MIRROR GROUP: DIRECTORS AND LAWYERS FORCED TO DEFEND COVER UP CLAIMS
Byline Investigates Big News, Part 26: High Court Judge orders thousands of documents be trawled and captains of company interviewed over claims of 'serious wrongdoing'
MIRROR Group Newspapers plc is being forced to investigate “over 40” former and current directors and in-house lawyers for evidence of alleged collusion in phone hacking, Byline Investigations can reveal.
The extraordinary review is so the £233m media giant can defend itself against accusations that top brass knew about phone hacking for at least nine years, but covered it up.
Mr Justice Mann has given Britain’s biggest newspaper publisher until December 22 to examine thousands of documents and interview up to 38 directors and five lawyers about knowledge, if any, of the illegal practise common to its main national titles in the noughties.
A full trial of the facts is due to take place in February. MGN declined to answer Byline Investigations’ questions about the matter last night.
The investigation - sparked by detailed claims about corporate knowledge of phone hacking made by three alleged victims - is the first time the scandal has gone beyond the activities of journalists and editors.
David Sherborne, the barrister representing the victims, set out his case saying that the “board and the legal department” of MGN had “knowledge of phone hacking” even though “this is a plc (public limited company)”.
Arguing that for these reasons his clients should receive additional aggravated damages, he added: “The board and their in-house lawyers ‘deliberately took steps to conceal the activities’ and ‘provided false statements to the public by denying these activities.”
The controversial former chief executive of Trinity Mirror left under a cloud amid a share-holders' revolt over her £1.7m salary compared to the nose-diving value of the business under her stewardship. During her tenure, the company's market capitalisation plummeted from more than £1bn to £80m, with a 90% drop in share price. Bailey was in post at the height of phone hacking epidemic on its titles.
He went on: “They knew about (phone hacking) at the time in 2002 and certainly by 2007. Given that they knew, they should have stopped it.”
The claimants include former This Morning presenter John Leslie, whose phone was hacked by journalists on all three Mirror titles when he was in the public eye in the 2000s.
Former Big Brother star Chantelle Houghton and Royle Family comic actor Ralf Little also say their private information was misused when hacking was rife in 2002.
Mr Little was in court to hear the judgement on Tuesday that MGN must defend itself against the allegations, in what is a further challenge for the company because some of the claims involve its Head of Legal Affairs, solicitor Marcus Partington, who is also overseeing its phone hacking defence.
Byline Investigations can reveal that Mr Partington was on Friday still working on phone hacking at MGN, even though the company’s barrister Richard Spearman QC agreed he was facing “serious allegations”.
The former Group Legal Director was the man in charge of leading the publisher's response to the phone hacking scandal. He initiated a 'huge' internal investigation into the practise, giving the company a clean bill of health in 2013; a conclusion later found to be wrong.
Vickers left in January 20015 after 22 years' service with a £400,000 pay off, going on to become one of the architects of the press self-regulator, the Independent Press Standards Organisation (IPSO), before joining the parent company of the Telegraph as its Editorial Legal Director.
Mr Vickers reportedly received close to £1m from share schemes and incentive payments after leaving.
Mr Spearman said: “The allegations are the same against the board and the legal department… and I have got a difficulty, which is obvious, which is that I have got to consider how I go about obtaining instructions on behalf of the company… when members of the legal department are said themselves to have been implicated in such serious wrongdoing.”
Mr Spearman added: “So, there is a problem there. All I am saying is simply if you look at any case of serious allegations against a company where officers or employees are said to be involved that the normal course is the company will not invite external lawyers to take their instructions from those people.
“That is (a) nonsense because there is a necessity to have some impartiality and visibility not dependent on their accounts.
Sir Victor Blank
MGN's former Chairman, Executive Director and Company Secretary, is said to have been present at a dinner in 2002, when former Daily Mirror Editor Piers Morgan allegedly teased TV presenter Ulrika Jonsson about accessing her voicemails. Sir Victor is coincidentally also both a corporate and personal defendant in a current £550m case again Lloyds Bank - of which he was a director - which is accused of "mugging" share-holders over its acquisition of HBOS at the height of the banking crisis. He denies wrongdoing.
“In any case where these serious allegations are made anybody with an ounce of common sense is going to want to look at the documents as well.”
Mr Spearman said investigators would now be “trawling through the records of communications between the legal department and people higher up the chain, and all communications that went to people higher up the chain and the board.”
He went on: “We are going to need to look at the papers. On the legal department front… it seems to me that part of this exercise is going to involve looking at the legal department’s involvement and knowledge in the (allegedly hacked) articles complained of.
“Because if the articles are said to be the product of hacking, then obviously if the legal department was involved with that and is said to know from that that there was hacking going on, that is obviously a live issue.”
The allegations against MGN’s legal department originated with two former Sunday Mirror investigative journalists who blew the whistle on the company’s extensive use of illegal newsgathering techniques between 1999 and 2009.
One, Graham Johnson, said in-house lawyers were aware of the use of private telephone data, fraudulently obtained by journalists, as a means of getting stories for the papers.
A second, Dan Evans, said Mr Partington had made a “knowing” jokey remark about voicemail interception with senior editorial staff in 2003.
Former Legal Director Paul Vickers was alleged to have known about phone hacking because he had approved ‘substantial’ payouts in legal cases, which involved illegal activity.
The first case involved David Beckham who sued the Mirror in 2003.
The second case involved a former Sunday People journalist called David Brown, who alleged that he’d been unfairly dismissed.
In a statement made in 2007, Mr Brown alleged that phone hacking was taking place at all three Mirror titles, citing a story about the hacking of David Beckham’s nanny’s phone.
Mr Sherborne said: “The David Brown settlement was discussed at board level.”
Mr Sherborne claimed that former Mirror Chairman Sir Victor Blank had knowledge of phone hacking because he’d been present at a dinner in September 2002, when former Daily Mirror Editor Piers Morgan was teasing TV presenter Ulrika Jonsson about accessing her voicemails.
He said: “As far as I can see logically, it doesn’t just extend to the articles complained of by these three claimants, it must logically extend to the articles complained of by any of the complaints, that is all the ones who have been settled in wave 1 and wave 2.”
He added: “The legal department was involved in pre−publication advice on that, and so forth. So in my perception to do this properly, which it has to be because it is a very serious allegation, it is going to involve basically trawling through the records so forth.
“As far as I can see, we are going to have a vast exercise even on those search terms. You can’t embark on something like this, in my submission, and do it in bits and pieces, it has to be done thoroughly.”
Mr Spearman went on: “I emphasise that in my submission what has to be done here is to get to the bottom of these matters over a period of at least nine years from 2002 to 2011, maybe right up to the present time, with all the people involved, five people in the legal department, on our evidence 38 directors… and that is on our case over 40 people.”
#phonehacking, #piersmorgan, #mirrorontrial, #phonehackingscandal, #marcuspartington