News International and Phone-hacking - Culture, Media and Sport Committee Contents

4  The Gordon Taylor and subsequent settlements


108.  In June 2008, News Group Newspapers (NGN) settled out of court a privacy claim brought against it by Gordon Taylor, the Chief Executive of the Professional Footballers' Association. Gordon Taylor had taken out the civil case against NGN following the conviction of Glenn Mulcaire for unlawfully intercepting voicemail messages, including messages left on Gordon Taylor's phone. In July 2009, it was the revelation by the Guardian of the size of this settlement that prompted us to prolong our inquiry into Press standards, privacy and libel. During the course of our current investigation, we have taken a substantial amount of evidence on the process by which the settlement was arrived at, which we discuss at length in this chapter. A summary timeline is printed here for ease of reference:[136]

  • Summer 2007 Before the emergence of the transcripts of voicemails taken from Gordon Taylor's phone that are now known as the 'for Neville' e-mail, Gordon Taylor had asked for £250,000 to settle his claim out of court. Julian Pike, the solicitor from Farrer & Co acting for NGN in the claim, said that "over the summer of 2007, the view we had of the case was that it was so weak that it ought to be struck out".[137] In an internal briefing note, Tom Crone stated that "Taylor served a full pleaded claim on us which did not seem to be supported by any evidence and we filed a defence denying any involvement in accessing or making use of information from his voicemails". [138]
  • 1 November 2007 In response to separate requests, Farrer & Co and Gordon Taylor's lawyers were told by the Metropolitan Police that the 'for Neville' e-mail existed. Julian Pike said that "they did not give it to us at that stage; they simply described it very briefly".[139]
  • April 2008 Farrer & Co, NGN and the solicitors acting for Gordon Taylor saw the e-mail. Following disclosure of the 'for Neville' e-mail, Gordon Taylor asked for £1 million in settlement plus costs.
  • May 2008 On behalf of NGN, Farrer & Co made an oral offer of £50,000 in addition to costs and other (unspecified) undertakings. Gordon Taylor rejected this offer.
  • May 2008 Farrer & Co offered £150,000 plus costs and undertakings. The offer was made under Part 36 of the Civil Procedure Rules. Gordon Taylor rejected the offer and Mark Lewis, who was acting on behalf of him for George Davies LLP, stated that he was not interested in negotiation and wanted to take the case to trial.
  • 24 May 2008 Tom Crone sent a briefing note to Colin Myler setting out the facts of the case,[140] and summarising the disclosures obtained by Gordon Taylor's lawyers, including a list of the News of the World journalists implicated in illegal activities in Operation Motorman and, relating to his particular case, the 'for Neville' email. The memorandum was intended to brief Colin Myler ahead of the editor speaking to James Murdoch.
  • 24-27 May 2008 Farrer & Co advised NGN to seek the advice of Michael Silverleaf QC on the potential level of damages that would be awarded by the court if the case went to trial.
  • 27 May 2008 Colin Myler spoke to Julian Pike about the case and problems at the News of the World. The note of this conversation suggests that a meeting or conversation between Colin Myler and James Murdoch took place at which the Gordon Taylor case was discussed.[141]
  • 2-3 June 2008 Julian Pike spoke to Michael Silverleaf QC on 2 June.[142] An opinion was produced the next day, which stated, inter alia, that the disclosures obtained by Gordon Taylor's team showed that there "is a powerful case that there is (or was) a culture of illegal information access" used at NGN and "my view is that the court might award a sum at any level from £25,000 to £250,000 or possibly even more, although I think this extremely unlikely. My best guess is that the award will be either about £100,000 or about £250,000 depending upon the personal reaction of the judge who hears the claim. These are to my mind the sorts of figure which are likely to commend themselves to a judge trying to reflect both disapproval and deterrence".[143] NGN was advised by Mr Silverleaf QC to increase the Part 36 offer to £250,000, the amount originally sought by Gordon Taylor.
  • 3 June 2008 Acting on behalf of NGN, Tom Crone instructed Farrer & Co to increase the Part 36 offer to £350,000, a significantly higher amount than advised. The offer to Gordon Taylor was made by Julian Pike through Jessica Kraja of George Davies LLP.
  • 6 June 2008 Gordon Taylor rejected the offer, Mark Lewis stating that he "wanted to be vindicated or made rich".[144] In response it was agreed to extend the period in which Gordon Taylor had to accept the Part 36 offer and that NGN would accede to some of his other requests.
  • 7 June 2008 Colin Myler e-mailed James Murdoch with an "update on the Gordon Taylor (Professional Football Association) case", stating that "unfortunately it is as bad as we feared". James Murdoch responded to the e-mail within three minutes of receiving it.[145]
  • 10 June 2008 James Murdoch met with Tom Crone and Colin Myler, who sought his authority to increase the offer to Gordon Taylor. That authority was given.
  • June 2008. "After further negotiations, final terms were agreed, including a payment of £425,000 in damages plus costs and the provision of undertakings and an affidavit".[146]

The settlement amount

109.  The settlement with Gordon Taylor eventually cost NGN approximately £700,000, of which £425,000 represented an amount for damages. It is difficult to set this within its context because privacy actions for unpublished stories were unprecedented at the time. Julian Pike told us that "there was no like case here [...] and it was all happening before Mosley, when there was a ceiling".[147] Nonetheless, the amount does seem very high when it is set in the context of advice from Michael Silverleaf QC that "a court might award a sum at any level from £25,000 to £250,000, or possibly even more, although I think this extremely unlikely".[148] It has been suggested on numerous occasions that NGN paid over the odds to settle the case because the company had something further to hide. This supposition is certainly reinforced by the contents of the Tom Crone briefing note to Colin Myler of 24 May 2008[149] and counsel's opinion from Michael Silverleaf QC of 3 June 2008[150] (both of which were only disclosed to us during this inquiry). Mark Lewis certainly thought that NGN were acting suspiciously during the negotiations:

Tom Crone came to see me in Manchester. That was the giveaway—that there was something more to it—and that is what led to the £250,000 offer. By way of explanation, I had at that stage been doing the job for 17 years. I had had numerous negotiations with Tom Crone over that period, and he had never once left Wapping. All of a sudden he was getting on a train to come and see me in Manchester. I knew that there was something more to it.[151]

He later added that "the most obvious thing to do would have been to pay £12,000 or so to settle without any admission of liability, to say that the phone was not hacked".[152]

110.  Julian Pike and News International have provided several alternative explanations for the high settlement amount:

a)  The lack of precedent: Michael Silverleaf QC stated in his advice to NGN that "there are no precedents for awards of damages in such cases and analogies with other causes of action are unhelpful".[153]

b)  The desire to avoid the risk of expensive litigation.[154]

c)  The context in which negotiations took place: Julian Pike told the Committee that "back in 2007, when Gordon Taylor had no evidence to support his case, he demanded £250,000. Having then received evidence which supported his case, it was obvious that he was not going to settle the case for less than he had demanded when he had no evidence, so immediately you are starting from a point that he was not going to resolve the case for less than £250,000. [...] He demanded £1 million, so we were negotiating against that sort of backdrop".[155] On the other hand, Mark Lewis told the Committee that "the idea that the parameters for negotiations were set by what I had asked for in the first place is just nonsense. It is quite conceivable that I could have been wrong. Of course I was wrong, in terms of the measure of damages for a privacy action for something that had not been published. There was no way that that case was worth that amount, but I was negotiating".[156]

d)  Part 36 of the Civil Procedure Rules: An offer made under Part 36 would have given the defendant protection in respect of the risk of paying the claimant's costs should the claim succeed but not reach the amount of the Part 36 offer. Julian Pike explained that "I was instructed to offer more by way of a Part 36 on 3 June 2008. That is a perfectly standard approach. You would offer more than you think the case is worth, because it gives you greater protection, in terms of the Part 36 regime, with regards to costs".[157]

e)  The desire to prevent further actions being taken: Tom Crone's briefing note to Colin Myler stated that "Gordon Taylor is the only one of the victims to issue civil proceedings (though others could still do so)".[158] He told us in oral evidence that "if it all went public with Mr Taylor, we were at risk of four other litigants coming straight in on top of us, with enormous cost".[159] In an e-mail to Colin Myler of 7 June 2008, he amplified this, noting that "there is a further nightmare scenario in this, which is that several of those voicemails on the Ross Hindley e-mail were taken from [Joanne Armstrong's] phone [...] we can also assume she will have seen this evidence and is waiting to see how Taylor's case concludes before intimating [sic] her own claim".[160]

f)  Confidentiality: Michael Silverleaf QC's opinion noted that "to have this paraded at a public trial would, I imagine, be extremely damaging to NGN's public reputation".[161]


111.  Ever since the Gordon Taylor settlement became public, it has been suggested that the amount of the settlement was unusually high in order to allow NGN to buy confidentiality. The opinion provided by Michael Silverleaf QC made it quite clear that confidentiality was, in his opinion, a factor in determining how best to proceed.[162] Tom Crone's briefing note for Colin Myler's meeting with James Murdoch on 27 May 2008 stated that, in making the opening offer of £150,000 to Gordon Taylor, "we thought it unlikely he would take it but hoped it would open negotiations which would lead to a confidential settlement".[163]

112.  Both in 2009 and in 2011 witnesses from News International asserted that confidentiality was a factor on both sides of the Gordon Taylor settlement. Tom Crone told the Committee that "they [Gordon Taylor's lawyers] would certainly assume that we would want confidentiality and I think it is fair to say we assumed they wanted confidentiality".[164] However, Mark Lewis distinguished between Gordon Taylor's claim, which "sought an injunction to stop the repetition of information which was obtained illegally" and the insertion of an additional condition to prevent knowledge of the settlement being made public: "That was not suggested by Gordon Taylor or by me on behalf of Gordon Taylor [...] that was put forward as part of the settlement offer".[165] Indeed, accounts of a conversation between Julian Pike and Mark Lewis suggest that, on behalf of Gordon Taylor, Lewis was using NGN's desire for confidentiality as a weapon in the negotiations. Lewis told Pike that Gordon Taylor "would rather have to pay some of NGN's costs and have NGN publicly hung out to dry than settle for a sum, in his view, which was too low".[166]

113.  Initially News International denied that confidentiality had been a financial element in the settlement offer. On 21 July 2009, our predecessors asked Colin Myler and Tom Crone whether or not the size of the payment was greater in order that the proceedings should be kept secret. Colin Myler said: "Absolutely not as far as I am aware" and Tom Crone said: "No".[167] On 19 July 2011, we asked James Murdoch the same question and he replied: "No, not at all. Out-of-court settlements are normally confidential. I do not know of many out-of-court settlements that are not kept confidential, although I am sure there are some. There was nothing about confidentiality".[168]

114.  In our 2010 Report, we were very sceptical about News International's evidence in this respect, however, and it has subsequently become clear that confidentiality did have an impact on the eventual settlement amount. By the time that he supplied written evidence in August 2011, James Murdoch had altered his stance:

I did not know at the time or when I gave my evidence that any part of the amount of the Taylor settlement specifically related to the confidentiality aspect of the settlement. Since I gave this response, I have been informed that confidentiality was a factor in determining the amount of the settlement payment; however, I was not party to those discussions nor was it my motivation in agreeing to settle the case which, as described above, was to avoid continuing to litigate a case which I understood we were bound to lose.[169]

115.  This later account is supported by Julian Pike's attendance notes from a telephone call with Jessica Kraja of George Davies LLP on 3 June 2008, when an offer of £350,000 was made to Gordon Taylor on the understanding that "the client was willing to pay something more—not a stratospheric amount—to resolve it this week on the basis that drew a line in the sand and that the deal was confidential".[170]

116.  In oral evidence in September 2011, we had an extended exchange about confidentiality with Tom Crone. He did not accept that the evidence on confidentiality he had given the Committee in 2009 had been misleading, distinguishing between "secrecy", which he had explicitly denied in 2009, and "confidentiality", which he had told the Committee comprised a clause—though not an amount of money—in the settlement.[171]

117.  The amount of the eventual settlement that related to the confidentiality requirement has proved difficult to quantify. Farrer & Co's written evidence stated that "an element of the sum paid to Mr Taylor would have reflected the agreement to keep the matter confidential but no precise figure was attributed to that element that we are aware of".[172] When pressed on this in oral evidence, Julian Pike said that "the best you could do is say that some of the difference between £350,000 and the amount paid, which was £425,000, would relate to confidentiality".[173] Mark Lewis, who acted on behalf of Gordon Taylor, has suggested that confidentiality represented more than the £75,000 maximum suggested by Julian Pike. For example, in oral evidence, he told the Committee that "they did not want it to get out. They had paid my costs in full. They didn't knock a penny off. That is unheard of in litigation".[174]

118.  News International have told us that, contrary to the evidence previously supplied, the settlement made to Gordon Taylor was higher as a result of the confidentiality requirement sought by NGN. It is not necessary to quantify the amount that related to confidentiality. Keeping the settlement out of the public eye was absolutely central to the agreement. Tom Crone was involved in the negotiations and knew that NGN's desire for confidentiality had increased the settlement amount. In seeking to give a counter-impression when questioned about this, Tom Crone misled the Committee.

119.  We have been given a number of reasons why the settlement made with Gordon Taylor should have totalled as much as £700,000. Centrally, however, this huge amount was paid over a story which was never actually published and was clearly done to buy silence, avoid further damaging publicity and to avert further civil claims over phone-hacking—fruitlessly, as it turned out. The very fact of settling at such a high level indicates that some senior people at News International were aware that Gordon Taylor had a case to be answered on phone-hacking and that the single 'rogue reporter' claim was untrue.

The 'for Neville' email

120.  In 2009, a number of senior executives from News International lined up to tell the Committee that, as far as they were concerned, Clive Goodman had been a single 'rogue reporter', entirely responsible for phone-hacking at the News of the World. Les Hinton, former Executive Chairman of News International, said that "there was never any evidence delivered to me that suggested that the conduct of Clive Goodman spread beyond him".[175] Andy Coulson, former Editor of the News of the World, said that "if a rogue reporter decides to behave in that fashion I am not sure that there is an awful lot more I could have done".[176] His successor Colin Myler, the newspaper's editorial lawyer Tom Crone and its former managing editor Stuart Kuttner maintained the same line—which was also repeated in evidence given to the Press Complaints Commission by Colin Myler[177] and in statements to the public at large.

121.  On 8 July 2009, Nick Davies published an article in the Guardian in which he alleged that News International had paid £700,000 in damages and costs to Gordon Taylor in relation to allegations of illegal voicemail intercepts. Six days later he disclosed to the Committee an e-mail, subsequently dubbed the 'for Neville' e-mail, which was the key piece of evidence in the Gordon Taylor case.[178]

122.  In the context of the disclosure made to the Committee by Nick Davies, the notion that any executives at News International could have continued to believe that the practice of phone-hacking was confined to a single 'rogue reporter' was as incredible to the Committee in 2009 as it is now. At the very least, it seemed that Ross Hindley—whose real name turns out to have been Ross Hall—and Neville Thurlbeck, two journalists at the News of the World, should have been aware that phone-hacking was taking place since, in June 2005, one of them, Hindley/Hall, had apparently sent an e-mail to Glenn Mulcaire which opened with the words "this is the transcript for Neville" and the other, the only person called Neville employed by the News of the World at the time, was the intended eventual recipient.[179] The e-mail contained a transcript of 35 voicemail messages. In 13 cases, the recipient of the message was "GT" (Gordon Taylor), and in 17 cases the recipient was "JA" (Jo Armstrong, Gordon Taylor's Personal Assistant).[180] The predecessor Committee stated in its Report that "no witness sought to deny that these messages had been intercepted by Glenn Mulcaire, or that they had been transcribed by Mr Hindley".[181]

123.  Tom Crone and Colin Myler had certainly seen the 'for Neville' e-mail at the time of the Gordon Taylor settlement in 2008. They told the Committee this in oral evidence.[182] Even on this simple point of fact, though, there is some confusion about dates. In 2009 Tom Crone told the Committee that, after a decision had been taken not to run the Gordon Taylor story in July 2005, "that is the last I heard of that story until the e-mail was produced in April 2008".[183] This is not true. Julian Pike was told of the existence of what "was known as the 'for Neville' e-mail on 1 November 2007, when it was referred to by the Metropolitan Police in response to an inquiry made by the Firm on 28 September".[184] When asked whether he had discussed this matter with Tom Crone in November 2007, Julian Pike said that he had.[185] Thus, although he did not actually see the 'for Neville' e-mail until April 2008, Tom Crone was aware five months previously of the existence of crucial evidence relevant to the Gordon Taylor case.

124.  Having seen the 'for Neville' e-mail in April 2008, Tom Crone investigated it. Apparently the News of the World's IT department found that there was no trace of the e-mail having gone "anywhere else".[186] In 2009, Tom Crone told the Committee that, as a result of his investigation, he was not aware of any evidence to prove conclusively that News of the World reporters had been involved in the hacking of Gordon Taylor's voicemail: "these are serious matters and I am not going to speculate or guess in front of this Committee. I can tell you what I asked and the information I was given and the evidence I have seen".[187] In the same session he stated categorically that "no evidence was found".[188] In 2011, Colin Myler told us that, in 2008, "there was no evidence to support anybody else [other than Clive Goodman and Glenn Mulcaire] being allegedly involved".[189]

125.  As part of his investigation, Tom Crone said he had questioned Ross Hall who "had very little recollection of it [the e-mail]" though he accepted that "he sent the transcript where the e-mail says he sent it".[190] Tom Crone did not at any point suggest to the Committee that Ross Hall had been able to offer any information about the individual who had commissioned the hacking of Gordon Taylor's voicemail. He told the Committee that he had not spoken to Ross Hall since he made his original enquiries—presumably in 2008—because "he is on a holiday": "I asked him at the outset. I asked him in detail".[191]

126.  It may be true that, after his initial conversation with Ross Hall, Tom Crone did not speak to him about the 'for Neville' e-mail again. It may also be true that, in 2008, Ross Hall had been unable to give Tom Crone any information about the individual who had commissioned the hacking of Gordon Taylor's voicemail. During this inquiry, however, we have received evidence[192] that Neville Thurlbeck had subsequently discussed the matter with Ross Hall and that he had taped the conversation. Ross Hall had been able to offer him further information: "I taped the call and it exonerated me and incriminated [a news desk] executive".[193] Neville Thurlbeck told us that this conversation with Ross Hall took place on 19 July 2009, two days before Tom Crone's appearance before the Committee. He reported that, when he tried to give Tom Crone the tape that he had made, Tom Crone didn't want it and "was unpleasant and extremely angry. He told me, 'I have to go in front of the Committee in a few days time and defend everybody. No, I don't want the bloody tape'".[194]

127.  In 2009, the Committee asked Tom Crone about the steps that he had taken to investigate Neville Thurlbeck's role in the Gordon Taylor case, given that Neville Thurlbeck was the intended recipient of the transcripts contained in the 'for Neville' e-mail. On 21 July 2009, he told the Committee that Neville Thurlbeck's "position is that he has never seen that e-mail, nor had any knowledge of it".[195] When asked to affirm his statement that the "transcript, which was sent in an e-mail to Glenn Mulcaire, as far as you are aware, never went beyond Glenn Mulcaire", he replied: "I cannot find any evidence that it did",[196] although he later noted that Neville Thurlbeck had received a "briefing" on Gordon Taylor from the "London news desk". Tom Crone's extended account of his conversation with Neville Thurlbeck was as follows:

He says that he was brought into the relevant editorial project, the story, at the end of the story and his task was to go and knock on the door of one of the story subjects, which was either in Blackburn or Manchester, and put the essence of the story to the person in order to get their comments, which is mostly standard practice in what we do. In order to conduct that task he says he was briefed; and when I spoke to him the first time he said he was briefed by one of our executives, Greg Miskiw who was then based in Manchester; and he also said it was very much a Greg Miskiw/Glenn Mulcaire project. He subsequently came back to me and said that he had refreshed his memory and in fact it could not have been Greg Miskiw, because Greg Miskiw left the News of the World on 30 June 2005, which was the day after that e-mail was created. He had worked out his redundancy package, I think, a week or two weeks before that, and he was no longer on active duty. Neville Thurlbeck told me that his refreshed memory told him that in fact the briefing that he received was from the London news desk.[197]

128.  We now have evidence to suggest that Tom Crone's 2009 account of his conversations with Neville Thurlbeck was misleading. In an e-mail sent by Tom Crone to Julian Pike on 24 May 2008, which was submitted as evidence by Farrer & Co, Tom Crone wrote "I went thru the new Taylor docs with [redacted] today. [Redacted] now remembers the transcripts... he was give [sic] the story only at the end to do the showdown and write it up... Glenn Mulcaire had been dealing with Greg Miskiw for months on it before that".[198] Similarly, in a memorandum prepared by Tom Crone and attached to an e-mail that he sent to Colin Myler and Julian Pike on 24 May 2008, Tom Crone noted that the 'for Neville' e-mail "proves we actively made use of a large number of extremely private voicemails from Taylor's telephone".[199] Michael Silverleaf QC's opinion states that "at least three NGN journalists" had been involved in Glenn Mulcaire's "illegal researching into Mr Taylor's affairs".[200] All three of these documents prove that, in direct contradiction to statements made to the Committee a year later, in May 2008 Tom Crone had evidence that Neville Thurlbeck and at least two other journalists had seen the voicemail transcripts and that he believed that this amounted to proof that the company ("we") had "actively" made use of Gordon Taylor's voicemail.

129.  Evidence submitted by Neville Thurlbeck asserts that the account given to the Committee in 2009 by Tom Crone and Colin Myler was misleading in other particulars as well. He told us that on 11 and 15 July 2009 he had furnished Tom Crone and Colin Myler with evidence that strongly suggested the involvement of a "news desk executive" in phone-hacking.[201] Neville Thurlbeck commented in his written evidence that "they were in possession of all this knowledge and they failed to disclose it to the Committee".[202] We are unable to verify Neville Thurlbeck's account because the documentary and audio evidence that he described has been passed to the Metropolitan Police as part of their investigations.

130.  In evidence, Tom Crone and Colin Myler gave repeated assurances that there was no evidence that any further News of the World employee, beyond Clive Goodman, had been involved in phone-hacking. This was not true and, as further evidence disclosed to us by the newspaper's solicitors Farrer & Co now shows, they would have known this was untrue when they made those statements. Both Tom Crone and Colin Myler deliberately avoided disclosing crucial information to the Committee and, when asked to do, answered questions falsely.

131.  Tom Crone told us that he pursued the matter of the 'for Neville' e-mail with Neville Thurlbeck in April 2008, when the e-mail was first disclosed. Indeed, a redacted e-mail sent by Tom Crone to Julian Pike on 24 May 2008 implies a recent conversation between Tom Crone and Thurlbeck.[203] The newspaper's former Chief Reporter's written evidence did not go into the events of 2008 in any detail but did mention a meeting with Tom Crone and Colin Myler on 11 July 2009, at which Thurlbeck states that he was told that he might lose his job on the basis of the existence of the e-mail.[204] The significance of 11 July 2009 is that, whilst it is over a year after the 'for Neville' e-mail first emerged, it is only three days after the Gordon Taylor settlement became public knowledge because of the appearance of a story in the Guardian.[205]

132.  The dates of the meetings between Tom Crone and Neville Thurlbeck strongly suggest that disciplinary action against Neville Thurlbeck was only considered when it became apparent that the contents of the 'for Neville' e-mail would become public knowledge. This is also hardly the approach of a company concerned to search out any wrongdoing and discipline the perpetrators.


133.  There is a marked difference between the way that the significance of the 'for Neville' e-mail was presented to the Committee by witnesses from News International, both in 2009 and 2011, and the way that it was discussed within the company.

134.  In evidence to the Committee, Tom Crone and Colin Myler sought to maintain two apparently contradictory positions:

  • On the one hand they maintained that the 'for Neville' e-mail was highly significant. They described it as "a piece of evidence that meant we had to settle the Gordon Taylor case".[206]
  • On the other hand, they maintained that, since it could not be proved that Ross Hall, Neville Thurlbeck or anyone else knew that the contents of the email came from phone-hacking, it had turned out to be less than a smoking gun. Tom Crone, for example, told us that "the document wasn't evidence that the junior reporter had intercepted phone calls. It was that he had transcribed, presumably from a tape or a disc, a number of voicemail messages. Therefore, it meant that evidence of Glenn Mulcaire's illegal activity in accessing Gordon Taylor's voicemail messages had passed through our office. Therefore, News of the World was implicated, certainly at least with knowledge that Glenn Mulcaire had done that".[207]

135.  Internal discussions of the significance of the 'for Neville' e-mail were more candid than Tom Crone and Colin Myler in giving evidence to the Committee. A briefing note prepared by Tom Crone and sent to Colin Myler on 24 May 2008 described the document as "an e-mail from a News of the World reporter to Glenn Mulcaire enclosing a large number of transcripts of voicemails from Taylor's telephone". The briefing note observed—rather more frankly than Tom Crone's evidence to the Committee—that "this evidence, particularly the e-mail from the News of the World is fatal to our case".[208] Far from the e-mail merely being evidence of "knowledge" of Glenn Mulcaire's activities having simply "passed through" the newspaper's offices, Tom Crone's internal briefing went on to elaborate:

Our position is very perilous. The damning email is genuine and proves we actively made use of a large number of extremely private voicemails from Taylor's telephone in June/July 2005 and that this was pursuant to a February 2005 contract, i.e. a 5/6-month operation. He has no evidence that the News of the World continued to act illegally after that but he can prove Glenn Mulcaire continued to access his mobile until May 2006 (because Glenn Mulcaire pleaded guilty to it).[209]

136.  We know from evidence received from Farrer & Co that not only did Tom Crone form an opinion as to the "damning" nature of the 'for Neville' e-mail, but that this view was endorsed and amplified by an independent opinion commissioned from Michael Silverleaf QC. This opinion, sent to News International on 3 June 2008, stated that "the material obtained from the Metropolitan Police has disclosed that at least three NGN journalists (Greg Miskiw, [redacted] and Ross Hindley) appear to have been intimately involved in Mr Glenn Mulcaire's illegal researching into Mr Taylor's affairs".[210] The opinion continued:

it seems to me, as it seems to both my instructing solicitors and junior counsel, that [News Group Newspapers]'s prospects of avoiding liability for the claims of breach of confidence and invasion of privacy made by Mr Taylor are slim to the extent of being non-existent. NGN must be vicariously liable for the conduct of its employees unless they were acting on a frolic of their own. The latter claim appears on the information now available to be impossible to establish. [...] In the light of these facts there is a powerful case that there is (or was) a culture of illegal information access used at NGN in order to produce stories for publication. Not only does this mean that NGN is virtually certain to be held liable to Mr Taylor, to have this paraded at a public trial would, I imagine, be extremely damaging to NGN's public reputation.[211]

137.  Michael Silverleaf QC's opinion explicitly demolished the lone 'rogue reporter' hypothesis:

[W]hen Mr Mulcaire was sentenced for the offences noted above, it seems to have been accepted by the prosecution and the court that his contract with NGN to provide research services was for legitimate activities and a confiscation order was made only in relation to additional cash payments made to him by Mr Goodman for the particular activities relating to the members of the Royal Household. The recently disclosed information seems to throw that acceptance into considerable doubt: if the trial proceeds, there would seem to be little doubt that Mr Taylor's case will be advanced on the basis that Mr Mulcaire was specifically employed by NGN to engage in illegal information gathering to provide the basis for stories to appear in NGN's newspapers.[212]

138.  Michael Silverleaf QC's conclusion regarding the 'culture of illegal information access' also rested on disclosures Gordon Taylor's team had gained regarding the activities of News of the World journalists from the Information Commissioner's Operation Motorman investigation into use of another private detective. These, Michael Silverleaf QC concluded, 'on the face of it, required illegal access to data sources.' On the Motorman evidence, Tom Crone's memorandum to Colin Myler was even more explicit: 'A number of those names are still with us and some of them have moved to prominent positions on NoW and The Sun. Typical infringements are 'turning round' car reg. and mobile phone numbers (illegal).'

139.  We know that Tom Crone was sent a copy of Michael Silverleaf QC's opinion on 3 June 2008.[213] Tom Crone said that he was "fairly certain" that Colin Myler had seen a copy.[214] Colin Myler's account stated that he probably had not seen a copy: "I do not believe that I read a copy of Michael Silverleaf QC's opinion. Tom Crone and Julian Pike had instructed Counsel to provide an opinion and it was provided to them. However, in advance of the meeting with Mr Murdoch on 10 June 2008, Mr Crone briefed me that the substance of Counsel's firm advice was to settle Mr Taylor's claim".[215] We do know that Colin Myler knew about the seriousness of the situation, should these matters be aired in public. In addition to receiving Tom Crone's frank memorandum of 24 May 2008, three days later he had a direct telephone conversation with Julian Pike which referred not only to Clive Goodman's "sprayed around allegations, horrible process,"[216] but to investigations at the newspaper into three individuals and concerns about evidence previously given by Les Hinton to our predecessors and assurances which had also been given to the Press Complaints Commission.[217] None of this came to light in evidence either he, or Tom Crone, gave to the Committee, but only after their appearances and as a result of follow-up questions asked by the Committee to Farrer & Co, following the appearance of Julian Pike. During his appearance on 19 October 2011, indeed, Mr Pike made it clear that he knew their evidence in 2009 to have been untruthful the moment it was given:

Paul Farrelly: At what stage did it become clear to you that the line that we were being given was not the truth?

Julian Pike: It would have been at the point it was given to you.[218]

140.  When giving evidence to the Committee, Tom Crone and Colin Myler made two assertions that were contradictory. They maintained that, whilst the 'for Neville' e-mail had meant that the company had had to settle the Gordon Taylor case, it had only been evidence that "knowledge" of Glenn Mulcaire's phone-hacking activities had "passed through" the newsroom. Tom Crone's internal briefing and Michael Silverleaf QC's opinion on the Gordon Taylor case clearly demonstrate that they believed that the 'for Neville' e-mail was evidence of far more than this. In his own internal briefing, Tom Crone described it as being "fatal" to the case and "damning". He also stated that it proved that "we actively made use of a large number of extremely private voicemails from Gordon Taylor's telephone in June/July 2005 and that this was pursuant to a [...] contract". Colin Myler was sent that briefing and subsequently discussed evidence of wider involvement and problems in the newsroom with the newspaper's solicitors. We now know that Tom Crone had also had sight of counsel's opinion from Michael Silverleaf QC which referred to "a powerful case that there is (or was) a culture of illegal information access used at NGN in order to produce stories for publication". If Colin Myler had not read the opinion himself, he was certainly briefed on its contents. Yet in giving evidence to the Committee both Tom Crone and Colin Myler attempted to downplay the significance of the 'for Neville' e-mail and made no mention of the legal opinion that they had obtained. In itself this amounts to an attempt to mislead the Committee about the import of a crucial piece of evidence and the failure of the company to act upon it.

141.  It is clear, furthermore, from Tom Crone's briefing to Colin Myler and from Michael Silverleaf QC's opinion that the impetus to settle the Taylor affair was not simply to cover up the extent of phone-hacking at the newspaper, but was also driven by the bad publicity that would result from public disclosure of illegal activity by journalists at the News of the World that had been uncovered by the Information Commissioner during Operation Motorman. Again this imperative suggests the approach of the company was to cover up wrongdoing, rather than take disciplinary action to prevent it happening.


142.  As News International's executive chairman at the time, James Murdoch authorised the payment of the Gordon Taylor settlement but claimed to the Committee that he was unaware of the wider significance of the evidence in that case at the time that he did so. When he first gave evidence to the Committee, on 19 July 2011, he claimed that: "I can tell you that the critical new facts, as I saw them and as the company saw them, really emerged in the production of documentary information or evidence in the civil trials at the end of 2010".[219] This was a reference to disclosures obtained by lawyers in one of the further civil cases, that of the actress Sienna Miller, as News International's then Chief Executive Rebekah Brooks made clear. Giving evidence on the same date after the Murdochs, she amplified the company's position: "As you have heard in the last few hours, the fact is that since the Sienna Miller civil documents came into our possession at the end of December 2010, that was the first time that we, the senior management of the company at the time, had actually seen some documentary evidence actually relating to a current employee."[220]

143.  Soon after this, Colin Myler and Tom Crone issued a public statement rebutting James Murdoch's claim not to have seen the 'for Neville' email in 2008 revealing that the practice of phone-hacking had spread beyond a single 'rogue reporter' at the News of the World.[221] They followed their statement up with written and oral evidence to the Committee.

144.  James Murdoch's evidence was categorical and unwavering: he "was given sufficient information to authorise the increase of the settlement offer that had been made, or the offers that had been made, and to authorise them, or Mr Crone, to go and negotiate that settlement, but I was given no more than that".[222] His written evidence explicitly noted that he was not shown a copy of the 'for Neville' e-mail:

Prior to the meeting of 10 June 2008, I do not recall being given any briefing nor do I recall either Mr Crone or Mr Myler referring to, or showing me, any documents during the meeting. I recall being told by them when we met that the civil litigation related to the interception of Mr Taylor's voicemails to which Glenn Mulcaire had pleaded guilty the previous year and that there was evidence that Glenn Mulcaire had carried out this interception on behalf of the News of the World. It was for this reason that Mr Crone and Mr Myler recommended settlement. I was told that external counsel agreed with this. I was advised that there was no benefit in continuing to litigate the case and that we would lose. I did not ask for any evidence—I was content to rely upon Mr Myler and Mr Crone. Let me reiterate that I have no recollection of any mention of 'Thurlbeck' or a 'for Neville' email. Neither Mr Myler nor Mr Crone told me that wrongdoing extended beyond Mr Goodman or Mr Mulcaire. There was nothing discussed in the meeting that led me to believe that a further investigation was necessary.[223]

145.  Initially Tom Crone could not remember whether or not he had actually shown a copy of the 'for Neville' e-mail to James Murdoch:

My invariable practice when seeking authority for settlements would be to take a file of the relevant documents with me to such meetings so that, if asked or if necessary, I could illustrate whatever I was saying by reference to something in writing. Since the 'for Neville' document was the sole reason for settling and, therefore, for the meeting, I have no doubt that I informed Mr Murdoch of its existence, of what it was and where it came from. I do not recall if I produced it and showed him a copy of it.[224]

146.  He subsequently remembered a reason why he might not have produced a physical copy of the document at the meeting: "I had to sign a written undertaking, which was required either by the Metropolitan police or by Gordon Taylor's lawyers, or possibly by both, that I could not make any copy of the document. I was very restricted in what I could say about it to other people".[225]

147.  There is a discrepancy between the accounts of James Murdoch on the one hand and Colin Myler and Tom Crone on the other as to the manner in which the 'for Neville' e-mail was explained to James Murdoch:

a)  James Murdoch insisted that the Gordon Taylor case "was brought to me as a case simply that would be lost. It was described briefly to me that there was evidence of the voicemail interception transcript—the transcript of the voicemail interception—that proved that it was for or on behalf of the News of the World, that it was open and shut that the company would lose it, and that it was important to settle the case, because litigating the case would be costly, and it was seen as a matter of the past. It was seen more as the end of something that had been going on before, as opposed to the beginning of something new".[226]

b)  Tom Crone initially insisted that the significance of the e-mail was made plain to James Murdoch. He told us that "I would have explained the background to the litigation. I would have explained the stance we had taken up to the emergence of this document, and then I would have explained what this document was and what it meant".[227] Colin Myler's written evidence stated that he agreed with the evidence provided by Tom Crone.[228]

148.  We repeatedly tested the competing accounts that we had been given. It seemed unlikely to us that James Murdoch would have authorised settling a civil case for such a large sum without questioning the basis on which he was being asked to do so. On 10 November 2011, we asked James Murdoch "is this the way things are normally settled in your business—people come to you and say, 'We have to pay out this money,' and, rather than asking why, you just say, 'Okay'?" and he responded "no. […] reasons were given to me around the relevant evidence in the case, not in relation to wider phone hacking, but in relation to this case, and it was very strong advice that the company would lose the case".[229] When pressed later in the session about why he had accepted advice from Tom Crone and Colin Myler without question, he replied that it had been "the strong recommendation of very experienced counsel, who had some 20-plus years as counsel of News Group Newspapers. A new editor had come in and had a fresh look at all of these issues, I had assumed. They made a strong recommendation, and I followed it".[230] He was also asked how he could have been under the impression that phone-hacking had not spread more widely than Clive Goodman, given that Clive Goodman was Royal Editor at the News of the World and Gordon Taylor was not royal nor connected to the Royal Family; indeed, he "was not charged with Gordon Taylor; he was charged with the royal accessing".[231] He responded that "the details of the specific voicemail interception involving the Royal Family, and the fact that Mr Goodman was the Royal Reporter—those things were not top of mind for me".[232]

149.  James Murdoch did admit that mistakes had been made. He explained to the Committee that "the company, and I am sorry for this, moved into an aggressive defence too quickly, and it was too easy for the company to do that".[233] He also told the Committee that "in hindsight, today, I look back at the reaction to the Committee's report [Press standards, privacy and libel] and think that would be one turning point, if you will, that the company could have taken".[234] His father indicated that one of the mistakes made was the trust placed in senior employees by both him and his son. He told us that those responsible were "the people that I trusted to run it, and then maybe the people they trusted".[235] These regrets notwithstanding, James Murdoch's evidence was firm that it had not been made clear to him that there was a possibility that phone-hacking had involved more than one 'rogue reporter' and needed addressing more widely at the News of the World.

150.  Tom Crone was authorised to settle cases for amounts up to a £10,000 limit.[236] The evidence from Farrer & Co shows that Julian Pike had made settlement offers to Gordon Taylor's solicitor in excess of £10,000 before James Murdoch's authorisation had been obtained. James Murdoch told us that "Mr Crone and Mr Myler had already attempted to settle this case at a number of levels before they ever came to me—at a variety of levels, some of which appear to be above their authority".[237] He later amplified this remark: "it appears that Mr Crone took it upon himself to authorise a settlement of £50,000, and then £150,000. I certainly did not authorise that, nor the increase to £350,000 that came later".[238] Neither Tom Crone nor Colin Myler suggested that James Murdoch had authorised the earlier amounts so, despite the fact that the payments exceeded Tom Crone's authorisation limit, they cannot be treated as evidence of James Murdoch's direct involvement in the negotiation process.

151.  Some of the evidence we received from third parties supported James Murdoch's account. Neville Thurlbeck surmised in written evidence that "if Mr Murdoch had been told of the existence of the email, he would have asked questions of me. He didn't".[239] Similarly, a note taken by Julian Pike of a telephone call that he had with Colin Myler on 27 May 2008 finished with "Les no longer here—James wld say get rid of them—cut out cancer".[240] The conditional statement "James wld say" shows that Colin Myler was indicating the reaction James Murdoch would have if he knew: Colin Myler thought that, if James Murdoch had been aware of a problem, he would have insisted on cutting out "the cancer" and dismissing those involved. James Murdoch himself suggested this interpretation, telling us on 10 November that the note "shows that perhaps [Colin Myler] was worried about raising these issues with me, because I would have said, 'get rid of them all', and I would have said 'Cut out the cancer'—i.e. people who are suspected of wrongdoing, we would pursue and hold accountable. That was the way that I would approach it".[241] This is not what happened at the conclusion of the Gordon Taylor case but nothing definitive can be concluded from this. It can support, indeed, a number of interpretations: that James Murdoch was not fully informed about the extent of wrongdoing; that both Neville Thurlbeck and Colin Myler were wrong about the hard line that James Murdoch might have taken; or that he was informed, but his priorities lay elsewhere and he left Colin Myler to deal with the issue as the new editor of the newspaper.

152.  We gave Tom Crone and Colin Myler numerous opportunities to explain that they had either shown James Murdoch the 'for Neville' e-mail or made explicit its implications for the company. They failed to state directly that they had done either of these things. Indeed, on 6 September 2011 there was a lengthy exchange when we asked both witnesses explicitly to state for the record that they had made sure in June 2008 that James Murdoch understood the wider significance of the document. In response, Tom Crone could only tell us that "he was made aware, as I have said, of the document".[242] He added that he had "told [James Murdoch] about the document, and the effect of that document clearly is that it goes beyond Clive Goodman". Even after a lengthy thread of questions designed to elicit an answer on this specific point, Tom Crone would not say that he had made the effect of the 'for Neville' e-mail explicit to James Murdoch.[243]

153.  When asked whether there had been any ambiguity surrounding the significance of the document in June 2008, Colin Myler responded that:

I think there is no ambiguity in the significance of the document that the police had provided to Mr Taylor's legal team. Outside senior counsel, outside junior counsel, our outside lawyers, and Mr Crone all agreed that the significance of this document meant that there were essentially two choices: either settle the case or fight the case, and fighting the case would have meant going to a trial. So, in that respect, I do not believe there was any ambiguity. The significance of the document being produced was, I think, quite clear, to be fair.[244]

154.  That particular answer could be considered to be evasive: Colin Myler was willing to assert that the significance of the e-mail was understood insofar as it related to the Gordon Taylor case, but not in terms of its wider ramifications for the company. He was also willing to state that he was certain that various third parties had understood the document's significance, but not James Murdoch. Indeed, he later stated that "I cannot speak for Mr Murdoch's recollection of this, and I cannot speak for Mr Murdoch's view that he took away from that meeting".[245]

155.  Under oath at the Leveson inquiry, however, Tom Crone insisted he had indeed shown James Murdoch the 'for Neville' e-mail: 'I'm pretty sure I held up the front page of the e-mail….I'm also pretty sure that he already knew about it.'

156.  At the inquiry, Tom Crone also went further. Before Rhodri Davies QC, counsel for News International, cut the interrogation short, on the grounds that the company had not waived legal privilege, Tom Crone said that the Silverleaf opinion had also been discussed:

I think I certainly took a copy and possibly spare copies of the opinion. I probably took the pleadings, because that certainly is what I would normally do. And I think I took a copy plus spare copies of the front page of the 'For Neville' email.

What was certainly discussed was the e-mail. Not described as 'for Neville', but the damning email and what it meant in terms of further involvement in phone-hacking beyond Goodman and Mulcaire. And what was relayed to Mr Murdoch was that this document clearly was direct and hard evidence of that being the case. At the same time, I think I must have referred at some stage to Operation Motorman, because that would explain the quite hard references in senior counsel's opinion.[246]

157.  In testimony to the Leveson inquiry, James Murdoch also said of the conversation with Colin Myler on 27 May 2008 (which neither of them could recall, but which was referred to in the file note made by Julian Pike):

The note suggests that the conversation was brief. It records the outcome of the discussion as being 'wait for the silks [sic] view', so it is likely that, if the conversation took place, I would have suggested postponing any further discussion until we had advice from the QC. This is consistent with my recollection that the decision was based on advice from external counsel.[247]

158.  Again, the fact that James Murdoch was awaiting the Silverleaf opinion proves nothing definitively one way or the other as to what he was shown, or of what he was made aware. It would be surprising in the circumstances, however, if it had not been discussed in some form. Whatever the reliability of other evidence given by Tom Crone, it is also unlikely that an in-house lawyer would go into such a meeting empty-handed. What we are being asked to believe by James Murdoch, however, was that he was neither told, nor asked to see, the essentials of the opinion he was waiting for. Once again, his and Tom Crone's accounts regarding the Silverleaf opinion are contradictory.

159.  Tom Crone has given conflicting accounts as to whether he showed James Murdoch the 'for Neville' email, while James Murdoch has been consistent in insisting that he did not see a copy of the document until he saw the redacted version published in the Committee's 2010 Report on Press standards, privacy and libel. Whilst this may seem surprising in itself—as the email had been widely published during the summer of 2009—it is possible that he did not see a copy at the time the Gordon Taylor settlement was agreed. Given the conflicting accounts, however—and the reliability of evidence we have been given previously by witnesses from News International—the reality is that we cannot come to a definitive conclusion, one way or the other.

160.  Surprising as it may seem that James Murdoch did not ask to see this crucial piece of evidence, nor the independent Counsel's opinion, his lack of curiosity—but wilful ignorance even—subsequently is more astonishing. This stretched from July 2009—when the 'for Neville' e-mail first became public—through the Committee's critical report in February 2010 and further allegations in the New York Times in September 2010, to as far out as December 2010, when disclosures in the Sienna Miller case finally led him to realise, according to his own account, that the 'one rogue reporter' defence was untenable.

161.  In 2009 Tom Crone and Colin Myler asserted that they had investigated the 'for Neville' e-mail and that there was no concrete evidence to support the allegation that journalists other than Clive Goodman had been involved in phone-hacking. If they admitted to us that in 2008 they had made James Murdoch aware of the serious implications of the e-mail, they would have had to admit to having misled the Committee. They clearly did not tell truth to us then. Though their evidence has been demonstrably unreliable in other respects, however, it does not necessarily follow that they are not telling the truth with respect to James Murdoch and the 'for Neville' e-mail and Silverleaf opinion. We simply cannot adjudicate with confidence either way and suspect, as with so much to do with the phone-hacking saga, that more light will be shone on this as more documents and evidence emerge in the future. We may well revisit our conclusions in this Report if more information, currently subject to criminal proceedings or subject to legal privilege which has not been waived, is disclosed.

162.  James Murdoch told us that, with the benefit of hindsight, News International should have taken note of the Committee's 2010 Press standards, privacy and libel Report and investigated the provenance of the 'for Neville' e-mail more thoroughly. He also expressed regret that the company had moved to an "aggressive defence" so quickly. We would add to these admissions that, as the head of a journalistic enterprise, we are astonished that James Murdoch did not seek more information or ask to see the evidence and counsel's opinion when he was briefed by Tom Crone and Colin Myler on the Gordon Taylor case. Even for a large company, £700,000 is a not inconsequential sum of money, and it is extraordinary that the Chief Executive should authorise its payment on the basis of such scant information. If he did, indeed, not ask to see either document, particularly the counsel's opinion, this clearly raises questions of competence on the part of News International's then Chairman and Chief Executive.

163.  There is, however, a bigger picture—and longer timeframe—that is relevant beyond the Gordon Taylor settlement. Not specifically being shown evidence, nor asking to see it, nor discussing explicitly its ramifications is not the same as not being aware. From the conflicting accounts, and despite our surprise, we cannot say whether in 2008 James Murdoch was aware of the significance of the Taylor case, or of the importance attached by his executives to it being settled in confidence. We have been told that, notwithstanding our 2010 Report, the further media investigations including the New York Times, the settlement with Max Clifford and further civil cases by non-royal victims, it was as late as December 2010 that James Murdoch—and Rupert Murdoch—realised that the one 'rogue reporter' line was untrue. This, we consider, to be simply astonishing.


164.  Mark Lewis claimed in written evidence that he was told by Julian Pike that, in negotiating the Gordon Taylor settlement, he was "negotiating with Murdoch".[248] Farrer & Co denied that the remark was made:

Mr Pike does not recall making the statement Mr Lewis claims to have been made, nor anything similar to it. [...] As a matter of fact, in Mr Taylor's case, Mr Lewis was not negotiating with Mr Murdoch; he was negotiating with Farrer & Co, and specifically with Mr Pike. In turn, Mr Pike obtained instructions from Mr Crone. Mr Pike never had any contact with Rupert and James Murdoch regarding the settlement negotiations.[249]

165.  The Committee invited both Mark Lewis and Julian Pike to give oral evidence but neither of them altered their positions. Mark Lewis told the Committee that "I think James Murdoch would like to give you the impression that he is mildly incompetent rather than thoroughly dishonest".[250] James Murdoch claimed not to have had any involvement in the final decision about the settlement amount: "as far as I can recall, I authorised Messrs Tom Crone and Colin Myler at the meeting of 10 June 2008 to go ahead and negotiate a settlement. [...] it is possible, although I do not recall it, that someone may have given me a brief update subsequently as to the amount of the final settlement".[251] Tom Crone's account stated that "he certainly authorised us to settle at the best figure we could reach".[252] Julian Pike told the Committee that "I know that in this particular case, because it was anticipated that damages would reach a level which Mr Crone did not have authority to sign off on, then [...] he would need to go and get Mr Murdoch's approval".[253] Julian Pike later indicated that he had been given the authority that Tom Crone had sought from James Murdoch to increase the settlement amount on "around about 10 June, which is the date of the Colin Myler and Tom Crone meeting with James Murdoch".[254]

166.  Given the conflicting accounts—and there have been many regarding chance, off-the-cuff, undocumented remarks during our inquiries—we cannot adjudicate whether Gordon Taylor's solicitor Mark Lewis was told by Farrer & Co that he was 'negotiating with Murdoch'. In any event, it is a red herring. Given the sums claimed, and NGN lawyer Tom Crone's £10,000 authorisation limit, it was James Murdoch—as with Les Hinton before over Clive Goodman's pay-off—who gave final authorisation for the payments.

167.  James Murdoch told the Committee that the first time that the existence or significance of the 'for Neville' e-mail was brought to his attention was on 10 June 2008: "I was briefed by Mr Crone and Mr Myler on the status of the case on 10 June 2008 at a meeting in my offices in Wapping".[255] Tom Crone's recollection was less definite: "I cannot remember the exact date but I believe the meeting at which I informed Mr James Murdoch of the 'for Neville' email was in June 2008".[256] Murdoch thought that the meeting took "less than 30 minutes" and Tom Crone thought that it took "no more than 15 minutes".[257]

168.  Subsequent evidence from Julian Pike suggested that the 'for Neville' e-mail may have been brought to James Murdoch's attention before 10 June 2008, at a meeting with Colin Myler on 27 May 2008:

on 27 May 2008, Colin Myler had a meeting with James Murdoch, which I know took place for two reasons. First, three days earlier, on 24 May, I was copied in on a briefing that Tom Crone had given to Colin Myler about that meeting. Secondly, after the meeting, I was telephoned by Colin Myler, who told me that it had taken place, and that they wanted to wait until they had counsel's advice.[258]

This difference of a fortnight is significant because, if James Murdoch had been considering the matter of the settlement and associated evidence for any significant period of time, it would undermine his claim not to have given the matter much thought.

169.  Neither James Murdoch nor Colin Myler had any recollection of a meeting taking place on 27 May 2008.[259] James Murdoch stated that "I am aware of the note of a conversation with Mr Myler. Neither Mr Myler nor I recall that conversation. A conversation or a telephone call could have happened, but I neither accept nor deny that it occurred. I have no recollection of it".[260] Julian Pike's note of a telephone conversation he had with Colin Myler that took place on 27 May 2008, however, contained the words "spoke to James Murdoch".[261] Similarly, Tom Crone's briefing note of 24 May 2008 seems to have been prepared for the express purpose of a conversation between Colin Myler and James Murdoch anticipated for 27 May.

170.  We have had confidential sight of James Murdoch's diary from the period in question and confirm that the only appointment that appeared in it that related to the Gordon Taylor case was a meeting on 10 June 2008, listed simply as "Colin Myler & Tom Crone" and scheduled to last from 5.15 until 5.45 p.m. There is nothing related to the Gordon Taylor case listed in the diary for 27 May 2008, although there are three gaps of up to an hour each in the schedule when an impromptu meeting or conversation could have taken place.

171.  In December 2011, further evidence emerged to support the contention that James Murdoch had been briefed on the Gordon Taylor case prior to the meeting that took place on 10 June 2008.[262] On 7 June 2008, Colin Myler sent him an e-mail, which purported to be an "update on the Gordon Taylor (Professional Football Association) case". Colin Myler summarised that "unfortunately it is as bad as we feared". The e-mail goes on to comment on Gordon Taylor's "vindictiveness" and Colin Myler requests a meeting with Murdoch the following Tuesday (10 June 2008). A thread of e-mails between Julian Pike, Tom Crone and Colin Myler is appended. The e-mails discuss the case in some detail and make glancing reference to "the Ross Hindley ['for Neville'] e-mail".[263] James Murdoch briefly replied to the e-mail within three minutes of receiving it: "no worries. I am in during the afternoon, if you want to talk before I'll be home tonight after seven and most of the day tomorrow".[264]

172.  On the one hand, Colin Myler's e-mail to James Murdoch implies some familiarity with the Gordon Taylor case on James Murdoch's part. It describes itself as an "update", which suggests an earlier conversation, and refers to the situation being as bad as "we" feared. Anyone reading the appended thread of e-mails would have been made aware that Tom Crone was proposing a defence to the claim "that we knew of and made use of the voicemail information Glenn Mulcaire acquiresd [sic] between Feb and July 2005". They would have also gleaned that there was a tape on which Glenn Mulcaire was heard "instructing someone on how to get into Taylor's voicemail".[265] On the other hand, Colin Myler clearly did not think that James Murdoch would know what the Gordon Taylor case was without the addition of "Professional Football Association" in parentheses afterwards, suggesting only glancing familiarity with it. Similarly, the "we" in Colin Myler's second sentence could be taken to refer either to Colin Myler and James Murdoch or to Colin Myler, Tom Crone and Julian Pike. The "update" would tend to support the existence of a brief meeting or discussion which took place on 27 May 2008.

173.  The email of 7 June 2008 from Colin Myler to James Murdoch was disclosed to the Committee by Linklaters solicitors, acting for News Corporation, on 12 December 2011, and contained a chain of emails regarding the Gordon Taylor case. It was provided to James Murdoch five days previously and, in his letter of the same date, he said he had not read the underlying chain before granting Colin Myler a meeting within minutes of receiving it. The date of the email was a Saturday, which is significant in two respects: it was press day for the News of the World, a busy time for the Editor; but, as it was a weekend, James Murdoch would not necessarily have been working. Indeed in his letter to the Committee, dated 12 March 2012, he reiterates that he only read the request for a meeting and did not read the full email chain as 'this was because it was received on a Saturday afternoon when I was likely alone with my two young children'.[266]

174.  The fact that James Murdoch responded within three minutes to an email, on a Saturday—7 June 2008—from Colin Myler granting him a meeting the following Tuesday over the Gordon Taylor case proves nothing one way or the other about James Murdoch's awareness of the wider significance of the Gordon Taylor claim.

175.  James Murdoch, Tom Crone, Colin Myler and Julian Pike all agree that James Murdoch was briefed on the Gordon Taylor case on 10 June 2008. The fact that all witnesses agreed that the 10 June 2008 meeting only lasted in the region of 15 minutes would tend to support the assumption that the matter was disposed of relatively straightforwardly.

176.  Neither James Murdoch nor Colin Myler has any recollection of a conversation that took place between them on 27 May 2008. James Murdoch's diary confirms that no formal meeting was scheduled to occur on that day. It is possible that a more informal and impromptu conversation took place. Indeed, there would be no reason for Tom Crone's briefing note to exist at all if it had not been Colin Myler's intention to speak to James Murdoch. It would also be difficult to explain the reference in Julian Pike's notes to a conversation between James Murdoch and Colin Myler unless Colin Myler had lied to Pike about a conversation having taken place. It is difficult to understand what possible motive he could have had for doing so.

177.  The e-mail exchange that took place on 7 June 2008 demonstrates that James Murdoch was given the opportunity to appraise himself of the Gordon Taylor case and to make himself aware of its significance. Had he read the e-mail chain properly he ought to have asked searching questions of Colin Myler and Tom Crone. If he did not read the e-mail chain, there is no good excuse for this and it betrays an astonishing lack of curiosity on the part of a Chief Executive. Had James Murdoch been more attentive to the correspondence that he received at the time, he could have taken action on phone-hacking in 2008 and this Committee could have been told the truth in 2009. We have, however, seen no firm evidence that James Murdoch had any significant involvement in negotiating the Gordon Taylor settlement until he authorised the increased settlement amount on 10 June 2008.

Evidence from the Clifford and subsequent settlements

178.  Shortly after the publication of our Report, Press standards, privacy and libel, in February 2010, NGN settled out of court a claim brought against it by Max Clifford. This was, as far as we are aware, the next settlement of a civil action after those reached with Gordon Taylor, his colleague Jo Armstrong and John Hewison, a partner with George Davies Solicitors, and the second claim to have been brought by one of the individuals named as a target in the criminal case in which Clive Goodman and Glenn Mulcaire were jailed.

179.  The Max Clifford case is significant to us because of its timing, when the News of the World and News International were still vigorously defending themselves against allegations that they had know that phone-hacking was not confined to a single 'rogue reporter'. It also has significance because negotiation of the settlement was conducted by Rebekah Brooks, who had become chief executive of News International in September, 2009 (while James Murdoch remained as News International's chairman). Like Gordon Taylor, Max Clifford was not a member of the royal household and was unlikely to have been of professional interest to Clive Goodman.

180.  Max Clifford settled his claim out-of-court and in confidence, though he did supply disclosures subsequently to the Metropolitan police. In view of the arrest of Rebekah Brooks, we have not sought to probe extensively, so as to not risk prejudicing any future trial. We cannot ignore, however, the basic facts of the case, which are on the public record and which are relevant to our inquiry.

181.  On his second appearance to give evidence, on 10 November 2011, James Murdoch told us he was neither involved in, nor authorised the settlement with Max Clifford, which was handled by Rebekah Brooks "…it was discussed with me in general terms, but not from an authorisation perspective. As the chief executive of the business with full day-to-day responsibility, she could make those judgments,"[267] he told the Committee. Unlike in the Gordon Taylor case, James Murdoch and the company declined to waive legal, professional privilege, even to a limited extent, to better help our understanding. In response to a letter from the Committee to James Murdoch dated 22 November 2011, however, the newly-created Management and Standards Committee at News Corporation did supply us with some information in relation to the Clifford case:

  • July 2009. Max Clifford initiated legal proceedings against NGN and Glenn Mulcaire.
  • October 2009. A defence was filed by NGN.
  • Early January 2010. Michael Silverleaf QC was retained to advise on Max Clifford's claims and the case was discussed with him in a conference in early January 2010. He did not provide a formal written opinion.
  • February 2010. An agreement was reached between Rebekah Brooks and Max Clifford but this was not on the basis of advice from Michael Silverleaf QC. According to the Management and Standards Committee, the agreement reached specified that Max Clifford would recommence his relationship with NGN and would be paid a retainer of £200,000 per annum for two years in return for assistance with news stories. NGN also paid his legal costs, which amounted to £253,500 plus VAT.[268]

182.  The Management and Standards Committee also said that Jonathan Chapman was involved in 'internal discussions concerning the Clifford case,' while in a follow-up letter Colin Myler said Tom Crone and Julian Pike were also involved in giving Rebekah Brooks advice.[269] [270] We have not received any evidence that anyone other than Rebekah Brooks was involved in negotiating its settlement on behalf of NGN.

183.  Notwithstanding her role in settling Max Clifford's claim and our 2010 Report, in evidence on 9 July 2011 Rebekah Brooks told us that—like James Murdoch—she only realised in the final days of 2010 that the 'one rogue reporter' defence was untrue.

Everyone at News International has great respect for Parliament and for this Committee. Of course, to be criticised by your Report was something that we responded to. We looked at the report. It was only when we had the information in December 2010 that we did something about it.[271]

184.  We subsequently wrote to Rebekah Brooks asking further questions about the Clifford settlement, but she declined to answer on the basis that the circumstances of the case were of interest to the Metropolitan Police.[272] The Management and Standards Committee also cited similar concerns.[273] Following his settlement, Max Clifford also passed evidence in his possession to the police. This has not been volunteered to the Committee and, given the police investigation, the Committee decided not to press Max Clifford further over this.

185.  The settlement with Max Clifford certainly did not draw a line under the affair—far from it. During 2010, eight further claims were issued; and by October 2011, the number had escalated to 65.

186.  A claim by the designer Kelly Hoppen, in March 2010, was the first from a victim not named in the criminal charges. She also alleged that hacking had continued in 2009-10, long after the criminal convictions. As well as NGN and Glenn Mulcaire, she sued Dan Evans, another News of the World journalist (who was suspended in April 2010 and later arrested). The claim was settled in October 2011, after NGN paid £60,000 in damages, plus legal costs.

187.  The case brought by Kelly Hoppen's step-daughter, the actress Sienna Miller, is—by Rebekah Brooks' and James Murdoch's admission—particularly significant. Following a court order forcing the Metropolitan Police to provide unredacted disclosures from Glenn Mulcaire's notebooks, her letter before action was sent to NGN on 6 September, 2010.

188.  She alleged that three of her phones, and those of friends and her publicist, were hacked from January 2005 to August 2006 as part of an exercise called 'Project Sienna Miller'. The claim stated that from January 2005, NGN agreed a scheme with Glenn Mulcaire whereby 'he would, on their behalf, obtain information on individuals relating to the following: 'Political, Royal, Showbiz/Entertainment' and that he would use electronic intelligence and eaves-dropping in order to obtain this information. He also agreed to provide daily transcripts.[274]

189.  The particulars also described Glenn Mulcaire's alleged modus operandi, in which he would mark the first names of his journalist contacts in the top left hand corner of the pages of his notebooks. From the pages disclosed by the police, Sienna Miller's lawyers inferred the involvement of a named, senior News of the World journalist, who was not Clive Goodman. These disclosures were provided by Sienna Miller's lawyers to NGN in December, 2010.

190.  NGN eventually admitted liability in Sienna Miller's case in May 2011, agreeing to pay £100,000 damages, plus legal costs. In February, 2011, however—despite the disclosures in December—NGN still served a defence, stating Clive Goodman had a "direct and personal and clandestine relationship" with Glenn Mulcaire and denying its journalists had authorised Glenn Mulcaire to hack into voicemails; that it could be inferred that the other named, senior journalist had been involved; and that the personal stories cited came from "independent (and confidential) sources". NGN also denied that its conduct amounted to harassment and that, in any event, its "course of conduct was, in all the circumstances, reasonable".

191.  We comment further on this defence with respect to News International in the next section.[275]

192.  In January and February 2012, all but five of the first wave of claims were settled under a case management procedure overseen in the High Court by Mr Justice Vos. Admissions made by NGN show that hacking started long before 2005. Glenn Mulcaire had been working with the newspaper from 1998 and by February, 2005 had signed at least five agreements for his services. But the practice appears to have escalated substantially between 2005 and 2006.

193.  At least three of the victims were targeted from 2001-2002: Guy Pelly, a friend of Prince Harry; the singer Charlotte Church; and Claire Ward, the former Member of Parliament for Watford and then a member of this Committee.

194.  Chris Bryant, MP for the Rhondda and another Member of this Committee at the time, was targeted from 2003, and victims in 2004 included Christopher Shipman, son of the serial killer Harold Shipman, whose e-mails were also hacked by Glenn Mulcaire. Victims during the escalation between 2005 and 2006 included Deputy Prime Minister John Prescott, former Olympics minister Tessa Jowell, and rugby and football players Gavin Henson and Ashley Cole.

195.  The final case to be settled so far, that of Charlotte Church and of her family in February 2012, involved the biggest publicly announced settlement—£600,000 in all. Charlotte had been targeted since 2002, when she was just 16, and her parents James and Maria Church, too. The illegal interception—as well as the wider harassment to which it contributed—had lasting and damaging consequences:

'People working for the News of the World were paid to watch their every move,' the agreed Statement in Open Court related. 'Maria in particular is a vulnerable person, with a complex medical history. The News of the World found out about this and published private details of her hospital treatment. At her lowest moment, the News of the World issued her with an ultimatum and coerced her into giving them an in depth interview about herself harming and attempted suicide. She felt she had no choice...and was deeply traumatised by the publication of the story in the News of the World.' [276]

196.  In December 2011, before the settlements, NGN finally admitted that Glenn Mulcaire had helped News of the World journalists to hack voicemails themselves; that four employees—other than Clive Goodman—had instructed him to do so 'on a large but unquantifiable number of occasions'; and that his services were known about by other employees of NGN.

197.  These names are contained in confidential schedules to the civil claims, which Mr Justice Vos has ordered not to be published, so as not to prejudice possible future criminal trials.

198.  For the purposes of assessing aggravated damages in the civil claims, NGN also agreed that the cases could proceed on the basis that unnamed 'senior employees and directors' of NGN knew of the wrongdoing and sought to conceal it by knowingly putting out false public statements; deliberately failing to provide the police with all the facts; by deceiving the police over payments to Glenn Mulcaire; and destroying evidence, including e-mails and computers. [277]

199.  In January 2012, in a judgment ordering further disclosures by NGN, Mr Justice Vos commented, indeed, on what he had now seen regarding the alleged destruction of evidence:

I have been shown a number of emails which are confidential and therefore I will not read them out, but suffice it to say that they show a rather startling approach to the email record of NGN and they show, because this much has been said in open court, that only three days after the solicitors for Sienna Miller had written their letter before action, asking specifically that NGN should retain any emails concerned with the claim in relation to phone hacking, what happened was that a previously conceived plan to delete emails was put into effect at the behest of senior management.[278]

200.  From the civil claims to date, it is clear that phone-hacking at the News of the World started as far back as 2001. Given the confidentiality of disclosures in the civil cases and the wishes of Mr Justice Vos not to reveal names before possible criminal proceedings, we only set out certain of the facts which are on the public record, as we have gathered them, in order to bring this Report up to date. The Metropolitan Police are currently investigating and we also do not wish to run the risk of prejudicing any future trials by going beyond what is already publicly available.

The corporate culture at News International

201.  In November 2011, James Murdoch asserted that News International had responded so aggressively to the Committee's 2010 Report because senior company executives had themselves been misled: "I received the same assertions around the quality of those investigations and the lack of evidence that this Committee received, and that's something that is a matter of regret".[279] On 19 July 2011, a similar view had been expressed by Rupert Murdoch, who told us that "I feel that people I trusted—I am not saying who, and I don't know what level—have let me down. I think that they behaved disgracefully and betrayed the company and me".[280] Jonathan Chapman, formerly Director of Legal Affairs, told us that, in terms of knowledge held by Rupert and James Murdoch and Rebekah Brooks about payments made to Clive Goodman:

None of them had any first-hand knowledge of that. Mr Murdoch junior and senior were out of the country, and had not taken on executive obligations then—in Mr James Murdoch's case—and Rebekah Brooks was still editor then. In order for them to be able to comment in any way on what happened in 2007, they would be reliant on briefings from others, and I believe those briefings were incorrect.[281]

202.  Jonathan Chapman's account appears consistent with the corporate culture that was portrayed to us throughout our investigation. Rupert Murdoch explained his claimed lack of direct involvement in the News Group Newspaper titles as follows: "the News of the World is less than 1% of our company. I employ 53,000 people around the world".[282] In November 2011, James Murdoch said that "this is a company of over 50,000 employees globally, and—appropriately so—senior management in the company, myself included, rely on executives at various levels in the business to behave in a certain way".[283] When asked who he held responsible for phone-hacking, Rupert Murdoch said "the people that I trusted to run it [the company], and then maybe the people they trusted. I worked with Mr Hinton for 52 years and I would trust him with my life".[284]

203.  Delegation relies on trust and on the integrity of those to whom authority is delegated. Of News International, James Murdoch told us that:

The way that the company has always operated is to rely on executives directly responsible for a unit of the business—a paper, etc.—to go and do the things that they needed to do, under the assumption that they would be appropriate and lawful, and that they would be questioned from time to time, and come to senior management with issues.[285]

204.  The same principle was, we were told, in operation at the company when it came to expenditure. On 19 July 2011, James Murdoch told us that "as long as they stay within those guidelines, the belief is that they should be empowered to make those judgments, to spend those moneys and achieve the ends that they can".[286] Individual papers were described as functioning in the same way. Rebekah Brooks, for example, told us that "I think the newsroom of any newspaper is based on trust. [...] You rely on the people who work for you to behave in a proper manner, and you rely on the clarity of information that you are given at the time".[287]

205.  The evidence we have taken on the corporate culture of News International suggests that Rupert and James Murdoch not only delegated authority to those beneath them but also actively kept out of their business affairs. In July 2011, Rupert Murdoch told us, for example, that "sometimes, I would ring the editor of the News of the World on a Saturday night and say, 'Have you got any news tonight?' But it was just to keep in touch. [...] I'm not really in touch, I have got to tell you that".[288] He claimed that his habit of being out of touch extended even to being unaware of payments as significant as that made to Gordon Taylor. We asked him whether the Editor of the News of the World would have told him about a payoff of £1 million. He answered emphatically "no" and then "he would expect other people to tell me that, if anyone was to".[289] We were curious as to whether this amounted to senior executives being kept in the dark. Rupert Murdoch told us that "nobody has kept me in the dark. I may have been lax in not asking more, but it was such a tiny part of our business".[290] James Murdoch told us that "there is a difference between being kept in the dark, and a company that is a large company, the management of which is delegated to managers of different companies within the group, and so on and so forth".[291]

206.  The Gordon Taylor settlement was sizeable (approximately £700,000), and the claims made by Gordon Taylor had potentially very serious reputational consequences for the company. However keen senior executives may have been to delegate, it seems extraordinary that they would not have sought greater involvement in the decisions that were made given how much was at stake for the company. Yet we have been told that this is precisely what happened. Rupert Murdoch was apparently completely unaware of the Gordon Taylor settlement. James Murdoch, we have been told, authorised the settlement on the basis of a possible rushed conversation in the corridor or over the phone; a single meeting that lasted between 15 and 30 minutes; and an e-mail exchange that he took no longer than three minutes to peruse.

207.  We have struggled to understand such a lack of openness with senior management and have considered whether it can be explained by a deliberate policy of "don't ask, don't tell" designed to shield senior executives from events taking place beneath them. This hypothesis is given weight by Neville Thurlbeck's evidence to the Committee, in which he describes being frustrated by trying to bring evidence about phone-hacking to the attention of Rebekah Brooks, by then Editor of the News of the World, and allegedly being repeatedly denied access to her by the Managing Editor, Bill Akass.[292] A note made by solicitor Julian Pike of Farrer & Co of a conversation that he had with Colin Myler on 27 May 2008 illustrates just how reluctant senior employees at the company may have been to approach James Murdoch. In the note, Colin Myler is reported as saying "James wld say get rid of them—cut out the cancer".[293] The use of the conditional tense is noteworthy because it shows that the issue in hand—the possible culpability of journalists at the News of the World—may not have been explicitly brought to James Murdoch's attention before the meeting on 10 June 2008, perhaps in order to avoid the consequences that might ensue if it had been. In September 2011, we also heard from Jonathan Chapman that on the papers at News International "when someone messes up badly and commits a crime, I think there was also a feeling that, yes, they have done a terrible wrong, but their family should not suffer", in other words that the cancer should not always be cut out.[294] We considered whether employees at News International went out of their way to try to please the Murdoch family. On 19 July 2011, Rupert Murdoch told us that "I am sure there may be people who try to please me. That could be human nature, and it's up to me to see through that".[295]

208.  Both Rupert and James Murdoch referred several times to their high expectations of Colin Myler, who was appointed as Editor of the News of the World after Andy Coulson's resignation with, as Rupert Murdoch put it, a remit "to find out what the hell was going on".[296] James Murdoch described Colin Myler as "an outside person who had a responsibility and remit to both clean up and investigate the issue, and move the company and the newspaper forward in a way that made sure that these things could not happen again".[297] Similarly, in September 2009, Les Hinton had told the Committee that "Colin had come in from New York, a very experienced editor with a clear remit to do two things: make sure that any previous misconduct was identified and acted upon and that the prospect of any future misconduct would be ruled out".[298] Clearly, Colin Myler did, partially at least, 'find out what the hell was going on' and it has been a matter of dispute between him and Tom Crone on the one hand and James Murdoch on the other as to whether a culture of wrongdoing at the News of the World was explicitly brought to the attention of executives outside the confines of the newspaper. It seems to us on balance, therefore, that Les Hinton's subsequent description of Colin Myler's role in his evidence to the Committee in October 2011 was more accurate when he said that 'he would just settle down the company and get people back on track'. Within the corporate culture of News International, it seems clear to us that there were no incentives to convey unwelcome news, if problems could be contained—as the company clearly thought they largely had been, indeed, through the confidential settlements of the claims brought by Gordon Taylor, Jo Armstrong, John Hewison and Max Clifford.

209.  The portrayal, furthermore, that we have been given to believe, of Rupert and James Murdoch being at one remove from events at the News of the World, as it was such a small part of the global News Corporation empire, is at odds with other evidence we have received, and which has been subsequently given to the Leveson inquiry.

210.  Rupert Murdoch is certainly not, as part of his evidence would have us believe, a 'hands-off proprietor'. We have Rebekah Brooks' testimony for that:

Q549. Philip Davies: How many times would you speak to Rupert Murdoch when you were chief executive of News International?

Rebekah Brooks: I would speak to Mr Murdoch and James Murdoch much more regularly since I have become chief executive than I did when I was editor.

Q550. Philip Davies: Once a day? Twice a day?

Rebekah Brooks: James Murdoch and I have offices next to each other, although he has his travel schedule because of his wide responsibilities, and I would talk to Rupert Murdoch quite regularly.

Q551. Philip Davies: Once a day, twice a day—can you give me any other idea?

Rebekah Brooks: On average, every other day, but pretty regularly.

211.  James Murdoch, too, has testified to the Leveson inquiry about his father's role which in February 2012 with respect to launching a replacement for the News of the World appears to have extended to bypassing his son entirely, despite his position as Chairman and Chief Executive Officer, International, of News Corporation:

The decision to launch a Sunday edition of The Sun was made by my father, in conjunction with the management of News International. There had previously been discussions about a Sunday paper, but the timing of the launch, the pricing of the paper and the reinstatement of the journalists were all decisions made by my father and the management of News International.[299]

212.  Rupert Murdoch's close involvement with his newspapers is entirely understandable: he built his empire from a single publication in Australia and print and ink, it can be said, are in his blood. James Murdoch, clearly, has a different background. Until he took responsibility for all of News Corporation's operations in Europe and Asia, which included News International's print publications, his career had focused on broadcasting and digital media.

213.  Nonetheless, though James Murdoch's main interests and priorities may have lain elsewhere, before authorising the Gordon Taylor settlement, he was not content to rely solely on advice from Colin Myler and Tom Crone—two experienced newspaper hands—but wanted to wait for independent counsel's opinion. As we have explored earlier, why then he did not ask to read that opinion is one of the many astonishing things about this whole affair.

214.  As for corporate culture, James Murdoch's characterisation of the epiphany moment in December, 2010—when they allegedly realised that the 'one rogue reporter' defence could not be true and leapt into action—is also at odds with the company's behaviour afterwards. Despite contacting the police—and suspending and sacking a senior member of staff—the organisation continued to maintain that no more of its journalists had been involved with Glenn Mulcaire in its defence to Sienna Miller's claim several weeks later in February, 2011.

215.  Far from having an epiphany at the end of 2010, the truth, we believe, is that by spring 2011, because of the civil actions, the company finally realised that its containment approach had failed, and that a 'one rogue reporter'—or even 'two rogue journalists'—stance no longer had any shred of credibility. Since then, News Corporation's strategy has been to lay the blame on certain individuals, particularly Colin Myler, Tom Crone and Jonathan Chapman, and lawyers, whilst striving to protect more senior figures, notably James Murdoch. Colin Myler, Tom Crone and Jonathan Chapman should certainly have acted on information they had about phone-hacking and other wrongdoing, but they cannot be allowed to carry the whole of the blame, as News Corporation has clearly intended. Even if there were a 'don't ask, don't tell' culture at News International, the whole affair demonstrates huge failings of corporate governance at the company and its parent, News Corporation.

216.  The history of the News of the World at hearings of the Committee is a long one, characterised by "collective amnesia" and a reluctance fully and fairly to provide the Committee with the information it sought. News International has repeatedly stone-walled, obfuscated and misled and only come clean, reluctantly, when no other course of action was sensible and when its wider commercial interests were threatened. In Rupert Murdoch's own words to the Leveson inquiry, News Corporation in the UK mounted a cover-up.

217.  In any company, the corporate culture comes from the top. In the case of the News of the World this is ultimately the American parent company of News International, News Corporation and its chairman and chief executive, Rupert Murdoch. Rupert Murdoch has repeatedly claimed that News Corporation has a zero tolerance approach towards wrongdoing.[300] He stated this, indeed, long before he gave evidence to the committee, when he gave the inaugural Thatcher Lecture in London on 21 October 2010: "we will not tolerate wrongdoing" he told his audience. He also made similar statements at the annual general meeting of News Corporation in Los Angeles in October 2011 when, in relation to phone-hacking, he said there was "no excuse for such unethical behaviour" at the company and that staff had to be "beacons for good, professional and ethical behaviour".

218.  On 8 April 2011, News International finally issued a statement admitting that phone-hacking had indeed occurred in a number of cases and was not restricted to the News of the World's former royal reporter, Clive Goodman. It offered certain civil litigants an unreserved apology and a compensation scheme. At this point, the 'single rogue reporter' defence was clearly dead. That defence had become very questionable long before, but now that News International had finally acknowledged that hacking had been widespread, it was clearly no longer tenable.

219.  In his testimony to us and also the Leveson inquiry, Rupert Murdoch has demonstrated excellent powers of recall and grasp of detail, when it has suited him. Had he been entirely open with shareholders on 21 October 2010—and with this Committee on 19 July 2011—he would have learned for the first time on some date between 21 October 2010 and 8 April 2011 that he had been misled by senior employees of his company.

220.  Such a revelation, had it happened, would have been a shock. He was the chairman and chief executive officer of a major international company. He had repeatedly given clear and categorical assurances to the general public, and to his shareholders, that phone-hacking and other wrongdoing were not widespread and would not be tolerated at News International. These assurances had now turned out to be false. This is not a situation a chief executive would or could tolerate, still less simply ignore. Action would have been taken.

221.  Yet, when asked by the Committee if he "knew for sure in January [2011] that the 'one rogue reporter' line was false", he replied: "I forget the date."[301] This is barely credible. Had he really learned for the first time at some point in the six months following his Thatcher Lecture that he had been deceived, and so that he in turn had deceived the public and his shareholders, that moment would have been lodged forever in his memory. It would have been an unforgettable piece of information.

222.  On the other hand, had he suspected all along that phone-hacking and other wrongdoing was endemic at the News of the World—that the means justified the ends in beating the competition and getting the story—and that elaborate, expensive steps were being taken to conceal it, it is entirely understandable that the precise moment between 21 October 2010 and 8 April 2011, when he recognised the game was up, might have slipped his memory. And all the more so, had he already realised the truth long before those dates.

223.  In such circumstances, even if he took no part in discussions about what to reveal and when, there would probably not have been a clear moment of revelation. There would have been a gradual erosion of the 'one rogue reporter' fiction to the point where a collective decision to abandon it would have been taken. In those circumstances, it would be entirely understandable that he should forget the date, if indeed there was a single date on which the decision was taken, rather than an unfolding contingency plan involving gradual admissions.

224.  The notion that—given all that had gone on, right back to evidence given over payments to the police to our predecessor Committee in 2003—a hands-on proprietor like Rupert Murdoch had no inkling that wrongdoing and questionable practice was not widespread at the News of the World is simply not credible. Given his evidently fearsome reputation, the reluctance of News International employees to be open and honest internally and in their evidence to the Committee is readily understandable. In assessing their evidence, the culture emanating from the top must be taken into account, and is likely to have had a profound effect on their approach in 2007 and 2009 in evidence given to the Committee.

225.  A further example of this culture and Rupert Murdoch and his management's failure to focus on serious wrongdoing within the organisation was his response to the Committee's questions about attempts by Neville Thurlbeck, then chief reporter of the News of the World, to blackmail two of the women involved in the newspaper's controversial exposure of Max Mosley's private life.[302] His reply that this was the first he had heard of this claim and that no one in the UK company had brought the allegation to his attention[303]—if this was indeed the case—indicates a seriously wrong state of affairs in his company. Furthermore, it appears that having had the matter brought to his attention during questioning by our committee, he had still not read the Eady judgement by the time he gave evidence to the Leveson inquiry on 26th April 2012.

226.  When asked if he agreed with the judge in that case that this "discloses a remarkable state of affairs at News International", Rupert Murdoch replied "no".[304] He appeared to see nothing unusual in News International failing to investigate or take action when a senior employee was cited by a High Court judge as resorting to blackmail in the course of his employment. This wilful turning of a blind eye would also explain Rupert Murdoch's failure to respond (or to have another executive respond) to a letter sent to him in New York by Max Mosley on 10 March 2011, inviting him to order an investigation at News International into the blackmail allegation.[305]

227.  Another example of Rupert Murdoch's toleration of alleged wrongdoing is his reinstatement, on 17 February 2012, of journalists who had been arrested. This is in contrast to most organisations this Committee can think of, which would have suspended such employees until the police had confirmed that no charges were being brought.

228.  Rupert Murdoch told this Committee that his alleged lack of oversight of News International and the News of the World was due to it being "less than 1% of our company".[306] This self-portrayal, however, as a hands-off proprietor is entirely at odds with numerous other accounts, including those of previous editors and from Rebekah Brooks, who told us she spoke to Rupert Murdoch regularly and 'on average, every other day'. It was, indeed, we consider, a misleading account of his involvement and influence with his newspapers.

229.  On the basis of the facts and evidence before the Committee, we conclude that, if at all relevant times Rupert Murdoch did not take steps to become fully informed about phone-hacking, he turned a blind eye and exhibited wilful blindness to what was going on in his companies and publications. This culture, we consider, permeated from the top throughout the organisation and speaks volumes about the lack of effective corporate governance at News Corporation and News International. We conclude, therefore, that Rupert Murdoch is not a fit person to exercise the stewardship of a major international company.

136   Unless otherwise stated, the evidence in the timeline is taken from Ev 225 Back

137   Q 1157 Back

138   Ev 239 Back

139   Q 1158. It was not known until Julian Pike gave evidence in October that Farrer & Co had also applied to the police for relevant documentation. Mark Lewis did not know this and Tom Crone's briefing note to Colin Myler states "unknown to us a few months ago Taylor applied to and obtained from the court an Order obliging the Police to release the criminal prosecution paperwork and evidence to his lawyers"; Ev 240 Back

140   Ev 240 Back

141   Ev 242 Back

142   Ev 245 Back

143   Ev 247, para 6, and Ev 249, para 17 Back

144   Ev 243 Back

145   Ev 273 Back

146   Ev 225 Back

147   Q 1068. In July 2008, Max Mosley was awarded £60,000 in damages plus costs, in his action against the News of the World for breach of privacy. At that time, this was the biggest award in recent history in respect of a privacy action. Mosley's request for punitive exemplary damages was rejected: see, for example, the Guardian, 24 July 2008, 'Max Mosley wins £60,000 in privacy case.' Back

148   Ev 249 Back

149   Ev 240 Back

150   Ev 247 Back

151   Q 1237 Back

152   Q 1259 Back

153   Ev 249, para 16 Back

154   See for example Q 242 (James Murdoch) Back

155   Q 1070 Back

156   Q 1267 Back

157   Q 1084 Back

158   Ev 240 Back

159   Q 796 Back

160   Ev 271 Back

161   Ev 247, para 6 Back

162   Ev 247, passim Back

163   Ev 241 Back

164   Q 792 Back

165   Press standards, privacy and libel, Vol II, Ev 381 Back

166   Ev 271 Back

167   Press standards, privacy and libel, Vol II, Ev 305 Back

168   Q 264 Back

169   Ev 172 Back

170   Ev 242 Back

171   Qq 796-804 Back

172   Ev 225 Back

173   Q 1109 Back

174   Q 1268 Back

175   Press standards, privacy and libel, Vol II, Q 2106 Back

176   Press standards, privacy and libel, Vol II, Q 1554 Back

177   "PCC report on phone message tapping allegations", Press Complaints Commission, 9 September 2009 Back

178   Press standards, privacy and libel, Vol II, Ev 295 Back

179   Press standards, privacy and libel, Vol II, Ev 457 and Ev 467 Back

180   Press standards, privacy and libel, Vol II, Ev 295 Back

181   Press standards, privacy and libel, para 412 Back

182   Press standards, privacy and libel, Vol II, Q 1342 Back

183   Press standards, privacy and libel, Vol II, Q 1351 Back

184   Ev 225 Back

185   Q 1160 Back

186   Press standards, privacy and libel, Vol II, Q 1342 Back

187   Press standards, privacy and libel, Vol II, Q 1367 Back

188   Press standards, privacy and libel, Vol II, Q 1398 Back

189   Q 978 Back

190   Press standards, privacy and libel, Vol II, Q 1342 and 1344 Back

191   Press standards, privacy and libel, Vol II, Qq 1368 and1365 Back

192   Ev 260 Back

193   Ev 260 Back

194   Ev 260 Back

195   Press standards, privacy and libel, Vol II, Q 1344 Back

196   Press standards, privacy and libel, Vol II, Q 1347 Back

197   Press standards, privacy and libel, Vol II, Q 1344 Back

198   Ev 241 Back

199   Ev 241 Back

200   Ev 247, para 3 Back

201   Ev 260 Back

202   Ev 260 Back

203   Ev 241 Back

204   Ev 260 Back

205   "Murdoch papers paid £1m to gag phone-hacking victims", Guardian Online,8 July 2009, "No Inquiries. No charges. No evidence", News of the World, 12 July 2009 Back

206   Q 737 Back

207   Q 815 Back

208   Ev 240, paras 6 and 8 Back

209   Ev 241, para 11 Back

210   Ev 247, para 3 Back

211   Ev 247, para 6 Back

212   Ev 247, para 7 Back

213   Ev 239 Back

214   Ev 266 Back

215   Ev 257 Back

216   Ev 242 Back

217   Ev 242 Back

218   Q 1099 Back

219   Q 155 Back

220   Q 420 Back

221 Back

222   Q 1460 Back

223   Ev 172 (in response to Q 11) Back

224   Ev 199 Back

225   Q 742 Back

226   Q 1552 Back

227   Q 818 Back

228   Ev 198 Back

229   Q 1568 Back

230   Q 1591 Back

231   Q 979 (Tom Crone) Back

232   Q 1618 Back

233   Q 1483 Back

234   Q 1483 Back

235   Q 231 Back

236   Q 1582 Back

237   Q 1582 Back

238   Q 1583 Back

239   Ev 260 Back

240   Ev 242 Back

241   Q 1519 Back

242   Q 895 Back

243   Q 897 Back

244   Q 905 Back

245   Q 910 Back

246   Evidence of Tom Crone to the Leveson inquiry, pages 38-40, 14 December, 2011 Back

247   Witness statement of James Rupert Jacob Murdoch to the Leveson inquiry, para 16.4, 16 April 2012 Back

248   Ev 221 Back

249   Ev 225 Back

250   Q 1279 Back

251   Ev 173, para 11 Back

252   Q 807 Back

253   Q 1063 Back

254   Q 1128 Back

255   Ev 173, para 11 Back

256   Ev 200 Back

257   Ev 173, para 11 and Ev 200 Back

258   Q 1117 Back

259   Ev 238 Back

260   Q 1493 Back

261   Ev 242 Back

262   Ev 273 Back

263   Ev 273 Back

264   Ev 271 Back

265   Ev 272 Back

266   Ev 289 Back

267   Q 17 Back

268   Ev 263 Back

269   Ev 257 Back

270   Tom Crone declined to give any further details unless NGN waived legal professional privilege, which-unlike in the Gordon Taylor case-it did not; Ev 269 Back

271   Q 559 Back

272   Ev 266 Back

273   Ev 263 Back

274   Sienna Miller v Newsgroup Newspapers Ltd and Glenn Mulcaire, Claim No. HC10C03458 Back

275   Sienna Miller v Newsgroup Newspapers Ltd and Glenn Mulcaire, Claim No. HC10C03458, Particulars of Claim, 29 November 2010, and NGN Defence, 9 February, 2011 Back

276   Charlotte Church, James Church and Maria Church v News Group Newspapers Ltd and Glenn Mulcaire, Claim No. HC11C03393, Statement in Open Court, 27 February 2012 Back

277   Various Claimants v News Group Newspapers Ltd and Glenn Michael Mulcaire, Admission of Facts, Notice to Admit Facts and Generic Particulars of Claim, 13 December 2011 Back

278   Various Claimants v News Group Newspapers Ltd and Glenn Michael Mulcaire [2012] EWHC 88 (Ch), 19 January 2012 Back

279   Q 1481 Back

280   Q 412 Back

281   Q 707 Back

282   Q 167 Back

283   Q 1482 Back

284   Q 231 Back

285   Q 1590 Back

286   Q 243 Back

287   Q 542 Back

288   Q 274 Back

289   Qq 282-283 Back

290   Q 370 Back

291   Q 372 Back

292   Ev 260 Back

293   Ev 242 Back

294   Q 701 Back

295   Q 383 Back

296   Q 366 Back

297   Q 1479 Back

298   Press standards, privacy and libel, Volume II, Q 2110 Back

299   Witness statement of James Rupert Jacob Murdoch to the Leveson inquiry, para 20.1, 16 April 2012 Back

300   Q 161 Back

301   Q 200 Back

302   Q 173 Back

303   Q 175 Back

304   Q 177 Back

305   Witness statement of Max Rufus Mosley Leveson inquiry, para 124, 31 October 2011 and transcript of evidence to Leveson inquiry, 26th April 2012 Back

306   Q 167 Back

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Prepared 1 May 2012