Whatever the outcome of Leveson's proposals, media practices face an uncertain future. Suzanna Ring reports

After eight months, 300 witnesses and 2,000 pages, Lord Justice Leveson finally published his long-awaited report into the culture, practice and ethics of the press last week, calling for the biggest shake-up of media law in years.

At the centre of the report is his recommendation for a new, tougher system of media self-regulation supported by legislative backing, with a statutory body such as Ofcom handed responsibility to monitor the press.

Yet for media lawyers, the report contained plans of perhaps greater significance, such as the mooted low-cost arbitration system for media claims and the introduction of exemplary damages against media outlets in privacy cases, with such moves likely to result in far fewer claims making it to court.

The proposals are broad and currently lacking in specifics, but media practices across the City are already facing the possibility that they will have to reshape parts of their business as newspaper claims set to become an even more marginalised source of income.

New media, new regulation

Leveson's proposal of a new arbitration system for civil legal claims against the press, which would allow complaints to be dealt with "quickly and inexpensively" and would allow "frivolous or vexatious" claims to be struck out early, can only mean one thing for media lawyers: a reduction in potential billings.

Olswang media dispute resolution partner Ashley Hurst says: "If the proposals are implemented in full, and a cost-effective and streamlined dispute resolution procedure is introduced, then there is a distinct possibility that newspaper work for libel lawyers will shrink."

Leveson suggests that the arbitration system should be used as an incentive for publishers to become members of the industry's new independent regulatory body, with those opting not to participate unable to participate in the arbitration system and recover any costs from the courts, even if successful – a convincing incentive when coupled with the proposed extension of exemplary damages to privacy law.

If the new arbitration system is adopted, it would effectively cut back the running time of cases, consequently reducing legal fees as well as the number of "frivolous" cases that currently rack up billable hours before being dispatched in court.

However, such a system could also encourage more claims, allowing firms to offset potential losses by keeping volumes high.

charlotte-harris-2-web"At the moment, the details surrounding how an arbitration system associated with the self-regulatory body might work are not very clear. However, if something like this is implemented, it might increase the amount of arbitration work for firms," says Mishcon de Reya partner Charlotte Harris (pictured), who has acted for a number of the News of the World phone-hacking victims.

In order to meet this, firms would need to ensure they have a sufficiently broad arbitration capability to handle what is likely to become the bulk of libel work, or instead focus on the top end of the media litigation market, taking on fewer but more lucrative disputes.

Matrix Chambers' Hugh Tomlinson QC comments: "The proposed arbitration arm is intended to save legal costs and therefore it will have a substantial potential impact on media lawyers; although, while the costs in individual claims should decrease, the number of claims may well increase."

Privacy revisited

Leveson's proposed introduction of a punitive element to damages awards in privacy cases was another part of the report to attract particular attention from lawyers, with such a move having been avoided to date for fear of its potential chilling effect on the media.

However, last year's phone-hacking scandal has prompted Leveson to revisit the topic, with some protection against exemplary damages put forward as an incentive for media outlets to subscribe to the new self-regulatory body.

The possible consequences for media lawyers are two-fold. The introduction of a punitive element to damages in privacy cases would be expected to be enough of a deterrent for newspapers to subscribe to the new watchdog, leading to a drop-off in the number of privacy claims making it to court as newspapers turn to the arbitration system for fear of punishing damages payouts.

And with the Jackson reforms of conditional fee agreements set to come into force next April, newspapers will also be less likely to pursue a claim that could lead to multiple hours and high legal bills that they cannot recover, even if they stand a good chance of success.

On the flipside, media lawyers acting on the claimant side could see high success fee payouts on privacy cases if they are able to secure roles on the most lucrative disputes. This could lead to a tougher pursuit of court proceedings where lawyers deem a claimant to have a high chance of a punitive damage award.

Online on the up

As print journalism's prominence has continued to fade against the rising tide of websites, bloggers and social media, City media practices have already been forced to shift their focus away from newspapers in recent years.

But Leveson's proposals, if implemented, leave no doubt that there would be a further reduction in contentious work for law firms with major media clients.

Coupled with a fall in the number of defamation cases (last year marked a five-year low in the number of cases brought against traditional media companies, according to Sweet & Maxwell), media lawyers face tough times ahead as they look to keep up with the rapidly evolving face of media law.

And while the implementation of Leveson's proposals is by no means guaranteed amid the political wrangling, there is no doubt that the impact of the phone-hacking scandal has ensured that media lawyers now face a much-changed landscape.

As Tomlinson puts it: "Claims against newspapers are a much smaller part of media law work than they were 10 years ago – but that could reduce even further post-Leveson."

For more, see Leveson calls for new press law and tougher media self-regulation.