09 December 2012

What Price Privacy?

In a forthcoming article for Privacy Law Bulletin and book chapter I have commented that the 1,987 page report by the Right Honourable Lord Justice Leveson on An Inquiry into the Culture, Practices and Ethics of the Press at first glance seems a world away from Australia, a media world that features by naughty vicars and photogenic princesses, executives with a penchant for spanking, official corruption, allegations of child sex offences involving media personalities, and defamatory claims regarding other figures.

On second glance that world looks familiar, with disagreement during the past month about mining deals involving a NSW politician, the pasts of Julia Gillard and Julie Bishop, revelations about child abuse and payoffs involving religious institutions, another round of litigation by Australia’s richest woman involving public access to information about family trust arrangements, and claims by the pharmaceutical industry to the ACCC that transparency in undisclosed payments to medical practitioners would both be premature and breach practitioner privacy.

From an Australian perspective the Leveson Report is important for three reasons.

The first reason is that it looks backwards, documenting activity involving journalists and their agents that has seen some people go to prison, others facing criminal charges and questions about corporate governance in some of the UK’s most powerful organisations, including the Metropolitan Police and the British arm of Australia’s dominant media group – News Corporation. Some of those actors egregiously and recurrently breached a range of UK privacy law. Others appear to have condoned the breaches or failed to provide a corporate culture in which serious misbehaviour was identified and dealt with.

The second is that the report looks forward, recommending changes that address those privacy abuses and failed governance. Irrespective of Prime Minister Cameron's dismissal of Leveson’s recommendations, they will provide a benchmark for debate within Australia about media self-regulation at a time where analysts forecast the demise of one of the commercial television groups, the dominant commercial television group has been restructured, Ms Rinehart apparently hasn’t completely lost interest in Fairfax and Ten, and the Gillard Government has lost interest in both the Finkelstein Report and the proposed Privacy Tort.

The third reason is that the Leveson Report poses questions about public interest justifications for disregard of privacy. In essence, it suggests that we need to differentiate between public curiosity and public interest. Curiosity does not justify invasions of privacy. Leveson is emphatic that privacy should be enjoyed by public figures and by ordinary people alike, expressing concern that the victims of privacy abuses in the UK have often been the powerless rather than individuals whom Rupert Murdoch characterized as scumbag celebrities. There is a public interest in politics, public administration, corporate misgovernance, dangers to health, environmental dangers and other matters. That interest justifies responsible journalism; something that is different to entertainment.

Contrary to hyperbole over the past two weeks, Leveson does not call for a draconian restriction on journalism or media proprietors. By extension he would not crimp the implied freedom of political communication found by the High Court in Australia.

He does not call for a government agency to control media groups and journalists. His report does, however, distinguish between what is socially valuable and what is merely salacious or saleable. That differentiation should be borne in mind as courts, private sector bodies and the national Privacy Commissioner give effect to the Privacy Amendment (Enhancing Privacy Protection) Act 2012 (Cth) passed on 29 November and in effect from 14 March next year.

Investigation since initial public disquiet about hacking of a murdered teenager’s mobile phone has resulted in 17 arrests over interception of mobile phone messages, 52 arrests over payments to officials (primarily to police) and 17 arrests regarding other offences such as computer hacking and unauthorised access to personal records. It has resulted in the demise of the tabloid News of the World and the current breakup of the global News conglomerate into discrete print and broadcast groups, along with serious damage to News Corporation senior executives such as James Murdoch. As Leveson asked, in quoting two 2006 papers by the Information Commissioner, What Price Privacy?

The report deals with the culture, ethics and practices of the UK press, including questions about governance in the major print groups – misbehaviour within the Murdoch publications was particularly egregious but problems are evident in other publications such as the Mirror – and analysis of whether industry self-regulation has been effective. The  inquiry encompassed competition policy and, importantly, the UK regulatory framework for data protection.

Overall, the report emphasises the virtues of a free press and the importance of responsibility. It is a notably lucid, carefully written and in parts quite cautious document. Leveson’s condemnations thus have particular force. He questions governance within the News group and the credibility of some senior News figures. He characterizes the Press Complaints Commission (PCC) – counterpart of Australia’s Press Council (APC) – as lacking independence, having “numerous structural deficiencies” and “not actually a regulator at all”.

The APC is a voluntary body - like the PCC - with no statutory power. Its credibility was placed in question with the announcement in April this year that Seven West Media (one of the dominant players in the media sector, encompassing Pacific Magazines, Yahoo!7 and the Seven television network) was putting in place an 'alternative independent complaints-resolution body' that would "guarantee accountability of all the group’s publications". We are of course still waiting on details: the announcement indicated that Seven West would release full details of its plan in future, with no further comment until then.

Leveson notes “serious and systematic illegality and poor practice in the acquisition and use of personal information”, going on to conclude that existing criminal law is insufficient and that the Data Protection Act 1998 hobbled the Information Commissioner through “unnecessary and inappropriate barriers in the way of regulatory law enforcement and the protection of victims rights”. Public benefit rationales mean that privacy is not absolute but journalists, along with other actors such as the police, must act responsibly.

His report accordingly seeks to ensure a balance, by both providing a statutory underpinning for an independent press regulator and enshrining an explicit duty of the Government to uphold and protect freedom of the media. In particular, amendment of the Data Protection Act should provide for the Information Commissioner, in considering exercise of any powers regarding the media, to have special regard for the obligation in law to balance the public interest in freedom of expression alongside the public interest in upholding the data protection regime. Leveson indicates that more rigorous application of existing UK criminal law does not and will not provide the solution to governance problems.

 The report features a recommendation that the Civil Justice Council (the independent public body advising the Lord Chancellor) should consider increases in the level of damages regarding privacy, breach of confidence, and data protection. Leveson suggests that the Law Commission’s 1997 report on Aggravated, Exemplary and Restitutionary Damages should be adopted, with retention of exemplary damages (retitled as punitive damages). Those damages should be available in actions for breach of privacy, breach of confidence and defamation. Aggravated damages should only be awarded to compensate for mental distress, with no punitive element. Compensation under s 13 of the Act should encompass pure distress rather than being restricted to pecuniary loss.

 Leveson’s most controversial recommendations concern a new model of self-regulation. He suggests a voluntary “independent regulatory body”, established and organized by the industry (ie not a government entity) but subject to periodic review by an independent “recognition body”. The recognition body would not regulate individual journalists, publications or publishers but would certify whether the regulator had fulfilled certain “legitimate requirements” enshrined in a new statute. Leveson suggests that Ofcom (counterpart of Australia’s ACMA) should act as the recognition body, although a “less attractive alternative” would be to appoint an independent ‘Recognition Commissioner’ supported by Ofcom staff.

Commitment by the publishers would be encouraged through the potential for direct statutory regulation by a “backstop regulator” such as Ofcom – similar to the potential for ACMA to supersede auDA if there is a fundamental failure in Australian domain name regulation - and the likelihood of adverse costs awards in civil litigation.

Leveson comments that
I have made very clear that, by a very long way, my preferred solution, and hence my recommendation, is that the industry should come together to construct a system of independent regulation that could be recognised. If it does so, there will be no need for a backstop regulator.
However, if some or all of the industry were not prepared to adopt that position, I do not accept that they should expect the public to settle for less, much less escape standards regulation altogether. More significantly, if the possibility exists that a significant provider of press like services could avoid independent regulation without consequence, then there would simply be no incentive for an unwilling industry collectively to deliver it. My personal view, therefore, is that there may be a need for the realistic prospect of a backstop regulator being established.
The new regulator would not have the power to prevent publication. Instead it would promulgate and promote a Code of standards (including privacy), hear complaints and offer redress regarding alleged breaches (with power to investigate “serious or systemic breaches” and impose appropriate sanctions), and provide a quick and inexpensive arbitration service to deal with civil law claims.

The regulator would provide guidance on the interpretation of the public interest. Leveson suggests consideration of “a purely voluntary pre-publication advice service to editors who want support on how the public interest might be interpreted in a specific case before a decision is reached on publication”, without “notice to the subject of the story” and thus contrary to recent requests by Max Mosley for a ‘prepublication notice’.

Sanctions by the regulator – independent of the Data Protection Act 1998 – would be “appropriate and proportionate”, including financial sanctions up to 1% of turnover (with a maximum of £1m) on a member found to be responsible for serious or systemic breaches of the Code or governance requirements.

Given Leveson’s criticisms of inaction by media executives and difficulties facing the Information Commissioner he recommends that the regulator have power to conduct own-motion investigations and be strengthened though establishment of a whistleblowing helpline for journalists.

Participation in the regulator’s arbitration service would be a condition of membership. That service would be staffed by retired judges or senior practitioners with specialist knowledge of media law. Arbitration would rely on an inquisitorial model, with the process being be free for complainants. (Vexatious or trivial complaints would be struck out at an initial stage.) Importantly, under amendment of the Civil Procedure Rules a choice by a publisher not to participate in the new regulatory body would permit the courts to deprive that publisher of its costs in any privacy, breach of confidence or defamation litigation where the publisher was successful.

 Leveson also suggests that consideration should also be given to amending the Data Protection Act 1998 to formally reconstitute the Information Commissioner’s Office as an Information Commission. That is of interest locally, given concerns about the resourcing of the Privacy Commissioner function within the Office of the Australian Information Commissioner and perceptions that the OAIC is disengaged, evident in criticisms of belated and permissive responses to incidents such as the Telstra, Sony and Vodaphone data breaches. The Australian Commissioner now has enhanced powers but there is uncertainty about whether those powers will be used and used effectively.

 Australian responses to Leveson so far have been unenthusiastic or simply indifferent, with for example comments that media practive and governance in the UK are so very different as to have no relevance downunder. That is unsurprising given the vehemence with which the 2012 Finkelstein Inquiry report was received and condemnation by the commercial media (particularly News group outlets, where Andrew Bolt worried about “a sinister law, planned by a government with sinister motives”) and bodies such as the Rule Of Law Institute of the Government’s vague proposals for a privacy tort.

The notion of a privacy tort is not remarkable and does not seriously threaten freedom of speech, freedom of political communication or freedom of publishers (three categories sometimes conflated by advocates for the commercial media groups). Statutory provision of a tort regarding invasion or serious invasion of privacy has for example been recommended by the Australian Law Reform Commission, NSW Law Reform Commission and Victorian Law Reform Commission.

A reader of the Leveson report might reasonably conclude that individual journalists and media groups are not necessarily best equipped to self-regulate and that commercial pressures may well induce a race to the bottom. In a symposium last month I questioned some of the more alarmist expressions of concern that enhanced privacy protection in Australia would lead to a wave of frivolous litigation or fundamentally crimp investigative journalism in the public interest.

The history of confidentiality law, and more broadly Australian jurisprudence in cases involving the media over the past thirty years, suggests that Australian courts have coped effectively with litigation and founded their decision-making on public interest. Examples of that jurisprudence are Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39 and Attorney General (UK) v Heinemann Publishers Australia Pty Ltd (1988) 165 CLR 30, where the courts have looked to the bases of civil society – in the same way that they have identified foundations for the implied freedom of political communication – and have not confused public curiosity with public interest.