A Public-interest Stand for Smart Contracts
In framing the Constitution, the nation’s founding fathers were hardly thinking of media insurance or newsroom layoffs. But they might be now—at least for one part of the experiment. FIRE addresses freelance public-interest journalism. In our experience, unfavorable contracts are burdening an increasing pool of unaffiliated reporters with untenable liability, which in turn has threatened a key component of accountability and thus democracy.
In response, FIRE has launched a series of contract-related initiatives to strengthen freelance investigative reporting:
- We support stories—and encourage our counterparts to support stories—only for outlets that legally protect freelancers by any fair and viable arrangement.
- We back up that policy by offering FIRE's new contract template and by offering pro bono access to two veteran media attorneys for contract-related legal assistance.
- We encourage systemic thinking about freelance liability in the public interest, in part via the FIRE Contract Principles.
Below we describe the trends driving these initiatives. This is not legal advice and should not be construed as such. Reporters and any other parties are entirely responsible for their own decisions on legal matters.
Because of their independence, expertise, ability to cultivate sources, and freedom from newsroom demands, freelancers are ideally suited to hold powerful interests to account.
But too often publishers and broadcasters require freelance reporters to cover their own legal costs, and sometimes those of their publishers and broadcasters—more frequently in recent years according to anecdotal evidence, though no hard numbers exist.
It's one more version of an increasingly common risk-management model worldwide—pushing liabilities to non-employees. Many contract “content creators” must indemnify their distributors. But it simply doesn't work for the contractor in this case, for two separate reasons: 1) Unlike a music composer, an investigative reporter simply can't be expected to afford their indemnity costs on a sensitive story; 2) for editorial purposes (e.g., meeting a publisher or broadcaster's standards), the freelancer is not really independent at all—at least no more than a staff reporter for whom the outlet takes responsibility.
Even if it weren't flawed in other ways, the common risk-management model just doesn't fit public-interest journalism: it's both impractical and inappropriate. But with downsized newsrooms creating a much larger pool of freelancers, it's now affecting more people than ever.
This in turn affects the public. If nothing else, liability for even a frivolous defamation suit can require tremendous time, attention, and money—enough to make any reporter justifiably skittish. Without a promise of protection, it's far more prudent to abandon a sensitive story entirely or forfeit proposing one in the first place.
In FIRE’s experience, some of the country’s best investigative freelancers are opting for safer feature stories—a trend that deprives the public of a key source of accountability journalism, especially as newsroom jobs decline.
Who covers the Legal Costs?
Who should bear the risk of serving the public good?
Some media companies don't take any responsibility at all for sensitive stories. Instead, they seek all the benefit of stories with none of the risks. They may not even have insurance to cover freelancers. Unless they renegotiate a policy, they are outside this discussion.
Other outlets may have insurance to protect freelancers but still require the reporter to sign an “indemnity clause,” putting the freelancer on the hook for any legal costs on the outlet’s part.
Still others have adequate insurance—and even say they’ll "stand by” the reporter in case of trouble. (Not to belabor the details, but usually this means contributing the heavy labor of the reporter's legal defense—for example, by filing a motion to dismiss that a reporter's counsel could simply join).
And yet all too often they make these assurances only conditionally, informally—not in writing. The freelancer must rely on individual insurance.
None of these stances is satisfactory. None fulfills an outlet's First Amendment potential.
Every freelancer must pledge in writing to uphold journalistic and ethical standards. They must also show the capacity to back up that pledge. If they don't, they would get nowhere with any reputable editor or producer, or with FIRE or its counterparts. To commission a piece, an editor or producer must trust a freelancer’s honesty—but also their standards, judgement, experience, and skill.
If such trust holds, why hedge on protecting the reporter?
There is no good reason that we know of. FIRE no longer supports stories for which an outlet externalizes risk onto investigative freelancers—we reward only those that indemnify a freelance reporter, via FIRE’s boilerplate or the outlet’s own arrangement.
We expect our counterparts to do the same. No funder or facilitator should support a story that leaves its reporter vulnerable. Every FIRE counterpart—and all of our funders—should ensure that any freelancer we support is indemnified.
No funder or facilitator should support a story that leaves its reporter vulnerable. Every FIRE counterpart—and all of our funders—should ensure that any freelancer we support is indemnified.
For far too long, well-intentioned parties in the field have sought to find better personal insurance for independent reporters. It is a worthwhile enough objective for other reasons — but it is not the solution to the problem.
As a back-up plan, a reporter should always try to have an individual insurance policy (one commonly cited plan comes via The Freelancers Union). But even if it's not prohibitively expensive for investigative purposes, a back-up plan can only go so far.
In publishing or broadcasting an investigation, a freelancer should never rely on personal insurance—or be forced to rely on it. The greatest benefit to all parties—especially the public—comes when an outlet agrees to legally protect the freelance journalist reporting an investigation, as it would any staff reporter.
The benefit certainly holds for a freelancer: "Coverage" by the outlet provides not only critical confidence to report an immediate story but also protection to pursue future stories in the public-interest. Individual insurance policies simply cannot do that.
Relying on a reporter’s individual policy—or letting them fend for themselves—forfeits two practical advantages associated with indemnification by outlets:
1) Compared to a reporter’s individual insurance, indemnification by an outlet almost invariably involves better coverage—a more robust policy, more effective law firms, more experienced lawyers. (Besides, the publisher almost always chooses to lead the defense anyway—in part because it's simpler to do so (see below)).
2) If indemnified by an outlet, the freelancer 1) doesn’t usually have to pay deductibles that can range as high as five figures; 2) doesn’t have to file a claim, which can significantly increase premiums; and 3) doesn’t have to rely on an individual policy’s insurance company, which is almost always smaller and weaker than the outlet’s, with less leverage and more incentive to settle, even on bad terms.
But covering a freelancer is ultimately in the outlet's interest as well. As any First Amendment-friendly general counsel will privately acknowledge, a publishing or broadcasting company will benefit most when it fully protects a freelancer for a commissioned investigation. This is because the disadvantages are virtually non-existent and the advantage substantial:
- indemnifying the freelancer generally doesn't cost an outlet more money;
- reasonably careful stories typically do not lose in court; and
- having the reporter securely embedded within the outlet’s legal team, if nothing else, reduces the incentive for the reporter to communicate separately with the plaintiff and negotiate a separate settlement. Why enable parties on the same side to sue each other or interfere with each other's legal defense?
In fact, an outlet's own insurer will routinely recommend covering the freelancer—and almost always the outlet actually follows the insurer’s advice in the event of a lawsuit.
In short, the problem is not that publishers and broadcasters don't cover freelancers when there's trouble. The problem is that the outlets don't promise to do so at the outset. Like any other sole proprietors, freelancers make risk-management decisions based on words on a page—written assurances up front.
There is no good reason those assurances can't happen more often. FIRE has taken steps to ensure that they do happen more often. That includes creating a model story agreement that outlets and freelancers can use or draw from—the FIRE Contract Template.
Investigative freelancers must uphold professional standards for a fair and accurate story. As long as they promise to do so (and show signs of backing their promise), all the provisions of FIRE’s template agreement belong in any freelancer arrangement. Some outlets already offer some of them. Those outlets deserve support.
From a legal or insurance perspective, there is no good reason why more outlets could not do the same, via FIRE’s contract or their own arrangement. We encourage all funders and facilitators of freelance reporting—as well as our partner outlets—to ensure that responsible investigative freelancers receive proper protection in the public interest—including via sign-on to the FIRE Contract Principles.
For more information, feel free to contact FIRE.