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8 May 2018updated 24 Jun 2021 12:22pm

Journalism needs reform – but Section 40 will stifle it

Section 40 could see local newspapers collapse under the hefty costs of a lawsuit – even if they won the legal battle.

The mainstream media don’t make themselves all that easy to defend. Newspapers will run huge inflammatory headlines across the full width of their front page, only for them to turn out to contain huge factual inaccuracies – not that most of their readers will ever know, as the correction runs weeks or months later, hidden away in a tiny box on page two.

Given most of us agree there’s a crisis of trust in the media, and many of us believe the media should be more accountable to the public, it’s not hard to see why we would be tempted to listen to press campaigners who want to help people challenge media inaccuracies.

This is what’s at stake in the debate over “Section 40”, a clause in the law introduced in the wake of the Leveson hearings, which was never made active and which the government now wishes to repeal. MPs – backed by press reform campaigners – are pushing to enact the clause through amendments to new data protection rules passing through parliament this week.

On the face of it, the intentions of Section 40 are good. The rule is designed to encourage newspapers to join a regulator with a low-cost and quick arbitration system, so that people who can’t afford the hefty costs of going to court and suing for libel have an easy form of redress against newspapers.

News outlets are “encouraged” to join such a regulator by means of a hefty penalty if they don’t: newspapers who aren’t members of a regulator would generally have to pay not only their own costs, but also the legal costs of anyone suing them, whether they won or lost.

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It’s costs, rather than damages, which terrify news outlets into running cautious, careful articles that won’t rock the boat too much. Several years ago, the Guardian accused Tesco of (legal) tax avoidance, in an article which made a number of errors: Tesco had been reducing its tax bill through a scheme similar to the one the Guardian described, but they had identified the wrong tax, and thus come to a sum considerably bigger than the one actually being avoided.

Tesco sued, and because of the various errors in the article, the Guardian reached a confidential settlement with the supermarket giant (Disclosure: I was a reporter and editor at the Guardian for over four years. This settlement was before my time there, and I am not party to its confidential details – figures mentioned here are from contemporaneous reporting in Private Eye).

The deal reportedly involved paying relatively modest damages of about £5,000 – but then the Guardian received a bill for around £700,000 for Tesco’s legal costs, despite the case being settled relatively early. Had a case been fought through and up to the Supreme Court – as is sometimes necessary – it could have been far, far higher still.

The seemingly reasonable Section 40 opens up numerous papers that, for one reason or another, have not joined a regulator, to this prospect. They would be expected to cover the costs of any lawsuit they would face, whether they won or lost. This would be a power easily abused by wealthy offshore tax avoiders, corporations and others: an aggressive individual or organisation could bring more lawsuits, even if they wouldn’t win, and cripple organisations through cost bills. For independent and local outlets, one case would be enough to end the organisation.

That could lead us to a journalism even more insipid and restrained against the powerful than we have already – but would do nothing to stop headlines demonising groups of people (Muslims, LGBT people, immigrants, people on benefits, or more). The law has some phrasing attempting to shield cases where it wouldn’t be “reasonable” to pay such costs, but courts can have (and often do have) very different definitions of “reasonable” than you or me.

The rule then in effect amounts to a bid to force all UK outlets to join a regulator approved by the state, without making that coercion explicit. For many journalists, such state regulation is a red flag: news is one of the few industries that requires daily clashes with the government and parliament of the day, and regulation is often used across the world to stifle free expression. Even if that risk seems remote here – though the rise of Donald Trump in the US should warn against complacency – the only such approved regulator at present is Impress. Despite having made some good rulings, and having some good people on board, this regulator is deeply mistrusted by much of the industry.

Part of that distrust comes from its funding: Impress is funded by foundations that are in turn funded by Max Mosley, who has led a one-man campaign against much of the British media – including bids to redefine privacy law in such a way as to make a lot of accountability journalism far harder. It is not hard to see why such a grouping would be eyed with mistrust by the UK media.

It’s often a good rule of thumb in politics to look at who’s cheering on a policy, and who’s shouting it down. The Sun, The Mail, and other outlets are visibly fighting hard against Section 40, which might make many of us on the left want to support it. But we should look past them to the local papers, the investigative journalists, and others who are also trying to fight against this change. We need reform that will improve journalism, not stifle it.

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