The risk of reporting

Guardian editor Alan Rusbridger (disclosure: I work for him) recounts at length an expensive libel action against the paper by giant retailer Tesco over highly complex reports that included errors on the company’s alleged attempts to avoid taxes. Rusbridger calls for a reform of British libel laws (“Do not be lulled into a false security by the word ‘British': in the Internet age the British laws can bite you, no matter where you live”) – particularly in the midst of a economic crisis, when we need more reporting about companies’ activities. He writes:

Whether we are dealing with banks, taxation, security, religion, or climate change, we need more than ever to find ways of encouraging, not penalizing, news organizations that try to report matters of the greatest complexity and significance. The financial crisis currently facing newspapers in America and Europe is grave and comes at a time when they are more needed than ever. In years to come people may not question why newspapers got things wrong about such complicated matters as corporate tax structures or the behavior of investment banks; they may express wonder that they even tried.

In my various scenarios for the future of news that relies more heavily on independent practitioners and networks, libel suits remain a huge question for which I can’t find an answer. It’s enough to ask, as Rusbridger does, why a (financially struggling) news organization would go ahead in reporting on large companies with the chance of errors and crippling punishment for them or of legal harassment. It’s another matter for an individual reporter – a Josh Marshall (even if his wife and business manager is a high-level attorney who used to work for Dow Jones) or a HuffingtonPost blogger – to take on the risk of financial ruin for the sake of reporting. The Media Bloggers Association has arranged libel insurance for bloggers, but in the face of prosecution of the level Rusbridger describes, that would be just spitting in a volcano.

We need a frank discussion about the good, need, and risk for society of reporting. I think we also need to investigate new ways to make even the subjects of investigation part of the process of investigation, so it is clear they have the opportunity for correction and clarification earlier on – and if they forego that opportunity, they share risk. The more transparent they are, the more they mitigate that risk. To do this, we must acknowledge the public good of having watchdogs look over corporate activity, especially as governments fail to do so.

: LATER: John Naughton sees some hope:

There is, however, a chink of light in the gathering darkness. Rusbridger spells out in great detail the huge cost of retaining the specialist accounting and legal expertise needed to understand the Tesco transactions. But one rule of the new ecology is that there is wonderful expertise out there on the Net, and there might be ways of harnessing all that collective knowledge — rather as Linux harnessed the distributed skills of great programmers across the world to build a ferociously complex operating system; or as Larry Lessig and Charlie Nesson have crowdsourced the task of preparing legal briefs for pro bono cases.

  • http://www.guardian.co.uk/technology/ Charles

    The link – you wanted to give the link, right? – is http://www.nybooks.com/articles/22245

  • http://www.guardian.co.uk/technology/ Charles

    oh durr. Just saw it was in there. Strange, it didn’t show in the RSS feed.

  • Ryan

    Just to play devil’s advocate, after seeing first hand how awful financial reporting can be, there should be a recourse for companies when reporters make mistakes. The other consequence of the Google age – as we saw with the Google News/airline fiasco a few months ago – if that the tiny mistakes can have massive repercussions for companies. It’s common for reporters to let their desire for an exciting story shape their judgment and cause errors. Companies bear the brunt of that negligence and they should not have to.

    Obviously the 1st Amendment should be protected at all costs. However, adults are responsible for the mistakes they make. Don’t report on “complex matters” if you don’t have the chops.

  • http://estherarmstrong.wordpress.com/ Esther Armstrong

    I took a similar point to Jarvis’s out of the Dacre speech at the Society of Editors conference in November. Dacre spoke of the “ruinous financial implications” newspapers could face if they pursued a law suit or stuck to their guns on an story they believed they were right to cover and which is being contested.

    This is not only true of reporting on large companies, just look at the News of the World battle with Tommy Sheridan; they thought they had a cast iron case with plenty of witnesses and were still found guilty of defaming Sheridan and fined £200, 000.

    Combine this with the rise of Conditional Fee Arrangements and it is not too far fetched to imagine newspapers choosing to leave out a scoop altogether to avoid potential claims against them.

    It’s up to the goverment to figure out a way of stopping these legal frameworks from being exploited as a means of making money and shutting up the press.

  • http://www.timworstall.com Tim Worstall

    The G’s original reporting on this was terrible. I blogged the story the day it came out and within an hour or so I was getting comments from City types pointing out that the journalists simply didn’t understand what they were writing about at all.

    What is a great deal more amusing though is that what Tesco really was doing was organising to avoid (not evade!) Stamp Duty, not Corporation Tax. And, umm, the Guardian Media Group had exactly the same structure set up to avoid (not evade!) Stamp Duty on their transaction with EMAP.

    So the reporters could have got the skinny on it just by asking the internal accountants. Odd that Rusbridger didn’t mention that really….

  • http://www.webtransplant.com Evan Rudowski

    Jeff,

    I am interested in another aspect of your relationship with the Guardian.

    During the 2006 Lebanon war you wrote a number of blog posts that strongly defended Israel. I happened to agree with you.

    The Guardian, however, was and is on the opposite side of the fence. It is arguably the leading publication for the extreme left-wing intelligentsia here in Britain who typically condemn Israel and reflexively support Palestinian causes. The Guardian’s recent editorials about the Gaza situation continue in this vein. News coverage also actively reflects this bias.

    Given the past positions you’ve taken, how have you reconciled yourself to the Guardian’s positions on this issue? I recognize that the Guardian prints a diversity of views, but the pro-Israel views are in the minority.

    Unlike U.S. newspapers which tend (or at least purport) to take an editorially neutral position in their news coverage, British newspapers openly adopt a position on the political spectrum and readily reflect it in the tone of their coverage. Therefore if you associate yourself with a particular newspaper in Britain, you are associating yourself with their positions.

    Presuming you do not agree with many of the Guardian’s positions on such Issues, how do you reconcile this to your satisfaction?

    Kind regards,
    Evan Rudowski

  • Andy Freeman

    Everyone else has to stand behind their work-product, so why is it unreasonable for journalists to do likewise?

    While the “underdog newspaper vs a big bad corporation” may make a good story, there’s also the case where a newspaper slimes some poor individual.

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  • http://www.buzzmachine.com Jeff Jarvis

    Evan,
    Of course, I don’t agree with the Guardian on every issue on earth. but I agree with them on many. On this, we disagree.

  • Andy Freeman

    And then there are cases where a newspaper just makes things up for political purposes.

    http://libn.com/blog/2008/12/30/dc-lobbyist-sues-times-over-mccain-affair-story/

  • http://www.webtransplant.com Evan Rudowski

    Jeff,

    Thank you for the reply. The problem I have with the Guardian is that they play an important role in the mainstreaming of what I consider to be extreme anti-Israel sentiment. And without living in the UK it may not be possible to realize how mainstream that sentiment is here. The extremism of the views perpetuated in the Guardian and in the left-wing community they appeal to leaves little room for dialogue and therefore only serves to fan the flames of further conflict. It influences politics here which translates directly into a more difficult environment for Israel (although the policies of the two major parties are typically not as extreme as the media).

    The Guardian’s “Comment is Free” website has been a notorious venue for anti-Semitic diatribe posted by visitors (and I do appreciate the difference between legitimate criticism of Israel and outright anti-Semitism). The Guardian has done a poor job in the past of moderating and filtering such comments.

    For these reasons I personally would have a hard time working with the Guardian; I would feel I was aiding and abetting these kinds of harmful activities. However I realize I’m in the minority here, as you are among several people I know and respect who do work with the Guardian.

    This is also why I feel the Guardian’s US edition is not likely to gain much traction — if the politics are similar I doubt there is a very large audience for it in the US.

    Kind regards,
    Evan

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  • http://video2zero.com peter ralph

    disappointing that Rusbridger is so hesitant to praise his true savior – Private Eye.

    Why is that? Without Private Eye the Grauniad would be facing multi-million dollar defamation suit.

    Could it be that Private Eye blows the gaffe on those dweebs who whine about needing bigger budgets when what they need is bigger balls.

    The facts speak for themselves.

  • http://evilpundit.mee.nu/ Evil Pundit

    Defamation laws are a sledgehammer used to crack a walnut, and ought to be reformed.

    But there should be some way to punish newspapers for false reporting even if no individual is defamed. Fake stories like this should not be allowed to go unpunished.

  • jazzone

    Before I click through to Evan’s blog can someone let me know if it’s as mind blowingly pompous as his posts on this thread?

  • http://video2zero.com peter ralph

    yes Evan does come across as a right sanctimonious wally.

    [1/1/09 UPDATE]

    congratulations to Ryan Sholin, Jeff Jarvis et al for jumping on the “more balls” bandwagon

  • http://www.webtransplant.com Evan Rudowski

    @Jazzone — Cute comment, under cover of anonymity.

    @Jazzone and peter ralph — Usually people resort to personal insults when they are unable to come up with any more thoughtful or intelligent response.

    Call me sanctimonious, but neither of you would win any awards for intellect.

    Kind regards,
    Evan Rudowski

  • http://video2zero.com peter ralph

    Evan – it was not an insult. It was a mild and humorous quip. Had it been delivered in a Mayfair dining room over the port and cigars – you would have been forced to smile ruefully as the assembled guests laughed in good-natured ribaldry. “Perhaps I am a little pompous sometimes” you might even have thought to yourself as you joined the general merriment with good cheer and an open heart.

  • http://www.webtransplant.com Evan Rudowski

    Peter – thank you for clarifying. I never have done very well with the banter in Mayfair dining rooms. Perhaps if I read the Guardian more . . .

    Kind regards,
    Evan

  • alan rusbridger

    Peter- the NYRB piece does spell out in some detail Private Eye’s (extremely good) reporting on Tesco and corporation tax and the Guardian’s reliance on it, both in print and in the legal action.
    Tim- You are confusing Stamp Duty with Stamp Duty Land Tax.

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