The proposed new scheme of press regulation agreed by the main political parties and encapsulated in a Royal Charter includes an arbitration arm as part of the new body. Leveson was keen to ensure that people of all means had access to justice under the new regime and not just those who could afford to go to court.

The arbitration scheme will only deal with claims that would usually go to court, such as libel, privacy and data protection cases. Other complaints for breach of the standards code would be dealt with by the board of the regulator.

In order to make the arbitration scheme attractive to the newspaper industry, Leveson recommended that parties that went to court rather than using the arbitration service should be penalised in costs, putting substantial pressure on individuals to use the new scheme. However, the quid pro quo is that complainants will not have to pay any costs to use the arbitration scheme, even if they lose, unless their claim is judged to be frivolous or vexatious. The intention is that the scheme will be more streamlined than court proceedings and suitable for people to use without lawyers. The likelihood is that the scheme will be more inquisitorial rather than adversarial (as in court), and rather than letting the parties battle it out the arbitrator will control the process more closely and seek to investigate what has happened.

It has been suggested that the costs pressure put on complainants to use the arbitration scheme rather than going to court will deny them their human right to a fair trial. Whether the scheme can deliver justice remains to be seen but arbitrations are already used, albeit voluntarily, in many commercial disputes, and the employment tribunal service is a similar creature.

Clearly, the arbitrators will have to be independent – which may rule out many solicitors who act regularly for newspaper publishers – but there are enough media barristers available to fulfil this role. They are used to acting for both publishers and complainants, and it is unlikely that their independence would be questioned. It is not clear what, if any, powers the arbitrator would have to compel third parties to give evidence or disclose relevant documents, and it may be that such matters have to be referred to the court. But otherwise an arbitrator should be able to deliver a just outcome and get to the bottom of a complaint relatively quickly. It is uncertain whether there would be any appeal from an arbitration; usually appeals are limited to obvious failures to apply the correct law rather than factual findings, and this might be a concern if the initial arbitration is not of sufficiently high standard.

Overall the new arbitration scheme could well be a substantial improvement for complainants over the options currently available. The Press Complaints Commission has been widely criticised for being ineffective. Its main deficiency is its lack of remit to investigate complaints thoroughly, in particular those relating to phone hacking. An arbitrator could be more proactive in investigating complaints and therefore produce a more satisfactory outcome. Unlike the PCC it will also be able to award fines or compensation of up to £1m and payment of legal costs as well as directing the publication of apologies.

These remedies make arbitration far more attractive than using the PCC. The alternative of going to court is likely to be very expensive with even a ‘simple’ libel claim costing over £100,000 to take to trial and taking at least a year of stressful litigation, and even if you win the court does not have the power to order an apology. If newspapers know they have made a mistake and are faced with a swift arbitration and being ordered to publish a prominent apology, they are likely to reach a settlement early on rather than drag out the litigation hoping to weaken the claimant’s resolve.

The newspaper industry has expressed concern about the potential cost of the arbitration scheme as it will be they who will have to fund it. The two possible models for the scheme are either employing full time arbitrators and support staff to deal with the complaints ‘in-house’ or having a small staff to check the complaints initially to see that they qualify for arbitration and then sending them out to freelance lawyers to deal with. Any frivolous and vexatious complaints could be weeded out at this stage.

The in-house option could be very expensive, and the freelance option would probably work better in that the level of resources needed to deal with a caseload could be varied easily as required. The arbitrators will need to take a firm hand to the case management to ensure that the process focuses on the real dispute and is not allowed to run off at a tangent, as can often happen in commercial arbitration and also in court. Many of the complaints received would not qualify for arbitration but would fall to be dealt with as breaches of the code and dealt with by the board. They could still, however, receive compensation and an apology if that was considered appropriate.

One further advantage to the new regime would be that interested third parties, such as consumer groups, could make complaints. While this might increase the number of complaints substantially, they are likely to be the type of complaints dealt with under the standards code rather than by arbitration, so the impact on costs should not be an issue.

If the arbitrators can take a robust approach to the new scheme by adopting an inquisitorial style, then the access to justice and attractive remedies available should make the regime an attractive alternative to the old PCC and to the courts.

Oliver Smith is a consultant solicitor at Keystone Law specialising in defamation and privacy