Over the past fortnight Lord Justice Leveson has heard evidence on the future of press regulation for module four of the inquiry. On the morning of Monday, July 9, Lord Justice Leveson opened module four by saying he had read all the evidence sent to him and would take every proposal into account before making recommendations later this year. He told the inquiry he had asked Deputy Assistant Commissioner Sue Akers to return for a third time to give an update on police investigations Operations Weeting, Elveden and Tuleta, and would ask for another briefing in the autumn.

Lord Justice Leveson added:

“In response to the invitation that has been posted on the website from the outset, many hundreds of members of the public have offered both evidence and their views whether by letter or e mail.  I am grateful for the interest that so many people have shown in the work of the Inquiry and I trust that, as intended, everyone has received an acknowledgment and an assurance that if the Inquiry wishes to take what they have said forward (and in more than a few cases that has happened), one of the Inquiry team would be in touch.

My willingness to hear further evidence also means that if there is any other significant event which it is considered could substantially and significantly affect the Inquiry or its Terms of Reference, it will remain possible to notify the Inquiry team but that step should only be taken in truly exceptional cases.  Save for the circumstances that I have outlined, the general collection of evidence has now concluded.”

Lord Black – chairman of the Press Board of Finance, the body that funds the Press Complaints Commission – said decisions by a new regulator based in statute would be constantly challenged by newspaper publishers.  Lord Black – also a senior executive of the Telegraph Group – said:

“A statutory system, which would be forced on a majority of unwilling publishers, is likely to become a target to be aimed at rather than a framework within which to be worked for the benefit of both the public and the public interest.”

He added:

“It is my belief that the vast bulk of the industry remained opposed to that and that is very much the flavour of the responses that I’ve received through consultation exercises. I have always believed and I believe it is a view across the bulk of the industry that self-regulation is the guarantor of press freedom and interference from state control. I think the moment that statute enters the system, we’re in a very different system where government can control, however limited it might appear to be at the start.”

Lord Black – who referred to his proposal as “independently-led self regulation” – was challenged by inquiry counsel Robert Jay QC, who said the public would see “willing co-operation” with the press in the new system. Black said the introduction of statute would bring “considerable legal challenge” from the industry. He went on to deny his proposal was “the son of the PCC” by arguing it would have the power to levy fines and robust enforcement of standards.  The body would consist of a central trust board – made up of an independent chairman, three lay members and three non-serving press representatives – and oversee a complaints committee, a compliance and investigations panel and an arbitration arm for libel and privacy disputes.

Lord Black’s written statement said:

“The trust board will have a majority of independent, public members on it. It is proposed that there should be seven directors in total comprising the independent chairman of the regulator, three public members who have no connection with the print or digital media and three press or new media representatives. The appointment of the independent members of the board will be through an independent appointments process determined by the trust Board itself in line with public appointments procedures. Members will serve a three-year term, renewable once. It will be for the Trust Board to put in place arrangements to ensure the orderly rotation of members.”

Lord Justice Leveson said he could “see blood all over” the proposal and told Lord Black he appreciated the difficult consultation process PressBoF has undertaken since the chairman originally appeared at the inquiry in February.  Lord Black met newspaper owners and publishers through trade associations like the Newspaper Publishers Association, but has not consulted the National Union of Journalists or the public.  He said PressBoF had held back on drawing up detailed contracts before Lord Justice Leveson’s recommendations are made public.

Lord Black said the standards arm would be the most important element of the contract-based body and said he hoped improving internal governance would mean less money spent on handling complaints. The new body is expected to have an annual budget of £2.25 million, compared with the current £1.95 million funding the PCC. He told the inquiry:

“This contract is going to be handing a regulator for the first time in the newspaper industry’s history very serious powers.”

In February, Lord Black said the News of the World phone hacking scandal meant a new regulator should have the ability to fine newspapers. He told the inquiry he had proposed a “ring-fenced” fund to allow the body to investigate standards breaches, starting with £100,000 from the NPA.

On Monday afternoon, and spilling into Tuesday morning, PCC chairman Lord Hunt said any statutory regulation of the press would be “adversarial”. Hunt gave evidence to outline his proposal for a reformed self-regulatory system. Jay QC said he could not understand Hunt’s fears that a statutory framework would stifle press freedom after the chairman said he was concerned such a body would result in “censorship and licensing”.  He added: “I have no grasp of your fear. I don’t even see how the concern can be sensibly articulated, with respect. It’s tilting at a windmill which simply doesn’t exist.”

LordHunt told the inquiry some politicians would want new legislation to restrict the media and those who had accepted the need for a statutory framework had done so reluctantly. He told Lord Justice Leveson the current PCC would start forming a new body – formed by contracts with publishers – if given the go-ahead by the inquiry. He said:

“It could be up and running in a matter of months. Any statutory underpinning would take years. I confidently predict that, but what in the meantime are we to do? We have a wonderful opportunity to get this system up and running and my fellow commissioners on the PCC have given me authority to say to this inquiry, if we receive a green light we will immediately move to set up the new body.”

He later added:

“This system can achieve whole-hearted commitment by the regulated community, and above all I believe it can restore trust in British journalism.”

The judge reminded Lord Hunt that the final decision will be made by the Home Secretary and Culture Secretary. Lord Hunt praised the industry for accepting the need for regulation, which Hunt said was for the first time ever with teeth, the ability to fine and bound under contract. He proposed powers allowing the regulator to levy fines of up to £1 million. He added:

“It’s just appropriate, I think, to recognise the distance that the press has come, albeit faced by unacceptable and disgraceful behaviour by a comparatively small number of journalists than others.”

In his written statement, Lord Hunt recognised the failure of the PCC to properly address the concerns of several victims of press intrusion and noted the treatment of some high-profile cases had fallen short of what a genuine regular could do. Hunt’s proposal advocates a whistleblowing hotline for journalists to report on failing standards and internal governance, and an ombudsman for handling appeals of decisions made by the complaints arm of the body. He told the inquiry it was right third-party complaints should be handled by the regulator.

He admitted the credibility of the system would be undermined if any “big fish” chose not to join up – referencing Northern & Shell owner Richard Desmond. Hunt said he had spoken to the publisher, who he has claimed are keen to sign up to a future regulator, but said the group had been critical of a proposal to restrict press cards to journalists falling under the body’s remit.

The National Union of Journalists urged Lord Justice Leveson not to waste a “golden opportunity” to reform the press. Michelle Stanistreet – NUJ general secretary – said Black and Hunt’s proposals would only maintain the status quo.  She said:

“It seems to us that this is nothing more than an attempt by the vested interests of the owners and editors, to have a continuation of the status quo and obviously it’s in their interest that that would be the outcome of this inquiry, but it would be a monumental waste of a golden opportunity for change and a waste of everybody’s time here.”

The general secretary said the proposals amounted to “nothing but more of the same”.  A joint statement prepared by Stanistreet and Professor Chris Frost, of Liverpool John Moores University, criticised the “industry-fostered” structure of the PCC for leading to the body’s failure.  Frost told the inquiry:

“Lord Hunt in his evidence said editors set the standards and they’re leaders. I have to say they’ve not shown a very good lead over the last few years and that’s partly because they’ve been able to bully our members into doing what they see as commercially appropriate rather than what they see as good journalism.”

 The NUJ proposal calls for a statutory underpinning. Stanistreet told the inquiry the union believed it was wrong for publishers to be able to opt in or out of regulation and compulsory membership would be the only way to achieve change.  She added:

“We heard yesterday from Lord Black if we see any form of statutory involvement, whether its underpinning or regulation, that members of the industry would up sticks and leave the country and set up elsewhere, so in terms of relying on their goodwill to be part of a new process, if it’s a voluntary process, I would have doubts… making it a compulsory process seems to me the only sensible, pragmatic way forward.”

She later told the judge:

“You’ve made it very clear that you have no intention of doing anything akin to the jeopardy of putting press freedom in peril, and that doesn’t have to be the choice before us.”

Frost said several methods – including assessing circulation, turnover and VAT registration – could be used to decide which organisations should fall under the body, allowing smaller organisations to carry the kitemark of the system.  On complaints, he said:

“[They] could come from individuals, they could come from groups, but those should be entertained by the new body to look at how they line up against the code and practice that I was talking about so they could say ‘Well, good practice in these types of stories would be…’ and the PCC does do a little bit of that, although not as much lately as it has done in the past.”

On Tuesday afternoon the inquiry heard from Dr Martin Moore, director of the Media Standards Trust, who put forward a two-tier proposal for press regulation. He said:

“What we’ve tried to do this time, and I think others have as well, is to demonstrate that actually there is a significant spectrum which, if you put on the one hand statutory regulation and on the other hand voluntary self-regulation, there a significant number of possibilities in the middle, which are better than the existing system and don’t go nearly as far as statutory regulation.”

The Media Standards Trust proposal, called A Free and Accountable Media, sets out a plan for self-regulation, with large media organisations – defined under the Companies Act 2006 as having over 50 employees or annual £6.5 million revenue – having to exceed a set of criteria and be approved by independent auditor set up under law. Moore said submissions from Lord Black of PressBoF and PCC chairman Lord Hunt were “insufficiently different” to the current regulatory system. He added:

“I think it’s insufficiently independent. I think it’s insufficiently robust. And I think the incentives that have been proposed are regressive and potentially in some cases dangerous for journalism. We talked to lawyers about the use of commercial contracts, most of them felt that the contracts were, in these circumstances, not really suitable and would necessarily need to be crowbarred into being used.”

The proposed system obliges large news organisations to join an independent self-regulatory organisation, that ensures the system works by establishing a backstop independent auditor recognised in statute, introduces basic internal complaints mechanisms and transparent compliance mechanisms within large news organisations, and protects free speech by imposing no regulatory obligations on anyone but large news organisations. It also recommends a public interest defence in law to protect investigative journalism and support self-regulation.

Moore said it was important large organisations set up internal compliance and complaints mechanisms and joining an external self-regulatory system. The auditor – or Backstop Independent Auditor – would then oversee organisations to ensure standards are upheld, with powers to sanction and fine. He said the public needed an independent body that accepts, resolves and offers redress for complaints. He added:

“We wanted to provide a system and an environment, an ecology, where actually one could see this lasting for 10, 15, 20, 30 years because it would be flexible enough to allow for other self-regulatory organisations in the future.”

Asked by Jay QC why the proposal excluded smaller organisations, Moore said the main purpose of regulation is to deal with “disparities in power” and individuals were more able to deal with smaller news outlets when making complaints about accuracy. He said:

“The problem, particularly in the case of phone-hacking, as we’ve seen, is that because not only was there no regulation, but there was the impression that there was regulation, some of these practices did become routine and institutionalised and it got to the stage where the police were and are going into newsrooms and arresting journalists and taking material – and part of the purpose of regulation is to prevent that happening. In that sense it is to protect journalism and to protect journalists from the strong arm of the law. Regulation and particularly regulatory codes ought to be both consistent with and supplementary to the law and part of the purpose of a regulator would be not only to make journalists extremely clear of the code and of law.”

He added:

“I think we have to recognize that not only is there precedent in other industries, there is a precedent in the press, and we are working from the basis of experience of 60 years looking at what has and what has not been effective.”

On Thursday morning the inquiry heard from Professor Roy Greenslade, who backed statutory underpinning for a new press regulator. Greenslade – a professor of journalism at City University who writes for the Guardian and Evening Standard – said self-regulation had failed to work. His written statement said:

“I think self-regulation could, and should, have worked. It did not. I have struggled to come to terms with the need for some kind of state involvement. In order to clean the house and to restore public confidence in our journalism, I reluctantly agree that parliament will need to provide enough power to a regulatory system to ensure that it has real teeth.”

He said a new regulator should have statutory underpinning but pointed out the state should not have involvement in the running of the body or the appointment of executives. He called Lord Black’s plan a “bureaucratic spider’s web”. He said:

“[PressBoF have] obviously spent a huge amount of time trying to do this, but it stuck me that it’s a sort of bureaucratic spider’s web, and the spider is the industry still at the centre of the web, controlling everything, and it seemed that they still have far too much control in order to alleviate public disquiet that this is still an industry organisation in which [owners and editors] still have too many levels of influence.”

He told Lord Justice Leveson:

“We have this chance to improve the standards and ethics of our profession, trade, craft, whatever you care to call it, and I think that we’ve had periodic bouts of bad behaviour and we need to devise a final system that for the moment, while we still have print, can actually stop the dominance and power of large organisations to make life incredibly miserable for other people.”

Tim Suter, a former Downing Street advisor and Ofcom executive, warned against regarding the statutory underpinning of a new regulator as state control. He told the inquiry:

“Everybody has set up this dangerous notion that the state would dictate what the press could do, would dictate the standards by which the press had to operate and would form limits as to what was or was not acceptable. I see statutory underpinning as being further removed from that, as setting a framework within which the regulation happens, but where the regulation itself is carried out by independent bodies dealing directly with the press and the related entities.”

Suter – who heads advisory group Perspective – recommended the broadcast regulator act as a backstop for a future press body, and said publishers could be directly regulated by Ofcom if they chose not to join an independent system.  He added:

“The reason for inserting the [Ofcom] content board’s role in there is to create an additional layer between those who are directly appointed by government and the regulatory bodies who are charged with regulating the press. What I do think will be helpful is for there to be a single framework within which all of the content that we as the public believe needs to be regulated, that that framework can encompass everything and can authorise the necessary regulatory bodies who will be able to carry that out in a way that is in response to the way that industry is developing, the way that audiences are consuming content, but that is still rooted in what the public believes should be delivered in terms of safeguarding our standards.”

Ed Richards – chief executive of broadcast regulator Ofcom – called an industry proposal for press regulation “unimaginable”. Richards, who appeared with chairman and Colette Bowe, said decision-making would be difficult to defend publicly if serving editors sat on a board charged with adjudicating complaints. He said:

“I think that is quite the wrong thing to do and makes effective… decision-making extremely difficult and to be honest in our context would be unimaginable. I will say in terms of code setting, in terms of sanctions, in terms of corrections or anything of that kind, and in terms of policy-making overall, you need to have a bright line separation between those who are regulating and making decisions and those who are regulated, and I think any breach of that in our experiences means that you will immediately undermine the perception – and indeed in all reality – the actuality of your independence.”

He told the inquiry Ofcom approached the matter in a different way from the printed press because of impartiality rules in broadcasting, which newspapers are not subjected to. Bowe said governance arrangements must be able to demonstrate visible independence.

Lord Justice Leveson also heard from barrister Sir Charles Gray, during the afternoon hearing, on a proposal for an arbitration system for small libel and privacy disputes. Gray said his company – Early Resolution – could form part of a new regulator and would allow publications and complainants to resolve issues in a fast and cheap way rather than resorting to legal actions. Gray said an experienced lawyer could deal with complaints in a day, and any hearings would be held in private. He added:

“You will achieve in a day with a competent silk what might take several days for a jury certainly, or even a judge who is less versed in these matters.”

Gray – who told the inquiry a future regulator should be mandatory – said the arbitrator was no risk to press freedom, as it would only cover problems arising after articles are published.

David Thomas, of the British and Irish Ombudsman Association, discussed how an independent ombudsman could fit into a future regulator to oversee decisions on complaints and standards. He told the inquiry the individual would be able to handle issues people are unable to take to court, or chose to divert from the legal system. He said although the ombudsman would be independent from a regulator, a free flow of information on emerging industry issues would be important. Jay QC suggested that the public would automatically trust an ombudsman figure, if appointed.

On Friday morning, the inquiry heard from Angela Phillips and Professor James Curran from the Coordinating Committee for Media Reform, who said limiting the remit of self-regulation to editors and owners is “extraordinarily arrogant”.

Phillips – chair of the CCMR ethics committee – said journalists should be properly represented in a future regulatory body and told the inquiry she was “astonished” Lord Black and Daily Mail editor Paul Dacre recommended limiting press cards to reporters from accredited publications. She added:

“I think that whatever we end with here, it has got to support ethical journalism, while at the same time trying to curb what I can quite happily call unethical journalism. They tend to be quite often done by two different groups of people.  I think it would be a pity if we end up with changes that are very slight because the only people who really matter are the editors of the very biggest newspapers. Because we have to keep reminding ourselves that they are the problem. Why do we expect them to be the solution?”

 CCMRChair James Curran said only a robust response from the Leveson Inquiry would change the concentration of power in the media. He said:

“If we take the press with which we are particularly concerned, we have a situation where you have major press oligarchs who make tacit deals with government, who at the behest of small number of people can move into coalition with government or launch a jihad had against government. People draw upon information from different sources. But that doesn’t obliviate the point that a concentration of fire power within particular sectors has enormous political clout and enormously influences the nature of British politics.”

The CCMR proposal recommends publishers owning a 15 percent share of a given market should make sure journalists and editors have a voice in the organisation. It also wants companies to contribute to a trust funding public interest journalism by individuals or small start-ups.

Irish press ombudsman Professor John Horgan – who has independently overseen the Irish Press Council since 2007 – said industry endorsement is “essential” for the success of a new press regulator in the UK. He told the inquiry:

“It depends on the robustness of the measures that are put in place to ensure redress, and it depends on the whole-heartedness of the endorsement and uptake of these by the newspaper industry themselves. Those two things are absolutely essential.”

Horgan advocated the independence of the body – from the industry and government – along with clear incentives for publishers to join and the introduction of an appeals system. He added:

“[Appeals] would be valuable in any system in which people are attempting to counterbalance the necessary freedom of the press and the freedom of expression, with a system that gives people who are the object of press attention some reasonable redress.”

The ombudsman told Lord Justice Leveson his role “demystified” the power of the press for those wanting to complain and had led to the improvement of internal complaints-handling mechanisms in newspapers. The judge has been exploring the potential for an introduction of a similar figure in a new UK regulator. On statutory underpinning, Horgan said:

“The statutory recognition of the [Irish] Press Council – and the various elements associated with that – were at first seen by some of the UK titles as being the thin end of a very big wedge in relation to statutory regulation. But all those concerned persisted really on the basis, not least of the fact that they felt that it wasn’t the thin edge of the wedge, and could argue that case as they saw it, fairly convincingly. To have a press council in Ireland, without the participation of those UK-based, but Irish published, newspapers would be pointless to a large degree.”

He added:

“The seismic shift that has taken place, because of the establishment of the council and of my own office, is that although the industry has created, with the involvement of public interest individuals, a code of practice, that that code is administered by myself and the council. So on matters such as the definition of the public interest that is not a matter for the newspapers. They may advance it in defence of something that they’ve done, but the final decision on that is taken by myself or on appeal by the council.”

During the afternoon hearing, Hugh Tomlinson QC, a prominent media lawyer, said privacy rights would not be protected without a more effective regulatory body. He added:

“Without some more effective form of regulation, the practical position is that privacy rights are simply not protected, as one has seen in notorious cases over the past two or three years.”

His proposal, compiled after a series of round table discussions with lawyers, academics and journalists, calls for a ‘Media Standards Authority’ with a mediation arm to resolve small legal complaints against publications, before they reach the courts.  Tomlinson said the body could also mediate disputes between newspapers and complainants in other cases. He said:

“Take a not atypical case, where a newspaper writes about a dead family member in a way which is extremely upsetting to the family, which is not actionable in law because the person who is being written about is dead, or there’s no cause of action. Even if there is a victim, if the victim chooses not to complain, the MSA should still consider it. Either it’s a breach of the code or it’s not. And people often don’t complain for all kinds of reasons.

Tomlinson said it is important newspapers are able to demonstrate they are acting in the public interest. He added:

“It seems to me that once you get into the land of misleading implied claims, then that opens up a can of worms. It means that it can be really open season on anybody, because you can see by implication, by walking down the street with your wife, you are implying that you’re a faithful person, and therefore you’re life can be exposed by the newspapers if it’s not entirely in accordance with the expectations of the editor.”

The inquiry also heard from Lara Fielden from the Reuters Institute, who talked through her report on media regulation abroad, and said the UK could find ways to “weave independence” through a new regulator by learning from foreign systems. She added:

“There is an issue about convergence… what should our expectations be of content that’s out there? How is it that broadcasting is regulated by comprehensive statutory rules, whereas the press is subject to voluntary rules – online [has] barely any rules at all? Combined with influential bloggers, new media, a whole debate is going on there that simply doesn’t fit currently comfortably within the regulatory structures.”

Fielden advocated a system of kitemarking publications that fall under an approved regulator, to demonstrate commitment to the public. She added:

“[Citizens] may choose to access information and publications within the regulatory fold or they may choose to go outside. That’s their choice, but they need to know what’s there – and I would defy anybody currently to be able to go to a newsstand or go online and identify who is inside and outside the regulatory fold.

“Every time we invoke [Northern & Shell owner] Richard Desmond, we have a fear of who will sit outside, and it seems to me it’s already not just him who sits outside. There’s a whole multitude of online providers that will only grow in size that sit outside, and the public should be able to make informed choices about where they go.”

The Monday, July 16, morning hearing began with a ‘hot tub’ of academics on public interest – Professor Jennifer Hornsby (Birkbeck), Professor Susan Mendus (York) and Professor John Tasiolas (UCL).  Tasiolas told Lord Justice Leveson:

“The sort of culture which we’re talking about is one for which we’re all responsible. It’s not just legislators or people in the media. It’s also individuals as consumers of what’s in the media, it’s how people talk to their children, what they get them interested in, how they set certain ethical boundaries in their own lives and so forth. We’re talking about how you create a culture where people spontaneously act in accordance with certain standards.”

Leeds University’s Professor Chris Megone said the industry code should become “more lived in” and journalists should feel comfortable expressing concern about newsroom culture. He added:

“You need a code which expresses in a more positive way the positive contribution of the press to the common good.”

In the afternoon, Baroness Onora O’Neill called for newspaper editors and proprietors to reveal their financial interests. The baroness – a professor of philosophy at Cambridge University – said journalists should be open about owning property and political leanings and advocated “openness” across the industry. Dr Rowan Cruft – a senior lecturer at Stirling – also said senior media figures should declare political and business interests.

O’Neill recommended a future regulator have a statutory basis, independence from government and corporate interests, a duty to regulate in accordance with a code and have no power to censor content.  She added:

“I think we have enormous experience in this country of the limitations of self-regulation for powerful professions and institutions, and in fact we’ve more or less eliminated self-regulation.”

O’Neill said she was concerned people were put off taking public positions because of fear of the press attacking their families or exposing private details.  She told the inquiry:

“One way of thinking about it would be to suggest that part of the media express themselves in ways that might not be inappropriate if they were individuals and relatively powerless, but which, given that that is not their situation because they are quite powerful organisations, are not appropriate.  I think it’s a serious [problem] because when people who are not shrinking violets, like MPs, say that they have pulled their punches in a routine way because of this fear, I think that is quite damaging to democratic life.”

Dr Neil Manson from Lancaster University echoed this, telling the inquiry the press “doesn’t form relationships in the way that individuals do” and pointing out the importance of separating freedom of expression from freedom of the press.

On Tuesday morning, the inquiry heard from Philip Coppel QC – a barrister specialising in data protection and freedom of information law – who gave evidence on the Data Protection Act in relation to the press. He told the inquiry the Act was often confusing to use in privacy cases. He said:

“My experience is that whenever the Data Protection Act is raised in court, it doesn’t get a very favourable reception because it is daunting to most. The concepts are unfamiliar and the way in which the Act is worded and structured doesn’t help to that level of understanding, so one immediately is confronted which difficulties, which it’s very often impossible to overcome.”

Coppel said he had looked into raising fines for breaches of the Act in certain cases. He said:

“If something has a very wide dissemination of very sensitive personal information – let’s say a person’s medical reports were disseminated in a national newspaper.  I find it difficult to see why that should be only modestly compensated.  That, it seems to me, is a fundamental breach of what the Act is there to protect.  In particular, sensitive personal data has been disseminated abroad, and the fact that the individual doesn’t break out into boils or doesn’t show some other physical manifestation of the nakedness of that individual’s personal medical details being put in a public forum is, so far as I’m concerned, neither here nor there.”

Stuart McIntosh and Steven Unger – from Ofcom – appeared to discuss a report giving advice to the culture secretary on media plurality. The report, made public on the inquiry’s website last month, recommended the government consider how to strike the right balance between promoting plurality and encouraging economically sustainable news media organisations on the other.

In the afternoon, Robin Foster – an adviser on media policy regulation – told the inquiry it is harder for general interest newspapers to persuade readers to pay for online content when “they can find a lot of free of charge elsewhere on the internet”.

Lord Justice Leveson called the financial state of the press “depressing” after hearing evidence on digital media from a media analyst Claire Enders, of Enders Analysis. She told the judge no newspaper group had found the “magic bullet” to ensure digital platforms would provide financial stability for news organisations. She said:

“It isn’t the fault of the newspapers for not having found the magic bullet, because my heavens, they have all tried and they’ve tried from one end of America to the other.  They’ve tried from one end of Europe [to the other].  I really wouldn’t task the newspapers with finding some wonderful model, because, my heavens, they’re desperate to do it and we, as their advisers, would be delighted if they could but so far the only method of staying alive has proved to be cutting your costs.”

When Lord Justice Leveson told her it sounded “all rather depressing”, Enders replied: “It’s the way things are.”

She told the inquiry the Mail Online, one of the biggest newspaper websites worldwide, made £16 million last year compared to £608 million taken by Associated Newspapers titles – the Daily Mail and Mail on Sunday

On Wednesday morning, Max Mosley told the inquiry the British press has repeatedly gone beyond the bounds of civilized behaviour. The former head of the Federation Internationale de l’Autormobile (FIA), who gave evidence to the Leveson Inquiry for the second time, was the subject of a sting by the News of the World and won a privacy case against the newspaper in 2008.

In a written statement, Mosley criticised sections of the industry for breaking the law and adopting a “bullying and dishonest approach” to legal challenges. He also said justice for defamation and privacy breaches were denied to most of the population because of legal costs. Mosley, who in previous evidence discussed his privacy case, this time put forward a proposal for a press tribunal for handling disputes and a ‘Press Commission’ to replace the current PCC. He told the inquiry the press should be allowed to make rules for regulation with outside help. He said:

“I think keeping [the bodies] separate then overcomes any suggestion of state control of the press, because the only thing you’d need a statute for would be the body to enforce the rules. We need the public to be involved in making the rules but then [the regulator] can be a non-statutory body, provided there is a statutory body to stop breaches of the rules.”

The tribunal would be given powers to define the public interest, provide a public interest defence for journalists, impose a requirement for prior notification on story concerning medical details, sexual and family matters, and be given powers under the Harassment Act. It would be funded by a levy on publications with circulations above a set level and fines – which could equal 10 percent of group turnover. He added:

“Let’s take an extreme case. The pursuit of the McCanns in the Daily Express… At a certain point the tribunal, had it existed then, would have said to the Express, ‘This is not acceptable’ and imposed a significant fine if it had continued – the fine would have been very significant indeed – and undoubtedly [Northern & Shell owner] Mr Desmond would have given orders to stop.”

He also suggested tweets, social media posts and blogs should be covered by a press regulator.

Professor Steven Barnett said concentration of media ownership has produced the problems emerging in the industry over the last year.  Barnett – professor of communications at the University of Westminster – said the inquiry was a “transformative moment” in British public life and called on Lord Justice Leveson to consider media ownership when making recommendations. In his written proposal Barnett said corporate culture determined cultural output, including drama and comedy programmes, and plurality issues go beyond politics and current affairs.

He told the inquiry BSkyB spent £1 million in legal fees last year trying to rebuff regulatory enquiries by broadcast regulator Ofcom, citing this as an example of unaccountable corporate power being used to generate greater control. He said that last year the company’s £6.6 billion revenue almost exceeded those of the BBC, ITV, Channel 4 and Channel 5 put together. He recommended that the discretion for initiating an inquiry – of the kind ordered by Vince Cable and later Jeremy Hunt into the BSkyB bid – should be shared by minister and Ofcom, and that final decisions on mergers should not be left to politicians alone.

The inquiry also heard from Dr Damian Tambini of the London School of Economics, who recommended a press council jointly formed by owners and journalists, with public representation. He told the inquiry:

“Privacy violations provide a huge amount of resource. They provide front pages, which sell newspapers. No economist, as far as I know, has actually valued that, but if you have a self-regulating body [it] might have the value of keeping statutory regulation at bay.”

Lord Justice Leveson replied: “That might be the sole entire common interest of everybody [in the industry], keeping statutes away.”

In the afternoon, the inquiry heard a former Metropolitan Police surveillance photographer followed the McCann family on holiday to Canada, on behalf of the People.

Matt Sprake, a photographer and founder of the NewsPics agency, told the inquiry that he and a reporter for the Sunday paper followed and took pictures of Gerry and Kate McCann, and their young twins Sean and Amelie, at Vancouver Airport during a holiday in 2008, the year after Madeleine McCann disappeared in Portugal. Sprake said he thought this was appropriate because it helped to keep the case in the news. He said:

“I have to be careful what I say because of where we are, but I recall a conversation as to where the information came from that they were in Canada, and it came from a source close to the family, ” he said. “So at the time I felt it was appropriate, bearing in mind with the McCanns, there was a feeling that publicity, keeping Madeleine in the news, was helpful to the cause of finding Madeleine.”

 The photographer was called to give evidence at the inquiry following a report by investigation website Exaro News, which alleged that officials including probation and prison officers were being targeted by NewsPics. Sprake said he removed advertisements urging public officials to bring stories to the agency after the investigation alerted him to the “inappropriateness” of the wording on the website.

His written statement read:

“The whole website was removed on 4th July 2012 after an article appeared on ExaroNews relating to our business. The website had been ‘broken’ since March 2010 when the database editor software became corrupted an we were no longer able to change the content.”

Jay QC questioned Sprake on the practices of photographers working for the agency. He said he had fired two “good” photographers for breaching the PCC code – one for harassing a former Big Brother contestant by following her down the street and backing her into a doorway, the other for refusing to call off an arranged job photographing a celebrity couple and their respective parents after the couple had a change of heart.  He called the latter “a blatant breach of privacy”, adding: “I can’t have people doing that.”

A redacted list of commissions undertaken by the agency for publications including the People, Daily Mail and the News of the World was shown to the inquiry, documenting jobs carried out between July 2010 and June 2012. Sprake said the agency was used by newspapers to verify tip-offs for stories.  He said

“If the story’s not true then nobody would ever know that we were there working on a story anyway. And if the story is proved to be true, then that’s a matter for the newspaper to decide whether to publish it or not”.

Sprake was asked about several cases, including the surveillance in 2007 of a former senior Metropolitan Police officer and a married woman who was working for the Independent Police Complaints Commission.  The photographer said he had been asked by the People to trail the woman and take pictures of her with her husband, and had then followed her to a meeting with the officer in a Liverpool Street pub on two consecutive evenings.

He said the story had been dropped after the couple left separately on both occasions, but was picked up months later when the affair was confirmed on a TV programme. The People and the Mail on Sunday then jointly used the pictures after the latter bid £10,000 to buy them up. Sprake said the story had been in the public interest as the IPCC were investigating the officer’s unit at the time.

He admitted to using a body-worn camera to capture bankers “spending their bonuses on a big booze up” in 2011, but said the accusations had turned out to be false. He was also asked about a job on September 23, 2010 to expose “a drug-taking prostitute” using a hidden camera during an interview but he said the subject agreed to participate with an article and was paid for the story. He said:

“It was a full proper features job, it turned into in the end, where that person admitted to her mistakes, admitted to her remorsefulness about what she had done, and the story went in that direction other than what it could have gone into.”

Questioned by Jay QC about the ethics of hidden cameras, he explained:

“If I went to interview you and I sat and I had a camera in my tie and I videoed everything that we said, the only thing that’s different between that and a dictaphone is that I have pictures of you. A reporter in the normal course of his duties would be expected to record an audio of the conversation, so all I’m adding is video footage to that.  If I leave a camera in that room after we’ve finished our chat, and that video camera is transmitting imagines to my van, to me, to wherever – I haven’t even got that kit – but if that happened, that is blatantly breaking the law under RIPA [Regulation of Investigatory Powers Act] but we don’t do that. We’re only gathering the evidence.”

He said photographers faced many hazards.

“I’ve been beaten up in the street by having a camera out because members of the public think that we are some sort of criminals, because we’re photographers. It is that bad. Security men think they can throw us in bushes and up against walls, and beat us up just for having a camera out. I feel far safer in the back of my van with a hidden camera, I really, really do. And at the end of the day, all were trying to do is prove the truth, because someone is phoning in a false story.”

Next week the inquiry will be updated on Metropolitan Police investigation by DAC Sue Akers, and hear closing submissions from the core participant victims, Metropolitan Police, Telegraph Media Group, Northern & Shell, Associated News Limited, Guardian News & Media Limited and News International.

Natalie Peck, is the web reporter for Hacked Off and a PhD researcher examining privacy law and public figures. She is @nataliepeck on Twitter