Could you be caught up in the new Leveson law? Getting to the bottom of the Royal Charter on press and internet regulation

The system envisaged by the Charter and the Crime and Courts Bill gives British courts the ability to impose serious costs consequences on all "relevant news publishers" who fail to sign up to the new regulator. This includes the British press.

However, it also includes news bloggers and all websites which publish material in the UK (therefore, foreign news websites which publish here in the UK will be caught). Interestingly, the definition does not catch certain broadcasters' websites.

The scheme envisaged by the Charter is voluntary in that nobody has to be a member. However, the system is likely to fail if it does not cover all significant news publishers insofar as the Recognition Panel will have a duty to report this to Parliament and could end up withdrawing recognition.

While it is true that nobody has to be a member, if a "relevant news publisher" is not a member it could be penalised by the courts using sanctions set out in the newly amended Crime and Courts Bill. The term "relevant publisher" means "a person (other than a broadcaster) who publishes in the United Kingdom: i.e. a newspaper or magazine containing news-related material, or ii. a website containing news-related material (whether or not related to a newspaper or magazine). This would certainly catch bloggers. It is unlikely to catch Twitter itself. We do not think the definition catches individuals who tweet.

Essentially, where a relevant publisher is not a member of the regulator and it is sued in the courts in relation to the publication of news-related material, exemplary damages can be awarded against it. The rationale for this is that the defendant's failure to sign up to the regulator, and therefore its arbitration scheme, means the claimant has incurred costs. Where a relevant publisher is a member of the regulator and is sued in the courts, rather than the claimant using the arbitration scheme, it will not have to pay the claimant's costs. The flip side of this is that, where a publisher is not a member of the regulator, it will have to pay costs. The way the Bill is currently worded, the publisher would have to pay the claimant's costs whether it wins or loses.

There are plenty of reasons why a publisher would not want to sign up to the regulator. For example, the regulator will have the power to direct the nature, extent and placement of corrections and apologies. It is easy to conceive of a situation where a publisher will not want to publish an apology - for example, where it believes that it has a proper defence which has not been heard in full by an arbitrator. Also the regulator will have the power to impose heavy fines.

While the first draft of the Government's draft Royal Charter stated that its terms could not be amended unless the leaders of the three main political parties agreed, the proposals now envisage the Charter could be amended by a two thirds Parliamentary majority. In practice, this means that if successive governments do not like the way the regulatory system is working, they can intervene to amend the Charter. A successive government achieving a two thirds majority is a distinct possibility. For example, in 1997 Labour had 63.4 per cent of House of Commons seats with the Liberal Democrats having 7 per cent of the seats. In short, the proposed mechanics allow for the possibility of significant governmental involvement in the way the press operates. The press will see this as a huge u-turn by David Cameron.

We wait to see whether the press will adhere to the significant changes being proposed. Given the potential impact on freedom of expression, the press could challenge what is being proposed by way of judicial review on the basis that the new system is not compliant with Article 10 of the European Convention on Human Rights which protects freedom of expression. As for foreign publishers, the news that the proposed system will impact on them may come as a surprise.

In the case of US publishers, some of those may have nothing to worry about. Their Speech Act specifically excludes the possibility of foreign judgments being enforced against publishers based in the US where that judgment impinges on their freedom of expression. Therefore, an award of exemplary damages and/or a large costs award is unlikely to be enforceable in the US.

As for the discrepancy between news websites and the news websites of broadcasters, we envisage that there will be strong debate about whether this is fair on non-broadcasters who have to compete with the websites of broadcasters.

Lorna Caddy and Niri Shan are media experts at international law firm Taylor Wessing. Caddy (@LornaCaddy) is a senior associate and Shan (@nirishan) is head of intellectual property and media & entertainment UK