Complex, costly and confusing - will IPSO's arbitration pilot fly?

Earlier this month, the Independent Press Standards Organisation (IPSO) launched a 12-month pilot arbitration scheme to resolve legal claims against the press relating to defamation, privacy, confidentiality, information protection or harassment and a number of national titles have agreed to participate.

Will IPSO's arbitration pilot fly? wonders David Engel
Will IPSO's arbitration pilot fly? wonders David Engel
Under fire from some quarters (although not from the national press, obviously) for flouting most of the recommendations of the Leveson Report, IPSO appears to wish to be seen to be complying with at least one of them, in providing an alternative to legal proceedings. 

Whether this scheme will achieve that remains to be seen.

In the first place, the scheme's rules run to some 22 pages and more than 8,000 words. 

Convoluted is putting it kindly. What a complainant without legal advice would make of them is anyone's guess. 

Second, the mechanisms for the apportionment of costs between the parties are unnecessarily complex but still create significant downside exposure for a complainant who does not succeed.

Strangely, there is much more focus on who pays the (relatively modest) arbitration fees, depending on various outcomes, than on who pays the legal costs. 

The practical reality is that, as with any arbitration, the legal costs on each side are likely to dwarf the arbitration fees.  

It is therefore difficult to understand why the scheme puts in place so many detailed rules for the latter, while confining itself to some very broad-brush provisions concerning the former.  

Third, a complainant has a number of hoops to jump through even to get a claim into the scheme.  
It must agree to be legally bound by the outcome (ruling out any future legal proceedings).  

The newspaper is not obliged to go to arbitration.  

And even if it agrees to do so, the rules set out numerous reasons why a claim may be deemed "unsuitable", including that it raises "a novel or complex point of law".

If a claim is straightforward, it can usually be resolved directly with the publication concerned or by way of a complaint to IPSO for breach of the Editors' Code of Practice.  

Given the choice, it is therefore difficult to see why a complainant would embark on a complicated but private arbitration process, which gives it significantly less leverage against the newspaper than would litigation, or the threat of it, when there is a relatively user-friendly and low or no cost alternative already available of making a complaint direct to IPSO under the Code.  

On the upside, unlike a Code violation complaint, the scheme will provide remedies similar to those which a Court would be able to award, including damages of up to £50,000.  

Also, from a presentational perspective at least, it might be viewed as a half-way house between a Code violation complaint – with no meaningful remedies available – and legal proceedings.  

For this reason, it may commend itself to businesses and their PR advisers who wish to put down a marker with the media, and/or to take advantage of the confidentiality of an arbitration, but would prefer to avoid litigation. 

It will be interesting to see how many takers there are.

David Engel leads the reputation and information protection team at Addleshaw Goddard LLP

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