BYLINE INVESTIGATES MURDOCH: SUN PHONE HACKING - £30 MILLION IN LEGAL COSTS ALONE, ESTIMATES PAPER'S LAWYER
This article was first published on 05-02-2018
- The Sun’s phone hacking allegations aired in court - on same day Chief Executive Rebekah Brooks named in separate case
- Loss-making Murdoch tabloid now facing hundreds of phone hacking claims
THE SUN newspaper is facing a £30 million legal bill for phone hacking, according to its lawyer.
Some 47 claimants are suing the paper for allegedly listening to people's voicemails and stealing medical records - with each case estimated to cost £800,000 in legal fees and court time, said Clare Montgomery QC.
The figures do not include damages paid personally to claimants, many of which will run to six figures.
The costs of phone hacking have hit Rupert Murdoch hard.
The Sun made a loss of £24m last year as print advertising slumped and phone hacking liabilities dragged on for the twelfth year.
Initiatives to boost profitability at The Sun, whose image was damaged by the long-running Hillsborough campaign, such as gambling games and marketing spin-offs, have floundered.
A case management hearing today gave some details about the compensation and the negotiating techniques involved in settling the long-running cases.
The High Court heard The Sun newspaper trebled their offer of an out-of-court settlement to an alleged victim of phone hacking to avoid a trial.
Rupert Murdoch’s News Group Newspapers first offered comedian Vic Reeves £65,000 in September last year.
But on the evening before trial on January 18th last month, his lawyers dramatically bumped-up the offer to £185,000 to make Reeves back down.
Mr Reeves, whose real name is Jim Moir, could have pressed-on with his trial in theory.
But practically, he would have faced a ‘huge’ risk of incurring court costs, if he lost the case.
In another settlement, the publishers of The Sun increased their offer by £117,500 to soap actor Jimmi Harkishin, as part of a last-minute deal, with three days to spare before trial.
The lawyers for News Group Newspapers (NGN) disputed that they had deliberately thwarted a court case, by waiting until the last minute to come to a deal.
Clare Montgomery QC, the counsel for News Group Newspapers, said they had offered Vic Reeves exactly what he wanted – which was £100,000 – months before the trial was due to start.
Ms. Montgomery also cited another example of a claimant, who NGN had tried to settle with fairly.
She claimed that ex-Spice Girls’ manager Chris Herbert’s case had been valued at £50,000 in July 2017.
But three months later NGN had offered £70,000 in damages.
During the complex hearings, The Sun has never admitted liability for any criminal activity.
However, at previous sittings, during two years of preparation for the trial, it was revealed that Sun journalists and editors allegedly hacked mobile phones.
Allegations have been levelled at ex-showbusiness editors Victoria Newton, Dominic Mohan and Gordon Smart.
However, the court also heard that veteran news journalists such as Nick Parker and Jon Sturgis, working under Head of News Chris Pharo, allegedly tasked private investigators to ‘blag’ medical records.
Scores of payment slips from The Sun to unlawful 'blaggers’, cash dockets for ‘phone checks’ and emails discussing 'dark arts' were evidenced.
The claimants argued that journalists allegedly bought illegally-obtained phone-billing data on an industrial scale.
Today, the court heard that a ‘very large’ number of alleged victims of phone hacking are suing The Sun.
A full-blown trial was aborted last month after Rupert Murdoch’s publisher News Group Newspapers (NGN) settled-out of court with four ‘test’ cases.
In addition to Vic Reeves, The Sun also paid compensations to former X-Factor presenter Kate Thornton, pop group manager Chris Herbert and Coronation Street star Jimmi Harkishin.
Now, the six-figure damages have opened the gates to more claims against the under-fire paper.
Legal papers revealed that around £650,000 had been paid out in damages to the four claimants.
Millions more were incurred in court costs.
Hundreds of potential claimants are lining-up to sue The Sun for allegedly listening to voicemails and obtaining confidential data by deception.
David Sherborne, the counsel for the claimants, pointed out that because of the vacation on 18th January trial, there was an 'amount of court time that was lost with no benefit to the litigation.
‘There are 51 claims on the register.
‘And a very large number of cases in preparation, and some claimants have been notified.’
Much of today’s hearing at Court 1 at The High Court Rolls Building was taken-up with an inquiry by the judge into the events leading up to the out-of-court settlements on January 18th.
Both sides have blamed each other for the eleventh-hour settlements, which effectively wasted court time, as a six-to-nine-week trial was due to take place.
When a trial is vacated on the night before it is due to start, the court officials find it hard to fill the time with other cases, which are not necessarily ‘trial ready.’
David Sherborne, the counsel for the claimants, said his clients could not have settled earlier because NGN had not provided adequate disclosure of evidence in time.
He stressed that full disclosure was important because it allowed the claimants to assess the alleged intrusion, which was required to estimate a financial number to be put on the damages.
Mr Sherborne said NGN didn’t engage with his clients for a long time, and in one case ‘suddenly doubled’ the settlement offered.
He said that three days before the trial, offers from the other side were substantially increased.
Mr Sherborne said: ’There could not be a clearer indication that the defendant wanted to avoid trial.’
He said NGN had not been sincere.
Ms Montgomery said the suggestion that NGN had thwarted a trial wasn’t right.
She said that NGN had effectively been bidding against itself, in a difficult attempt to value the claims.
This system was ‘unreasonable,' Ms. Montgomery added.
First time around, Vic Reeves was offered £65,000 in September last year.
But days before this figure was bumped-up to £185,000.
Me Sherborne said Reeves was 'forced' to accept this offer, and to fight on would have put ‘enormous risks’ on Mr Reeves, with regard to court costs racked-up had he gone to trial.
Mr Sherborne revealed that the claimants' legal team had taken out an extra one million pounds in legal insurance, to help cope with the uncertainty of the high-risk negotiations.
He said: ‘The individual claimants have to be aware of their position.
‘If cost protection was in place, the claimants would go to trial.’
Former Smash Hits' editor Kate Thornton was offered money at the end of September.
But the claimants wanted to see more disclosure from NGN before coming to an agreement, which would have allowed them to put a price on the damage caused to their client.
Clare Montgomery QC, counsel for NGN, said NGN had no objection to going to trial.
She said it was relevant ‘if a case was incapable of resolution of a settlement figure.
‘Particularly, in cases where the numbers were very far apart.’
For example, Ms. Montgomery said, actress Liz Hurley had pleaded 250 articles, which all needed close examination, which would increase costs.
There were five claimants who had pleaded 100 articles.
Ms. Montgomery said that NGN had offered exactly what the claimants had asked for during early stages of the negotiation.
The NGN hearing came hours after the phone hacking story was dramatically revived, over a decade after the scandal first erupted.
Earlier in the day, actor Hugh Grant received substantial damages from Mirror Group Newspapers (MGN) after settling his claim over illegal phone hacking.
The Hollywood A-lister named several former Mirror executives for being phone hackers in a statement, and others for turning a blind eye or being incompetent.
Mr Grant said: ‘This litigation has made clear that phone-hacking and other unlawful information-gathering took place on an industrial scale at the Daily
Mirror, Sunday Mirror and Sunday People, under the editorships of Piers
Morgan, Richard Wallace (both Daily Mirror), Tina Weaver (Sunday
Mirror), Neil Wallis, Mark Thomas and James Scott (all People).
'It is clear from the evidence in this litigation so far that Ms Weaver,
and Messrs Wallace, Thomas and Scott were all phone-hackers themselves,
and that either Piers Morgan and Neil Wallis were so incompetent as to
not to know the real source of scores of exclusives that they published,
or they were complicit in the criminal conduct.’
The 57-year-old was at the High Court, shortly before the NGN hearing, to hear his lawyer Anjlee Saigol give details of the settlement, which is understood to be a six-figure sum.
Grant donated the money to the Hacked Off campaign for press reform and called for the second part of the Leveson inquiry to be held, to further probe corruption in newspapers.
Grant serves on the board of Hacked Off and also gave evidence to the first part of Leveson Inquiry into press ethics.
Former Crimewatch presenter Jacqui Hames also received an apology and damages from News Group Newspapers.
Lawyers for The News of The World, which closed down in 2011 after being caught phone hacking, admitted carrying out voicemail interception and surveillance against her.
Rebekah Brooks was the Editor of the News of The World, when Hames and her former police officer husband David Cook were hacked.
In the summer of 2002, News of the World photographers were tasked to 'snatch' the couple with long-lens cameras from blacked-out surveillance vans.
Former News of the World Irish edition editor Alex Marunchak has been accused of commissioning the 'watch' on the Hames' family but he has said that he only provided a tip to the news desk during a '30-second phone call.'
The story tip, that Hames and Cook were having an illicit affair, was untrue - the couple were married.
The illegal activity was carried out during the time the officers were investigating the murder of Daniel Morgan on Crimewatch in 2002.
Morgan's murder, as a result of an axe attack, in a South London car park remains unsolved.
Southern Investigations did illegal jobs for the News of the World newspaper.
Daniel Morgan's brother Alistair Morgan has repeatedly claimed that Southern Investigations gave the tip to Marunchak with a view to scuppering Hames' and Cook's Crimewatch appeal into the murder.