The UK Independent Press Standards Organisation Launches Pilot Arbitration Scheme

In August 2016, the Independent Press Standards Organisation (IPSO) announced the launch of its pilot arbitration scheme. It comes nearly four years after Lord Justice Leveson's recommendation for a "fair, quick and inexpensive" arbitration service for resolving disputes against members of the press. A number of the UK's national publishers have already signed up.

The industry regulator's trial scheme aims to provide a low-cost alternative to what is often perceived as a lengthy and expensive journey through the UK court system. At the same time, the new scheme's suite of remedies theoretically offers claimants stronger recourse than the IPSO's current mechanism for handling complaints under its Editors' Code of Practice.

Full details of the new scheme can be found here.

The Pilot Scheme and its Rules

The scheme is being administered by the Centre for Effective Dispute Resolution (CEDR) and will run for a period of 12 months (or 50 completed claims, whichever is earlier) with a view to reviewing its "uptake and effectiveness" thereafter.

Only publishers who are members can arbitrate under the scheme, but membership does not obligate a publisher to do so. Rather, as with most other forums of arbitration, the prior agreement of both parties is a pre-requisite. By contrast, all participating publishers are obligated to engage with complaints made under the IPSO's complaints procedure.

The scheme's rules (the Rules) contain the following interesting features in particular:

• Types of Claims - Whereas arbitral claims are typically contract-based, claims which may be arbitrated under the scheme are tortious in nature and are limited to the following: libel, slander, malicious falsehood, misuse of private information, breach of confidence, harassment and data protection breach. If, following the alleged wrong, the publisher refuses to arbitrate, it will, of course, remain open to claimants to litigate their claims.
• Matters Outside of the Tribunal's Jurisdiction - The Rules direct tribunals to discontinue any claim falling outside the scheme's remit. In addition, a claim must be discontinued where: (i) it gives rise to a novel or complex point of law; (ii) it is in the public interest for a court to determine a given issue; (iii) it is unlikely that the claim could be completed within a reasonable timeframe; (iv) third-party disclosure is likely to be required and such disclosure cannot be readily obtained; (v) the relief available would not provide an effective remedy; or (vi) the scheme is unable, or is unlikely, to fulfil the objective of providing a quick, cost-effective, fair and impartial procedure.
• Procedural/Substantive Law – The English Arbitration Act 1996 will ordinarily be the governing law of the arbitration. The Rules do allow the parties some (very limited) latitude to amend the applicable laws to others within the UK, but there arguably remains some uncertainty regarding the available frameworks due to some of the terminology used in this context (under 4.2 and 6.4 of the Rules). As such, there is potential for inconsistency if parties are not clear in terms of their intentions.
• Procedure - The Rules provide for document-only arbitrations by default, with oral hearings only in exceptional circumstances and with the agreement of both parties. A sole arbitrator will be appointed by the CEDR from its approved shortlist of barristers (although the parties may alternatively request the CEDR to appoint a panel). The Rules also provide for a "preliminary ruling" procedure, whereby the arbitrator is expected to make a determination on the "core" issues within 30 days of his/her appointment. Thereafter, this determination will commence a 21 day "interim period" (effectively a stay) within which the parties are expected to attempt settlement negotiations. Where those negotiations fail, the claim can then proceed to a final ruling.
• Available Relief - The Rules confer broad powers on the tribunal to award the same remedies as the courts, unless the Rules state otherwise; e.g. damages awards under the scheme are capped at £50,000. Although that cap can be removed by agreement of the parties, the tribunal retains no power to award either exemplary or aggravated damages. Notably, although the Rules allow the tribunal to make an order requiring the publisher not to re-publish the information that is the subject of the claim (or its removal/destruction), they expressly prohibit the granting of pre-publication injunctions. As such, claimants looking to pre-empt the dissemination of harmful material will still need to seek their remedy via the courts.
• Costs - Perhaps the most detailed aspect of the Rules concerns the mechanisms for the allocation of fees and legal costs between the parties. Broadly speaking, claimants must shoulder a portion of the associated costs, but much of the financial risk falls on the publisher. Indeed, although a claimant may recover costs where its claim is successful (up to a maximum of £20,000), the publisher is unlikely to recover its own costs in any event (subject to a few limited exceptions). Interestingly, the Rules define the success of a claim by reference to whether the relief awarded is more favourable than an offer previously made by the publisher. Costs associated with experts are not recoverable from the other side whatever the outcome. Likewise, the parties are not entitled to recover conditional fee arrangement success fees or after-the-event insurance premiums.
• Challenge and Appeals - As is typical of arbitrations, rulings made under the scheme are final and binding, subject to the mandatory grounds of challenge or appeal provided by the relevant governing law. The Rules exclude the right to appeal on a point of law (unless otherwise agreed between the parties).
• Confidentiality - Finally, although parties may request the arbitrator to direct that a final ruling should be made confidential, the starting position is that it will be public. Unless the arbitrator decides otherwise, final rulings will be published on the IPSO's website (albeit on an anonymised basis where the arbitrator so agrees). While the absence of automatic confidentiality in the Rules is not unheard of (see, for instance, the ICC arbitral rules), it certainly goes against the general trend seen amongst most major arbitral institutions (and the general implied obligations of confidentiality relating to arbitral proceedings under English law, which extend to the publication of awards).

Comment

With no final rulings yet published on the IPSO's website, the popularity of the new scheme, and how far it will ultimately succeed in satisfying Lord Justice Leveson's recommendation, remains to be seen.

It is notable that its commencement comes at a time when section 40 of the Crime and Courts Act 2013 (CCA) is still yet to come into force, despite its enactment some three years ago. That section, which is still awaiting a date for implementation, would potentially give rise to significant cost exposures on the part of publishers who are not members of an approved regulator, where the court is satisfied that a claim against them could have been resolved using that regulator's arbitration scheme (i.e. even where the publisher's defence is successful).

Section 40 is perhaps indicative of a post-Leveson aim of encouraging publishers to move towards arbitration as a means of media tort dispute resolution. For now, the IPSO itself is not an approved regulator under the CCA in any event (nor has any other body been so appointed). However, the introduction of its pilot arbitration scheme may prove to be a meaningful step in the transition.

For further information, please contact Nicholas Peacock, Partner or Richard Mendoza, Associate.