4 The Gordon Taylor and subsequent
settlements
Timeline
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]
CONFIDENTIALITY
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.
THE SIGNIFICANCE OF THE 'FOR NEVILLE'
EMAIL AND THE SILVERLEAF OPINION
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.
WHAT JAMES MURDOCH KNEW IN 2008
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.
FURTHER EVIDENCE RECEIVED
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
www.guardian.co.uk/media/2011/jul/21/james-murdoch-select-committee-evidence 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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