Newspapers furious as Lords vote to make them foot legal costs

Peers have backed a change in the law that could force publishers to pay litigation costs for both sides in media cases – even if they have won.

An amendment to the Investigatory Powers Bill was last night passed by 282 votes to 180 in the Lords and pressure will now be exerted on MPs to agree to the change.

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Cross-bench peer Baroness Hollins (former professor of psychiatry Sheila Hollins) said defendants in media cases should be exempt from paying both sides’ costs only if the issues raised by the claim could not have been resolved by an arbitration scheme or if the defendant is a member of an approved regulator. No national newspaper has agreed to join the approved regulatory scheme. 

The reform would be similar to section 40 of the Crime and Courts Act 2013, yet to be implemented by the government, and is fiercely opposed by publishers.

The Society of Editors said section 40, which would require publishers to pay both sides’ legal costs in a dispute, would have a ’devastating effect’ on local media.

But in the Lords, peers stressed the need to reform the law to offer justice to victims of phone hacking, the scandal which prompted the Leveson Inquiry.

‘All the government need to do is honour their commitment and commence section 40,’ said Hollins. ‘So many times over the past three years we have heard assurances that have come to nothing. It would be an injustice to victims if I passed up this chance to progress the intentions previously enshrined in the Crime and Courts Bill.’

Earl Howe, deputy leader of the House of Lords, urged Hollins to withdraw her amendment and said the government had set up and is funding the Press Recognition Panel, which is currently considering an application for recognition from regulator IMPRESS. The panel is set to rule on this application on 25 October.

Hollins was supported in the chamber by Lord Prescott, the former deputy Labour leader John Prescott, who said people have a right to financial support when making complaints against the press.

‘[Victims] have a right to justice when the press have abused them, whether by phone hacking or otherwise,' he said. ‘The victims need money to go to court, make no mistake, particularly after the government got rid of legal aid in most areas. They have no chance.’

The Society of Editors said it is hoping MPs will defeat the amendment.

Bob Satchwell, the society's executive director, said: ‘Members of the House of Lords have hijacked other important legislation, with which we still have issues, to pursue a vendetta that could seriously damage papers which had nothing to do with the Leveson report. Hopefully the House of Commons will take a more considered view.'

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Newspapers furious as Lords vote to make them foot legal costs