplary damages in strikingly wide circumstances that render the apparent protection of being a member of a regulator entirely illusory. All the court needs to do is to be satisfied either that the regulator when looking at a case behaved “irrationally”— unlike the Minister I do not think that is a very high bar for some judges—or that it would,

“have made an award of exemplary damages ... against the defendant”,

even though it was a member of the regulator.

That is compounded by the new clauses in subsection (2) of Amendment 17 on awards of costs—which are the real issue in cases like this and which could have a far greater impact than damages themselves—which mean that the court can award costs against a member of the regulator where the issues could have been resolved by the regulator's expensive arbitration service or it is,

“just and equitable in all the circumstances”

to award costs against the defendant. In other words, there are so many loopholes that membership of the regulatory body might be largely irrelevant.

As structured, the Bill does not provide any form of carrot and stick: in fact, it provides a disincentive to membership because it establishes a system of double jeopardy. A publisher could be part of an approved regulatory structure, for which it will, as the noble Lord, Lord Lucas, said, have to pay a lot of money along with exposure to fines, and then it could still face the prospect of exemplary damages and crippling costs in court. Why on earth should publishers do that and face paying twice? I fear that this Bill makes it less likely that publishers would want to join an approved regulator. Some smaller publishers in the regional and periodical press, in particular, may as well just take their chances and stay outside. If the Government want a new regulator with universal coverage—which is absolutely right—this is a bizarre way of going about it.

I am not a lawyer, but I have the benefit of an opinion from the noble Lord, Lord Pannick, Desmond Browne QC and Anthony White QC, which makes clear that the provisions contained in the amendments to this Bill are likely to be unlawful because they single out for punishment a particular category of defendant rather than a particular kind of conduct. As the opinion states:

“This is particularly objectionable where the category of defendant singled out includes the press. To punish the press for what others may do without punishment is inconsistent with the special importance that both domestic and Strasbourg jurisprudence attaches to freedom of the press”.

Because the proposals will catch many publishers, from individual bloggers to NGOs, they go beyond the recommendations of Leveson. This Bill is not even itself, in the jargon, “Leveson-compliant”.

We could face the absurd situation whereby a newspaper undertook an investigation in conjunction with a programme such as “Dispatches”; this is not unknown. Both could publish the material at the same time on different platforms, one online and the other on television. If there was a legal action on grounds of defamation, the newspaper, whether or not it was a member of an approved regulatory body, could be exposed to crippling costs and damages. However, under the amendments the TV programme that broadcast the same material would be exempt. That is a completely untenable position as a matter not just of law but of fundamental justice.

As the noble Lord, Lord McNally, mentioned, there is a great deal of jurisprudence in English case law which sets out the case against exemplary damages. They have been described as anomalous and indefensible in judgments from, among others, Lord Diplock, Lord Devlin and Lord Reid. Indeed, in one of the most recent cases where this issue involving the media was raised—that of Max Mosley v News Group Newspapers—Mr Justice Eady, who some say is no friend of newspapers, concluded that exemplary damages,

“could not be said to be either ‘prescribed by law’ or necessary in a democratic society ... There is no pressing social need for this. The ‘chilling effect’ would be obvious”.

That point about the chilling effect is extremely important because these clauses—as the noble Lord, Lord Lucas, rightly said—import a huge amount of uncertainty into the law; and uncertainty is the enemy of investigative journalism. Why should newspapers pursue a story that could leave them exposed to exemplary damages and costs unless they are operating against the background of a law that provides certainty?

The amendments allow for an award against a publisher where conduct is judged to be “outrageous”—as described in subsection (6) of Amendment 11—or

“such that the court should punish the defendant for it”.

Yet legal precedent rules that the use of this test for outrageousness is “far too vague”. Lord Diplock, in a wonderful phrase in one ruling, rejected it as being merely one of,

“a whole gamut of dyslogistical judicial epithets”.

Given that almost all publication of information concerning an individual engages his or her Article 8 rights—those of privacy—the focus of any action will inevitably revolve around whether a defendant's conduct was “of an outrageous nature”—something on which views will differ. Uncertainty and unpredictability in the area of freedom of expression are wholly undesirable.

There are further problems that will chill investigative journalism. First, subsection (4) of Amendment 11 gives the court power to look at a publisher’s “internal compliance procedures” to see whether material was obtained “in an appropriate manner”. That will invite claimants to include in legal cases questions about how information was obtained, with massive repercussions for confidentiality of sources. Journalists and publishers will inevitably be pressed to disclose information about sources in an attempt to avoid crippling financial penalties. It will positively discourage whistleblowing.

Secondly, there is the issue relating to costs in Amendment 17. The Bill turns on its head the principle that generally costs follow results. If these provisions become law, publishers—and this is particularly crucial for the local press—who do not agree to arbitrate a dispute, something which can be very costly, face the prospect that when they are sued in a libel or privacy case, they may have to bear the entire costs even if they are successful. This issue does not affect the traditional media, as is highlighted by the amendments of the noble Lord, Lord Lucas. He made that case extremely well.

The case against exemplary damages and costs orders in English law is overwhelming, and the implications are, as I have tried to set out, disturbing. However, even if this House decides to go down that road, it will face an even stiffer test in Strasbourg, where I am sure this Bill will eventually founder because of its incompatibility with Article 10 on freedom of expression.

I mentioned the case of Max Mosley, which ended up in the European Court where this issue of exemplary damages was considered. The Court concluded that it,

“is satisfied that the threat of ... punitive fines would create a chilling effect which would be felt in the spheres of political reporting and investigative journalism, both of which attract a high level of protection under the Convention”.

We should take real note of the what the court said about how these measures would impact not on celebrities who have for too long been the focus of this debate but on political reporting.

Furthermore—and this is an important matter for Europe—the Bill discriminates between substantial commercial publishers whose business model allows them to afford membership of an approved regulator and small publishers or bloggers, such as those mentioned by the noble Lord, Lord Lucas, which cannot afford membership or may regard it as unnecessary or undesirable. That discrimination is impossible to justify under Article 10.

Everything about these proposed new clauses is wrong. They were cobbled together late at night over pizza, with no thought for the legal and constitutional issues involved. They exhibit no understanding of the digital world into which all publishers are moving. They are alien to decades of English law, and almost certainly illegal under European law. They would provide a serious blow to investigative journalism. They would disproportionately impact on smaller publishers and, in particular, the regional press. If ever there was a case where this House should have asked the Government and the other place to think long and hard, and to take their time studying the massive implications of what is being proposed, it is this. However, we do not have the ability to do so. I may be a lone voice making these points, and the cross-party deal with Hacked Off on its proposals means that these amendments will inevitably become law. I understand that. However, my noble friend is an honourable man and I ask him simply to pause and think again.