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Digital Economy Bill [HL]

My Lords, I shall speak also to Amendment 192. We move now to an interesting part of these provisions which has not yet been properly touched on. The Bill makes provisions for either Ofcom or the semi-independent body to impose a requirement on a body specified in the code to pay a penalty. The new body may also require damages from a copyright owner to indemnify an internet service provider for any loss resulting from the copyright holder’s failure to follow the obligations set out in the relevant code. On first reading the Bill, I thought that the penalty could be levied on both the internet service provider and the copyright holder and was to be given by one to the other as compensation for breaching the obligations in the relevant code. Having read Clause 14 more carefully, and after looking at the brief Explanatory Notes, I think that the penalty might apply only to the internet service provider, as the defences laid out in proposed new Section 124K(3) relate only to the provider. That would leave the internet service providers liable only to the penalty and the copyright holders liable only for damages. I hope that the Minister will be able to clarify whether that is the case. If it is, I hope that he will either satisfy the Committee that such a division is fair and clear under the legislation or bring back amendments to make it clear. Can the Minister confirm that, if an internet service provider has a penalty levied on it, the penalty is paid to the copyright owner? Is that the case, or does Ofcom pocket some or all of the penalty as it passes through? What was the thinking behind making the internet service provider liable for a penalty unrelated to damages? If the Government were concerned about the internet service provider becoming liable for disproportionately enormous sums of money, damages could have been capped. As it is, the penalty need have no relation to the damage caused by the failure to comply. Similarly, why are copyright owners liable for financial penalty only if they cause damages? If a copyright owner sends in an infringement report and demands a notification letter in a non-compliant manner, but the internet service provider catches the copyright owner’s mistake before it sends out a letter or before any actual loss has resulted, why is the copyright owner not liable to any penalty? There appear to be two separate justifications for these two financial enforcement measures. I have several more questions relating to this area of the Bill, but more amendments are to be brought forward and I shall save my points until then. I beg to move.