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November 2, 2015

Crime and Courts Act: damages provisions in force

Category: News

Tags: Costs, damages, press regulation

But costs provisions are not yet commenced


Tomorrow (3 November 2015) the provisions at sections 34-39 Crime and Courts Act 2013 relating to exemplary and aggravated damages in claims against the press come into force. The provisions automatically come into a force a year after the setting up of the Press Recognition Panel, which was established following the Royal Charter on Press Regulation which was set up in the wake of the Leveson Inquiry. The related costs provisions, at section 40 remain not yet in force.

To whom and what do the provisions apply?

The provisions apply to certain claims brought against “relevant publishers”. This is defined at section 41, but in substance means the press, but not broadcasters (who are exempted by Schedule 15 along with certain other publishers). This is because they are governed by a different regulatory regime under OFCOM or the BBC Trust.

The claims to which the provisions apply are: defamation, misuse of private information, breach of confidence, malicious falsehood and harassment. Importantly, claims under the Data Protection Act 1998 are not included (they are specifically excluded by section 42(5)(a)). Claims under that Act can be brought for damages for distress alone after the Court of Appeal decision in Vidal-Hall v Google.

Damages provisions

Sections 34-38 put on a legislative footing awards of exemplary damages against publishers, and importantly state that exemplary damages cannot be awarded against a publisher who was a member of an approved regulator at the time of the claim except in certain specified circumstances. Otherwise the court is given fairly wide discretion to award exemplary damages where it considers it appropriate in all the circumstances to do so, but, under section 34(6) an award should be made only if the court is satisfied that:

(a) the defendant’s conduct has shown a deliberate or reckless disregard of an outrageous nature for the claimant’s rights,

(b) the conduct is such that the court should punish the defendant for it, and

(c) other remedies would not be adequate to punish that conduct.

Exemplary damages can only be awarded if they are claimed however – an important point for those drafting on behalf of claimants in such actions.

Section 39 relates to aggravated damages and clarifies that such damages may be awarded against the defendant only to compensate for mental distress and not for purposes of punishment. This appears to make no change to the pre-existing common law position.

The extent to which courts will use these provisions to award exemplary damages, the circumstances in which they will do so and the sums involved remain to be seen.

Costs Provisions

Alongside the damages provisions, the Act, at section 40 also makes provisions for costs in the same types of cases. This section is not yet in force. It will mean that where a claim is brought against a publisher which is not a member of an approved regulator the court must make an costs order against the publisher even where it has successfully defended the claim – unless the court is satisfied that the issues could not have been solved by the regulator, or it finds that it is just and equitable in all the circumstances to make a different award of costs. This is a matter of great concern for publishers, particularly as in such cases the costs often far exceed the damages awarded. The “carrot” to this legislative “stick” is that publishers who are a member of an approved regulator will not be liable for a claimant’s costs – again, unless the claim could not have been resolved by the regulator, or the court finds that it is just and equitable in all the circumstances to make a different award of costs.

There are two things that need to happen for that section to come into force. The first is that costs provisions cannot come into force until there is a recognised regulator (section 40(6)). At present, although the Press Recognition Panel has said that it is ready to accept applications, none have been made. IPSO, which regulates a large number of news publishers, including the majority of the major national newspapers except for the Guardian, the Independent and the Financial Times, has indicated that it does not intend to seek recognition. Rival regulator IMPRESS, to which at present no newspapers have signed up, will seek recognition.

The second trigger is that the section must be commenced by the Secretary of State, and this has not yet been done. As 5RB’s Greg Callus has pointed out it may be that sections 40-42 were given separate commencement requirements because of an error in the drafting. Sections 41 and 42 (which are interpretive provisions) will come into force on 3 November, having been separately commenced by the Minister of State for Justice in an Order dated 27 October 2015. In a speech to the Society of Editors on 19 October, the Secretary of State for Culture, Media and Sport, John Whittingdale indicated that he was not, at present, convinced that the costs provisions should be brought into force. He said (for the full speech please click here):

I have to say that at the moment, I am not convinced the time is right for the introduction of these costs provisions. Given the changes under way within the industry, the introduction of the new exemplary damages provisions, and the pressures on the industry, I question whether this additional step, now, will be positive and will lead to the changes I want to see.

My mind is not made up, and I will want to examine the matter further in the coming weeks before taking any decision. But let me be very clear: I would like to see the press bring themselves within the Royal Charter’s scheme of recognition. What is key is that we should have a regulator that is tough, independent, fully subscribed and that commands confidence.

This means that at present, even if IMPRESS is approved by the Press Recognition Panel, the costs provisions at section 40 will still not come into force. A decision will need to be made by the government as to whether or not to commence section 40. The Secretary of State for Culture, Media and Sport intends to “examine the matter further”. It remains to be seen what the result of that examination will be, and if the government will consider it necessary to hold a further consultation on the matter.

The 5RB website will publish any further updates as news items.