5 Things to Know About the U.K. Press Regulation Compromise

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A new self-regulator of the newspaper industry following the phone-hacking scandal would have the right to ensure apologies and fines.

LONDON -- After months of wrangling, Britain's political parties have reached a compromise that will establish a new press regulator based on suggestions of the Leveson Inquiry, which was launched in the wake of the phone-hacking scandal.

The goal was to set up a new regulator, which would draw up tougher media standards and stricter sanctions than were in place.

The 22-page royal charter that details the all-party agreement involves a range of elements, some of which are based on traditions specific to the U.K.

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Here is a look at five key things to know about the agreement: 

1. Royal charter versus statutory law:

The compromise comes in the form of what in Britain is known as a "royal charter."

Royal charters typically create major organizations, including the BBC, the Bank of England, the Royal Opera House, universities and more. This one will create a new voluntary self-regulator -- which doesn't have a name yet -- of the newspaper industry that is different from current broadcast regulator Ofcom. It will replace the toothless Press Complaints Commission, which has been winding down in the wake of the phone-hacking scandal.

Prime Minister David Cameron, the leader of the Conservative Party, had always favored the use of a royal charter rather than a detailed law setting up the regulator and its various rules. He argued that would amount to direct regulation of the press by the government. 

The opposition Labour Party, though, had called for some kind of statutory, or legal, underpinnings, which would ensure that government ministers couldn't change the press regulator at will. They also argued that such an underpinning would keep powerful media companies from watering down the regulator's power.

Labour gets this form of entrenchment via a clause that states that the press regulation charter requires a two-thirds majority in both houses of parliament for changes.

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2. Members of the press regulator:

One of the biggest issues of debate has been whether newspaper publishers should get a right to veto any members of the new U.K. press regulator.

The final compromise says proposed members don't need the unanimous support of this panel as originally envisioned, avoiding any veto power. 
Current politicians or current newspaper industry folks cannot sit on the regulatory body.

Critics in the newspaper industry have worried that "unreasonable" representatives of anti-press groups could end up being part of the regulator. But the charter says that all members must meet strict requirements, ensuring professionalism.

3. Regulator versus newspaper industry code of conduct:

The Leveson Report called for self-regulation of the newspaper industry and for a regulatory body to oversee it.

Under the regulation plan, the industry will get to write its code of conduct, while the regulator will get to independently decide if that code has been breached. 

4. The regulator's powers:

What powers will the new press regulator have?

Public apologies and corrections are one key sanction for newspapers running afoul of the code of conduct. The new regulator will be able to require and even direct apologies, the latter being a form of using more force. 

Offending papers can also be forced to pay fines of up to $1.5 million (£1 million).

Victims can use a complaints process, in which the regulator will decide whether complaints are warranted and what measures to take. 

Newspaper publishers that don't accept the new press regulator are subject to exemplary damages if they publish stories in disregard of claimants' rights. The Leveson Report suggested this to encourage publishers to join the new self-regulator.

5. Who wins?

All parties have said that victims of press abuse will be big winners. Hacked Off, the non-profit supported by the likes of Hugh Grant, lauded the new royal charter.

All political parties also claimed victory, but it wasn't immediately clear how newspaper publishers would react to the regulation deal.

 Cameron called the agreed-upon mechanism "tough independent self-regulation" without the risk of hurting press freedom via full-on legislation. 

But members of the Labour Party said Monday that the deal also includes many of the party's proposals, with some even saying it ensures statutory underpinnings on a de-facto basis.

Publishers, such as News Corp.'s News International, as well as the owners of the Telegraph and Daily Mail newspapers, have been opposed to statutory regulation, and it will be interesting to see if they interpret the final compromise as acceptable or not. If not, they might look to set up their own regulatory system, observers have suggested.

 News International wasn't available for comment.

Email: Georg.Szalai@thr.com

Twitter: @georgszalai