The options for Leveson

The key issue that Lord Justice Leveson has to address in his report is the appropriate model for regulation of the press. Numerous proposals have been advanced but the viable options essentially fall into four categories. Each is problematic.

Business as usual

The press contends for retaining self-regulation, albeit with a regulator with increased powers for example to award compensation. Others suggest that the regulator could have the power to fine and scrutinise the internal operations of newspapers to a greater extent.

This proposal presents two key problems. Firstly, many would see that the current system of self-regulation has seriously failed and that continued regulation on this basis lacks credibility. Secondly, under self-regulation there is no compulsion for any newspaper to take part. For the past few years the Richard Desmond-owned Express titles have been outside the remit of the Press Complaints Commission (PCC) without any obvious consequence. Any model for self-regulation has to address what has become known as the ‘Desmond problem’.

A state regulator as licensor

At the other end of the spectrum is a statutory regulator that would issue licences to newspapers, requiring strict compliance with some form of publishing code. This is the model for broadcast regulation. Such a regulator would have powers to penalise newspapers and robustly maintain standards.

There are a number of difficulties with such a model. First and foremost, there is the question of which types of publishing operation would require a licence. Surely not any person disseminating information would require a licence, such as an individual using social media or a parish magazine. But how do you define in legislation those operations that should be licensed? One might say that newspapers should be licensed, but that simply begs the question of what in legal terms constitutes a newspaper. In a publishing world increasingly going online, that is not a very helpful definition.

Another problem is that a statutory regulator would for the first time confer state control of the print media. Many commentators are at pains to say that any such control would be very significantly at arms length from government. It is said, for example, that the judicial appointment system or a similar system could be used to insulate any regulator from any political influence.

But this is not entirely convincing. It is true that we have a long history of independent judges that works well. But can the same principles really be established for an industry regulator that is not steeped in the long tradition of judicial independence?

And who would the regulator be? What is needed is an individual who is politically astute but has no political affiliation, who is a man or woman of the world but has no baggage, who understands how the media operates but is not of the media. That is a challenging person specification.

Moreover, regulators from the ICO to the FSA to Ofcom that start with a circumspect approach tend to become more interventionist as time progresses and improprieties have been revealed in the industries under their watch. Regulation connotes responsibility and every failure ratchets up the level of scrutiny and control.

A state regulator but no licences

An alternative model is for there to be no licences but a regulator that can simply impose itself on the print media as it sees fit. This is more or less what happens in the telecoms industry; operators do not need a licence but they must comply with conditions laid down by Ofcom. If they stray outside of the conditions, Ofcom can take action. A press regulator could have a similar roving role, able by means of statutory powers to impose conditions on publishers as it sees fit.

But this simply exacerbates the definitional problem. Now it has to be decided (presumably in statute) whom the regulate may regulate and then subsequently the regulator must decide in any particular case whom he or she wishes to action against. Moreover, handing over such broad powers to a regulator to intervene in any form of publishing operation he or she sees fit increases the concern of state control over what we write and read.

A regulator with incentives

In many ways the most elegant solution is a regulator that has no statutory powers as such and to whom no publisher is required to submit as regulator, but one for whom membership confers benefits. For example, membership of such a regulator may provide a bar to complainants bringing libel claims in the courts at least without exhausting the complaints procedure of the regulator. (Another suggestion was that the exemption that newspapers currently enjoy from VAT should be dependent on membership, but it is thought that such a regime would be contrary to European law.)

Some benefits of being subject to media regulation already exist. For example, the severe financial penalties potentially available against a media organisation under the Investment Recommendation (Media) Regulations 2005 can be largely avoided if the media organisation can show that it is subject to an appropriate regulatory regime, currently Ofcom or the PCC.

This essentially solves the definitional problem. Any entity, whether national newspaper or obscure blog, can be a member, if it considers the benefits of membership outweigh the disadvantages and costs.

But serious issues still remain. If very substantial benefits are conferred on membership then the system may in effect be compulsory in all but name. Then similar questions will arise as to who the regulator is and if it is proper for a state regulator to exercise such powers. But if the incentives for membership are not strong enough, there may be media entities who should be subject to regulation but who decide not to join.

There is no easy answer to any of these issues. It is virtually certain that Leveson LJ will recommend a stronger regulatory regime, but how far he goes and how he tries to reconcile these competing difficulties remains unclear.

Dan Tench is a partner at Olswang