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Section 40 would cost local press £48m a year say bosses

NMALogonewThe implementation of new laws designed to force newspapers into a system of statutory press regulation could cost the local press £48m a year according to industry leaders.

Ministers are now weighing up whether to introduce Section 40 of the Crime and Courts Act after its consultation on the issue ended at 5pm last night.

If enacted, the provision would mean that any newspaper not signed up to a state-sponsored regulator could be forced to pay both sides’ costs in a privacy or libel action.

The News Media Association, which represents national and regional publishers, says the move would cost the local press £48m a year in additional legal costs.

It follows an NMA analysis of figures provided by its members which also shows that Section 40 would cost the national newspaper sector around £52m a year.

The figures are based on an average number of legal actions in a year together with the estimated cost if just 10pc of general complaints against local papers were converted to legal claims.

The analysis forms part of the NMA’s formal response to the consultation on press regulation which was submitted ahead of yesterday’s deadline.

As part of its submission, the NMA said Impress was “not a genuine regulator” and appeared to have been set up purely as a device to trigger the Section 40 costs sanctions against the press.

NMA chairman Ashley Highfield said: “Section 40 is designed to force newspapers into a system of state-backed regulation which the industry views as entirely unacceptable and incompatible with the principles of free speech.

“Not a single significant publication has signed up to Impress, the state-recognised regulator funded by one wealthy donor, with the vast majority of the industry choosing instead the new tough self-regulatory regime under IPSO which is independent of the industry and completely free from state control.

“Section 40 would have a hugely negative impact upon the press industry both here in the UK and overseas. Newspaper titles would be forced to close and our democracy would be poorer for it. This harmful legislation must be repealed immediately.”

A recent YouGov poll found that just 1pc of people believe press regulation should be among the government’s priorities at the current time.