Summary:

News Corp could be laden with a multi-million pound UK compensation bill after agreeing to settle claims on the basis its executives tried t…

James Murdoch and BlackBerry
photo: Murdoch: Hubert Burda Media

News Corp could be laden with a multi-million pound UK compensation bill after agreeing to settle claims on the basis its executives tried to cover up and destroy evidence about tabloid phone hacking.

In London’s High Court on Thursday, News International settled with 19 high-profile victims, whose lawyers issued a statement reading…

“News Group has agreed to compensation being assessed on the basis that senior employees and directors of NGN knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence.”

The wording “on the basis” is key. It means News International is not admitting to such actions themselves at this stage. The company will likely want to avoid prejudicing itself in the event of any such criminal charges being brought.

But calculating its compensation payouts on this basis could nevertheless be a milestone. The publisher had originally blamed phone hacking on a single “rogue reporter” and some executives had originally denied knowledge. Through its own investigation and others, the company has since learned to the contrary. News International declined to comment when approached on Thursday.

From a financial perspective, today’s 16 disclosed settlements total £645,000 – an average £40,312 payout per victim. London’s Metropolitan Police believe 803 people may have been hacking victims. The total compensation bill calculated on this basis could reach £32.37 million.

But this estimate is inexact and theoretical. It is not clear that every victim, many of whom are likely still unaware of their victimhood, will settle with the company in this way. It would also be difficult to forecast figures for such prospective settlements. Today’s settlements vary between £25,000 (to a hacked journalist) and £130,000 (to actor Jude Law), for example.

From a corporate perspective, today’s statement reflects damagingly on the unnamed “senior employees and directors” referred to.

James Murdoch was a director on the board of News International’s News Of The World and Sun publishing imprint, News Group Newspapers, at the time, but resigned in the wake of the scandal, according to a September filing. He remains News International’s chair. News Group’s current and former directors are listed here.

News International’s former legal manager and News Of The World’s former editor previously told a parliamentary committee they had made James Murdoch aware of the scale of the problem. But Murdoch repeatedly told the committee they had kept it from him.

Then, last month, in an embarrassing further submission, he told the committee he had recalled that he had indeed been made aware, via a weekend email that he did not fully act upon when he returned to the office later that week.

James Murdoch is chairman and CEO of News Corporation’s “international” (non-U.S.) business.

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