Evidence heard in Public

Questions 581 - 1044



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Oral Evidence

Taken before the Culture, Media and Sport Committee

on Tuesday 6 September 2011

Members present:

Mr John Whittingdale (Chair)

Dr Thérèse Coffey

Damian Collins

Philip Davies

Cathy Jamieson

Louise Mensch

Mr Adrian Sanders

Jim Sheridan

Mr Tom Watson

Examination of Witnesses

Witnesses: Jonathan Chapman, former Director of Legal Affairs, News International, and Daniel Cloke, former Group HR Director, News International, gave evidence.

Q581 Chair: Good morning. This is a further follow-up session for the Committee’s inquiry into press standards, privacy and libel where we are continuing to examine, specifically, the illegal activities that took at the News of the World several years ago. I would like to welcome this morning for our first session Mr Jon Chapman, the former Director of Legal Affairs at News International, and Daniel Cloke, the former Group HR Director. If I might begin, Mr Cloke, this Committee became aware a few weeks ago of the letter that was sent to you, dated 2 March 2007, by Clive Goodman in which he set out a number of grounds on which he wished to challenge his dismissal. Were the contents of that letter a surprise to you?

Daniel Cloke: Yes. I had not been involved with any of the activities in relation to Clive Goodman and the criminal charges brought against him so the first knowledge I had of the situation was that letter which I received.

Q582 Chair: So, Mr Goodman’s suggestion that the practice of phone hacking had been carried out by others and that there were a number of people at the News of the World who were aware that it was taking place-you had no idea that he was making those suggestions until you got his letter?

Daniel Cloke: No, not until I got the letter.

Q583 Chair: Right. In his letter he said that he was very surprised because Tom Crone had attended almost every meeting of his legal team where, presumably, if this was his defence, that was discussed.

Daniel Cloke: It was not discussed with me.

Q584 Chair: So, Mr Crone never said to you, "He’s probably going to challenge it on the basis that he has told us"?

Daniel Cloke: No. The first conversation I had with Tom Crone was after I received the letter from Mr Goodman.

Q585 Chair: Right. And when you received this letter, which was copied to Les Hinton and Stuart Kuttner, it must have come as a surprise to you, therefore, to discover that he was saying that this was a widespread activity. So what did you do?

Daniel Cloke: First of all I discussed it with Jon and also with Les Hinton and Colin Myler in terms of what we were going to do about the letter. As an HR director I was quite clear that there were two issues here. One was whether the fact that Clive Goodman had intercepted voicemail messages was gross misconduct, which I thought it was. So that was an employment issue. Obviously he had made allegations about other members staff and so we should look at those almost as a separate issue. There were two issues that I think he was raising. So I agreed that approach with my colleagues and we subsequently started the appeals process.

Q586 Chair: And did all of those you discussed it with express similar surprise that Clive Goodman was making these suggestions?

Daniel Cloke: Yes. That is my recollection.

Q587 Chair: So Les Hinton had no knowledge of this before the letter and nor did Stuart Kuttner?

Daniel Cloke: No. I did not discuss the matter with Stuart Kuttner at that time. The letter had been copied to Stuart, but the people we were discussing it with in terms of the appeals process were Jon Chapman, Les Hinton and Colin Myler.

Q588 Chair: But you did not say to Tom Crone, "According to this letter you’ve been attending all his legal meetings. Why have you not told us before that this was his suggestion?"

Daniel Cloke: No. I interviewed Tom Crone, along with Colin Myler, basically to ask Tom for his recollection of events. Tom said that this was a surprise to him, as it was to everybody else.

Q589 Chair: He said to you that it was a surprise. So he had no knowledge?

Daniel Cloke: Yes. That is my recollection. It was four and a half years ago and I do not have the notes I made at the time in front of me, but that is certainly my recollection.

Q590 Chair: So despite his attending virtually every meeting of Mr Goodman’s legal team, Mr Crone said that he did not know that this was going to be the defence?

Daniel Cloke: Yes, that is right

Q591 Chair: May I turn to Mr Chapman? You will have perhaps watched, or certainly heard about since, the sitting that this Committee had with Rupert Murdoch, in which we discussed with him the exercise that you undertook to examine the e-mails of those individuals who were named by Clive Goodman. Rupert Murdoch said, "Mr Chapman, who was in charge of this, has left us. He had that report"-we understand that there wasn’t actually a report-"for a number of years. It was not until Mr Lewis looked at it carefully that we immediately said, ‘We must get legal advice’". What is your reaction to the suggestion, which Mr Murdoch appears to make, that something that was immediately obviously to Will Lewis escaped you throughout the time that you had these e-mails?

Jonathan Chapman: I do not know whether it was immediately obvious to Will Lewis or whether that is correct. The only interface that I had in respect of the e-mails was with a firm called Burton Copeland, which was acting for News International earlier this year in relation to the Metropolitan police inquiry, so I cannot comment on that.

In terms of the e-mails themselves, my reaction was one of surprise. We did what I thought was a careful and diligent exercise back in 2007. It is hard for me to comment on individual e-mails at this stage, because nearly four and a half years have elapsed, but I would maintain that Daniel and I carried out a thorough exercise then and passed on the file to Harbottle and Lewis, which came up with the report that you and your members have seen.

Q592 Chair: When you carried out your exercise, did you see anything that suggested to you that illegal activity had been taking place?

Jonathan Chapman: It is hard for me-I can’t really recollect individual e-mails. There were certainly some e-mails where Daniel and I would confer with each other just to ensure that our understanding of them was correct, but we looked at everything in the context of a very long string of e-mails. The thing about e-mail conversation, as you will be well aware, is that it is quite chatty, and sometimes there is exaggeration and so on in it. So it is important to look at e-mails, when doing this sort of exercise, in the context of a string of e-mails, rather than individual ones in isolation. The Harbottle e-mails that have subsequently come to light were ones that were pulled out of context. So I would say, as I sit here today, four and a half years on, that it is difficult for me to recollect individual e-mails, but I know that we did-I still maintain that this is the case-a thorough exercise at the time.

Q593 Chair: But Mr Murdoch’s suggested that Will Lewis immediately said, "We must go to the police with this." Presumably you would recall if you had had a similar reaction on examining any specific e-mails.

Jonathan Chapman: That is correct, and I don’t recall having that reaction when examining the e-mails in 2007.

Q594 Chair: Do you recall whether you saw anything that suggested to you not necessarily that Clive Goodman was correct, but simply that illegal activity had been taking place?

Jonathan Chapman: We looked carefully at the e-mails, and we came to the conclusion, having carried out that exercise carefully and taken quite a long time on it, that there was nothing there that indicated reasonable evidence of the matters that we were looking for, which was knowledge of or complicity in voicemail interception.

Q595 Chair: What about other illegal activities?

Jonathan Chapman: We were looking for voicemail interception. In terms of other illegal activities, I am well aware that Lord Macdonald mentioned stuff to the Home Affairs Select Committee in July. What I can say on that is that I have no recollection of specific e-mails at the time that would have led me to that conclusion, but I am at a disadvantage, of course, because he has seen those e-mails and I haven’t seen anything subsequently. If I were to look at those again, I could give my reaction, but I cannot recollect specific e-mails that led me to that conclusion.

Q596 Chair: So essentially you are saying that you emerged from the exercise that you carried out happy that there was no evidence to support any serious allegation of illegal activities.

Jonathan Chapman: What our brief was at the time, Mr Whittingdale, was to look for evidence of voicemail interception linked to Mr Goodman’s appeal process, so that is what we were looking for. Now, if, by the by, we had come across something else that we clearly recognised to be evidence of some other illegal activity, then my reaction at the time would have been that we would have to go through the correct procedure on that. What I am saying is that we did not find anything that amounted to reasonable evidence of voicemail interception, and my recollection is that that was it. There was no other illegal activity that stood out at the time.

Q597 Chair: For instance, you do not recall seeing any suggestion in the e-mails that payments were being made to police officers.

Jonathan Chapman: I can’t recall that.

Q598 Louise Mensch: Just to recap on what you have just said, you said that your brief was to look for voicemail interception, but if there was anything else illegal, that would have to go through a proper process.

Jonathan Chapman: Indeed.

Q599 Louise Mensch: Are you saying now that, to the best of your recollection-I understand that you cannot pick out individual e-mails, but in the string as a whole-there was no widespread illegal blagging activity that jumped out at you, no payments to police officers and nothing to give you, as the legal director, any cause for concern?

Jonathan Chapman: To my recollection, as we sit here today, there was nothing that gave me cause for concern or that needed to be escalated.

Q600 Louise Mensch: Okay. Mr Cloke, you have just said that Mr Hinton, yourself and others were entirely shocked at Clive Goodman’s allegations that everybody knew that this was going on and that it had been authorised by many people at the News of the World. You said that you made Les Hinton aware of it. Given that you have said now that it came as a complete shock to all the senior executives at the company with whom you discussed it, was this kicked any further up the chain at News Corp to your knowledge? Was it kicked up to James or to Rupert Murdoch?

Daniel Cloke: Not to my knowledge, no. I am not aware of the conversations that Les Hinton might have had with those two gentlemen.

Q601 Louise Mensch: When you discussed this with Les Hinton-you say that he had no knowledge of it-did he express shock and dismay?

Daniel Cloke: From what I recall, he was upset about it. There was never any question but that we were going to have a look at this, because they were serious allegations.

Q602 Louise Mensch: Did he ever express to you at any time that this was such a serious matter that he would consider referring it up the chain to more senior executives at News Corporation?

Daniel Cloke: Not that I can recall.

Q603 Louise Mensch: And that never came up in any subsequent internal discussions over this matter or review with Mr Chapman or others to your knowledge-specifically that it was going to be referred up the chain?

Daniel Cloke: Not that I can recall, no.

Q604 Louise Mensch: What about you, Mr Chapman?

Jonathan Chapman: I do not recall that. I did not have dealings with Mr Hinton on the letter that came from Mr Goodman.

Q605 Louise Mensch: And Mr Crone never expressed that this was so serious a matter that he was going to refer it up the chain for corporate governance to have a look at? Anything of that sort?

Jonathan Chapman: I think that is probably a question for Mr Crone.

Q606 Louise Mensch: But not to your knowledge?

Jonathan Chapman: Not to my knowledge.

Q607 Louise Mensch: You selected that you were going to have a review of a certain number of e-mails. There are approximately 2,500 e-mails in the dump that you selected to review. On what basis did you select those particular e-mails to pull out for review? Why did you choose those 2,500 e-mails?

Jonathan Chapman: I did not choose them. The parameters for the e-mail review were set by claims made by Mr Goodman in the context of his appeal.

Q608 Louise Mensch: So just describe to me the process by which you said, "Okay, these are relevant to Mr Goodman in the context of his appeal." Did you wish to examine all correspondence between the editors of the paper between particular dates? What were your terms of reference for picking out the e-mails that constituted the basis of this review?

Daniel Cloke: Essentially, Clive Goodman had specified in his letter that he would like to see e-mails between certain individuals, from, I think from memory, about six months prior to his conviction. They were the parameters. What happened then was that we asked the IT department to retrieve all of the e-mails under that search criteria that could be retrieved.

Q609 Louise Mensch: So you went through e-mails between individuals from a specified set of dates.

Daniel Cloke: Yes.

Q610 Louise Mensch: You did not look through your general e-mail files and say, "This looks a bit dodgy, we’re going to kick it back for review." They were literally e-mails between individuals at the paper within dates, and those were your search parameters.

Daniel Cloke: Yes. The search parameters, to be really clear, were specified. What we did was we followed Clive Goodman’s request. I think that he requested e-mail correspondence between him and four or five other people. They were the parameters of the search.

Q611 Louise Mensch: You have also stated that as part of your review, you questioned the individuals named by Mr Goodman as well as reviewing the e-mails. In that questioning, did anything arise that caused either one of you concern that laws had been broken by executives or reporters at the News of the World, other than by Clive Goodman?

Daniel Cloke: No one, when we spoke to them, admitted any wrongdoing at all.

Q612 Louise Mensch: And when you spoke to them in those interviews, as part of this review-not just looking at the e-mails but also talking to the individuals- no one, other than Clive Goodman, said that anybody else had been involved in phone hacking and the interception of voicemails at the News of the World.

Daniel Cloke: Not that I can recall, but I do not have the notes of those conversations in front of me.

Q613 Louise Mensch: But presumably, since that was the focus of your investigation, it would be something that would stick out in your mind had it happened.

Daniel Cloke: Yes.

Q614 Louise Mensch: What about you, Mr Chapman?

Jonathan Chapman: I was not involved in the questioning. It was carried out by Mr Myler and Mr Cloke.

Q615 Louise Mensch: Did you see a review or notes of the questioning after it happened?

Jonathan Chapman: No, I did not. I had a conversation with Mr Cloke after it had happened in which he recounted to me, I think in fairly broad-brush terms-it would be fair to say, Daniel-that nothing had come up in it.

Q616 Louise Mensch: One last question for you, Mr Chapman, which will relate to questions I am going to be asking Mr Crone later. You had duty legal managers at the News of the World whose job it would be to sign off on individual stories. As part of your review to find out whether there had been widespread hacking, did you ever talk to any of your duty legal managers-the lower level legal managers-to ask them if they had signed off on or had concerns about stories that may have been obtained by voicemail hacking?

Jonathan Chapman: My involvement in the e-mail review was as the employment lawyer for News International. The duty lawyers at the News of the World would be Tom Crone’s responsibility, so it would be for him to have done that.

Q617 Louise Mensch: What about you, Mr Cloke? Did it occur to you that you might want to ask your in-house lawyers if they had ever flagged up any concerns that stories were based on phone hacking?

Daniel Cloke: No. As far as I was concerned, this was an employment matter that I was looking at from an HR perspective. I am not an investigator in that respect.

Q618 Louise Mensch: That does seem an obvious line of inquiry for an internal investigation of this sort to have pursued. Thank you for your answers.

Q619 Damian Collins: Mr Chapman, from your evidence that you submitted to us subsequent to the Murdochs’ appearance before the Committee, and also from evidence that we have received from Lawrence Abramson and from Harbottle and Lewis, do you think that it is fair to say that actually there never was a full, wide-ranging investigation into phone hacking at the News of the World following Clive Goodman’s letter?

Jonathan Chapman: Subject to what Mr Crone might be able to tell you about the Burton Copeland exercise-about which I know very little-I am not aware of anything other than the Burton Copeland exercise.

Q620 Damian Collins: But in terms of the work you were involved with, that was not a wide-ranging investigation.

Jonathan Chapman: No, and it was never intended to be. In a sense, it was reactive. It occurred because of a specific set of circumstances, which was Mr Goodman’s disciplinary appeal, and it was a reaction to that, rather than a proactive inquiry. As I hope Harbottle and Lewis and myself have made clear previously, it was quite limited in its scope.

Q621 Damian Collins: Am I right in saying as well that no one with any criminal law experience was involved in reviewing any of those 2,500 e-mails?

Jonathan Chapman: The 2,500-correct, because it was an employment-related exercise, so we were looking for stuff that stood out as potential reasonable evidence in the context of an employment tribunal and not a criminal case.

Q622 Damian Collins: You said in your written evidence to the Committee, and you have touched on this already in part, that "it is very easy to presume, without the benefit of that context"-i.e. the context of an e-mail exchange-"that all or many of them point to something sinister." I wonder if you would say a little bit more on that, because to me, that suggests that a layman, or Will Lewis, or the Metropolitan police reading these e-mails now would think they do point to something quite serious that warrants further investigation.

Jonathan Chapman: I am not going to comment on individual e-mails, as I have said, because I do not have the benefit of the e-mails that were reviewed, or even the Harbottle and Lewis archive, in front of me. What I would say is that-to explain our position-when we were doing this exercise, we looked at a whole string of e-mails, chronologically ordered and in context. The setting of the context allowed us to take views on e-mails, as to whether they constituted reasonable evidence of something that might perhaps not be the case without that context. That is what I was trying to say.

Q623 Damian Collins: Mr Abramson, in his letter to the Committee, suggested there were about a dozen or so e-mails, from their point of view, where they felt that there was enough concern to discuss them in some detail with you. He says that he was satisfied by you that those e-mails "fell outside the scope" of the brief that you had given Harbottle and Lewis. Was that the reason for setting them to one side and not believing they warranted any further investigation? Simply, that they fell outside of the remit of the investigation Harbottle and Lewis were undertaking.

Jonathan Chapman: When I had the conversations-my recollection of the conversations with Mr Abramson is that he had concerns about some e-mails, just as Daniel and I did, and we discussed those. He looked at the e-mails in context, thought about them further and was able to issue his report.

Q624 Damian Collins: He says that. He says, "In one specific case, Jon Chapman told me to look at News’ server myself to put the e-mail in" context, but he refers to a dozen or so e-mails. The only reason they were set aside was because they fell outside of the remit of the investigation-they fell outside of the terms of the employment process dispute you were going through with Mr Goodman-not that they were not interesting in their own right. Is that a fair reflection?

Jonathan Chapman: If that’s a suggestion that there were some that indicated criminal activity other than voicemail interception, I do not think he is trying to say that. I do not really understand that sentence-I have not had the benefit of looking at his evidence.

Q625 Damian Collins: In the evidence Harbottle and Lewis presented to the Committee, they go in some detail into the discussions between yourself and Lawrence Abramson about the wording of the opinion that they gave-

Jonathan Chapman: Yes.

Q626 Damian Collins: And in particular Lawrence Abramson’s view that he could not support something you had added. I will read out that last sentence for the benefit of people who have not seen it. You had suggested adding, "Equally, having seen a copy of Clive Goodman’s notice of appeal of 2 March 2007, we did not find anything that we consider to be directly relevant to the grounds of the appeal put forward by him."

Jonathan Chapman: Yes.

Q627 Damian Collins: That is a much broader term than that included in the opinion.

Jonathan Chapman: Yes.

Q628 Damian Collins: Again, that does suggest that there may have been some things there that were a cause for concern and may have warranted further investigation, and which therefore meant that Harbottle and Lewis were not prepared to give such carte blanche to the review.

Jonathan Chapman: I think the grounds for appeal of Mr Goodman were related to voicemail interception activities, be it complicity in them from other individuals or knowledge of them by other individuals, so I was trying it on there, to tell you the truth, to see if I could get a wider opinion from him. It was very much limited, as the wording suggests, to his appeal, which was limited to voicemail interception matters. That does not cover, to my mind, anything else nor was it ever intended to, because nothing else was in contemplation at the time other than voicemail interception.

Q629 Damian Collins: To use the legal term, was it Harbottle and Lewis’s view that you were simply trying it on?

Jonathan Chapman: Yes.

Q630 Damian Collins: They just struck it out-

Jonathan Chapman: It is a strange process, and I am not sure that those outside the hallowed portals of the legal profession will necessarily know this, but when you get a report or an opinion from external counsel, your job is to get it as wide as possible if you are in-house, and their job is to cut it back as far as possible and thus limit their liability subsequently, you might say. There was a normal to-ing and fro-ing, and I would say that, as usual, Mr Abramson won on that one and I lost. We got to the final form of the report that he gave and it was very close to what he wanted to give.

Q631 Damian Collins: Yes, and was very narrow in its-

Jonathan Chapman: Yes, very narrow.

Q632 Damian Collins: But, without wishing to be seen to be splitting hairs on this, I think it is of the utmost importance because your very narrow investigation has now been blown open by the Metropolitan police-

Jonathan Chapman: Yes.

Q633 Damian Collins: And there are investigations that suggest that there was more in those e-mails than was shared with people at the time. That is a subject of great interest to not only this Committee but other people as well. When you concluded the review, you and Mr Cloke obviously discussed that and you discussed it with Harbottle and Lewis. Mr Cloke, did you then brief Les Hinton on the outcome of the review?

Daniel Cloke: Yes.

Q634 Damian Collins: Did you say to him, "Good news; nothing to worry about", or did you give him a flavour of what the e-mails contained?

Daniel Cloke: No; from what I recall, I actually showed him the letter from Harbottle and Lewis. If I can be frank, it did not feel like good news at the time actually, because someone had made some very serious allegations, the e-mail review had not brought up anything at all and the people who had been accused cannot prove their innocence, so to some extent you are in middle ground. I would certainly have communicated the result of the letter to him, but I don’t think I would have said, "Good news".

Q635 Damian Collins: Colin Myler, in his evidence says: the phrase I believe "used by Mr Cloke was…‘good news; there is no smoking gun or silver bullet in the emails’." Do you recall saying that?

Daniel Cloke: I do not recall saying that. Again, I’m pretty sure I showed Colin the Harbottle and Lewis letter, but, as I said, it did not feel like good news. We had just interviewed a number of people, putting some very serious allegations towards them and we had done the e-mail trawl, so in some ways obviously it was good news that we had not found anything, but to some extent there is still that suspicion, if you like.

Q636 Damian Collins: So am I right in saying that all Les Hinton knew about the outcome of the review was the opinion letter from Harbottle and Lewis that you showed him? He was not told anything else about it.

Daniel Cloke: Yes, that is right. He knew the review was happening and, as far as I recall, I showed him the letter as a result of the review.

Q637 Damian Collins: Okay. Do you think, based on your knowledge of what the e-mails contained, that that was enough, although you had satisfied yourself in terms of the employment dispute you had had with Clive Goodman, the purpose of the review and the reason you had briefed Harbottle and Lewis. Did either of you consider that there may have been enough suggestion, maybe just insinuation, of other activity that would have at least warranted getting someone with expertise in criminal law to have a look-to have a check-as well, to see whether there should be a further investigation of what the e-mails contained? Is that something you ever discussed?

Jonathan Chapman: Not to my knowledge.

Daniel Cloke: Not that I can recall, no.

Q638 Damian Collins: In your opinion, there was absolutely nothing there at all that might warrant further investigation, beyond the remit of the very specific employment dispute you had with Mr Goodman.

Daniel Cloke: If I can talk as an HR person, the reason why I was anxious to get the e-mails reviewed by a third party was to give us comfort on this employment matter that the review Jon Chapman and I carried out was accurate, and that is why we sent it to a third party.

Q639 Damian Collins: But going back to the question I asked Mr Chapman, clearly there was a discussion about e-mails that were a cause for concern. Harbottle and Lewis were assured that those e-mails were outside the remit of their inquiry, but that does not mean to say that they were not of interest. Harbottle and Lewis have said, and Mr Chapman has said, there were no criminal lawyers involved in this investigation; it was purely an employment dispute. Do you not think there were some grounds perhaps to get a third party to check from a criminal law point of view whether this suggested further wrongdoing beyond the very narrow terms you had set Harbottle and Lewis?

Daniel Cloke: If I can take us back to the events of 2007, at that particular moment in time this was one employee-ex-employee-making allegations about others. As a result, we interviewed those people, and we also looked at around 2,000 to 2,500 e-mails and then took it to a third party. I think at the time I had comfort that taking it to a third party actually was a reasonable step to take.

Q640 Damian Collins: Going back to 2007, it follows on the back of the judge’s remarks at the sentencing of Mr Goodman that he believed there were other people at News of the World who commissioned material from Glenn Mulcaire. It comes on the back of Colin Myler’s appointment, where he and Les Hinton were so concerned about practices at the News of the World that there was a full-scale review of the way people work, with seminars being set up and attempts to re-educate and retrain people. In the context of that particular time, if there was anything in the e-mails that suggested something that should be investigated further, I am amazed that that was not considered, and I am amazed that you did not discuss that with Mr Hinton-the possibility that maybe further work should be done.

Daniel Cloke: We had a situation where an ex-employee was making allegations against other members of staff. We interviewed those people; we held the appeal; we trawled through 2,500 e-mails-I did it separately on two occasions, and I know Jon Chapman did as well-and we sent it out to a third-party review. That gave me comfort as an HR director that we had covered the bases and done the proper thing in terms of investigating these claims, bearing in mind that this was an employment dispute. If there had been a more wide-ranging inquiry, in addition to the Burton Copeland one that has been referred to earlier, frankly I would not have been involved in it, because I do not have those investigative skills.

Q641 Damian Collins: When the review was concluded, was anyone else at News International or News Corporation made aware of the contents of the e-mails themselves, or was all that was shared with people within the company simply the letter from Harbottle and Lewis, which offered their opinion about the conduct of the review?

Daniel Cloke: Yes, that is my recollection.

Q642 Damian Collins: So you two alone in the company understood what had been in those e-mails and the discussions you had had with Harbottle and Lewis external counsel. Any concerns, debates, doubts or question marks remained within your knowledge and no one else in the company.

Daniel Cloke: Yes.

Jonathan Chapman: Yes.

Q643 Damian Collins: With hindsight, do you think that was a good idea?

Daniel Cloke: Hindsight is a wonderful thing, but all I can say is that you had a director of legal affairs and a director of human resources look through 2,500 e-mails, and we also sent them out for a third-party review. In the context of an employment dispute, I think that they are reasonable steps to take.

Q644 Damian Collins: In the context of News Corporation’s codes of practice for employees, they state that employees should promptly raise any concerns about any actual or potential violations of policies with the appropriate people in the company. In the light of that, I wonder whether it would have been appropriate for you to have had a conversation with either Colin Myler or Les Hinton and said, "We don’t have a problem in terms of the employment dispute. We are satisfied with the opinion there, but there are other things that have come out of this e-mail review that may not be hard proof of wrongdoing but that suggest there may be further investigation. That should be handled by an external party and should involve someone with criminal law expertise, because we need to satisfy ourselves that there is nothing there." Maybe if that had been done at the time, you would not be in the place you are now. I wonder whether you feel your behaviour was consistent with the wording of the News International codes of practice for members of staff.

Daniel Cloke: Yes. I can only repeat what we did. We had an ex-member of staff and it is not unusual for ex-members of staff who have been dismissed for gross misconduct to make allegations. We did not sweep them under the carpet. We interviewed the people who that person had alleged were also aware of their wrongdoing and we trawled through 2,500 e-mails, on three occasions internally, and once externally. I think in the context of an employment law dispute, they are reasonable steps to take.

Q645 Damian Collins: We are talking about two different things. You keep talking about the Goodman case and settlement and that was the reason why the e-mail review was commissioned. Everyone understands that. But what I am asking is, outside of the very narrow remit in which you set yourself and you set Harbottle and Lewis, were there other things in those e-mails, and I think there is a suggestion from Lawrence Abramson and from Harbottle and Lewis that there may have been, that may have given cause for concern? They were set outside the very limited review and nothing was ever done about that. There was no opinion taken from any criminal law person. No one else within News International was given any information at all about the fact that there may have been some things that suggested other wrongdoing that should have been further investigated. You are content that that risk was not there and you did not discuss it with anyone else. Putting the context of the Clive Goodman case to one side, I wonder whether you think that you should have done that.

Daniel Cloke: I can only refer you to the comments that I made earlier. I would have hoped that if an independent third party had thought that there was definite evidence of criminal activity, that that lawyer would have told us. And that lawyer did not tell us that.

Q646 Damian Collins: But there is definite evidence, definite proof, and you keep using those terms. But there may have been a grey area which suggested further investigation and there never was any further investigation.

Daniel Cloke: No.

Q647 Damian Collins: Do you think that was right?

Daniel Cloke: I can only refer you to the comments I made earlier.

Q648 Dr Coffey: So talking of the comments made earlier by Mr Chapman, you said that nothing stood out to, in a way, answer what Mr Collins just asked. I appreciate that you are not a criminal lawyer, but what would it have taken for something to have stood out?

Jonathan Chapman: It is a matter of common sense to some extent, seasoned with legal knowledge. If I had seen stuff which I thought was indicative of activities that were criminal, I would have felt under an obligation to report that. I do not think you need necessarily to be an expert criminal lawyer to do an e-mail review and pick up stuff that looks suspicious. We were not looking for anything else. There was no suggestion at the time of any other illegal activities apart from voicemail interception. That is what we were focused on. But if something had stood out to me and looked suspicious then I would have done something about it.

Q649 Dr Coffey: So just to clarify, on the written evidence you have sent to us, Mr Chapman, you talk about how you were tasked with looking at evidence for the employment appeal. I understand that. You also suggest on page 4 that there could have been a further investigation. It did not examine e-mail traffic between Mr Goodman and several other senior reporters and editorial executives. It did not examine e-mails to and from Mr Mulcaire. As you say, it was just a review of e-mails. I understand from what Mr Cloke just said earlier that you only looked at the e-mails that were requested by Mr Goodman. Can you explain why you felt that you could not look at any of the other things? If you are saying that now, perhaps in hindsight, in order to do a full job, why didn’t you do some of the things that you suggested could have been done?

Jonathan Chapman: Absolutely, Dr Coffey, but my brief here was as an employment lawyer. I did not have responsibility for the editorial and journalistic side of the business there. I was asked to assist on this in a relatively limited and narrow way, as was Daniel. So it was not for us to suggest at that time that the inquiry should go further. We were 10 months after the events of August 2007 and we were looking at this in a reactive way in the context of an employment appeal.

Q650 Dr Coffey: The impression I have taken from some of the letters is that it was Mr Cloke who decided what would be looked at internally in reaction to the claims by Mr Goodman. Could you confirm my view on that?

Jonathan Chapman: Yes, I think we had discussions on it. But basically what I did was to look at the letter that Clive Goodman had sent and then discuss with my colleagues, saying, "Okay, I think we need to look at these documents."

Q651 Dr Coffey: So you specifically chose to narrow it solely to the e-mails that Mr Goodman had requested. If you can go back in your mind, why would you only do it for that and perhaps not delve a little bit wider to, for example, Mr Mulcaire, to the private investigator?

Daniel Cloke: I think we did look at some other documents as well. I think, from memory, we did look at invoices. I think Mr Myler and his team looked at those. In terms of some of the other-

Q652 Dr Coffey: So you think Mr Myler and his team looked at those.

Daniel Cloke: Yes. I think, from memory, Mr Myler and his team looked at invoice payments. Some of the other documents Mr Goodman had requested were matters of public record, such as Les Hinton’s remarks to the Committee and those sorts of things. So I think we did look at more than just the e-mails.

Q653 Dr Coffey: That leads me on nicely. As you say, Mr Goodman asked for several things. He asked for e-mails relating to his transfer from one budget to another and e-mails between specific individuals, but also mobile phone records and payment information. Based on what Mr Goodman was trying to base his appeal on, is there any reason why you two would not have looked at all those different story payments and that kind of level of detail?

Daniel Cloke: No. I did not look at the story payment details. As I said, I think in terms of the payments and invoices, that was Mr Myler and his team. I looked at a lot of the other documents, and I think it is probably worth pointing out in the context of this that what we appeared to be having at the time was someone who was almost on a fishing expedition and requesting a huge amount of documentation in terms of almost like a discovery process from a court perspective. However, in actual fact, the central issue that I, as an HR director, was looking at was whether his conduct was gross misconduct and whether the company was within its rights to dismiss him. That was the central issue that I was dealing with. Then, in terms of the other aspects, we decided to look at those as well, but it was not a forensic, wide-ranging investigation. It was purely within the context of that employment dispute.

Q654 Dr Coffey: Finally-I do not want to stray too much into what Mr Davies will do, Mr Chairman-could you let me know when you first became aware that Mr Goodman was going to plead guilty and why procedures were not initiated then for gross misconduct?

Daniel Cloke: I was not aware that Mr Goodman was going to plead guilty. The first involvement that I had with this matter was when I received Clive Goodman’s appeal letter.

Q655 Dr Coffey: So it is fair to say that Mr Crone did not inform you that-there were suggestions made by Mr Goodman that Mr Crone was present at meetings and knew he was going to plead guilty, but Mr Crone withheld that information from you.

Daniel Cloke: I do not recall speaking to Mr Crone on that at all until after we received Clive Goodman’s appeal letter.

Dr Coffey: Thank you.

Q656 Jim Sheridan: Briefly, can you give us an idea of what period of time this review of e-mails, invoices and other documents was over? What period of time would it take you to carry out this review?

Daniel Cloke: From memory, I think it was about six weeks from start to finish. This was four and a half years ago and I do not have any of my notes, but it was about six weeks. I think there was a break, because there was Easter and those sorts of things, but it was that sort of time.

Q657 Philip Davies: May I go back a bit to the start? I think you said at the start, Mr Cloke, and you just repeated it to Dr Coffey, that you had no involvement at all in the Clive Goodman case until you received his letter of appeal. Given that this chap had committed a criminal offence and was bringing the company into shame, it seems quite extraordinary that the group HR director would have had no involvement at all in the decision to sack him or other decisions. Can I just go back? It seems that during his trial, when he was pleading guilty, he employed the services of John Kelsey-Fry to represent him in court. He was one of the most expensive lawyers in the country, if not the most expensive lawyer in the country. It now appears that News International paid for his legal representation in that case. Who authorised News International to pay for Clive Goodman’s legal costs at a trial where this chap is pleading guilty to a criminal offence that means a summary dismissal and is bringing the company into shame. Who authorised that News International will pay his legal fees?

Daniel Cloke: I do not know.

Jonathan Chapman: I do not know. You will have to ask Mr Crone, because that is a matter for the newspaper lawyer.

Q658 Philip Davies: The thing is we asked Mr Crone back in 2009, and he said that he did not know. If he did not know, and you do not know, who would know who authorised it? In that context, it seems extraordinary that those legal fees would be paid for the most expensive lawyer in the country. You are the HR director, surely you have some involvement in such things.

Jonathan Chapman: I had no involvement in that or in the decision.

Q659 Philip Davies: If you had been asked, would you have suggested that it was an appropriate thing for the company to do?

Jonathan Chapman: It is appropriate for the company to do that only if it has a purpose. If, for example, there is a vicarious liability issue through which the company could be held liable for something in the context of civil litigation, it might be appropriate, in certain instances, to look at an individual defendant’s position. But in that circumstance, I have no idea. I am afraid that I cannot answer the question.

Q660 Philip Davies: Your view is that Tom Crone would know, despite my saying, "We asked him earlier, and he didn’t know"?

Jonathan Chapman: Yes, I think you should ask Mr Crone.

Q661 Philip Davies: Going through the papers we received, I want to explain how I saw them and my reaction, because it seemed quite an extraordinary situation. Here is a man who has pleaded guilty to a criminal offence, gross misconduct; summary dismissal. He has left the company. He receives a letter from Les Hinton explaining to him that he was being summarily dismissed, but in that the letter it said-I am summarising here-that he had been a good egg for many years for the paper. He had worked for many years without a blemish on his character and, even though the company were not obliged to do anything at all, in lieu of his previous work for the company they would, as a gesture of good will, pay him a year’s salary, which seemed to be in the region of £90,000. Who decided that it was a good course of action to pay him a year’s salary, based on the fact that he had committed a criminal offence?

Daniel Cloke: I think that is a question you will have to ask Mr Hinton. As I have said, I was not involved until the appeal process.

Q662 Philip Davies: Mr Chapman, were you not involved at all in deciding?

Jonathan Chapman: Mr Hinton asked me to help him with that letter. He indicated that he was going to pay 12 months’ salary, and he said that he wanted to do it on compassionate grounds because of Mr Goodman’s family situation. That is all I can recall, but it is a question for Mr Hinton.

Q663 Philip Davies: Did you not express any surprise that this was a strange precedent for the company-paying people a year’s salary for committing a criminal offence?

Jonathan Chapman: It could be seen on the outside as a strange thing to do, but it was Mr Hinton’s decision.

Q664 Philip Davies: Did it not seem a strange thing to you, on the inside?

Jonathan Chapman: I can see both sides of it. I can see that, viewed externally, it looks strange, but I can also that if you have someone who has a hitherto unblemished record and they have a family, to throw them straight out with no financial support for the family is a tough thing to do. I can see both sides.

Q665 Philip Davies: But you did not raise any objection to this as a strategy?

Jonathan Chapman: Mr Hinton had decided to do it.

Q666 Philip Davies: As I read this letter that has gone out to Clive Goodman: "Here’s a year’s salary. You’ve committed a criminal offence, and we don’t have to do anything at all, but you’ve been a good egg. Here’s £90,000." Then it says afterwards, "You have 28 days in which to appeal against this decision."

I am reading this letter thinking, "My God, £90,000 for committing a criminal offence. There is no way this chap is going to appeal. He’s going to take the money and run. He must be the luckiest man on earth." The next letter I read in the file is Clive Goodman saying, "Too right, I want to appeal. For all these reasons-".

You have explained in some detail the extent to which you checked the veracity of Mr Goodman’s claims. You have gone through that, and I do not want to go over that kind of ground. The bit I struggle with is that earlier you seemed to say that you could not find any evidence to back up Clive Goodman’s claims in his appeal letter. Did I hear you right? You could not find any grounds. Clive Goodman was taking his case to a tribunal. You had looked at all of this information and had done what you thought was above and beyond the call of duty in terms of an employment matter. If Clive Goodman had pursued his case to a tribunal and won, can you clarify what was the maximum amount Clive Goodman could have been awarded?

Jonathan Chapman: Notice and up to about £60,000 compensatory award, unless he was able to bring a claim under the Public Interest Disclosure Act-the whistleblowing Act-in which case the compensation is unlimited.

Q667 Philip Davies: But generally, £60,000 was the upper limit of the tribunal powers.

Jonathan Chapman: A compensatory award, plus contractual awards.

Q668 Philip Davies: Absolutely. As far as you were concerned, there was no basis in his appeal because you had checked out all of this information and could find no supporting evidence, so there was no basis. You were quite confident that you had made the right decision to dismiss it as a result of-you were happy that the company made the right decision.

Daniel Cloke: As an HR person, I think if you are convicted of a criminal offence, the company is within its rights. I probably would have dealt with the process slightly differently, but in terms of the broad decision-yes.

Q669 Philip Davies: Absolutely, I think we’d all agree with that. What then is bizarre in the extreme to a layman like me is given that if Clive Goodman had gone to a tribunal, the upper limit of what he could be given was £60,000, and having said that you were absolutely adamant that the right decision had been taken-there was nothing to support his allegations-so you could have defended yourselves at the tribunal, that didn’t happen. You two took the decision, according to James Murdoch, not to defend yourselves at a tribunal, but to pay off Clive Goodman, not to the tune of £60,000, but to the tune of £140,000 plus £13,000 costs. If you’d made the right decision, and there was absolutely no basis for Clive Goodman’s allegations, what on earth were you doing paying him a further £140,000 on top of the £90,000 he’d already been given as a year’s salary? How on earth could you justify that?

Jonathan Chapman: May I answer that? We didn’t take the decision. The decision was taken by Mr Hinton that it should be settled, following our work on it and recommendation, having been told to try to get a reasonable settlement figure. The position is that it was a stark choice: settle at a reasonable figure or end up in tribunal. The tribunal proceedings would have been several months down the line. At the tribunal proceedings, Mr Goodman would have been able to make a number of allegations, which we did not believe, having done our exercise, had any foundation, but he would have been able to make those allegations in a public forum. There was a-this is a pragmatic, commercial business decision, to my mind, and can be characterised as that. Many companies, particularly big companies, pay out on employment claims of little or no merit for pragmatic reasons, because they do not want stuff to be raked up. Even if allegations that are unfounded are made in the context of a tribunal, those who wish to believe those allegations will believe them.

Q670 Philip Davies: You’ve paid a quarter of a million pounds to this man. A quarter of a million pounds for committing a criminal offence.

Jonathan Chapman: I was asked to settle the matter when the appeal process had finished and we got lawyers’ letters. The £90,000, I have to leave to Daniel or Mr Hinton to explain, because that was outside my brief and I don’t really have any recollection of how that fitted into it. It is not part of the settlement-the £90,000. I also don’t believe it was actually paid in February as indicated in Mr Hinton’s letter; I have a recollection that Mr Goodman’s family said they didn’t want it then, so the history of that £90,000, I can’t-

Q671 Philip Davies: So what was your advice? When you got Clive Goodman’s letter, and you had done your investigation and decided that there was no merit in these allegations, what was your advice as the legal director and the HR director as to what you should do? Was it that you should pay that money? Was that your advice to Les Hinton?

Jonathan Chapman: I was asked to try to reach a reasonable settlement with Mr Goodman’s lawyers on this. As I’ve said, I believe that there was no basis on which we were trying to cover up anything. We had carried out an e-mail review and a number of executives had been interviewed by Mr Cloke and Mr Myler, as Mr Myler told us in his evidence in August, so my job was to see if we could reach a reasonable settlement. We got to a figure that would have been, in my mind, potentially acceptable from our point of view for a settlement, which was based on notice and £40,000 out of the maximum £60,000 compensatory award. I went back to Mr Cloke with that. Then that went to Mr Hinton and that was accepted.

Q672 Philip Davies: How was the £140,000 made up?

Jonathan Chapman: It is essentially notice-

Q673 Philip Davies: Another year’s salary?

Jonathan Chapman: Yes.

Q674 Philip Davies: So you did not take the first year’s salary that had already been given into account?

Jonathan Chapman: As I said, my brief at that time, having come into this exercise after the appeal proceedings and being asked to deal with Mr Goodman’s lawyer, was to settle the matter. On the £90,000 payment, I don’t know the circumstances of that, I’m afraid, but it was not part of the settlement. It was gratuitous, in other words. It was not part of a settlement agreement.

Q675 Philip Davies: When you say you were tasked to make a reasonable settlement, what constituted a reasonable settlement? What was the upper limit that you had in your mind that you would have baulked at? What level would you have got to where you would have said, "Well no, we’ll take this to a tribunal"?

Jonathan Chapman: A traditional settlement will be the contractual notice period, which here was between £90,000 and £100,000, and an element to represent the compensatory award that a tribunal would grant to the claimant. So here we had £140,000. I thought that given that there was a desire to settle the case for pragmatic, commercial business reasons, that was potentially an acceptable outcome. But to say how far we would have gone: probably not much further.

Q676 Philip Davies: It strikes me as bizarre that you knew that he had already had a year’s salary and you didn’t actually say, "You’ve already had your year’s salary, so now we are talking about the tribunal bit". It seems to me bizarre that you would agree to another year’s salary on top of that. That seems a most extraordinary thing in the circumstances.

Jonathan Chapman: It was not me agreeing to that, it was not me having a say on that finally. It was Mr Hinton. I don’t have a final say on any settlement.

Q677 Philip Davies: But did you recommend that they settle? Was that your recommendation?

Jonathan Chapman: Given that the imperative was to try to settle at a reasonable amount, I said, "This is as good as we are probably going to get". There was quite a significant negotiation. It was not a short process.

Q678 Philip Davies: You said that you did not want to cover up anything. It was not an issue of covering up anything. That seems to me exactly what it was because you have just made it clear that the reason you were prepared to settle at such a high figure was simply to stop it from being raised in open forum at a tribunal. That was the motivation: to try to cover it up-from these allegations being made more widespread-wasn’t it?

Jonathan Chapman: What we were trying to do was to stop the reputational effect of a tribunal claim where allegations, which we believed to be unfounded, having carried out investigations, would be made and those who wished to give currency to those allegations would do so.

Q679 Philip Davies: There was a confidentiality agreement as part of the payments as well, was there not?

Jonathan Chapman: The standard compromise agreement confidentiality clause, yes.

Q680 Philip Davies: Which also helps to cover it up?

Jonathan Chapman: My view on confidentiality clauses is that if in the context of a tribunal or court someone tries to plead a compromise agreement’s confidentiality clause, you would be hard pressed to do so. For an employer to try to bring an injunction in the context of court proceedings would be strange.

Q681 Philip Davies: My final question is this. After you made this extraordinary settlement to Clive Goodman of almost a quarter of a million pounds for committing a criminal offence, who knew within News of the World, News International, News Corporation, that that scale of payment had been made? Who would have known that?

Daniel Cloke: I think it would have been Mr Hinton, Mr Myler. They would probably be the two people as well as Jon, myself-

Q682 Philip Davies: Would Mr Kuttner have known?

Daniel Cloke: I do not know.

Q683 Philip Davies: But Mr Myler would have known?

Daniel Cloke: I believe so.

Q684 Philip Davies: So when I said to Mr Myler back in 2009, "Was any payment subsequently made to Clive Goodman" and Mr Crone said, "I am certainly not aware of it," would that be right?

Daniel Cloke: If that is what Mr Crone has said, yes.

Q685 Philip Davies: Mr Myler said "Again, likewise, I am not aware of any payment" either. You are quite clearly saying that he would have known that a payment had been made when, quite clearly, he said, back in 2009, that he wasn’t aware of any payments that had been made.

Daniel Cloke: I cannot comment on the specific question you had asked him, but certainly, Colin would have known a settlement had been reached.

Q686 Philip Davies: Of that kind of figure.

Daniel Cloke: I do not know whether he knew the actual amount.

Q687 Cathy Jamieson: Can I just take a moment or two to follow up on a couple of points, just for absolute clarity? In written evidence, it appears that James Murdoch did state that Clive Goodman was paid the amounts "£90,502.08 in April 2007 and £153,000 (£13,000 of which was to pay for his legal fees) between October and December 2007. The first payment was approved by Mr Daniel Cloke, Director of Human Resources…The second was approved by Mr Cloke and Mr Chapman, Director of Legal Affairs…These payments were"-as we have heard-"in the context of an unfair dismissal claim". Why would he couch the answer to the question of who authorised the payment in those terms? You are telling us this morning that a whole range of other people knew and had involvement in that process.

Daniel Cloke: In terms of the first £90,000, I was not even aware that that had been paid, because the letter was-I think-in February, and I did not know of any of this until the appeal process came.

Q688 Cathy Jamieson: So you are stating that you did not authorise that £90,000 payment.

Daniel Cloke: No, because it was in Les Hinton’s letter of-I think-February 2007, and I had not even seen that until the appeal meeting took place with Clive Goodman.

Q689 Cathy Jamieson: And in terms of the second payment, when it says that it had been authorised by both of you?

Daniel Cloke: The second payment-I remember agreeing to the recommendations we had from our legal team, but the final authorisation was Les Hinton. Les Hinton had been the person who had taken the decision to dismiss Clive Goodman and, as is usual, you would get that person’s approval before the settlement was reached.

Q690 Cathy Jamieson: So is Mr Murdoch simply wrong in stating-

Jonathan Chapman: May I just intervene here? What I think has happened here is that Mr Murdoch’s team have looked at internal financial approval records. They have gone to accounts, and certain people within News International had certain limits. So, typically for a settlement of a compromise agreement, I would have just initialled it-because unfortunately, as a poor lawyer, I had virtually no ability to authorise anything. Then that would have been authorised by someone who had a higher financial limit signing it, and that would have been Daniel, but we are talking here about the process of getting the payment through and not the actual prior authorisation of the settlement.

Q691 Cathy Jamieson: Does it not seem strange though that only that information would be given to the Committee, rather than the information that has been brought to the Committee here this morning, in terms of the wider involvement of people at News International?

Daniel Cloke: Could you repeat the question for me?

Q692 Cathy Jamieson: If the question was, "Who authorised the payments?", surely Mr Murdoch would have understood that we did not want to know who had actually signed the cheque or filed it in accounts. We wanted to know who had taken the decision.

Daniel Cloke: I understand the question now. I think that is a question for Mr Murdoch.

Q693 Cathy Jamieson: Can I also double-check? You made reference earlier to your trying to negotiate-or you had the authorisation to negotiate-a settlement, and you probably could not have gone much more. Presumably, someone spoke to you and said at some stage, "You are authorised to negotiate up to X amount". What was that amount that you were authorised to negotiate up to?

Jonathan Chapman: I believe the amount would have been very close to what we finally settled at, because it is within the normal parameters on a compromise claim. I would feed back-typically, in these circumstances, I would work with HR. I would be called in when it became contentious to try and deal with the other side’s lawyers. I would then liaise with the person in HR who was dealing with the file-or in this case, Daniel-and feed back to them on where we getting on the to and fro of negotiation.

Q694 Cathy Jamieson: Again, just to be absolutely clear, in terms of who, or which group of people, finally took the decision on those payments, before it was sent down to you guys to sign off the process-who was that?

Jonathan Chapman: The process would have been me saying, "I believe we have reached the end of the road if we are going to get a negotiated settlement on this." I would have spoken to Daniel about that, and then that went to Mr Hinton.

Q695 Cathy Jamieson: So it is Mr Hinton, absolutely, who had the final decision, and you would then have expected him to report to anyone else or simply to take that decision.

Jonathan Chapman: Yes, as he chose.

Q696 Mr Sanders: On confidentiality clauses, you presumably have a standard confidentiality clause for the eventualities of employees having to have their contracts terminated. Did the confidentiality clause for Mr Goodman deviate at all from your standard confidentiality clause?

Jonathan Chapman: No, it did not.

Q697 Jim Sheridan: May I follow up the questioning by Mr Davies? In a past life, I had the misfortune to represent people at industrial tribunals, and I must say that I would have been delighted to go to a tribunal chaired by your good selves. If I, at any moment, had gone into a tribunal and said, "Not only do I want 12 months’ pay for this convicted criminal, but I want an additional payment on top of it," I would have been told to go away and sober up. That is just incredible. You are asking us to believe that is the case. Is that precedent now set for every employee in News International? If a cleaner gets sent to prison, when he or she comes out do they get a year’s salary and a top-up payment?

Daniel Cloke: Shall I answer that, because I think Jon has answered this question. The company at the time had a choice to make. If I can take us back to 2007, what had happened was that someone had been convicted and had gone to prison. As a result, we had lost a successful and popular editor. A new editor had been appointed and essentially was putting in place policies and procedures and, if you like, getting the ship back on an even keel.

Then, several months later, from left field comes a series of allegations, which we investigated and did not believe were substantiated. Then the company had a very simple choice to make. Bearing in mind that things, if you like, had just been starting to return to normal, do we allow this matter to proceed to an employment tribunal, where the proceedings are very widely reported and potentially unsubstantiated allegations can be made, which will be widely reported, or do you try and make a reasonable settlement? Those sort of commercial judgments are made very frequently by lots of companies and lots of individuals.

Q698 Jim Sheridan: The question I am asking is whether that is company policy.

Daniel Cloke: No.

Q699 Jim Sheridan: So you treat people differently depending on what level they are in the food chain.

Daniel Cloke: You would look at the merits of the case that you’ve got. In this particular case, as I think you know, we felt that we were exposed in terms of procedural grounds and that we would probably lose at an employment tribunal on procedural grounds, so it becomes a matter of commercial judgment.

Q700 Jim Sheridan: Can I ask both of you whether, in the unlikely event that both of you went to prison, you would expect to be treated the same way as Mr Goodman?

Jonathan Chapman: It is a tough question. I do not think that I would be, no.

Q701 Jim Sheridan: Why not?

Jonathan Chapman: One thing that Daniel has not mentioned is that there-I have noted that on the editorial side at News International, there has certainly always been more of a feeling of family compassion and humanitarian stuff, which, as a person on the commercial side at News International, I am not sure that I would enjoy. I do not think that there is anything sinister in that; I just think there is quite a big feeling of family on newspapers. 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. I am not sure that applies through the business to the rather newer commercial side at News International.

Q702 Jim Sheridan: It certainly does not apply to politicians and the effect on politicians-you do not think about their families when you do these things.

Can I just get a flavour for what you were doing at News International, Mr Chapman? How long did you work there?

Jonathan Chapman: I worked there for eight years, Mr Sheridan.

Q703 Jim Sheridan: Who did you report to?

Jonathan Chapman: I reported initially to the chief financial officer, and there was a period of time during which I reported to a US lawyer who was in charge of News Corporation Europe and Asia. Latterly, before I left, I reported to the chief financial officer.

Q704 Jim Sheridan: Who did you work for prior to News International?

Jonathan Chapman: I started off at Clifford Chance-a large law firm-as a mergers and acquisitions and corporate finance lawyer. I then moved to Enron Europe, which has been a source of some hilarity in the press, where I was an infrastructure projects lawyer. I ended up being head of HR there before I left, and I had another human resources role for a short period of time in the energy industry before going to News International.

Q705 Jim Sheridan: Why did you leave News International?

Jonathan Chapman: Really for personal reasons. It sounds strange to say, but I wanted to do other things. I am a deals lawyer, really, so I do buying and selling companies, projects and investments, and that sort of work had dried up completely at News International over the last year or two. In a fit of mid-life crisis I decided to leave and see if I could find something else rather than looking for a job within-

Q706 Jim Sheridan: What are you doing now?

Jonathan Chapman: Nothing.

Jim Sheridan: You are not working?

Jonathan Chapman: No.

Q707 Jim Sheridan: You said in your statement that you do not wish to suggest that anyone intentionally misled Parliament on 19 July. Are you seriously now suggesting that James and Rupert Murdoch and Rebekah Brooks did not know what was going on?

Jonathan Chapman: What I think, Mr Sheridan, is that their evidence, in so far as it related to me and Daniel on 19 July, related to the 2007 e-mail review. 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.

Q708 Jim Sheridan: You say they had no direct knowledge of what was going on. Did they have any indirect knowledge of what was going on?

Jonathan Chapman: I suspect not much.

Q709 Jim Sheridan: Is that a yes or a no?

Jonathan Chapman: Probably not.

Q710 Jim Sheridan: They did not know anything was going on?

Jonathan Chapman: I am talking about the 2007 e-mail review specifically, and how it was carried out and what its parameters were. I do not think any of them would have direct knowledge of it, because Rebekah Brooks was an editor at the time, Mr James Murdoch was out of the country doing other things and Mr Rupert Murdoch was in the States, so to the extent only that Mr Hinton told him what was going on; there would be no real knowledge of that process. That is why I found it strange that they were very definitive about what had happened, and what its parameters were and so on.

Q711 Jim Sheridan: I do not mean to be offensive, but you probably realise that people will find it incredible that this was going on and senior management knew nothing about it.

Jonathan Chapman: The e-mail review? Our e-mail review?

Jim Sheridan: Yes. Everything that was going on in News of the World.

Jonathan Chapman: Mr Hinton knew about the e-mail review, because he commissioned us to do it.

Q712 Jim Sheridan: Mr Cloke, can I ask you as well, how long did you work at News International?

Daniel Cloke: About seven years.

Q713 Jim Sheridan: And who did you report to?

Daniel Cloke: First Les Hinton, then James Murdoch and finally Rebekah Brooks.

Q714 Jim Sheridan: And are you currently employed?

Daniel Cloke: Yes.

Q715 Jim Sheridan: Who by?

Daniel Cloke: Vodafone.

Q716 Jim Sheridan: Can I put it to you that these large payments to Goodman would suggest that phone hacking was rife at News of the World and you didn’t want anyone to know? Would that be an accurate description of what was going on?

Daniel Cloke: No, not at all. To respond to that question, we had an ex-employee making serious allegations. At the time, that was all that was occurring; we didn’t know what we know now. We looked at those allegations, we went through 2,500 e-mails and we sent it out to an independent review. That is not conducive with trying to cover something up.

Q717 Jim Sheridan: Were you informed of the terms of the Mulcaire settlement?

Daniel Cloke: No, not the terms. I knew a settlement had been reached, but not the terms.

Q718 Jim Sheridan: Why do you think you were not informed of it?

Daniel Cloke: Glenn Mulcaire was not an employee of the company, so I would not have been involved in that.

Q719 Jim Sheridan: It was not because News International had something to hide?

Daniel Cloke: No. Glenn Mulcaire was not an employee of the organisation.

Q720 Jim Sheridan: Finally, did you have any discussion with Mr Crone about the allegations made by Mr Goodman?

Daniel Cloke: Yes, we did.

Q721 Jim Sheridan: What did he say?

Daniel Cloke: He denied them.

Q722 Mr Watson: Mr Chapman, other than yourself and Mr Cloke, Mr Myler and Mr Hinton, was there anyone else in the company aware of the Harbottle and Lewis investigation/review?

Jonathan Chapman: The exercise. Yes, I reported to the CFO at the time, who I would have told as part of my normal reporting process what was going on but without any great level of detail.

Q723 Mr Watson: Who was the CFO?

Jonathan Chapman: It was a guy called Stephen Daintith.

Q724 Mr Watson: Would Mr Hinton have raised that with his bosses in America?

Jonathan Chapman: I think that may be a question for Mr Hinton, Mr Watson.

Q725 Mr Watson: Mr Cloke, you said that Mr Myler and his team reviewed the invoice payments. When you say his team, who would that be?

Daniel Cloke: I do not know. I know that Colin was looking at those payments, and I do not know who he asked to do that.

Q726 Mr Watson: But there would be other people helping him do that.

Daniel Cloke: Yes, that would be my assumption, from memory.

Q727 Mr Watson: Mr Chapman, just to follow on from my colleague on the left, when you said you were trying it on with Mr Abramson on the thing he refused to put his name to, did you then follow that up with any other conversations, other than e-mail? Did you phone him or have face-to-face conversations with him about that?

Jonathan Chapman: I think our conversations and our interaction are set out in the Harbottle and Lewis statement, as I recall.

Q728 Mr Watson: Do you accept that it was wrong of Rupert Murdoch to blame Harbottle and Lewis for failing to investigate phone hacking properly, as that was not their remit?

Jonathan Chapman: I think that Mr Murdoch did not have his facts right when he did that. It goes back to what I said to Mr Sheridan-I do not think he had been briefed properly.

Q729 Mr Watson: So do you accept that he was wrong to say that?

Jonathan Chapman: I think it was wrong to set the Harbottle and Lewis exercise out-

Q730 Mr Watson: Answer the question. Was he wrong?

Jonathan Chapman: Yes, he was wrong.

Mr Watson: Thank you very much.

Chair: Final question, Philip Davies.

Q731 Philip Davies: There seems to be a bit of shifting the blame going on here. Let me just to try to clarify the situation. Back in 2009, I asked Les Hinton about the payments to Clive Goodman, and he said in answer not that it was his decision, or that he was initiating the decision, but that he did not have much experience in this field. He said, "The employment law was complicated and I was told that we should settle and I agreed to do it." Is that right? Did you tell him that you should settle, and he agreed to it, or did he say he wanted to settle and got you to agree to it?

Jonathan Chapman: Given that we had a commercial imperative to settle if we could at a reasonable cost, for the reasons Daniel set out, I recommended, given that commercial imperative, and given the brief I had to try and settle, that we settle. But it is not my decision; it is never my decision to say we’ve absolutely got to settle. There have been several occasions-quite high-profile cases-in the past where Daniel and I have recommended settlement, and the business has gone against us.

Q732 Philip Davies: Final question to you, Mr Cloke. In our previous session with Tom Crone and Colin Myler, when Paul Farrelly asked about payments to Glenn Mulcaire, Mr Crone replied that some payments were made, but it was in relation to employment law. He was not an expert, but as he understood it, the law meant that if you do so many hours a week, there are certain employment rights that come with that and that that was why there was a reason to pay off Mr Mulcaire. Now, you have just said you had no dealings with that because he was not a News International employee. Does somebody in his position have any employment rights?

Daniel Cloke: I do not know how often Glenn Mulcaire worked for the organisation; I do not have his records.

Q733 Philip Davies: You were never asked for any advice as to whether he would have had any employment rights?

Daniel Cloke: No.

Chair: I think that is all the Committee has. Thank you very much.

Witnesses: Tom Crone, former Legal Manager, News Group Newspapers, and Colin Myler, former Editor, News of the World, gave evidence.

Q734 Chair: For the second part of this morning’s session, I welcome back to the Committee Tom Crone, the former legal manager of News Group Newspapers, and Colin Myler, the former editor of the News of the World? Can I start with asking you about what has become known as the "for Neville" e-mail, which is essentially the main reason why we first wished to ask you to come? You made a statement, following this Committee’s session with Rupert Murdoch and James Murdoch, in which essentially you gave a different account of what had occurred. Can I first of all establish that both of you are certain in your mind that you told James Murdoch about that e-mail when you came to discuss the terms of the settlement with Gordon Taylor?

Tom Crone: I am certain. It was never referred to as the "for Neville" e-mail. That is quite significant, I think.

Colin Myler: Me, too. I am as certain as I can be.

Q735 Chair: Perhaps I could just explore that. I think, Mr Crone, you have said that essentially it was the sole reason for settling with Gordon Taylor.

Tom Crone: That’s correct.

Q736 Chair: So, in your mind this changed the picture entirely. Until you were made aware of this e-mail, there was not reason to settle. This e-mail was produced and you said, "Right, everything is now different. We’re going to have to settle."

Tom Crone: Yes, that was the decision or the advice that was formulated in consultation with the outside lawyers after sight of that e-mail transcript.

Q737 Chair: This was therefore a pretty devastating piece of evidence. It was going to cost the company you were working for the settlement with Gordon Taylor of £600,000, and a great deal more.

Tom Crone: It was a piece of evidence that meant we had to settle the Gordon Taylor case, yes. How much was effectively up for grabs through negotiation.

Q738 Chair: Because when you appeared before the Committee in 2009, when we examined this and we discussed the e-mail, you said that Neville Thurlbeck didn’t remember it, Ross Hindley didn’t remember it. You hadn’t managed to find evidence that it had been sent anywhere else from the servers operated by the newspaper and therefore it didn’t seem to be that important.

Tom Crone: I don’t think I ever said it wasn’t important.

Q739 Chair: No, but you said all the previous things-that the person it was supposed to get to didn’t remember it.

Tom Crone: We made it absolutely clear to this Committee how important that e-mail was on the last occasion. Mr Myler said that there were three things that needed to be discussed. The third item he identified was the e-mail. He effectively dispensed with the other two because one was irrelevant-that was Operation Motorman-and the other was the evidence given to the Committee previously by Les Hinton. Mr Myler made it clear that he thought that that was Mr Hinton’s truthful account as he then knew it. He said that leaves only one issue to be dealt with here today and that is the documents that had arisen-and one of them was the "for Neville" e-mail. He said that is the reason we are here, to answer questions about that. So we did not-we did not-underestimate or mislead you in any way whatsoever about the importance of that e-mail.

Q740 Chair: Okay. So do you regard the mere existence of the e-mail as evidence that phone hacking was taking place beyond Clive Goodman?

Tom Crone: I said that to the Committee on the last occasion. It was evidence clearly. That was the first piece of evidence that we had seen that it went beyond Clive Goodman.

Q741 Chair: Given it was so significant, clearly it must have featured pretty large in your conversation with James Murdoch?

Tom Crone: Listen, it was the reason that we had to settle the case. And in order to settle the case we had to explain the case to Mr Murdoch and get his authority to settle. So, it would certainly have been discussed. I cannot remember the detail of the conversation and there isn’t a note of it. The conversation lasted for quite a short period-I would think probably less than 15 minutes, or about 15 minutes. It was discussed, but exactly what was said I cannot recall.

Q742 Chair: But given that it was such a significant piece of information, surely you would have shown it to him. Mr Murdoch would have said, "Well, can I see this?"

Tom Crone: Not necessarily. Actually, I have been reminded since that there is a very good reason for that, which I had forgotten: when we were given copies, when the copy of the e-mail came into our building to me-I think just to me-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. That was probably insisted upon by Gordon Taylor, because the document contained Gordon Taylor’s personal information, and his lawyers were very sensitive about where that information went.

Q743 Chair: Even the Committee was given a severely redacted version.

Tom Crone: But not by Gordon Taylor.

Chair: No, indeed.

Tom Crone: By The Guardian.

Q744 Chair: It was by The Guardian, but, presumably, you could have shown him a sufficient amount to demonstrate how important it was, without necessarily-

Tom Crone: I cannot remember whether I showed it to him or not-I certainly did not make a copy of it-but I know that I discussed it with him.

Q745 Chair: Mr Myler, what is your recollection of those events?

Colin Myler: Mr Crone came to me in the morning, probably after conference, and explained the situation regarding the evidence presented to us by Mr Taylor’s legal team. It was clearly something that we would need to take to the chief executive. I told him that I did not know whether James Murdoch was available. As it turned out, he was in the country and was in the office that day. My secretary called his office, and, in the mid or late afternoon, Mr Crone swung by my office and we went down to see him.

Q746 Chair: May I turn to the letter that Clive Goodman sent on 2 March 2007 appealing against his dismissal? In that letter, he suggested that the grounds on which he was appealing should not come as any surprise because you, Mr Crone, had been at all of the meetings of his legal team. Were you aware, therefore, that his argument was going to be that others were doing it?

Tom Crone: No. I did not know anything about his letter until quite recently. I think Daniel Cloke came to ask me questions about points that he was raising in his appeal against dismissal, but I certainly was not aware that it was all contained in a letter, nor did I have sight of the letter, to the best of my recollection.

Q747 Chair: But one of the key points that he makes in the letter is, "This should not come as any shock, because Tom Crone has been involved in all of the discussions I have been having."

Tom Crone: He certainly makes that suggestion, but it is not true.

Q748 Chair: It is not true?

Tom Crone: It is not true.

Q749 Chair: Did you attend meetings of his legal team?

Tom Crone: I attended one full legal conference, the first one, but on the second occasion he said that he did not want me there for the entirety of the meeting. That was relayed to me through his solicitor, but the solicitor said that I could come in at some stage. I sat outside the meeting for quite a long time, and I went in for the last 20 minutes.

Q750 Chair: So, "Attended virtually every meeting of my legal team," is simply wrong?

Tom Crone: Yes. It is also wrong to say that, in the one-and-a-half legal meetings that I attended, I ever heard him say anything about, "Everyone else is doing it. It is common practice." That was not mentioned at all.

Chair: Presumably, however, when Mr Cloke received the letter-

Tom Crone: Nor, most relevantly, was it put forward in court, so it was not part of his defence at all.

Q751 Chair: Indeed. On receiving the letter in which you are named as having been involved in all of those discussions, did Mr Cloke not come and say, "I have received this letter in which he says you knew all about it"?

Tom Crone: I cannot remember him saying, "I have had this letter," but we did have a conversation at some stage about Clive raising an allegation in his appeal against dismissal. There seem to be two allegations in that letter, as far as I can tell: one is that I am supposed to know that he was saying that everyone was doing it; and the other is that I am supposed to have effectively said to him, "If you keep your mouth shut, you’ll keep the job." I cannot remember whether both allegations were mentioned, or which allegation was mentioned, to be perfectly honest. But he came to talk to me about at least one of those allegations, and I said that I did not believe it was true.

Q752 Chair: Can I come on to the second suggestion, which you have just referred to? I quote: "Tom Crone and the editor promised on many occasions that I could come back to a job on the newspaper if I did not implicate the paper or any of its staff in my mitigation plea." Is that true?

Tom Crone: No. It’s not true.

Q753 Chair: Mr Myler, is that true?

Colin Myler: I wasn’t there at the time. These are conversations that allegedly took place. I arrived at the newspaper at the end of January 2007, I think almost days after the trial had finished and Mr Goodman and Mr Mulcaire had been sent to prison.

Q754 Chair: But nobody ever said to you, "Well, actually we’ve said to him that he can have his job back"?

Colin Myler: Not at all.

Q755 Chair: There was never in your mind any suggestion that you would rehire Mr Goodman?

Colin Myler: No.

Q756 Chair: At any point?

Colin Myler: No.

Tom Crone: Can I try and clarify this? I don’t think the editor being referred to is Mr Myler.

Chair: No. I realise that.

Tom Crone: It was Mr Coulson. How this might have arisen is through a conflation of two issues. I have no idea what Mr Coulson said to Mr Goodman along the way, but Mr Coulson had conversations with me on at least two or three occasions when he said that, at the end of it all, if Clive was guilty and sentenced, when he had served his sentence, paid his fine, done his community service, served his prison sentence or whatever it was, he-Mr Coulson-was hoping that he could persuade the company that Clive Goodman could come back and work for the company, albeit not in a reporting capacity but perhaps as a sub-editor, a book filleter or in such a capacity.

When I spoke to Clive-either during the legal meetings or before and after them while we were hanging around-I relayed that to him. Clive Goodman was obviously in a fairly depressed state about everything. He foresaw the worst. He foresaw that he might be going to prison, and that was by no means the outstanding or the total opinion of his legal team because they thought that he might be able to avoid that. He was quite pessimistic, depressed and worried about his family for obvious reasons and his future. Now, I was able to say to him, "Andy Coulson is hoping that he can find a way that you can come back to the company. It is not absolutely certain that you are going to lose your job over this-"

Chair: But the chairman of the company-

Tom Crone: "Once you have served whatever sentence-if there is a sentence-is going to be imposed upon you."

Q757 Chair: The chairman of the company had sent in a letter saying, "You are summarily dismissed."

Tom Crone: Afterwards, yes. After sentencing. When I saw that letter-and Stuart Kuttner actually showed me a draft-I was very annoyed.

Q758 Chair: So these conversations took place before the sentencing of Clive Goodman.

Tom Crone: All the way through, from arrest in August to sentencing in January.

Q759 Chair: And this was entirely Andy Coulson feeling sorry for Clive Goodman and wanting to help him.

Tom Crone: The conversation was entirely Andy Coulson and myself.

Q760 Chair: Did you have any knowledge as to whether or not Andy Coulson had raised this, for instance, with Les Hinton?

Tom Crone: No, I didn’t.

Q761 Chair: Do you think he did?

Tom Crone: I think one other phrase he said was, "I’m hoping I’ll be able to persuade Les."

Q762 Chair: Did you say to Andy Coulson that you thought that that was something he might succeed in or did you say, "You must be barmy"?

Tom Crone: I don’t think I expressed any opinion at all about that to be perfectly honest. I felt quite sorry for Clive actually and the position he was in.

Q763 Chair: The fact that you mentioned it to Clive Goodman and said you were aware that Andy Coulson had this view at least suggests that you thought it was not impossible.

Tom Crone: No. I thought it was possible.

Q764 Chair: So you thought the company might have relented and taken him back?

Tom Crone: Once he had served his sentence or paid whatever penalty was imposed upon him.

Q765 Mr Watson: When did you tell the editor that Clive Goodman was guilty?

Tom Crone: I am not sure that I came away from the first legal meeting knowing the decision as to whether he was going to plead guilty or not-in fact, definitely not. At the second legal meeting, which was quite some time afterwards, yes, I think I knew that he was going to plead guilty. It would have been after that meeting I think that I would have relayed that.

Q766 Mr Watson: When did you think that he was guilty?

Tom Crone: Probably at the second meeting when he said he was going to plead guilty.

Q767 Mr Watson: What date was that?

Tom Crone: I can’t remember.

Mr Watson: That would have been in autumn-

Tom Crone: I think it was before he pleaded guilty, probably in November before the hearing.

Q768 Mr Watson: One way of settling litigation is a part 36 offer is it not?

Tom Crone: Yes.

Q769 Mr Watson: And that involves the complainant. If he does not accept the offer and subsequently recovers less than the offer, he pays all the costs of both sides from then on, even if he wins. Is that right?

Tom Crone: Twenty-one days after not taking that, I think that’s right.

Q770 Mr Watson: So to refuse a part 36 offer means a complainant taking the risk of paying possibly hundreds of thousands of pounds in costs, even if he wins the case?

Tom Crone: He would take the risk of paying the costs, yes, whatever they were.

Q771 Mr Watson: When you met with James Murdoch in June 2008, the highest ever privacy award was £3,500 to Naomi Campbell. When you settled with Taylor, the highest award ever made in a British court for breach of privacy was £60,000, in July 2008. So it was on that basis that Farrer and Co advised you to offer Taylor £50,000 was it not?

Tom Crone: I can’t remember offering £50,000 to be perfectly honest.

Q772 Mr Watson: That is what Farrer have told us.

Tom Crone: Okay.

Q773 Mr Watson: So that offer was rejected and you therefore offered £150,000 plus costs, by way of a part 36. Is that right?

Tom Crone: I can’t remember.

Q774 Mr Watson: Does it sound right?

Tom Crone: I can’t say it sounds right if I don’t remember. I am sorry.

Q775 Mr Watson: You are not aware of making a part 36 offer to Taylor’s lawyers?

Tom Crone: I think we would have at some stage, yes.

Q776 Mr Watson: Are you not familiar with the Taylor case, Mr Crone?

Tom Crone: Mr Watson, apart from coming and talking to you people about it in July 2009, the last active involvement I had with Taylor was when it was settled in 2007.

Q777 Mr Watson: When did you last review the Taylor file?

Tom Crone: Before coming here in 2009.

Q778 Mr Watson: So you have not read the Taylor file since 2009?

Tom Crone: I don’t think so.

Q779 Mr Watson: What on earth were you doing for two years, Mr Crone? The entire focus of public inquiry has been on the Taylor payment. You were the legal director of News Group Newspapers. Are you seriously telling me that you have not reviewed that file in over two years?

Tom Crone: Not in any detail, no. Individual documents from it might have been relevant, but what has happened since then is that various other pieces of civil litigation have commenced. Each of those were being dealt with on an individual basis and that’s was where the focus was going.

Q780 Mr Watson: Let me take you back to the part 36 offer that the company lawyers assure us you made and which you cannot remember. Given the record damages at the time, the part 36 offer would have afforded News Group a great deal of protection in respect of costs, wouldn’t it?

Tom Crone: If it was successful.

Q781 Mr Watson: And as a result, Taylor’s lawyers would have advised him that if he did not accept he would be at risk for both sides’ costs of possibly many hundreds of thousands of pounds.

Tom Crone: I assume they would have.

Q782 Mr Watson: So if you had settled using part 36 though, the details of the case would not have been kept secret, necessarily, would they?

Tom Crone: Can you repeat that? I’m sorry I did not catch all of that.

Q783 Mr Watson: If you had settled with a part 36, the details of the case would not necessarily have been secret?

Tom Crone: It depends on whatever happened when the part 36 was accepted and whatever negotiations took place.

Q784 Mr Watson: But the same would obviously be true if the claim came to trial and the documents became public. It would not have been secret, would it?

Tom Crone: Not if it became public, no.

Q785 Mr Watson: In this case it was the defendant, was it not, who required confidentiality? That is quite unusual.

Tom Crone: That is not my recollection, no. I think, as I said last time, that it was raised by the other side first.

Q786 Mr Watson: Did you require confidentiality?

Tom Crone: We were quite happy with it.

Q787 Mr Watson: Did you discuss that with anyone?

Tom Crone: The terms of the settlement would have been discussed internally and with our outside lawyers, yes.

Q788 Mr Watson: Was it not the case that Taylor’s solicitors knew that you would want confidentiality, which is why they asked for an unprecedented £1 million plus costs?

Tom Crone: I don’t know where you got that figure from, Mr Watson.

Q789 Mr Watson: From Farrer.

Tom Crone: Well, I did not know that.

Q790 Mr Watson: You did not know that they asked for £1 million.

Tom Crone: No, I did not know that you got it from Farrer.

Q791 Mr Watson: Well, did you know they asked for £1 million?

Tom Crone: Yes. But normally I would say that that is obviously part of the whole confidentiality-

Q792 Mr Watson: So would it be reasonable for Taylor’s lawyers to assume that you wanted confidentiality and then ask for an astronomical sum like £1 million from you?

Tom Crone: They would certainly assume that we would want confidentiality and I think it is fair to say we assumed they wanted confidentiality.

Q793 Mr Watson: So despite this demand, and having received advice from leading counsel that the most Mr Taylor could possibly hope to recover was £250,000, you agreed to pay Mr Taylor £425,000 in damages, plus his costs.

Tom Crone: I don’t think so. Was it £425,000 or was it £415,000?

Q794 Mr Watson: Well, Farrer tells us £425,000, but it could have been £415,000. You remember that figure, do you?

Tom Crone: I thought it was £415,000, is all I’m saying.

Q795 Mr Watson: Right, but despite the fact that a leading counsel had told you that the maximum they could get was quarter of a million, you settled at nearly double that.

Tom Crone: Leading counsel can advise about that, but I think he had a huge range of potential damages, so there’s nothing written in stone about that.

Q796 Mr Watson: So if you were not concerned about the adverse publicity that would result from the facts of the case becoming public, i.e. that phone hacking at News of the World extended beyond the rogue reporter, you would not have increased it to £425,000, would you?

Tom Crone: The context of the Taylor case was that during the prosecution sentencing of Goodman and Mulcaire, when they pleaded guilty, five more charges were levelled against Mulcaire, and Taylor was one of those charges. Mulcaire subsequently pleaded guilty to all five of those as well as to the hacking of royal employees. In the aftermath of the sentencing hearing, only one of the five issued civil proceedings against News Group Newspapers, and that was Mr Taylor.

My job at News Group and News International was to manage litigation in the most cost-effective and efficient manner. Part of that management is that if you can avoid litigation coming in, then you take steps to avoid litigation coming in. Mr Taylor was one case. 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. If we have to pay way over the odds for Mr Taylor, especially if there is a confidentiality clause, which was asked for by him and agreed by us-or mutually asked for-that is a good course of action. If it is £415,000 or £425,000 to settle one case, thereby avoiding being sued by four other people who might have similarly high demands and huge legal costs, that is the right decision to take from my point of view.

Q797 Mr Watson: So you do now accept that confidentiality was part of the deal to settle with Taylor.

Tom Crone: I’ve never not accepted that. If you read the evidence from last time, you will see that that is the case.

Q798 Mr Watson: In 2009, at question 1333, you categorically denied that confidentiality was a factor in settling the claim. That was the last time you gave evidence to this Committee. That was the last time you reviewed the file, Mr Crone.

Tom Crone: I’d have to see the sequence of questions and answers.

Q799 Mr Watson: So would you accept that you misled the Committee in 2009?

Tom Crone: Not without seeing the sequence of questions and answers.

Philip Davies: It’s there.

Q800 Mr Watson: Isn’t it the fact that the reason you paid-

My colleague has it in front of him. Would you read it out?

Tom Crone: "Was the size of that payment greater in order that the proceedings should be kept secret?…Absolutely not as far as I am aware…No…On what basis was it decided to keep the proceedings secret?…‘Secret’ is not the word I would use."-secret is not the word I would use-"This was an action against us for breach of confidence and privacy. We get quite a lot of those now since the privacy law has expanded somewhat in the last five years. Every single case against us for breach of privacy-unless the information is already out within the public domain-results in a very strict term of confidentiality at the end of the case. When you think about it, there would be absolutely no point in anyone suing us to stop their privacy being revealed if they did not at the end of the case tack on an absolutely strict and binding confidentiality term, and that is what happened in this case…Was it at Gordon Taylor’s request?…Actually I think he mentioned it first…He mentioned it first?…It was raised by him before it was raised by us, but we fell in with it. We always fall in with it, being privacy"-

Mr Watson: I think that’s enough now, Mr Crone.

Tom Crone: "because if the litigant goes in front of the judge"-

Mr Watson: Mr Crone, that’s enough.

Tom Crone: "the judge will order the injunction immediately-so certainly when we have accepted that there was a breach."

Q801 Mr Watson: So we now accept that the facts you gave us in 2009 differ from the facts you’ve given today. Are you misleading us today or did you mislead us in 2009?

Tom Crone: Excuse me, I gave evidence that confidentiality was a clause in the settlement.

Q802 Mr Watson: You said it had absolutely no part in your judgement in making-

Tom Crone: Sorry, secrecy. I think there is a difference between secrecy and confidentiality. What we were keen to avoid, certainly from my point of view, were four other actions coming in from the other four victims identified at the Old Bailey.

Q803 Mr Watson: Isn’t the reason you paid many hundreds of thousands more to the Taylor settlement because you were trying to conceal widespread criminality at News of the World?

Tom Crone: No.

Q804 Mr Watson: This is the reason that they agreed to the confidentiality clause-because they could get a higher payment from you. That’s it isn’t it? Taylor’s lawyers.

Tom Crone: They agreed to the confidentiality clause in order for everyone to keep quiet about widespread criminality at News International. Is that what you are saying?

Q805 Mr Watson: When you went to Mr Murdoch and raised this matter with him, did you explain that a relatively modest part 36 offer could settle the case and reduce the costs?

Tom Crone: Not to my recollection.

Q806 Mr Watson: Would Mr Murdoch know what a part 36 offer is?

Tom Crone: I have no idea.

Mr Watson: You have had many meetings with him talking about settling cases-

Tom Crone: In my entire time at News International I had probably two meetings with him.

Q807 Mr Watson: Would you have told him that you could have settled for less, but that would have meant that you couldn’t provide secrecy or confidentiality?

Tom Crone: At the time we spoke to him, the settlement figure had not been arrived at. The demand was relayed to Mr Murdoch, I believe. What we were seeking was authority to begin negotiations to reach whatever best figure we could achieve from the Taylor lawyers. I can’t remember whether he said that he wanted to know what that figure was before absolutely authorising it. I think he certainly authorised us to settle at the best figure we could reach.

Q808 Mr Watson: Wasn’t it the case that you said you would have to settle at a much larger sum to keep phone hacking secret?

Tom Crone: No.

Mr Watson: And to keep the pretence that Clive Goodman was a single rogue reporter.

Tom Crone: Not at all.

Q809 Mr Watson: But at the time you knew that Goodman was not a rogue reporter, didn’t you. You had seen the "for Neville" e-mail.

Tom Crone: Correct.

Q810 Mr Watson: Did you ever raise that with Mr Murdoch?

Tom Crone: Well, I explained the "for Neville" e-mail to him, yes.

Q811 Mr Watson: Did you look to prove that others were involved in criminal wrongdoing on the paper?

Tom Crone: What I explained to him-I cannot give it in clear accurate detail because I cannot remember-but there was only one reason we settled the Taylor litigation. There was one reason therefore that we went to him to seek authority to settle the Taylor litigation, and that was the emergence of a document which consisted of an e-mail transcript being sent by one of our junior reporters to Glenn Mulcaire. That transcript consisted-apparently consisted, from looking at it-of voicemail messages left to and by Gordon Taylor.

Q812 Mr Watson: So he would have been aware that another member of staff had transcribed an intercepted voicemail message-that is what you told him.

Tom Crone: I would have explained what the document was, yes.

Q813 Mr Watson: Did he then apply the company’s zero tolerance to wrongdoing policy and suspend that staff member?

Tom Crone: No.

Q814 Mr Watson: What did you do about that?

Colin Myler: Well it was left with the lawyers to continue the negotiations for a settlement, and that is what happened.

Q815 Mr Watson: So here is someone that you know has intercepted a transcript message, an illegally hacked phone by the criminal private investigator Glenn Mulcaire. You have explained to the chief executive of the company that you want to settle a case for hundreds of thousands of pounds more than you could have got with a part 36 offer, and none of you do anything about it, including James Murdoch.

Tom Crone: 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 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.

Q816 Mr Watson: That others were aware of phone hacking, other than Clive Goodman.

Tom Crone: Yes.

Q817 Mr Watson: And nobody did anything. What did James Murdoch say when you put that to him?

Tom Crone: I can’t remember. We settled the case.

Q818Mr Watson: You remember telling him that that was the case, but you can’t remember what his reply was.

Tom Crone: 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.

Q819 Mr Watson: Why did James Murdoch agree to settle?

Tom Crone: That was the advice he was certainly getting from me and from the outside lawyers.

Q820 Mr Watson: Which outside lawyers were they?

Tom Crone: Farrer and counsel.

Q821 Mr Watson: And he was talking directly to Farrer?

Tom Crone: I am not aware that he was, but I have certainly discussed it in great detail with them, and I passed on their advice to Mr Myler and then to Mr Murdoch.

Q822 Mr Watson: Why did he agree to settle for so much money?

Tom Crone: To get out of the case.

Q823 Mr Watson: Isn’t it the case that he was well aware that you would buy the silence of Gordon Taylor if you settled for £425,000?

Tom Crone: As I said, the imperative or the priority at that time was to settle the case, get rid of it, contain the situation as far as four other potential litigants were concerned, and get on with our business.

Q824 Mr Watson: He knew full well that to settle for that amount of money would conceal the "for Neville" e-mail, didn’t he?

Tom Crone: We couldn’t reveal the "for Neville" e-mail, because it had been given to us under strict undertakings of confidentiality imposed, almost certainly, by Mr Taylor, but also by the Metropolitan police. There is nothing covering up. May I make clear something that seems to be missed very regularly, possibly by this Committee? The provenance of the document was the Metropolitan police. It was a Metropolitan police document coming out of their files. How can we be accused of covering up something that has reached us from the police?

Q825 Mr Watson: Are you aware that the previous legal guy from the company, Mr Chapman, said that in any case a confidentiality clause wouldn’t stand up to a row of beans when it comes to a criminal investigation? So how could Taylor’s lawyers enforce you to confidentiality on an e-mail that suggested more criminal wrongdoing? You must have known that. You are a lawyer yourself.

Tom Crone: Well, I’m just telling you there were strict-What confuses me is that you seem to be missing what I’ve just said. This document came from the police. It’s not as if it hasn’t been looked at, considered or had experts pay close attention to it in the appropriate area-the police forces of this country.

Q826 Mr Watson: The police will have questions to answer, but you knew that if a crime had been committed, Taylor’s lawyers could not hold you to a confidentiality clause. You knew that, didn’t you? You’re a media lawyer; you’re a barrister.

Tom Crone: If there is a confidentiality clause agreed by both sides in a piece of civil litigation, the norm would be to stick to the confidentiality clause, I’m afraid. That’s what’s called straight dealing.

Q827 Mr Watson: Did James Murdoch set you any limit on the amount you could settle?

Tom Crone: I can’t remember that, but we certainly came away with, I think, authority to settle for the best figure we could get to.

Q828 Mr Watson: So it was an open-ended figure.

Tom Crone: Yes, and again I can’t remember whether there had already been some talk that he would take half a million, and we managed to get it down from there to-I thought-£415,000.

Q829 Mr Watson: Were there any other civil cases in which James Murdoch gave you an open-ended agreement to settle for any figure?

Tom Crone: I think I’ve met James Murdoch twice in my life. Once was about Taylor and there was another one. I can’t remember what it was about, but it wasn’t about this series of cases.

Q830 Mr Watson: You can’t remember was the second meeting was. Could it have been Max Clifford?

Tom Crone: No. Absolutely not.

Q831 Mr Watson: Did you keep him in the loop? Did you e-mail him, phone him or send him memos?

Tom Crone: No. I don’t remember doing so.

Q832 Mr Watson: You don’t remember, but they may exist.

Tom Crone: I can’t remember doing so.

Q833 Mr Watson: Given that there was no apparent investigation into phone hacking, do you accept that you lied to us when you told us you investigated this and were satisfied with the explanations you received?

Tom Crone: No. I didn’t lie to you about that.

Q834 Mr Watson: At the time, you told us that there was a Harbottle and Lewis inquiry, and a Burton Copeland inquiry. They both said-

Tom Crone: What I do-it goes with the territory, but the Chairman has also suggested that we lied to the Committee on the last occasion. You, Mr Watson, step out to College green and say that fairly frequently. You do it when a new development has occurred, or you see a new piece of paper that is evidence that is put before this Committee, and then say that it is devastating evidence of a cover-up, and Mr Chairman says it means that the Committee was clearly misled last time, or it’s clearly contradictory to the evidence on the last occasion. It wasn’t a contradiction in any way, shape or form, as I explained in my letter to you. I don’t know whether you will now accept that, but I hope you will. It was not contradictory. We did not contradict ourselves when we put out that statement in terms of the evidence we gave the Committee on the last occasion. Mr Chairman, I invite you to say whether you agree with that.

Q835 Chair: I have reviewed what you have told us, but there is no question in my mind but that the evidence from you and the other witnesses from News of the World in 2009 suggested to us that there was no real evidence to suggest anybody other than Clive Goodman was involved. That was what we heard repeatedly.

Tom Crone: But there is the clearest possible answer I gave you very early on in the proceedings that until the "for Neville" e-mail there was no evidence that went beyond Goodman. Clearly, when the "for Neville" e-mail came through, that evidence existed. You asked me what I did as a result, and I said we settled the case.

Q836 Chair: Yes, but you also said that you could find no record of it being forwarded to anybody. You said that the reporter did not remember it, and you said that Neville Thurlbeck did not remember it.

Tom Crone: That is true.

Q837 Chair: The impression you sought to give to us was that actually, this did not really amount to very much, since nobody seemed to have any memory of it.

Tom Crone: On the record, publicly, I challenge anyone to read the transcript, because I do not agree that that is the case.

Chair: The transcript remains on the record.

Q838 Mr Watson: Was it your job to see that endemic criminal phone hacking at News of the World was concealed?

Tom Crone: No.

Q839 Mr Watson: You did that by paying Goodman’s expensive lawyers, and you continued to pay him even when he pleaded guilty and was on remand.

Tom Crone: It is not remotely surprising that we paid for Clive Goodman’s lawyers. At the time he was arrested, we had no idea whether he was or was not guilty-whether he would plead guilty or would not plead guilty. You are certainly going to start off by supplying him with legal representation; that is the proper, decent and correct thing to do. Now, at some stage he then indicated that he would plead guilty. The financing of his representation continued to be paid by News International. I do not think that is a bad thing, to be perfectly honest.

Q840 Mr Watson: Was it right to pay him even when he was in prison, when he had been found guilty by a court?

Tom Crone: Pay what?

Mr Watson: Pay his salary in prison.

Tom Crone: I have nothing to do with how his salary was paid. I did not even know it was being paid.

Q841 Mr Watson: And all this despite gross misconduct-hacking into the voicemails of the royal family. It was right to pay him then.

Tom Crone: Pay him a salary?

Q842 Mr Watson: Was it right to pay him a £240,000 pay-off?

Tom Crone: I had nothing to do with employment or salaries.

Q843 Mr Watson: What do you think about that? What is your view of that?

Tom Crone: My view is irrelevant, Mr Watson.

Q844 Mr Watson: The truth is, you did not see it as gross misconduct, did you? You just thought it was a reporter’s job at News of the World.

Tom Crone: That is absolute nonsense.

Q845 Mr Watson: And as far as you are concerned, the only problem was that he got caught.

Tom Crone: That is nonsense.

Q846 Mr Watson: So now you had to conceal the crime.

Tom Crone: That is nonsense.

Q847 Mr Watson: You were desperate to ensure that it did not become known that hacking was standard practice at News of the World, weren’t you?

Tom Crone: That is not true.

Q848 Mr Watson: And that is why you told Goodman that he could have his job back, if he did not implicate the paper or any of its staff-

Tom Crone: Mr Watson, since confidentiality in these legal discussions seems to have been waived by Farrer, at least, it may be that if you ask the other lawyers who were present during the legal meetings, they will tell you that the allegation that you have just made, which was originally made by Clive Goodman, has no truth at all.

Q849 Mr Watson: You promised him his job in order to suppress evidence of criminality at News of the World.

Tom Crone: That is not true.

Q850 Mr Watson: And that was why James Murdoch agreed to pay the Taylor settlement, wasn’t it?

Tom Crone: That is not true.

Q851 Mr Watson: It was for the same reason that you sanctioned the payment of Glenn Mulcaire’s legal fees, wasn’t it?

Tom Crone: I don’t know whether I did sanction it. His legal fees were not paid in his criminal representation at the Old Bailey, but when the civil cases started he was not co-operating with us in any way, shape or form. He had to have lawyers, and it was agreed, I think, that his lawyers would be financed in the hope that we would actually get from him-the one person who could tell us the full story-the full picture.

Q852 Mr Watson: Who agreed it?

Tom Crone: I can’t remember.

Q853 Mr Watson: Do you now accept that it is false to say that you had not reviewed articles where it was clear that information can only have been obtained from phone hacking?

Tom Crone: Yes.

Q854 Mr Watson: Did you arrange for the lawyers of phone hacking victims to be monitored by private detectives?

Tom Crone: No.

Q855 Mr Watson: Did you arrange for a dossier to be kept on them and follow up on their private lives?

Tom Crone: No.

Q856 Mr Watson: How much have you received in your package terminating your employment?

Tom Crone: Nothing.

Mr Watson: Nothing?

Tom Crone: I have not had a package terminating my employment.

Q857 Mr Watson: Are you still in negotiations?

Tom Crone: There have not been really any negotiations, but I am hoping there will be shortly.

Q858 Mr Watson: You are expecting a package, are you?

Tom Crone: I would have thought so, yes.

Q859 Mr Watson: Why have you not settled already?

Tom Crone: I think most people have not settled already. There is something called a consultation period, which is supposed to be for 90 days, and that is still going on.

Q860 Mr Watson: So are there provisions about what you can and cannot say to this Committee?

Tom Crone: No. Provisions where?

Q861 Mr Watson: Have you discussed giving evidence to this Committee with News International lawyers?

Tom Crone: No.

Q862 Mr Watson: Have you ever been in contact with Jonathan Rees?

Tom Crone: I do not think I have had any discussions with News International about anything since I have left.

Q863 Mr Watson: Have you ever been in contact with Jonathan Rees?

Tom Crone: I met Jonathan Rees many, many years ago.

Q864 Mr Watson: When was that?

Tom Crone: Many, many years ago. Probably 10 years ago.

Q865 Mr Watson: What was that to do with?

Tom Crone: He was doing occasional work for the News of the World. Sometimes on under-cover investigations, there would be the need for someone to play the role of a chauffeur or body guard. He and his partner were used by the then news desk to perform those roles.

Q866 Mr Watson: Were you aware of his surveillance of DC Dave Cook?

Tom Crone: No.

Q867 Mr Watson: Were you aware that he was contracted to work for News of the World in 2004 and 2005?

Tom Crone: No, I was not.

Q868 Mr Watson: Are you aware now?

Tom Crone: I have seen what was revealed on the "Panorama" programme.

Q869 Mr Watson: Have you ever been in contact with Philip Campbell Smith?

Tom Crone: No.

Q870 Mr Watson: Were you aware of any civil claims against The Sun as a result of phone-hacking?

Tom Crone: No.

Q871 Mr Watson: Have you any indication that The Sun is implicated in the Glenn Mulcaire evidence file?

Tom Crone: No, I have no indication of that at all.

Q872 Mr Watson: Is it your belief that The Sun may have commissioned Glenn Mulcaire?

Tom Crone: No, I do not have that belief.

Q873 Mr Watson: Why did you tell the Committee that Burton Copeland carried out a detailed and thorough investigation and that their remit was to go through everything and find out everything that had gone on when Burton Copeland have told us that they carried out no investigation into phone hacking whatever?

Tom Crone: When Clive Goodman and Glenn Mulcaire were arrested in August 2006, I was on a week’s holiday. When I came back the following Tuesday, which would have been exactly seven days after the arrests, at the first meeting I went to Burton Copeland were sitting there. They were clearly instructed by News Group to liaise with the police and to deal with whatever inquiries or requests that the police put forward. They were actively involved in that role throughout the period until late autumn, I would probably think.

Q874 Mr Watson: How many times have you met Glenn Mulcaire?

Tom Crone: Never.

Q875 Mr Watson: How much contact did you have with his lawyers while you were negotiating the Clifford proceedings?

Tom Crone: With his lawyers?

Q876 Mr Watson: Yes.

Tom Crone: I doubt if I had any contact. That would have been handled by our outside solicitors, Farrers.

Q877 Mr Watson: Would they have kept you abreast of negotiations with his legal team?

Tom Crone: I am not sure that there was much in the way of negotiations.

Q878 Mr Watson: Did you advise Glenn Mulcaire and his legal team on the disclosure strategy?

Tom Crone: Not me, no.

Q879 Mr Watson: Would Farrers have done that?

Tom Crone: The disclosure strategy, did you say?

Q880 Mr Watson: Yes, the disclosure strategy in the civil cases.

Tom Crone: I have never heard of a disclosure strategy. Disclosure is disclosure. You have to disclose whatever is relevant.

Q881 Mr Watson: So when Justice Vos instructed Glenn Mulcaire to name the people from News of the World who instructed him in March 2010, did Glenn Mulcaire tell you or Farrers who the people were?

Tom Crone: He certainly did not tell me and I am not aware that he told Farrers.

Q882 Mr Watson: Were you aware that anyone in the company was told who at that time had instructed him?

Tom Crone: No.

Q883 Mr Watson: Did you ever order surveillance? Did you ever commission private investigations to do any surveillance at all?

Tom Crone: No, I don’t think I did actually.

Q884 Mr Watson: Have you ever received or commissioned reports on the civil case lawyers that involved private investigators?

Tom Crone: Let me just think about that last question. I may have in litigation-certainly not in the last few years, but a long time ago maybe-I might well have used, I probably did in fact use private investigators on various things like tracing, maybe a bit of surveillance and something else, I cannot remember. It is not unusual for lawyers to use private investigators.

Q885 Mr Watson: Did you ever sanction News International journalists to contact civil claimants to persuade them to settle their claims?

Tom Crone: No.

Q886 Mr Watson: Are you aware of any of your former colleagues who may have done that?

Tom Crone: No, I am not aware of that.

Q887 Mr Watson: Are you aware that Rebekah Brooks might have contacted civil claimants to ask them to stand down their claims?

Tom Crone: No, I am not aware of that.

Q888 Mr Watson: Did you advise Clive Goodman to plead guilty?

Tom Crone: No.

Q889 Mr Sanders: May I pick up one thing that you mentioned in relation to Mr Coulson? I want to get this absolutely right. After Clive Goodman pleaded guilty of illegal interceptions, Mr Coulson was looking for ways for him to come back when he had completed his sentence.

Tom Crone: Mr Coulson’s theme on this was that he felt that the company had a duty of care to Clive Goodman. That is the phrase he used in all of our conversations, which were about three in all. He felt that Clive Goodman, if he was guilty and was sentenced, once he had paid his penalty and served his sentence-he hoped that he could persuade Les Hinton that Clive Goodman could still come back, so that he was not effectively thrown on the scrap heap, in a different role.

Q890 Mr Sanders: He was a sort of believer in a second chance.

Tom Crone: Yes. It is quite a good policy actually.

Q891 Mr Sanders: In that context, because we heard evidence before you came in that it was Les Hinton who felt a duty of care in order to ensure that Goodman was looked after, do you think Andy Coulson had something to do with that?

Tom Crone: I have no idea. I very much doubt it, because he left on the day of sentencing.

Q892 Damian Collins: I want to go back, Mr Crone, to the meeting with James Murdoch. There are a couple of things that I want to clarify, particularly with regard to the written evidence that James Murdoch submitted to the Committee subsequent to his appearance. He says in that evidence, "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." Is that an accurate reflection on that meeting?

Tom Crone: Yes, it is.

Q893 Damian Collins: Okay, so that seems to be slightly contrary to what you said before to my colleague Mr Watson and to the Chairman, where there was an indication that, from what you told Mr Murdoch in that meeting, he must have been aware that wrongdoing extended beyond simply Clive Goodman in terms of personnel at the News of the World, but you are now saying that that was not the case.

Tom Crone: Perhaps I misunderstood what you said before. I thought you were asking me whether, during the Mr Murdoch meeting, it was made known to him that the wrongdoing went beyond Clive Goodman.

Q894 Damian Collins: And Glenn Mulcaire.

Tom Crone: Yes, but Glenn Mulcaire did not work for News International.

Q895 Damian Collins: Was it?

Tom Crone: He was made aware of that-well he was made aware, as I have said, of the document.

Q896 Damian Collins: Okay. This is quite important, because he is saying that he was not made aware that wrongdoing extended beyond Clive Goodman. Is that right?

Tom Crone: That is what I understand you are saying, yes.

Q897 Damian Collins: Is that your recollection of what you said to him? Is he right in making that statement?

Tom Crone: My recollection, which I have said quite a few times today already, is that I told him about the document, and the effect of that document clearly is that it goes beyond Clive Goodman.

Q898 Damian Collins: That I think we all understand, but there is an important connection here. In that meeting, did you make clear to him what the full significance of that document was-not just in terms of the Taylor case, but what it meant for the newspaper?

Tom Crone: The document clearly suggests that there is News of the World involvement-

Q899 Damian Collins: I know what the document suggests, but what did you tell him?

Tom Crone: I cannot remember the phrases that I used. I am sorry, but I just cannot, and it is because it was over three years ago.

Q900 Damian Collins: I am afraid that I find this difficult, because there seems to be a huge amount of ambiguity in something that should have been incredibly clear.

Tom Crone: Well, Mr Myler was there as well. Perhaps he can help.

Q901 Damian Collins: I will come to Mr Myler in a minute, but I would like to-

Tom Crone: I have answered. I cannot remember the exact phrases that were used, but I am certain that I explained to him that the case had been running on this basis up to the production of that document. This document meant that it was clear that News of the World had a wider involvement, and therefore we had get out of it.

Q902 Damian Collins: But you cannot be sure that you did explain to James Murdoch that wrongdoing extended beyond Clive Goodman at the News of the World.

Tom Crone: In fairness, and with respect, I think I have just answered that question.

Q903 Damian Collins: With respect to you, Mr Crone, when I first put the question to you of what Mr Murdoch said, you said that his recollection was correct that he was not told.

Tom Crone: In that case, I misunderstood what you have just said to me. I am sorry.

Q904 Damian Collins: Okay. So your view is that you did tell him. Your view is that, on his part, there should have been no ambiguity as to whether this evidence-the settlement in the Taylor case-meant that wrongdoing extended beyond Clive Goodman.

Tom Crone: I cannot tell you whether, on his part, there was ambiguity. I can only tell you that I explained that this document meant there was wider News of the World involvement.

Q905 Damian Collins: Mr Myler, what was your recollection of this conversation?

Colin Myler: As I have said, 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.

Q906 Damian Collins: What you are saying is that there is no ambiguity in the document; I think we all agree on that. What I am trying to get at is, was there any ambiguity in what was explained to James Murdoch? Was it made absolutely clear to him, not only that this document meant you had to settle the case, but that this document was in effect proof that there were more journalists at the News of the World who had been involved in phone hacking than purely Clive Goodman?

Colin Myler: I think there was evidence to show that clearly at least one potential journalist may have been implicated, but at the time, when Mr Crone talked to Mr Thurlbeck, he denied any knowledge of this document.

Q907 Damian Collins: I know, but just to go back to the meeting, the document is very clear and it is also very clear that he was not shown the document in the meeting. He relied on your explanation-of Mr Crone and Mr Myler-as to this document existing at all and what it meant. Was it absolutely clear to him, as a result of your discussions in that meeting, that not only did the case have to be settled-we have gone through that in some detail-but that this was evidence that wrongdoing extended beyond Clive Goodman?

Colin Myler: Based on the fact that, as I said, outside senior counsel, outside junior counsel, external lawyers-

Q908 Damian Collins: I am sorry, but we are going over the same ground again.

Colin Myler: With respect, Mr Collins, it is important, because you do not rush into these things. You take time by getting outside advice, as well as external-internal external advice, as it were. With respect, it is significant that that was the advice that they gave.

Q909 Damian Collins: Of course it was, in terms of settling the case, but in terms of an understanding of the broader issues and what this actually meant, I do think this is absolutely crucial. James Murdoch has been very clear in his written evidence to us, and if that is wrong, that is a very serious matter, and your recollection of this meeting is very, very important. On this crucial second part, was he clear that this meant that there was further wrongdoing within the News of the World, as a result of the existence of this document?

Colin Myler: It seemed to be clear to other people that were involved.

Q910 Damian Collins: I am not asking about other people. I am asking about him.

Colin Myler: Obviously, 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. What I took away from that meeting was that there was an agreement to settle, and that is what happened.

Q911 Damian Collins: I would have thought in your position-and Mr Crone, in your position-that you would have been extremely clear as to the seriousness of this, and you would have made it absolutely clear to him that not only would you have to settle, but there is evidence here of further wrongdoing that is of great significance for the company, and that has to be dealt with. I would have thought you would have been extremely clear about that. There would have been no room for ambiguity; you would not have left the room uncertain whether he had understood that or not. You would have known for sure.

Colin Myler: I did not leave the room with any ambiguity about what decision had been taken.

Q912Damian Collins: I am not talking about the decision that had been taken. There are two issues here: there is the settlement of the case and what the settlement of the case meant for the company. It is very unclear as to whether that was ever property communicated at all, or whether you left the meeting and that was just up in the air. Neither of you have been able to convince me that you made that absolutely clear to him-that beyond the settlement, there were wider issues for the company that existed from that "for Neville" document.

Colin Myler: With respect, Mr Murdoch was the chief executive of the company. He is experienced. I am experienced in what I do. Mr Crone is experienced as a legal manager. I think everybody perfectly understood the seriousness and significance of what we were discussing. I am not sure what you are alluding to about what he should have said or what we should have said that resulted from that meeting. I cannot get inside-he was probably dealing with a million and one things, as we were.

Q913 Damian Collins: The significance is clear from Mr Murdoch’s testimony. He said, "Neither Mr Myler nor Mr Crone told me that wrong-doing 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." He is very clear on his recollection of that meeting: you are not. That is my question.

Colin Myler: I am sorry but I am clear that there was no ambiguity about the significance of that document and what options were there for the company to take. One was to settle, and one was to fight the case. The decision was taken to fight the case, so I am sorry but as far as I am concerned there was no ambiguity-and there was no suggestion then or now that anybody had tried to conceal anything. That was a document that was produced by the police.

Q914 Damian Collins: We are not talking about that. Your view would have to be that you could not support James Murdoch’s recollection of that meeting; that he has misremembered what was discussed or interpreted it in a different way.

Colin Myler: The reason why the clarification was put out in the first place was simply because it was alleged, wrongly, that, as a result of what Mr Murdoch had said, we were guilty of concealing or covering up a sequence of events. That had to be clarified, because it was not factually correct.

Q915 Damian Collins: He said that there was no discussion about further investigation. This is a serious matter. Was it ever reflected on afterwards that there should be a full internal investigation, with outside lawyers, really looking to get to the bottom of this, because it is highly significant information?

Colin Myler: It was never suggested to me, but with hindsight we now know how devastating the evidence was that the police had had gathered from Mr Mulcaire in August 2006, which was not followed up. We now know that evidence gathered from an internal investigation e-mail at News International, which was handed over to the police in January this year, led to the reopening of the police inquiry. There are lots of things that have come to light from different areas; if we had known then what we know now things would have been massively different for everybody.

Q916 Damian Collins: Let us compare it with the company’s response to the Clive Goodman letter. There was a process. Les Hinton was copied on the letter and it was discussed with Mr Cloke; there was a decision that there would be a review of the evidence that Clive Goodman insisted had existed. You and Mr Cloke conducted interviews with members of staff, and there was the review of the 2,500 e-mails. It may have been too limited in scope, but there was a process.

In this case, you had a highly significant meeting with James Murdoch where he should have been made aware-you are saying that you think he was made aware-that the significance of the Taylor settlement and the "for Neville" e-mail document meant that wrongdoing existed, but there does not seem to be any kind of process following on from that, where the company decided to have a further investigation to get to the bottom of what really happened.

Colin Myler: That is the result of what happened, but I don’t think that anybody underestimated the seriousness of the document, and nobody was underestimating the seriousness of the decision that had to be taken to settle the case.

Q917 Damian Collins: May I go back to when you joined News of the World? When Les Hinton gave evidence to the Committee in September 2009, he said that you had come with a clear remit to do two things-to ensure that any previous misconduct was identified and acted upon, and that the prospect of any future misconduct would be ruled out. On the second of those points, you previously gave evidence to the Committee about the reforms that you instigated when you became editor of the newspaper.

On the first point, to ensure that any previous misconduct was identified, the evidence that the Committee has received so far suggests that there never was a broad investigation into wrongdoing at the News of the World as a result of the Goodman trial and conviction. Specific tasks were commissioned by Harbottle and Lewis and Burton Copeland, but there was never a broad wide-ranging review. Do you think you were remiss in the brief that Les Hinton gave you? Do you think that you should have done more?

Colin Myler: I take personal responsibility for my actions, and I am very comfortable with what I did. As I said, hindsight is important given what has emerged from the police evidence that they did not act upon and the internal evidence provided by News International subsequently. If I may, I shall clarify what happened when I did come in and what I understood the situation to be.

When Glenn Mulcaire and Clive Goodman were arrested-I think if you look back at my testimony, you will see that I understood this-Burton Copeland were brought in to be a bridgehead, as well as to provide any evidence that the police required. I think that was primarily a position of transparency, so that nobody could accuse News International of prohibiting, or of being an obstacle to, what the police were requiring from them, be it paperwork or anything else. If you look back also, you will see from Mr Coulson’s testimony and from Mr Hinton’s testimony at the time of the arrests that it was made clear that they had to try to get to the bottom of what was happening.

So, Glenn Mulcaire and Clive Goodman pleaded guilty, they were tried, they were convicted. When I came in, I instigated several reforms and changed the protocols and system within the business. The first thing I did was I sent an e-mail to staff within a week, and to freelancers, I believe, explaining the significance of their responsibility within the PCC code.

Q918 Damian Collins: Mr Myler, you have previously given evidence on this in some detail, and I was not disputing any of that in my question, because I know that that is what you did. My question was about the investigation into wrongdoing, because no investigation into wrongdoing was conducted by any external party. Very specific, tight briefs were given to external firms, and you may have done some interviews, but there never was a big investigation internally.

Colin Myler: Well, here we are in September 2011, and I am going back to January 2007. I certainly believe that there had been more of an investigation than, perhaps, I was led to believe.

Q919 Damian Collins: Are you referring to the police investigation with the assistance of Burton Copeland?

Colin Myler: With Burton Copeland. Harbottle and Lewis we will probably come on to later. The other thing to remember is that the police inquiry, as I understood it, was, at the time, I thought, very thorough. That clearly was not the case; I think they have accepted that. So, yes, clearly the police inquiry was not as thorough as I believed it to be. Forgive me, but if the police take away three bin-liners of evidence from Mr Mulcaire’s house, I would have assumed that had they wanted to talk to anybody else who may have been implicated in criminal acts, they would have interviewed them, and they chose not to. The only member of staff who was interviewed from the News of the World was Clive Goodman. I might be guilty of assuming too much, but I am journalist-I am not a detective and I am not a lawyer. If you look back at what Mr Andy Hayman, the assistant commissioner who led the inquiry, said at the time, I think the phrase he used was that no stone was left unturned. We might look back at that and say that clearly wasn’t the case-it wasn’t the case.

Damian Collins: By some measure.

Colin Myler: By some measure, and I think they have acknowledged that. But as I said, I did what I thought I had to do, and I did what I did-yes, other things may have been necessary, but at the time, I genuinely did believe that, because of what the police did in their inquiry, or what they did not do. I did not know about that then.

Q920 Damian Collins: But going back to Mr Hinton, he said he gave you a very clear remit to make sure any previous misconduct was identified. Did that suggest that, in his mind, there may have been things that the police investigation had not uncovered and that he wanted you, as the new editor coming in on the back of Andy Coulson’s resignation and Clive Goodman’s conviction, to do things to really get to the bottom of this?

Colin Myler: I did. When Clive Goodman appealed, I have to say I thought it was quite an extraordinary and surreal experience when I was first told about it-I thought, "On what possible grounds could he believe that he was unfairly dismissed?" But as the new editor, I was told by the human resources director that I had to sit and listen to his appeal. As a consequence of the allegations that he made, which were unsupported, and without any evidence whatever-he was asked many times, "Do you have any evidence to support your allegations?"-the so-called 2,500 e-mails were instigated and looked at. At the time, I have to say, I thought 2,500 e-mails seemed a lot. As a direct result of the allegations that Mr Goodman made against certain individuals, I sat down with Mr Cloke and talked to them about the allegations, and they denied every single one of them. In the absence of any evidence to put before them-now we know that potentially-I don’t know-that maybe evidence did exist. These are only allegations: there are x people who have been arrested by the police. I don’t know how this is going to resolve.

Q921 Damian Collins: If I may, because we have already gone into that in some detail, and I have a couple of short questions and appreciate that other colleagues want to come in. Finally, on the Harbottle and Lewis review, did you understand that the remit they had been given was very limited and was purely to the employment tribunal in effect, and was not a wider investigation into whether there was evidence of phone hacking?

Colin Myler: I had no involvement, no contact with Harbottle and Lewis whatsoever. I had no interaction with them.

Q922 Damian Collins: But in terms of how this was explained to you by Mr Chapman and Mr Cloke. Did they explain to you that the review they conducted-the e-mail review and the checking by Harbottle and Lewis-was very narrow in focus?

Colin Myler: I had hardly any contact with Jon Chapman through this process. My main point of contact was Daniel Cloke. Mr Chairman, if I may, I would like to clarify one point that Mr Cloke made. I played no part in either any conversation or negotiation regarding any financial settlement that was made with Mr Goodman, none whatsoever.

Q923 Damian Collins: If I may put one final question, going back to the meeting with James Murdoch that we have already discussed. Subsequent to that meeting, did you have any conversations with him or any other senior executive at News Corporation you might report to, suggesting that there should be further investigation within the newspaper, suggesting what you had done, or that maybe there should be an external investigation into wrongdoing at the News of the World involving phone hacking, as a result of the "for Neville" e-mail, as had been discussed at that meeting?

Colin Myler: At that particular time, I did not have any specific conversations with anybody relating to that. Any other issues relating to this, I have always reported to my superiors.

Q924 Damian Collins: So it was never discussed again?

Colin Myler: The "for Neville" stuff?

Damian Collins: Yes. Never discussed again.

Colin Myler: I never discussed it again with James Murdoch, I believe.

Q925 Damian Collins: Or anyone else at a senior level that you might report to, above your grade? There aren’t many, you work with a few, I appreciate that.

Colin Myler: Through the course of the past 18 months, two years or so, a lot of discussions have taken place because of what has emerged.

Q926 Damian Collins: My final question is going back to this situation: do you not think it is slightly extraordinary that you and Mr Crone sat in this meeting with James Murdoch, the agreement was made to settle the Taylor case, and from your view-you have been clear-everyone understood the significance of what James Murdoch was being told, and yet it was never discussed again? The idea of investigating that, getting to the bottom of it, the consequences for the company-you never went back to Mr Murdoch to say, "Are we doing anything about this?" You never volunteered that maybe something should be done. Do you not think that is extraordinary?

Colin Myler: No, I do not think it is extraordinary, Mr Collins. I think that the responsibility regarding the corporate governance of a company goes beyond my pay grade. Therefore, if anybody wanted to talk to me about my performance-what I was doing or not doing-they would have come to me pretty clearly and said, "Sorry, we don’t think you are doing the right job. You are not doing the job at all and we want to remove you." An editor’s life is a bit like a football manager’s job. You stay when you perform and you go when you don’t. It is very clear; there are no grey areas. It is black and white. If anybody was not happy with my performance, either editorially, dealing with the staff, with the budgets, with any other issues, they would have told me, and rightly so.

Q927 Cathy Jamieson: I have three questions to Mr Crone. In his notice of appeal, Clive Goodman asserts that you had full access to the files held by the CPS, giving evidence of phone hacking at the News of the World. Did you indeed have such access?

Tom Crone: No, that is completely wrong. He refused me access to the files. His lawyers will probably confirm that; or maybe they will not be allowed to.

Q928 Cathy Jamieson: Thank you for that clarification. You made a remark earlier in response to a question from Mr Watson, that at some stage you may have been in the past at some unspecified time, involved in a bit of surveillance. Could you describe what you mean by that?

Tom Crone: In civil cases, people are suing us for libel. We run a story saying they’re having an affair or something like that. If you believe that they are having an affair, the obvious thing to do is to keep an eye on them for a few days and see what happens.

Cathy Jamieson: I am sorry if you feel it is a trivial question.

Tom Crone: No, I don’t think it’s a trivial question.

Q929 Cathy Jamieson: Just in terms of the way you responded to it. I think that ordinary people watching this Committee will want to know what the kind of activities are that you perhaps feel are fairly run of the mill or routine but they may not have experienced. I think it would be helpful if you could explain exactly what you meant by a bit of surveillance and those activities.

Tom Crone: As I said, I think most legal firms involved in litigation on a regular basis will have used private investigators to check out what they believe to be true but do not have any evidence to prove it is true. One of the things is obviously the personal relationships with people. In the history of divorce law and divorce proceedings in this country, it is very often someone going in the box, saying, "I am a private investigator and I was commissioned by the husband’s lawyers to watch his wife over a period of a week, and this is what I saw." That is quite normal in litigation. It does not have to be affairs of the heart. It can be other things where you think someone is involved in an activity that they are suing you over for suggesting that they are involved in it. You think it is right and you think it is something that, if they are watched for a while, you may well get the evidence to prove your case. It is that sort of context.

Q930 Cathy Jamieson: Can I ask specifically if it would include routinely the activities that are now commonly known as "blagging"? In other words, trying to obtain information, perhaps by people purporting to be individuals or to hold a post that they do not.

Tom Crone: Going undercover is something that investigative journalists certainly do. They pretend to be someone else in order to get information which one would hope is in the public interest to reveal. That is as old as journalism actually. For example, probably the greatest story I have ever been involved in was last year. I can’t say too much, but I will tell you in general terms. It was the Pakistani cricket corruption story that ran last summer. It revealed that, during the course of the Lord’s test, England against Pakistan, Pakistani players were, through an agent, prepared to do things on the field-bowl no-balls-knowing that people were placing money on it. That information was gathered in by someone pretending to be someone he was not and, if you like, blagging. We would not call it blagging as a matter of fact; we call it undercover journalism.

Q931 Cathy Jamieson: Can I just ask a final question in relation to that? Again, this is just so that people understand the kind of practices that you would perhaps think are routine. Would people under your employment be allowed to freelance on that basis, or would they have to have that authorised by their management?

Tom Crone: Freelance reporters do come to us with a journalistic package, saying, "This is what I’ve been working on for the past three weeks. It’s a story I’ve got from going undercover somewhere." That would come to us without us having any knowledge of what they have been doing, so it would not be pre-authorisation. If they come to us and say, "Look, I’m in a position where I think I can get x, y and z, which would be a story of interest to you, and I can do it by posing as something or other," we would look at what was being proposed to us and either give the authority to go ahead with it, or not, as the case may be.

Q932 Cathy Jamieson: And you would at that stage look at the extent to which that was within the law or outside of the law?

Tom Crone: Absolutely.

Q933 Philip Davies: Mr Crone, I think you issued us with a challenge midway through the session, which was to try to demonstrate where what you said back in 2009 might not be wholly accurate. I think Mr Watson has already done that ably by pointing to question 1333 about whether the size of the payment was kept greater in order that the proceedings should be kept secret. Both you and Mr Myler said, "No", and, "Absolutely not", which we now know was not the case.

Can I put a few others to you? With the settlement of Gordon Taylor, you said back in 2009 to Mr Watson that you had agreed with the outside advice that was given. Well, quite clearly that was not the case either, was it? The letter from Farrer and Co makes it clear that the outside advice that you were given was that the award would be about £100,000 or possibly £250,000.

Tom Crone: The advice we were given after the "for Neville" document came to our attention--it was revealed to us by Mr Taylor’s lawyers and, ultimately, by the Metropolitan police-was that we should settle the case. Not long afterwards, we realised that Mr Taylor was asking for a very large sum of money. Mr Watson pointed out that it was £1 million; that is correct. The outside lawyers certainly suggested we should get out of the case and settle for the best figure we could arrive at.

Q934 Philip Davies: They didn’t suggest you settle for £425,000. That was a decision you took, wasn’t it?

Tom Crone: I am absolutely clear that they said we needed to settle this case, and if it took a lot more than we would normally expect to pay, we should still get on and settle it, partly because of the other cases that might be waiting in the wings.

Q935 Philip Davies: In a further question that Mr Watson posed to you back in 2009, the reason that you gave was that if the case had gone to court, it could have ended up costing more than you were settling for. That really was not the case at all, was it? You know that that was not the case. You knew that you were settling for-

Tom Crone: If the case had gone to court and been fought for two weeks, it would undoubtedly have cost us more than we settled for.

Q936 Philip Davies: Three million pounds?

Tom Crone: Potentially. Possibly. It would probably have had to go on a bit longer than two weeks for that. I have had at least two cases in the last four years where the length of the case was a week and a half or two weeks and the damages were not particularly high-less than £100,000-and we came out of it with a bill of £1.5 million to £2 million.

Q937 Philip Davies: Can I ask a question to follow on from Damian Collins? I am rather confused about the meeting that you both had with James Murdoch. The bit I struggle with is that you are both adamant that James Murdoch knew the full extent of what you were telling him about the "for Neville" e-mail, but that meeting lasted, at the absolute maximum, 15 minutes. If you were telling James Murdoch, "Actually, we have evidence here that shows that other people at the News of the World were involved in phone hacking; that’s what we’ve got in our briefcase here, and that’s why we must settle this case," I cannot imagine how you could go through all that and the implications of it in less than 15 minutes.

Tom Crone: Well, that is my recollection of how long the meeting would have taken. I cannot speak for what Mr Murdoch understood at the time or not. I have seen what he has said since. I am absolutely prepared to accept that he has got his recollection wrong, but I am certain that I explained to him that this document had emerged, what it was and why it meant that the defence that we had lodged in the case couldn’t be run any further and we needed to get out of it.

Q938 Philip Davies: Can I move on to the payments to Clive Goodman? Mr Crone, what you did not tell us back in 2009, and what you seem to be saying now, is that-correct me if I am wrong-you authorised the fact that Clive Goodman’s legal fees were paid by News International.

Tom Crone: It would have been authorised above me, but certainly I would have had discussions with people who authorised it.

Q939 Philip Davies: But you knew that at the time. You didn’t tell us that in 2009, but you did know it at the time.

Tom Crone: Well, are you sure I didn’t tell you in 2009 that his civil costs were being looked after by us?

Q940 Philip Davies: I will rely on you to go back and point out where that was. I certainly cannot find it. I have read it about four times, and I cannot find it.

Tom Crone: Okay. Well, maybe have another re-read.

Q941 Philip Davies: Maybe you should too. Who would have authorised the payment to pay his legal fees?

Tom Crone: I can’t remember. Les Hinton was the chief executive at the time. I would imagine that he would have authorised it.

Q942 Philip Davies: Well, quite.

Tom Crone: But, I think, for perfectly proper reasons.

Q943 Philip Davies: But when I put that to Les Hinton, I asked who knew about the legal fees being paid. He said, "If we paid their legal fees the company would know; I do not." So who authorised your decision to pay those legal fees?

Tom Crone: I don’t know, I’m sorry. I can’t remember.

Q944 Philip Davies: Well, who would you have gone to? You must know who you would have gone to.

Tom Crone: I’ve answered. Les Hinton. It’s possible that Andy Coulson could have done it, as the editor at the time.

Q945 Philip Davies: On what basis? In your last evidence, in 2009, you were at pains to stress on a number of occasions that you were in no way an employment lawyer and therefore could not be expected to know about those matters. If you were deciding whether or not to pay the legal fees of an employee who was being dismissed for gross misconduct, surely that would have been discussed with the director of HR to see whether or not you had any legal obligation to do that, or the legal manager for employment law.

Tom Crone: He was dismissed in February 2007. He needed legal representation when he was arrested in August 2006. Legal representation was supplied to him at the cost of News Group Newspapers in August 2006.

Q946 Philip Davies: He was pleading guilty to a criminal offence which would have-

Tom Crone: At the end of November 2006, he pleaded guilty.

Q947 Philip Davies: So when John Kelsey-Fry was employed, no doubt at great expense, he pleaded guilty to a criminal offence which came with a gross misconduct, summary dismissal, why did you not check with either the director of HR or the employment lawyer at News International whether it was still a proper thing to be paying his legal fees?

Tom Crone: Well, I think it was generally understood that his legal fees in the criminal proceedings were being paid for by us. It was generally understood internally.

Q948 Philip Davies: Internally by whom, because whenever we put this to anybody-

Tom Crone: By the editor of the News of the World at the time and, I think, almost certainly higher up from that. If someone felt that as soon as he pleaded guilty he should have the plug pulled on the payment of his legal fees, then someone would have told me that, but they did not.

Q949 Philip Davies: So as far as you are aware, Andy Coulson and Les Hinton knew that News International were paying his legal fees up to and including the court case?

Tom Crone: I am certain that Andy Coulson knew that and I am fairly sure that Les Hinton knew, but I can’t be absolutely certain.

Q950 Philip Davies: Mr Myler, you said not too long ago, if I heard correctly, that you disputed what Mr Cloke had said in the previous session, when he said that you were aware of the payments that were made to Clive Goodman, subsequent to his guilty plea, his sentence and his dismissal. He made it clear that you were aware of those payments. You may not have authorised them, but you were aware that they had been made.

Colin Myler: I was not aware of any financial settlement that was made between the company and Mr Goodman at any stage.

Q951 Philip Davies: You were not aware that a payment had been made-not the figure or anything like that? You are saying quite categorically that you were not aware that any payment whatsoever had been made?

Colin Myler: I was not aware of any payment and nor was I involved in any negotiation, conversation or meeting. Let me point out if I may, Mr Chairman and Mr Davies, that as an editor, as I said before, I found it quite extraordinary that I had to hear this appeal, but I did what I did, because I am not a human resources lawyer or expert. So there were several parts to this. I was sitting there as the editor because that is what I had to do. I listened to the appeal with Mr Cloke. I then spoke to the executives whom Mr Goodman had made allegations against. The e-mail search was authorised. Mr Chapman dealt with the outside firm of Harbottle and Lewis. Mr Cloke and Mr Chapman dealt with the e-mails. Whatever action was taken, all I know, as I said in my letter to the Chairman and the Committee was that Mr Cloke said to me after a period of time, "Good news, there is no smoking gun or silver bullet in the e-mails." I remember that quite clearly. I respect Mr Cloke’s recollection, but it is not something I would have said if I did not remember it or recall it.

Q952 Philip Davies: But you see, you are a journalist. I would have thought that journalists by nature were quite inquisitive characters. Did you not ask why on earth Clive Goodman had dropped his claim and his threat to go to an employment tribunal? Did you not say, "What happened to that Clive Goodman case?"

Colin Myler: Again, with respect, Mr Davies, Mr Cloke is an experienced human resources director. I am a journalist. I played the part in this whole episode as I have explained both to the Committee in 2009 and elaborating on it today. If I have fallen short, I will take responsibility for that and you will not find me falling short in any kind of humility.

Q953 Philip Davies: But you did not ask about what had happened to that case? You did not question what had happened and you had no idea that any payment-

Colin Myler: It was a case that I inherited. Quite frankly, my focus at that time was trying to get the paper back on track, to sort the paper out, to try to change the culture within the paper, to change the systems within the paper, the protocols within the paper, and that is what I thought I was doing.

Q954 Philip Davies: Can you think of any reason why Mr Cloke would say that you did know about those payments when you say you didn’t?

Colin Myler: No, I don’t. Those decisions were clearly, again, way above my pay grade.

Q955 Philip Davies: Just one final thing, in your evidence in 2009, when I put it to you that the idea that it was one rogue, maverick journalist appears now to be a somewhat discredited theory, your answer was, "No evidence, Mr Davies, has been produced internally or externally by the police, by any lawyers, to suggest that what you have said is the truth." You have been saying today that as far as you were concerned, the "for Neville" e-mail was absolutely categorical evidence that the one, rogue maverick journalist theory was discredited. What you have said today and what you said back then-surely you cannot reconcile those two?

Colin Myler: No, as Mr Crone has pointed out, the existence of the "for Neville" e-mail was made known to Mr Taylor’s lawyers by the police. The police had this information and had this evidence.

Q956 Philip Davies: I said that it was discredited. You said that no evidence has been produced to suggest that what you have said is the case. That’s not the case, is it?

Colin Myler: I made the point very clearly in my opening statement to that hearing that the "for Neville" e-mail was clearly a significant development.

Q957 Philip Davies: Mr Crone, finally to you: the payments to Mr Mulcaire. You said back in 2009 that, yes, apparently some payments were made, and that your understanding was that, because he had worked for so long doing work for the company, you weren’t an employment lawyer but you did think that you understood that the law meant that that person would have certain employment rights and that’s why he was paid off. Who gave you the advice that he had those employment rights?

Tom Crone: I think right at the beginning I asked Farrer about it.

Q958 Philip Davies: Did you not think to ask the director of HR in News International what the standing in terms of employment rights were for somebody in that position? Given the nature, you would think that it was such an important matter that you got it right.

Tom Crone: No, you misunderstand who was doing what. I had absolutely nothing whatsoever to do with Mulcaire and his employment claim, except at the very beginning. It was notified to me and I passed it on.

Q959 Philip Davies: So who dealt with his sort of bogus employment claims?

Tom Crone: HR dealt with it and I think Jon Chapman dealt with it.

Q960 Philip Davies: But the director of HR made it abundantly clear that he didn’t know about that and he didn’t-

Tom Crone: Jon Chapman certainly dealt with it, and I can’t imagine HR didn’t get involved through some way, whether it was Daniel Cloke or someone else.

Q961 Philip Davies: So you would question the points Mr Chapman and Mr Cloke made about his payment?

Tom Crone: Well, I am not actually clear what they did say.

Q962 Dr Coffey: Mr Myler, during the appeal, it was suggested by Mr Chapman earlier that you and your team looked at invoice payments for things that were referred to by Mr Goodman in his appeal. Can you tell us more about that please?

Colin Myler: I am not sure what he’s referring to. Forgive me: there were a lot of allegations being spread around at the time, so I don’t have that exact note at the time. I would have to be reminded of that. If Mr Chapman said that we looked at invoices, I am sure we did, but specifically what they were and what the system was, I cannot be clear about what that was, to be honest.

Q963 Dr Coffey: Reflecting on that, it seems unusual to me that when you were deciding the appeal that you cannot recall activities you undertook yourself.

Colin Myler: You may have more information than I have about what the allegation was that Mr Goodman was making specifically about invoice payments. If you could help me with that.

Q964 Dr Coffey: Sure. Earlier, in a letter of appeal, Mr Goodman made various accusations about activities and subsequently asked for a series of evidence, including authorisation of payments, that kind of trail of history-invoices, mobile phone records, copies of e-mails-which led to the subsequent review that you are fully aware of. It has been suggested today, in evidence to this Committee, that Mr Myler and his team looked at those invoice payments.

Colin Myler: First and foremost, the contents of the 2,500 e-mails were never shared with me.

Dr Coffey: I am not referring to that.

Colin Myler: Can I explain?

Dr Coffey: You don’t need to explain; I understand that perfectly.

Colin Myler: With respect, it has a significance.

Dr Coffey: It doesn’t to me, on that particular point.

Colin Myler: It has a significance. If, as has been published, some of those e-mails related to criminal behaviour, and Mr Goodman is relating to invoices that support that allegation, I am not aware of those invoices, and that specifically was what was being looked at, at the time.

Q965 Dr Coffey: So you undertook no review of invoices in any way?

Colin Myler: I undertook a very wide-ranging review of practices within the newspaper, including essentially not banning cash payments, but reducing and changing the protocol and the system of how cash payments would be paid. I reduced it by, I think, between 82% and 89%. Specifically on the invoices that Mr Chapman is referring to, I will need a little more information before I can answer that.

Q966 Dr Coffey: Okay. Just to put aside slightly what Mr Chapman said, in the appeal process, there was no investigation of invoices undertaken by you or anybody who worked for you?

Colin Myler: I am not saying that it didn’t take place. The main thrust-

Q967 Dr Coffey: Can you tell me what you did do, apart from the review of the e-mail, in regard to other information or interviews that you may have undertaken?

Colin Myler: The main thrust of Mr Goodman’s allegations was of other executives and people within the newsroom being aware of what he was doing. As a result of the e-mail search and as a result of his allegations, I sat down with Mr Cloke and spoke to the individuals Mr Goodman had named. They denied all knowledge of his allegations. That is what happened. That was specifically in relation to the allegations that he made.

Q968 Dr Coffey: From that, I am taking away from today that you, or somebody working for you, did not go and look at specific invoices.

Colin Myler: No, I am not saying that. That may have happened. What I am saying is that you need to be specific.

Q969 Dr Coffey: That is what I am trying to understand. What did you do in terms of looking at financial transactions?

Colin Myler: I changed the whole system.

Q970 Dr Coffey: That is not what I am talking about. You are talking about changing the practice.

Colin Myler: I am sorry if I am missing the point.

Q971 Dr Coffey: I am talking about a review of the appeal that was put forward by Mr Goodman. Did you look at any financial transactions as a consequence of the appeal made by Mr Goodman?

Colin Myler: I do not recall any financial transactions that were being investigated.

Q972 Dr Coffey: That is what I wanted to clarify.

Colin Myler: But if we could go back to any notes that were taken at the time, or if Mr Chapman or Mr Cloke could elaborate about which particular invoices Mr Goodman was referring to, I think we can clarify that. If that was asked of me, it would have been done, and if not by me personally it would have been done by the managing editor’s office.

Q973 Dr Coffey: Mr Crone, I am just trying to clear this up in my own mind. You were referring to the "for Neville" document. You suggested that four other people would potentially have sued if that had been made public. Have any of those people since sued or settled?

Tom Crone: No, not if that was made public. Obviously, if you have a class of four perhaps, all of whom are in the same sort of circumstances-in other words, they were victims of Mulcaire accessing their voice mails-and four of them don’t take any legal action but one does-but the other four probably don’t even realise that that person is taking legal action because there is no publicity about it at any stage as far as I can remember-and they suddenly learn that this person has not only sued us but has been paid a substantial sum of money, it is almost inevitable that they will sue us to get the same result.

Q974 Dr Coffey: Right, so there were four other people suggesting that they had been hacked?

Tom Crone: It was a matter of record. Mulcaire had pleaded guilty to five individuals, one of whom was Gordon Taylor, in five separate charges at the Old Bailey.

Q975 Dr Coffey: For my own understanding, I just want to go back to the meeting. I know Mr Collins and Mr Davies and others have gone back to it. What I heard you say earlier, Mr Myler, is that your recollection of that meeting is that James Murdoch heard that he needed to settle-or that was the recommendation and that is what he agreed. I do not recall you saying that any of the recollection of that meeting was what Mr Collins was referring to. You did not seem to state that you had a recollection that there was a discussion that other people were involved in illegal practices. You only suggested earlier that your recollection of that meeting was that Mr Murdoch had agreed basically to do the settlement.

Colin Myler: No, the purpose of the meeting was perfectly clear.

Q976 Dr Coffey: The purpose of the meeting was to discuss the settlement.

Colin Myler: The purpose was to discuss the development that had been presented to Mr Taylor’s legal team. That development was the fact that the police had handed over the so-called "for Neville" e-mail. That was the purpose for outside counsel-external counsel-Mr Crone and eventually my view to present to the chief executive, Mr James Murdoch, that they were the grounds to either settle or not and go for trial. There was no ambiguity about that.

Q977 Dr Coffey: There is ambiguity in my mind. What I am trying to get at is this. There were just three of you at the meeting, and the purpose of the meeting was to say, "This e-mail has been revealed now and we therefore, with our external advice, believe that there is no point in trying to defend the case. We should settle, and this is kind of the area in which we need to settle."

Colin Myler: I think that that is a bit of an over-simplification, with respect. This was not decided in 15 minutes. Conversations had been taking place for weeks between lawyers and Mr Taylor’s legal team.

Dr Coffey: I understand that.

Colin Myler: Outside senior counsel, outside junior counsel, Farrer and Mr Crone would not have come to the decision that they did and said, "We’re going to do that" in 15 minutes. These will have been conversations that have taken place over a matter of days and weeks.

Q978 Dr Coffey: I understand that. The 15 minutes referred to the meeting that the two of you had with Mr Murdoch, when ultimately he had to make the decision, as has been suggested, that you would agree to settle. What I am confused about is that that was the only recollection I thought you offered. The impression I have got from Mr Crone’s evidence to us today is that Mr Murdoch was clear that there were other aspects to the e-mail that implied wrongdoing was more than Mr Goodman and Mr Mulcaire. That is not your recollection that I have taken away today, and that is what I am trying to clarify in my mind. Of course, I will look at the transcript in detail, but can you clarify? Was there a discussion about other people apart from Clive Goodman and Glenn Mulcaire in that conversation with Mr James Murdoch?

Colin Myler: The discussion was really about the "for Neville" document. There was not, as far as I remember, a discussion about anybody else, because there was no evidence to support anybody else being allegedly involved.

Dr Coffey: That is very helpful. I now turn to Mr Crone.

Colin Myler: Sorry if I sounded vague.

Dr Coffey: I am just trying to get it right in my mind. Of course, you were at the meeting and we are trying to understand.

Colin Myler: Yes, of course.

Q979 Dr Coffey: Mr Crone, I inferred from what you said earlier that you felt other things were discussed at that meeting and that it was not simply about the settlement and that Mr Goodman and Mr Mulcaire were involved. Have I misinterpreted what you said?

Tom Crone: The meeting was all about settling the case on the basis of the document that arrived that showed that the News of the World was implicated in the Gordon Taylor accessing, which up to then we had not seen any evidence of.

Dr Coffey: You are being very careful about the News of the World.

Tom Crone: Clive Goodman was not charged with Gordon Taylor; he was charged with the royal accessing. Gordon Taylor was exclusively a Glenn Mulcaire charge. We had no evidence that the News of the World or News Group Newspapers were involved in that matter. Mulcaire had pleaded guilty to it, but we had seen no evidence that NoW was implicated. As I made clear on the last occasion, the first we saw of that was the "for Neville" e-mail that reached us in spring 2008. That document was the reason that we decided to settle the case. We needed authority to do that, so we went to see Mr Murdoch and it was explained to him that this document had emerged and what it meant, and he gave us authority to settle.

Q980 Dr Coffey: Have you been involved, Mr Crone, with the subsequent actions with Sienna Miller and other people?

Tom Crone: I was until, I would say, just over three months ago.

Q981 Dr Coffey: Referring to the Select Committee on Home Affairs investigation, back in the original investigation of 2005-06, Peter Clarke had suggested that News International did what it could to thwart the investigation. Were you involved in that?

Tom Crone: I would not say so, no. That was the role-not thwarting I hasten to add-that Burton Copeland were brought in for: to liaise with the police, to deal with what the police were asking for from us, to come back to us and say, "This is what they’re asking for" and to give us specialised criminal legal advice on what was needed.

Q982 Dr Coffey: From your recollection-admittedly it is five or six years ago-were you directly involved in interviews with Peter Clarke and the team?

Tom Crone: No. I did not meet the police. I had nothing to do with them.

Q983 Chair: May I just clarify one point? You said that you explained to James Murdoch what the e-mail meant. Did you accept that it was a genuine e-mail from a News of the World reporter to Glen Mulcaire?

Tom Crone: Yes.

Q984 Chair: So, you agreed that it implicated a junior reporter, Ross Hindley.

Tom Crone: Yes.

Q985 Chair: You said that you had never talked to Mr Murdoch about it, in terms of it being the "for Neville" e-mail.

Tom Crone: No.

Q986 Chair: Did you tell Mr Murdoch that the e-mail had Neville’s name on the top?

Tom Crone: I can’t remember.

Chair: The fact that the chief reporter of the News of the World was called Neville, wasn’t something you-

Tom Crone: Listen, I can’t remember is the honest answer. I’ve got a feeling I probably did, but I can’t be certain.

Q987 Chair: So, you probably told him, "Our chief reporter happens to be called Neville, and the e-mail says it’s for Neville."

Tom Crone: It’s got "for Neville" on it, yes.

Chair: Okay, thank you. Louise Mensch.

Q988 Louise Mensch: Just a further point of clarification-I’m sure you’re sick of them now-do I take it from what you’re saying that it was clear that it had gone beyond one rogue reporter in the meeting you had about the "for Neville" e-mail? Have we moved on to two rogue reporters?

Tom Crone: I’m sorry?

Louise Mensch: Have we moved on from one rogue reporter to two rogue reporters, Neville Thurlbeck and Clive Goodman, or did you in this meeting suggest to Mr James Murdoch that evidence had been brought to your attention that hacking was widespread throughout the News of the World?

Tom Crone: No.

Louise Mensch: Or, might you be able to say that there were just two rogue reporters?

Tom Crone: What the document showed and what I relayed in the meeting was that it-a transcript of Gordon Taylor voicemails-had passed through our office, actually back by e-mail, to Glen Mulcaire. Clive Goodman had not been charged with that.

Louise Mensch: I’m not interested in Clive Goodman. Let me try to be more specific.

Tom Crone: I know what your question was. That is what I explained and that is what was relayed to Mr Murdoch, the difference that this document made was that it implicated the News of the World in Gordon Taylor without any doubt at all, because it had passed through our office.

Q989 Louise Mensch: It implicated the paper, but in terms of the widespread nature, or the narrow nature, of hacking at the paper, was everyone doing it?

Tom Crone: It proved-

Louise Mensch: It proved that the paper as a corporate body had knowledge, but did it prove that there were many reporters at the News of the World involved?

Tom Crone: No. It had proved that it had gone through the computer system of a junior reporter.

Louise Mensch: Okay. That doesn’t sound-

Tom Crone: The obvious inference that can be drawn from that is that others-an other, or others-knew of it, because the junior reporter clearly wasn’t doing this off his own bat because he was just told to transcribe it.

Q990 Chair: The obvious inference is that Neville knew about it because his name was on the top of it.

Louise Mensch: Indeed.

Tom Crone: Neville’s name was on it, but Neville doesn’t accept that he knows anything about it.

Chair: Indeed.

Q991 Louise Mensch: May I ask you about the concept of on-duty lawyers? Mr Chapman told me they would be your responsibility-that they would report to you. How many on-duty lawyers would there be at the News of the World on any given day or night?

Tom Crone: One each evening, except for Saturdays, and quite often there would be someone in during the afternoon as well.

Q992 Louise Mensch: What happened if a story came in on Saturday night? Who would check that legally if it was required to be changed or altered?

Tom Crone: If I am around, me-or at home.

Q993 Louise Mensch: But there would always be a lawyer available to check stories if it was felt that there was some legal risk?

Tom Crone: Yes.

Q994 Louise Mensch: If the in-house lawyers had received a query from a reporter or they were checking a story and there was something legally dodgy about it and they ordered that changes be made to the story, would they subsequently make a report to you, as the legal director of News International?

Tom Crone: If it was of any significance. They look at stories and quite often they have some sort of legal-risk side to them, which can be eliminated by saying, "Well, that paragraph could get us into trouble with contempt of court or potentially a libellous allegation that can’t be stood up by the evidence available," and they would suggest either saying it in a different way that removed the risk, or just removing the paragraph or paragraphs. That’s quite routine. There’ll be half a dozen or a dozen of those per evening.

Q995 Louise Mensch: You were the legal director of News International on 13 April 2002, were you not?

Tom Crone: The title is legal manager, and yes, I would have been.

Louise Mensch: Sorry, you would have been legal manager. That was a Saturday night, so your recollection is that-

Tom Crone: I am sorry. Could you give me that date again?

Q996 Louise Mensch: Saturday 13 April 2002-you will see where I am going with this in a second. It was a Saturday night, and you were the legal manager in charge. There would not have been-

Tom Crone: I don’t know whether I was in the office or on holiday, but yes, at the time I was legal manager.

Louise Mensch: But there would not have been an on-duty lawyer because it was a Saturday night. That was the one night a week-

Tom Crone: Unless I was on holiday, in which case there would be an on-duty lawyer.

Q997 Louise Mensch: Would you have records stating whether you were on holiday that night?

Tom Crone: I doubt it.

Q998 Louise Mensch: Would you be able to supply that to the Committee?

Tom Crone: Not going back that long. I very much doubt it.

Q999 Louise Mensch: Would there be employment records of when you took your vacations?

Tom Crone: Not then, no.

Q1000 Louise Mensch: The News of the World would not record when you went on vacation?

Tom Crone: No, it would not. Absolutely not.

Q1001 Louise Mensch: The reason I ask about that Saturday night is because stories about the murder victim Milly Dowler were published on that Saturday night, 13 April.

A story came out in The Wall Street Journal on 20 August, subsequent to the Committee’s previous evidence session, that made some very serious allegations about the Milly Dowler story. Previously, the focus had been on the story that appeared in most editions of the News of the World on Sunday 14 April, which contained a passing reference to a voicemail left on Milly Dowler’s phone. Early editions of the paper published in Scotland under one byline, that of Sarah Arnold, and in England under a different byline, that of Robert Kellaway, contained a very different story with detailed phone messages left on Milly Dowler’s phone. One of the messages said, "Hello Mandy, give me a call because we have started recruiting." That was from an employment firm called Epson in the Midlands. The story goes on to discuss the fact that Neville Thurlbeck authorised reporters to stake out the Epson factory to discover whether Milly Dowler was still alive and had taken a job in the Midlands. When it was discovered after three days that she had not, he called it off. Did you have any knowledge that Mr Thurlbeck had authorised that stakeout of the Epson factory?

Tom Crone: I cannot remember that at all. I am sorry. I know it is a very serious subject, and I am sorry, but I cannot remember it. I am not even sure it rings bells now, but I have read about it since.

Q1002 Louise Mensch: The story about the stakeout of the Epson factory was never published. The story that was published in the first editions on the Sunday morning, and which would have been filed on the Saturday night, was pulled and replaced by a different story. Somebody, therefore, flagged up the first story as being legally dangerous and said that it ought to have been pulled. Who would have done that?

Tom Crone: I don’t know. If you showed me the two reports, maybe I could familiarise myself with them. I cannot find them, being outside the company.

Damian Collins: These are the documents published by The Wall Street Journal. That is the early English edition, and that is the early Scottish edition, which is the same. And that is the final edition of the story.

Louise Mensch: In the first edition of the story, which was published in the early English and Scottish editions, there was a story that concentrated on voicemails and referred to three specific voicemails. The first was that she had been offered a job and asked her to come in for an interview at the Epson factory. The second was from somebody who said, "Hey there, Piggo baby." And the third, although the article did not say what the words were, was an intimate voicemail that they could not understand. All these references were excised from subsequent editions of the story that came out on 14 April. Furthermore, the two separate journalists to whom the same story was ascribed, Robert Kellaway in England and Sarah Arnold in Scotland, deny that they had anything to do with the story, that they filed it or that their bylines were correctly ascribed to it.

I am sure you will agree with me, Mr Crone, that that is pretty much prima facie evidence that some lawyer at the News of the World instructed the editor to pull the first edition of the story on legal grounds and replace it with another edition. Do you have any knowledge of that whatsoever?

Tom Crone: I have no recollection of giving that advice or of seeing that story.

Q1003 Louise Mensch: Can you categorically deny that you gave such advice? This is Milly Dowler-I cannot believe that it would not have stuck in your mind.

Tom Crone: I can only remember to the best of my recollection. I absolutely promise you that I cannot remember that particular story. I certainly have no recollection whatsoever of legally advising on it.

Q1004 Louise Mensch: You will forgive me, Mr Crone, if I put it to you that, since we are talking about the murder victim Milly Dowler, on whom all media attention has been focused, it is literally not credible that you do not remember whether you did or did not spike a story about voicemails on her phone on Saturday 13 August 2002.

Tom Crone: Since I cannot remember it, I do not think I did, to be perfectly honest. I am very well aware of how serious this is. I am not trying to underplay it. It is hugely serious, and it is quite disgusting if what was published came about as a result of illegal accessing. I feel quite strongly about that, but I have no recollection of advising on that story.

Q1005 Louise Mensch: If it was not you, Mr Crone, it would have been a lawyer at the News of the World who advised pulling it.

Tom Crone: Not necessarily. Absolutely not necessarily.

Q1006 Louise Mensch: Who else might it have been?

Tom Crone: Look, this story-at first glance, this story would appear to come from police sources. Now, that is not unusual. In a murder investigation or any other big investigation, a reporter will perhaps get some information from a police officer-hopefully in a proper way, incidentally. Perhaps, a police officer-

Louise Mensch: Forgive me-

Tom Crone: Allow me to finish, please-this is important. The police, for their own intelligence reasons, might think it is important to put messages out there in pursuit of their investigation. Now, the detail on this story suggests it is a police briefing of some sort, either only to the News of the World or in a more general way. What could have happened is that the police see the first edition and they say, "No, I didn’t mean you to identify it in that way." They would ring in and say, "That’s ridiculous. You shouldn’t have done that." Then, the news desk would just pull it out.

Q1007 Louise Mensch: Forgive me, but perhaps I am misunderstanding. The first story is not based on tip-offs or information about Milly Dowler, but on phone messages.

Tom Crone: Yes.

Q1008 Louise Mensch: You are suggesting that the police would have intercepted these phone messages and then leaked them to the News of the World. The words that are in the first story-it is not a generic story-are actually the words used in the phone messages. You are suggesting to me that it is possible that the police would have been listening to Milly Dowler’s messages and passed them on word for word to a reporter at the News of the World, who would have put them in a story, which the news editor would have subsequently pulled.

Tom Crone: Taking that one point at a time, I think it is almost inevitable that the police investigating her disappearance would have gone to whatever was available on her mobile phone, which presumably is with the network. I do not know that-I am not an investigator-but I assume that the police would have had that information and they would have thought it very important. If that is the case, reading this, one assumes that the police have released it for some reason to do with the investigation. Now, it is not in the subsequent edition, and one explanation for that, especially as I do not remember a legal involvement with this, which means it probably did not happen, is that the police would have seen the first edition or become aware of what was in the first edition and said, "No, that’s not what we intended. Let’s get rid of it." That contact would have been with whomever the police contact was or straight into the news desk, and the news desk said, "Get it out of the subsequent edition. It shouldn’t be there because the police don’t want it there."

Q1009 Louise Mensch: Would any records have been kept of police involvement in leaks of this sort that would have been passed on to the duty lawyer? Would this have been passed on to your duty lawyer?

Tom Crone: No, it would not. Well, it was a Saturday, so it probably would be me, but the changes later on would have taken place at a time long after I had left the building. If I was involved, that would have been a phone call, and I certainly have no recollection-I would probably have remembered a phone call more than most things-so I do not think I was involved.

Q1010 Louise Mensch: In any parallel circumstance where the police might have leaked something very detailed to the News of the World and then requested that it be pulled, would that have been reported to the on-duty lawyer?

Tom Crone: No, not necessarily.

Q1011 Louise Mensch: Not necessarily. It would have gone directly to the reporters. Is that your experience too, Mr Myler? Does this sound credible to you?

Colin Myler: It is impossible for me to say. This was 2002.

Q1012 Louise Mensch: Okay, clearly you were not there at the time.

Colin Myler: I was not working there at the time. I was not in the same country at the time; I was working away. I do not know. You have to talk to the people who were on duty that evening to find out about what happened. There could be many reasons why the story was pulled.

Q1013 Louise Mensch: I am not asking that, Mr Myler. I am asking whether, in your experience as an editor of the News of the World, the scenario that Mr Crone has just outlined is plausible and whether the police might leak something word for word to the News of the World, see it in an early edition and ask for it to be pulled.

Colin Myler: I think it is plausible that the police talk to crime correspondents and journalists they know about all manner of things during different investigations. As Mr Crone said, nobody can defend what happened in this case; it is absolutely appalling.

Q1014 Louise Mensch: I am not asking that. I am asking you if it is likely that they would have leaked a specific story and then said, "Can we pull it?"

Chair: We are getting into speculation.

Q1015 Louise Mensch: Fair enough. Let me put something to you, Mr Crone. I do not know whether I speak for others on the Committee, but for me, the evidence you have given-this is the reason you were originally called here, as the Chairman started out by saying-contradicts Mr James Murdoch’s testimony about whether he was made aware of the "for Neville" e-mail and its broader consequences. As Mr Collins said, his evidence was crystal clear that he was not made aware that there was any wider involvement of other reporters, but I have to say, sir, that your evidence really has been as clear as mud on this point. You have been clear that you were discussing a settlement, but there appears to be no clarity whatsoever that he was made aware that there was wider involvement with the News of the World. The meeting took 15 minutes, there was no subsequent review at the paper, there was no subsequent action, and nobody said, "Hey, this is widespread, we should carry on". If Mr James Murdoch was sitting here might he not be able to say, "I’ve been totally clear. They’re completely muddled. The meeting lasted 15 minutes. There was no subsequent action. I stand by my testimony."

Tom Crone: There was only one reason for the meeting. We had pursued a course of conduct in our action, which was defence, because we had seen no evidence that there was News of the World involvement in the Gordon Taylor matter, as opposed to solely Mulcaire involvement in the Gordon Taylor matter. We were then given some evidence in the form of that document. The advice was to settle the action and we went to Mr Murdoch to get his authority for settling the action. It is absolutely inconceivable that it was not explained to him that this document had arisen-had come to our attention-which showed News of the World had an involvement and were implicated in Gordon Taylor.

Q1016 Louise Mensch: Sure, everybody gets that; it is whether he understood that the guilt in the Gordon Taylor matter meant that there was wider hacking at News of the World. That is the key question, not the settlement over Gordon Taylor, but whether he-James Murdoch-knew that it was wider.

Tom Crone: It is a very narrow point, but since the description he got about the e-mail was that it was prepared by a junior reporter and sent back to Mulcaire, then it is quite clear that it goes beyond Clive Goodman.

Q1017 Louise Mensch: You have said that there are many things you cannot remember about this meeting. You have said you cannot remember if you showed him the e-mail or not-that would seem to be a fairly significant piece of information you cannot remember. The other thing I note is that you have not said that James Murdoch himself commented in any way. You have said nothing about what he said.

Tom Crone: All I am doing is answering your questions.

Q1018 Louise Mensch: Did James Murdoch say at any point during the meeting, "Clearly, this has been more widespread; we must do something about it." In other words, did he acknowledge himself in his comments to you during the meeting that hacking had been more widespread than Clive Goodman? I am asking if he could say that he did not understand what you were trying to tell him.

Tom Crone: Since he gave us the authority we were asking for in the context of what we had said to him, I would take it that he understood-

Q1019 Louise Mensch: He gave you authority to settle the case?

Tom Crone: For the first time he realised that the News of the World was involved and that involvement involved people beyond Clive Goodman. On that basis, he authorised a settlement.

Chair: I think we have covered this issue at considerable length.

Q1020 Louise Mensch: Okay. Last question: would you not admit, Mr Crone, that your credibility has been somewhat damaged by the question that my colleague Tom Watson put to you when you clearly stated in evidence to the Committee in 2009 that confidentiality was not a factor in the Taylor settlement and now you are trying to parse the words "confidentiality" and "secrecy"?

Tom Crone: There was no hiding this. Last time the Committee knew very well that there was a confidentiality clause in the agreement. They knew very well that the deal was-clause by clause-pay him some money, agree confidentiality and pay his costs. Of course it was a factor, and we have never hidden that, but it was not, "secrecy gets more money".

Louise Mensch: It seems to be plainly contradictory. Thank you.

Chair: We have a couple more questions and then we’ll be done. Jim Sheridan.

Q1021 Jim Sheridan: Mr Myler, it has been a long day and I hope that my recollection of facts is correct. In response to Mr Davies, you said that you did not know anything or want to get involved in any individual payments to people, is that right?

Colin Myler: I was not involved in any negotiation or conversations about Mr Goodman’s post.

Q1022 Jim Sheridan: In fact, the only question you posed, as I understand it, was about why you were making a payment at all.

Colin Myler: No, I did not pose any question. I am just trying to put the record straight from my point of view about my lack of involvement in any negotiation or conversation regarding what payments Mr Goodman received.

Q1023 Jim Sheridan: I am sure the transaction will show that, but as I understand it, you said the only question, " I posed was, ‘Why were we making any payment at all?’" What I am trying to get at is, who did you pose that question to?

Colin Myler: I think that the question I posed at the beginning was that I felt it was a pretty extraordinary sequence of events that a man who had pleaded guilty and served a prison sentence then had the opportunity to appeal against his dismissal. As I said, I am not an employment expert, but I found that quite extraordinary, but of course he had every right to do that and that is why the process was followed.

Q1024 Jim Sheridan: Who did you make your views clear to then?

Colin Myler: I said to Daniel Cloke-I think I almost said to him- "Are you serious?"

Q1025 Jim Sheridan: And what was his response?

Colin Myler: He was incredibly serious, because-I think this was touched on in the last hearing in 2009-employment law and human resources are now increasingly something that executives have to understand. We actually sent our executives on seminars to understand the process of complaints and everything surrounding this, because it is an absolute minefield. However extraordinary I felt the decision was that we had to hear Mr Goodman’s appeal after he left prison, the reality was it was something that we had to do. He had every right on his side to say that he felt he had been unfairly dismissed.

Q1026 Jim Sheridan: I just have one final, brief question, but before I ask it I will read a paragraph from a letter that I received-I do not know whether other members of the Committee have received it-from a rather senior former member of News International, who says:

"for all kinds of reasons…I wish to remain anonymous. I hope you will understand this. You are dealing with highly sensitive, complex matters and incredibly powerful, well connected and ruthless individuals who will do anything to keep the real truth under wraps because the truth could well blow apart their global empire."

Why do you think a member of this Committee who is investigating what is going on should be sent that letter?

Colin Myler: I have no idea, but I think given the forensic scrutiny that the News of the World has been under since 2006-your own inquiries with the Select Committee, the police inquiry and the Leveson inquiry-I would doubt very much indeed whether anything remains under wraps. I think everything, rightly, will emerge. Hopefully, one day it will.

Q1027 Jim Sheridan: Given your flippant attitude to surveillance tactics, Mr Crone, what do you think this letter contains?

Tom Crone: What do I think what?

Q1028 Jim Sheridan: Why was this letter sent to members of the Committee that is investigating, given your flippant attitude towards surveillance tactics?

Tom Crone: I am not flippant. If I came across as flippant, I apologise. I did not intend to come across as flippant. I do not know who the letter is from, and I do not know whether it is genuine. You have quoted a line from it. The history of how this matter has unfolded involves two sources of information. One is, first and foremost, everything that was seized by the police from Glenn Mulcaire. Bit by bit, that has emerged in the civil litigation, case by case. We have found out about it when it has emerged through the civil litigant lawyers. The other source of information is the internal e-mail system at News International, which was properly investigated, it seems, quite recently. That was done under police supervision, and they are seeing what is coming out of that. I do not know what is in there; I have not seen what has come out of it.

Q1029 Mr Watson: Did you see dossiers on the private lives of claimant lawyers?

Tom Crone: I saw one thing in relation to two of the lawyers, except I do not know whether it was a dossier. It involves their private lives.

Q1030 Mr Watson: Did you feel the need not to answer that question when I had a round of questions with you earlier?

Tom Crone: Didn’t you ask whether I had ordered surveillance, or something like that-whether I had ordered a private investigator?

Q1031 Mr Watson: You gave me a lawyer’s answer, and now you have given me an accurate answer. Do you know the origin of those dossiers?

Tom Crone: Freelance journalists, I think.

Q1032 Mr Watson: Employed by News International?

Tom Crone: Freelance journalists employed by News International, yes.

Q1033 Mr Watson: And do you know who commissioned them to produce those dossiers?

Tom Crone: I know who contacted the freelancers.

Q1034 Mr Watson: Who was that?

Tom Crone: I don’t think we should do that because of the police investigation.

Q1035 Mr Watson: Are you aware of any members of this Committee who were the subject of covert surveillance?

Tom Crone: No, I only know about that one thing that I have just referred to.

Q1036 Mr Watson: In the 2009 inquiry, you were not aware that either freelance journalists or private investigators were commissioned to follow or surveille any Member?

Tom Crone: That is news to me.

Q1037 Mr Watson: Are you aware of any civil or criminal cases that involve the use of computer hacking or Trojan devices put on computers?

Tom Crone: No, not at all.

Q1038 Mr Watson: Are you aware of the use of tracking devices in any of the civil cases or criminal cases?

Tom Crone: No.

Q1039 Damian Collins: One last question; I appreciate that we have gone over the Milly Dowler story in some detail, but it is really just about process. The difference between the two stories that my colleague Louise Mensch described and I put in front of you is that obviously there are quotes from phone messages in the early version, and there are not any in the later version. As a matter of process, if a journalist was seeking to write a story and wished to use in it direct quotations from messages left on the voicemail of someone’s mobile phone-given that phone hacking is a criminal offence-is that the sort of thing that would have been referred to a lawyer on the newspaper before it was published?

Tom Crone: Not if it had come from the authorities, no. In retrospect, in 2002 I was not aware that phone hacking existed, to be perfectly honest, so looking at that, the only source that I could have seen for those messages would have been the police.

Q1040 Damian Collins: In this case, if the journalist had said it was from a police source, that would have been enough.

Tom Crone: Yes.

Q1041 Damian Collins: If they were not able to say that, would it have been referred to a lawyer before printing?

Tom Crone: If they were not able to say it?

Q1042 Damian Collins: Yes; given that it could potentially be illegally obtained information.

Tom Crone: You would certainly have to ask the question, "Where did you get the information from?" Or the desk would have to.

Q1043 Damian Collins: It does not seem to have always been very rigorously asked.

Tom Crone: The desk would ask that information, and if it involved going and asking the lawyer, that would happen thereafter.

Q1044 Damian Collins: In other news organisations, it seems that if there is any question that the material that is about to be used may have been sourced illegally, it may be necessary for the story, but that would normally have a legal referral.

Tom Crone: That would be right. That is why I assume that it came from the police.

Damian Collins: Thank you.

Chair: We have done. Thank you very much.

Prepared 9th September 2011