Regulation makes it costly to run a media business

Some of the nation’s most respected newspaper and publisher groups have threatened to lodge a European legal challenge if the government penalises them if they fail to sign up to the royal charter backed regulation on the press. The papers fear that this is likely to increase legal costs in privacy and libel court action if the government does not allow self-regulation and insists on the royal charter standard of media regulation.  

The law has been already inserted in to section 20 of the Crime and Courts Act and means that magazines and newspapers will be unable to recoup their legal fees even if they are to win in their high court cases unless they have gone through a process of arbitration with a unit approved by the regulator. In the larger more complex cases there are likely to be other legal fees incurred such as punitive and exemplary damages in addition to the libel damages.

This effect of the proposed regulation is threatening for the business of the media groups since they are already faced with hefty legal burdens in the region of £500,000 to £1,000,000 for those prolonged libel disputed. The newspapers have made no secret of their concern which in their eyes will have a “chilling effect” on journalism across the board. The changes are likely to mean that there is more safety in publishing with sources being checked thoroughly and some articles remaining unpublished.

Insiders in the press business say that if the proposals regarding exemplary damages and legal costs are not reconsidered and revised, they are likely to lodge a challenge on the government’s proposed regulation with the European Court of Human Rights. A newspaper executive stated that the action would signify the little choice which the newspapers are left with the legal costs being so hefty and out of proportion that they would simply be unbearable.

Deep disappointment has already been expressed by the Sun, Daily Main and the Telegraph who have all had proposals turned down by the government. Stig Abell, the managing editor of the Sun, stated that the government’s latest refusal of the regulation proposal has given them one final push for negotiation which could either end up in the press setting up its own regulation system which does not get government approval or a government backed regulator to which no paper signs up. Essentially the argument is one of business with the proposed penalties for not signing up to the royal charter possibly leading to intolerable trading conditions with little room for the maintenance of a sustainable business.