Review of Creators Contracts Needed
We need a proper review by Government or perhaps the BiS Select Committee of the law relating to creators contracts which are often unfairly weighted against the creator and in favour of the bigger business they are contracting with.
I recently raised this in a supplementary question in the House of Lords
Lord Clement-Jones (LD): My Lords, as the Minister knows, there have been many calls to change the application of the Unfair Contract Terms Act to intellectual property contracts over the past few years. Is it not now time to have a full review of how contracts for creators can be made fairer? How can we regard ourselves as the champions of creativity in the UK when the scales are so heavily weighted against creators?
Baroness Neville-Rolfe: My Lords, I do not agree that the scales are too heavily weighted against creators: there is a balance between the consumers who are going to buy works and the creators and writers. We have to have a good incentive system. The noble Lord knows a huge amount about the law of contract and I will follow up the point that he makes with him. We made a lot of reforms following the Hargreaves review. We have adjusted and changed matters appropriately, and I think that was a good result.
I expanded on this in a speech I gave to the Freelance Branch of the NUJ recently at a meeting in the House of Lords.
In the digital age freelance journalists, authors and writers face many challenges to their economic position.
The challenges facing authors for example were picked up in a study carried out in 2014 commissioned by ALCS (the Authors’ Licensing and Collecting Society) which showed the median income of professional authors to be at £11,000 per annum. This is a drop of 29% since the last survey of its kind was published in 2005 when the median income was at £15,450 per annum in real terms.
Down to falling advances, decline of the ‘mid-list’, diversion of funds towards celebrity titles, and uncertain public funding
With the review of the European Union’s rules on copyright, creators face a potential new challenge if they amount to an attempt to weaken the copyright regime across Europe, although it seems that creators rights have been discussed in Brussels.
In the UK too often authors and writers are presented with take it or leave it contracts which offer little scope for negotiation and demand full assignment of their rights or unnecessarily wide licences.
Authors often find themselves in a weak position when negotiating with powerful commercial interests.
For example, writers always have to sign clauses indemnifying publishers against any claims brought by other parties even when they arise through no fault of the author, and even though the publisher is covered by insurance.
Moreover, the UK is one of the few countries where moral rights and authorship can be waived entirely.
This applies to a whole range of contracts.
Creators’ contracts with publishers, broadcasters, record labels and film studios. Creators’ contracts with and mandates to collecting societies. Creators’ contracts with internet platforms, such as Flickr
Creators frequently need to negotiate with monopolies or with dominant players in highly specialised markets, such as scientific publishers.
Individual creators are therefore at an inherent disadvantage when negotiating the terms of the contracts that permit exploitation of their work.
Advice from a lawyer is unaffordable for most creators. While unions and professional associations have sought to address this imbalance by providing advice to their members and engaging in collective bargaining, the situation remains unsatisfactory for the majority of creators
A large part of the legal problem is that freelance writers – despite the massive disparity in bargaining power– are regarded as “businesses” so legislation on consumer rights eg in the recent Act don’t apply.
Creators are not on an equal playing field when it comes to negotiating contracts and often have little choice but to sign the contracts they are offered.
To promote fairness and equality in the negotiation process the Unfair Contract Terms Act 1977 should be amended to extend to intellectual property contracts.
In recent times pressed by me, the CRA, ALCS, The Society of Authors and others the last Government had discussion with artists and creators on extending the law governing unfair contracts to include intellectual property contracts.
I raised the issue during the ERR Bill in March 2013 with Lord Younger and he agreed to meet representatives from the various creative industries to discuss this.
From debate during the CR bill last October it seems the Government is asking for more detailed evidence of the problem.
But just dealing with the IP aspects of contracts is not far enough in the digital age.
With Mike Holderness and the CRA we in fact put in a paper in 2013 asking for a complete review of the law governing this type of contract.
ALCS also propose an independent review of copyright contracts for creators, which should explore how copyright contracts for creators can be made fairer – in order to ensure that creators receive a fair share of the money consumers pay for copyright content and that the purpose of copyright in stimulating and sustaining creativity is met.
.The areas which a review should explore include :
- Whether the doctrine of undue influence, which applies when a person in a dominant position uses that position to obtain an unfair advantage for him or herself, could be applied in these cases.
- Whether creators should be given a reversion right for licensing and assignment contracts, through the Copyright Tribunal or otherwise.
- Whether a right to equitable remuneration for creators could be enacted. This right is present in German law.
- How measures to encourage collective bargaining could be implemented. The CRA has suggested that creators’ organisations should have the right to negotiate minimum standards with exploiters or, preferably, their organisations. Does this fall foul of competition law however?
- Whether model licences and codes of conduct could extend the benefit of collective negotiations through professional bodies to a wider range of creators, particularly new entrants to the entertainment industries and “consumers turned creators”.
- Whether making the moral right to attribution unwaivable in contracts could increase creators’ earning powers, for example by raising creators’ profiles. It follows we need to ensure that there is a common understanding across the creative industries of what metadata needs protecting and how to do this. For example the Voluntary Code of Practice for Creating and Retaining Metadata in Images is an interesting precedent. The copyright hub is considering what are the essential identifiers that should be retyained in all cases.
- Whether a statutory requirement for renewable terms that fall back to the creator, or reversionary terms, could increase creators’ earnings – for example by providing that copyright is only assignable for a 10 year term, after which it will revert to the creator.
- Whether a statutory requirement for “use it or lose it” clauses along the lines of Patent Act and licences under the Directive on Term Extension for performers and sound recordings could increase earnings for authors and reduce instances of older copyright-protected works being effectively withheld from the market due to lack of interest by the publisher, record label or film studio.
I was really interested in Nicola Solomon’s speech to the All Party Writers Group the other day and her neat encapsulation of all these ideas:
R Fair Remuneration
E Exploitation ie Use it or lose it
A Fair Accounting Clauses
T reasonable and limited contract Terms
O Ownership Credit
R general test of Reasonableness.
The time has come to really mount a really serious campaign on this subject to secure a proper review.
How in the UK can we regard ourselves as champions of creativity when the scales are so badly balanced against creators?