‘Enforced self-regulation’ – what can the Leveson Inquiry learn from Australia ?

The Australian Independent Inquiry’s overall recommendation for a unified multiplatform regulator goes far beyond the remit of Leveson, but their model of ‘Enforced Self-Regulation’ provides some useful ideas for the future shape of UK non-broadcast media regulation.

On 28th February an Independent Inquiry for the Australian Department of Broadband, Communications and the Digital Economy (DBCDE) published its findings, recommending a complete overhaul of news media regulation and the concentration of regulatory authority in a single body with responsibility for print, broadcast and online news.

The 6-month inquiry, led by a Former Justice of the Federal Court of Australia and a distinguished academic, was in part prompted by the dramatic developments surrounding the UK press in July 2011, and the pre-eminence of Rupert Murdoch’s News Corp – through a subsidiary, News Ltd. – in his country of birth. The other main catalyst for the Inquiry is the DBCDE’s ongoing Convergence Review, and, while the breadth and scope of its main recommendations accordingly go beyond the remit of the Leveson Inquiry, the proposed model of ‘enforced self-regulation’ contains some ideas that are relevant to current discussions of the future shape of UK press regulation.

Framing Arguments for Reform

The Inquiry sets out five questions to guide the consideration of reform that could just as easily inform the deliberations of Lord Justice Leveson and his team:

  • Is there a problem and, if so, what is its cause?
  • What are the social costs of the problem and who bears them?
  • What regulatory mechanisms are available to mitigate the problem and is any one better than the others?
  • What is the cost of implementing the proposed regulation?
  • What are the likely benefits of implementing the proposed regulation?

The problem, they propose, is one of market failure – information asymmetry, concentration of ownership, and a lack of trust in the news media – combined with the failure of the existing system of self-regulation to maintain standards or deal with irresponsible reporting. Sound familiar? In response, their investigation of the social costs of regulatory failure prompts a spirited argument in favour of robust and effective regulation – a powerful counterpoint to the oft-repeated position that increased regulation of the press always results in a net loss to the public good (Paras 11.17-11.19):

In the context of the press, and of the media more generally, the costs of the harm produced by an ineffectively self-regulated free press are borne not by the media and their consumers but by other sectors of the community. This includes those subjected to adverse reporting, who have no meaningful redress at law, and the community as a whole insofar as it depends upon the news and public affairs reporting in order for democracy to function properly. As a consequence, media outlets have little interest in reducing those costs.

It is not possible to quantify the costs of the harms and risks identified. However, given the in-built limits on the effectiveness of the [present] self-regulatory model adopted by the press, there is reason to consider that the costs associated with market imperfections and with the social harms caused by the media will be significantly reduced (although not eliminated) by more effective regulation.

Further, to the extent that the media currently does not bear the costs of the harms it causes, an improved structure could to some extent transfer the costs associated with that harm from consumers and other affected individuals to the media. Assuming that media outlets are rational actors, this shift in cost-bearing ought to provide an incentive for them to act to avoid causing unjustifiable harms and so reduce the costs of the market imperfections in that way. If media outlets continue to cause unjustifiable harm, it is proper that they bear the costs of doing so rather than simply shifting those costs to the victim.

In considering the spectrum of possible regulatory responses (rejecting maintenance of the status quo and the opposite extreme of government licensing) the inquiry alights on two credible options. These are: the creation of an independent statutory body to replace the existing Australian Press Council (APC), with increased funding and powers; and the creation of a similar body, but with an extended remit to cover the broadcast news and current affairs standards functions of the Australian Communications and Media Authority (ACMA). The hallmarks of a new regulatory system should be possession of the backing of law and the absence of the ability to ‘opt out’, and the presence of adequate enforcement: “the media, like any social institution, should be accountable for its performance” (Para 11.27).

The Inquiry, doubtless because of its proximity to the ongoing convergence review and its terms of reference, opts for a multi-platform regulator covering print, online and broadcast news. Insofar as such an outcome – whatever other deficiencies it may possess – is beyond the scope of the Leveson Inquiry, the provisions of the report are considered here on the basis of how they might apply to the future non-broadcast regulatory context of the UK.

The Model – ‘Enforced Self-Regulation’

An independent statutory body – the News Media Council (NMC) – would be established, free from government influence through an independent appointments procedure, but funded via government. An independent committee, perhaps of senior lawyers and academics, would appoint a full-time independent Chair and 20 part-time members (50% lay appointments, 50% female). Industry candidates would not include managers, directors and shareholders of media organisations.

Funding – ostensibly to ensure independence from the industry – would be obtained from government via a transparent process. The emphasis is on ensuring adequate funding after the shortfalls of the APC.

The principal function of the NMC would be “to promote the highest ethical and professional standards of journalism” through: the preparation and review of standards, via setting both non-binding aspirational principles and detailed codes of practice; investigation and resolution of alleged contraventions of standards through complaints or on its own motion; the production at regular intervals of reports on the state of the Australian news media; educating the news media about the contents of standards; and educating the public about the standards and about the existence and role of the NMC.

The authority of the NMC is to be conferred by statute, and its jurisdiction is therefore bound by a legal definition of what constitutes the ‘news media’, such that no eligible body can opt-out of the system. The Inquiry adopts that of the New Zealand Law Commission’s recent report, subject to a ‘minimum threshold’ below which no regulatory obligations apply. This would be determined by size of potential readership, or by number of annual hits in the case of online outlets.

The complaints function is designed for speed of resolution, and so complainants should be obliged to waive any possible future action they might have; the Council would preferably not deal with cases in which litigation is pending or where courts may ultimately be involved. Complaints will initially be dealt with via mediation; failing that, a complaints panel would make a subsequent decision.

Remedial powers following complaints and own-motion investigations would be:

  • To require publication of a correction
  • To require withdrawal of a particular article from continued publication (via the internet or otherwise)
  • To require a media outlet to publish a reply by a complainant or other relevant person
  • To require publication of the NMC’s decision or determination
  • To direct when and where publications should appear (Para 11.74).

The NMC will have no powers to impose fines or award compensation. Following a successful decision/correction a form of privilege should ensure protection from further legal proceedings for both the NMC and the publication. In the event of non-compliance with a decision, the NMC or the complainant would be able to obtain a court order compelling compliance.

Lessons for Leveson?

The proposal contains some attractive features, but ultimately the system of  ‘enforced self-regulation’ suffers from being both overly-intrusive in relation to issues of news standards and content, and somewhat lacking in its ability to punish breaches of standards. The latter point is surprising given the prominence of the concern that harms caused by the news media have widespread and severe social consequences.

The overall plan of independent statutory regulation is credible, provided that appointments are independent and transparent. The system for appointment set out by the inquiry has merit, as does the balance of the Council itself. The application of a legal definition of news outlets, precluding opt-outs and with a ‘minimum threshold’ requirement positively reflects the democratic and social obligations and responsibilities that should be placed on news organisations, while ensuring that individual blogs and newsletters are free from regulatory control.

It is possible to envisage such a system being a applied in the UK: once a news outlet triggers a defined criterion of size or reach (reflecting its capacity to confer social costs and benefits), it would automatically come under the aegis of the new regulator and be subject to its rules and sanctions.

There are, however, some drawbacks. Granting the Council powers to set and control standards of content and codes of practices removes much of the news industry’s power to ‘self-regulate’. The focus on setting and regulating standards also risks dislocating journalists and their practices from the content of the code, and seems unnecessarily paternalistic in its application. The boundaries of the regulator and ‘self-regulation’ on this issue are not precisely defined in the report.

The system of funding is inherently problematic, regardless of the mechanisms of transparency put in place. While statutory backing of a new regulator is acceptable given the conspicuous failings of self-regulation in both Australia and the UK, any government ties to funding of the press should be rejected. The motivation of the Inquiry is to separate funding from the industry, but it is possible to achieve independent and adequate funding without involving Parliament. For instance, a regulator could set an annual budget that is then levied from publications on a transparent basis, as is already achieved in the UK by the Advertising Standards Authority.

The lack of economic sanctions is surprising given the report’s preoccupation with achieving enforceability of regulation. This is also reflected in the reluctance of the Council to consider complaints where courts may be involved at a later date (although the Council has the ability to report legal infringements uncovered in the course of an investigation to the appropriate authorities). More detail is certainly needed on the complaints and sanctions side, but it appears at present that the NMC is not intended to sanction publications alongside court judgements.

Overall, the Australian Inquiry provides a lot of suggestions for those involved in UK press regulatory reform to mull over. It is, to date, one of the most comprehensive of a growing field of alternative models to be placed before Lord Justice Leveson. It proposes a regulator based much more on statutory mechanisms than anything yet put forward here. For this reason it necessarily broadens the discussion in the UK and is an interesting counterpoint to those who reject any statutory mechanism out of hand. The report has already gathered criticism at home, and doubtless such a proposal would draw similar fire in the UK. However, it also has its supporters in Australia and ought to feed into Leveson’s thinking here.

Dr. Gordon Ramsay is a Research Fellow at the Media Standards Trust and Visiting Scholar at the University of Westminster’s School of Media, Art and Design