House of Commons Culture, Media and Sport Committee

News International and Phone-hacking

Eleventh Report of Session 2010–12

Volume II

Oral and written evidence

Ordered by the House of Commons to be printed 24 April 2012

HC 903-II Published on 27 April 2012 by authority of the House of Commons London: The Stationery Office Limited £22.50

The Culture, Media and Sport Committee

The Culture, Media and Sport Committee is appointed by the House of Commons to examine the expenditure, administration and policy of the Department for Culture, Media and Sport and its associated public bodies.

Current membership Mr John Whittingdale MP (Conservative, Maldon) (Chair) Dr Thérèse Coffey MP (Conservative, Suffolk Coastal) Damian Collins MP (Conservative, Folkestone and Hythe) Philip Davies MP (Conservative, Shipley) Paul Farrelly MP (Labour, Newcastle-under-Lyme) Louise Mensch MP (Conservative, Corby) Steve Rotheram MP (Labour, Liverpool, Walton) Mr Adrian Sanders MP (Liberal Democrat, Torbay) Jim Sheridan MP (Labour, Paisley and Renfrewshire North) Mr Gerry Sutcliffe MP (Labour, Bradford South) Mr Tom Watson MP (Labour, West Bromwich East)

Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the internet via www.parliament.uk.

Publication The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the internet at www.parliament.uk/parliament.uk/cmscom. A list of Reports of the Committee in the present Parliament is at the back of this volume.

The Reports of the Committee, the formal minutes relating to that report, oral evidence taken and some of the written evidence are available in a printed volume.

Additional written evidence is published on the internet only.

Committee staff The current staff of the Committee are Elizabeth Flood (Clerk), Sarah Heath (Second Clerk), Victoria Butt (Senior Committee Assistant), Keely Bishop/Alison Pratt (Committee Assistants) and Jessica Bridges-Palmer (Media Officer).

Contacts All correspondence should be addressed to the Clerk of the Culture, Media and Sport Committee, House of Commons, 7 Millbank, London SW1P 3JA. The telephone number for general enquiries is 020 7219 6188; the Committee’s email address is [email protected]

Witnesses

Thursday 24 March 2011 Page

John Yates QPM, Acting Deputy Commissioner of the Metropolitan Police Service Ev 1

Tuesday 19 July 2011

Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation, and James Murdoch, Chairman, News International Ev 16

Rebekah Brooks, former Chief Executive, News International Ev 41

Tuesday 6 September 2011

Jonathan Chapman, former Director of Legal Affairs, News International, and Daniel Cloke, former Group HR Director, News International Ev 58

Tom Crone, former Legal Manager, News Group Newspapers, and Colin Myler, former Editor, News of the World Ev 71

Wednesday 19 October 2011

Julian Pike, Partner, Farrer & Co. Ev 96

Mark Lewis, Partner, Taylor Hampton Solicitors Ev 108

Monday 24 October 2011

Les Hinton, Former Executive Chairman, News International Ev 119

Thursday 10 November 2011

James Murdoch, Deputy Chief Operating Officer and Chairman and Chief Executive Officer (International), News Corporation Ev 131

List of printed written evidence

1 John Yates QPM, Acting Deputy Commissioner, Metropolitan Police Ev 159 2 Keir Starmer QC, Director of Public Prosecutions Ev 161 3 John Yates QPM, Assistant Deputy Commissioner, Metropolitan Police Ev 165: 166 4 Rebekah Brooks, CEO, News International Ev 166: 167: 231 5 Chair of the Culture, Media and Sport Committee to Rebekah Brooks, CEO, News International Ev 167 6 James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation Ev 167: 168: 169: 172: 236: 265: 273: 283: 285: 287 7 Chair of the Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation Ev 168: 188: 264: 281: 284 8 Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation Ev 168 9 Chair of the Culture, Media and Sport Committee to Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation Ev 168 10 Sly Bailey, Chief Executive, Trinity Mirror Plc Ev 169 11 Louise Mensch MP Ev 170 12 Harbottle & Lewis Ev 170 13 Jonathan Chapman Ev 171 14 Rebekah Brooks, former CEO, News International Ev 190: 222: 266 15 Chair of the Culture, Media and Sport Committee to Rebekah Brooks, former CEO, News International Ev 190: 222: 223: 267 16 Jonathan Chapman Ev 190 17 Chair of the Culture, Media and Sport Committee to Jonathan Chapman Ev 197 18 Colin Myler Ev 197: 238: 255: 257 19 Chair of the Culture, Media and Sport Committee to Colin Myler Ev 198: 238: 256 20 Tom Crone Ev 199: 253: 268 21 Chair of the Culture, Media and Sport Committee to Tom Crone Ev 201: 254: 270 22 Harbottle & Lewis LLP Ev 202: 204 23 Chair of the Culture, Media and Sport Committee to Harbottle & Lewis Ev 219 24 Baroness Buscombe, Chairman, Press Complaints Commission Ev 221 25 Mark Lewis, Taylor Hampton Solicitors Ev 221: 236 26 Linklaters LLP Ev 221: 231 27 Daniel Cloke Ev 223 28 Chair of the Culture, Media and Sport Committee to Daniel Cloke Ev 224 29 Anthony Burton, Partner, Simons Muirhead & Burton Ev 225 30 Chairman of the Culture, Media and Sport Committee to Stuart Kuttner Ev 225 31 Farrer & Co Solicitors Ev 225: 239 32 Chair of the Culture, Media and Sport Committee to Farrer & Co Ev 227 33 Lawrence Abramson, Partner, Fladgate LLP Ev 227 34 Chair of the Culture, Media and Sport Committee to Lawrence Abramson, Partner, Fladgate LLP Ev 228 35 BCL Burton Copeland Ev 228

36 Chair of the Culture, Media and Sport Committee to BCL Burton Copeland Ev 229 37 Les Hinton, former Executive Chairman, News International Ev 229 38 Chair of the Culture, Media and Sport Committee to Les Hinton, former Executive Chairman, News International Ev 230 39 DLA Piper UK LLP Ev 230 40 Chair of the Culture, Media and Sport Committee to Andy Coulson Ev 230 41 James Saunders, Saunders Law Ltd Ev 234 42 Linklaters LLP, on behalf of the Management and Standards Committee Ev 234: 254: 263: 271: 273: 280: 282: 284: 291 43 Chair of the Culture, Media and Sport Committee to Linklaters LLP Ev 235 44 Chair of the Culture, Media and Sport Committee to Mark Lewis, Taylor Hampton Solicitors Ev 236 45 Michael Silverleaf QC Ev 237 46 Chair of the Culture, Media and Sport Committee to Michael Silverleaf QC Ev 237 47 Chair of the Culture, Media and Sport Committee to Julian Pike, Partner, Farrer & Co Ev 252: 259 48 Julian Pike, Farrer & Co Ev 259 49 Neville Thurlbeck Ev 260 50 Chair of the Culture, Media and Sport Committee to Neville Thurlbeck Ev 262 51 Surrey Police Ev 274 52 Chair of the Culture, Media and Sport Committee to Surrey Police Ev 280 53 Metropolitan Police Ev 281: 286 54 Chair of the Culture, Media and Sport Committee to the Metropolitan Police Ev 282: 286 55 Chair of the Culture, Media and Sport Committee to Linklaters LLP, on behalf of the Management and Standards Committee Ev 283: 284: 291 56 Mark Thomson, Atkins Thomson Solicitors Ev 292

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Culture, Media and Sport Committee: Evidence Ev 1

Oral evidence

Taken before the Culture, Media and Sport Committee on Thursday 24 March 2011

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Mr Adrian Sanders Damian Collins Jim Sheridan Philip Davies Mr Tom Watson Paul Farrelly ______

Examination of Witness

Witness: John Yates QPM, Acting Deputy Commissioner, Metropolitan Police Service, gave evidence.

Q1 Chair: Good morning. This session is a follow- During my evidence, I set out the very prescriptive up to the Committee’s report on press standards, definition of Section 1 of the Regulatory Investigative privacy and libel. It comes after the Adjournment Powers Act, RIPA. It is what has become known as debate held by Chris Bryant on the floor of the House mobile phone voicemail hacking. Principally, I recently, in which he suggested that Assistant explained to the Committee that to prove the offence Commissioner Yates might have misled both this of interception under that Section, the prosecution had Committee and the Home Affairs Committee. Acting to show that a voicemail had been intercepted prior to Deputy Commissioner Yates then wrote to me it being listened to by the intended recipient. On this suggesting that he took these allegations seriously, and basis, I advised that there may in fact only have been that we might wish to invite him to come back to the 10 to 12 victims against whom we could actually Committee in order to allay Chris Bryant’s and our prove an offence. concerns, and it is on that basis that I am pleased Mr Bryant then stated that “never at any stage during to welcome Acting Deputy Commissioner Yates this the prosecution of Goodman and Mulcaire did morning. I should also say that the Committee is anybody from the CPS advise the Metropolitan Police aware that there is an ongoing police investigation that that the law should be interpreted in such a way”. That could lead to criminal charges, and of course there are is not correct. I have provided you a letter today, civil cases under way as well; we will bear that in which I sent to both this Committee and the other mind during our questioning this morning. Committees that have an interest, that sets out in detail Deputy Commissioner Yates, when you appeared the nature and the extent of the CPS and leading before this Committee in September 2009, we counsel’s advice that was provided in this case. It discussed at some length what constituted an offence constitutes, in my view, an absolute rebuttal of what under the Regulation of Investigatory powers act. You Mr Bryant has wrongly claimed, and supports my were very clear that you had to prove that a voice previous evidence both to this Committee and other message had not been listened to by the person it was Committees of this House. sent to in order for a criminal act to take place if it Taking this in turn, the DPP, in his letters to this were then hacked. That remains your understanding Committee of 30 July and another letter of 3 November 2009, states the law says, “To prove the of the law? criminal offence of interception, the prosecution must John Yates: It does, Chair. I wonder whether you prove that the actual message was intercepted prior”— might afford me the opportunity just to make a brief and he underlines “prior”—“to it being accessed by opening statement on these matters. the intended recipient.” The same factor is also further Chair: Yes, okay. described “as an essential element of the offence”. John Yates: You referred, quite understandably to the That same legal advice was given to the senior adjournment debate led by Mr Bryant MP; he made a investigating officer during the Mulcaire and number of statements in that debate about the manner Goodman case, and consistently throughout that in which this investigation had been undertaken by the investigation back in 2006. It actually permeated Met. He also made several assertions that are not every aspect of his investigative strategy and all the correct. The most stark and immediate of these is the submissions to the CPS. It also resulted in the aspect that relates to my evidence provided to the employment of tactics and, indeed, experts to Home Affairs Select Committee on 7 September last evidence the difference between a voicemail being year. He is saying that I misled the Committee in opened or unopened at the point of its alleged relation to the legal advice received by the original interception. investigation team; he stated I “misled the Committee In the adjournment debate, Mr Bryant also went on to and used an argument that had never been relied on say the CPS “formally warned a team from the Met by the CPS or by his own officers so as to suggest the in October last year that it was wrong to claim such number of victims was miniscule.” I take this to be a an interpretation”. Further, he states that this very serious allegation, as I know you understand. misinterpretation of the law was the very reason and cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

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24 March 2011 John Yates QPM the only reason why the Met refused point blank to employed a very experienced forensic reopen the case until January of this year. Mr Bryant telecommunications expert to absolutely adduce these is, in my view, mistaken on both matters. There was factors, and differentiate between the opened and the no such warning in relation to any historical case. His unopened. In my letter I think I talk about three claim may, however, refer to the provision of some separate advice files to the CPS on that point and that newly commissioned legal advice in late 2010 as to point alone. what might constitute an offence of interception for the purposes of any future—and I underline Q5 Chair: Are you therefore surprised that the “future”—investigation. The CPS have signalled an Director of Public Prosecutions should tell the Home intention, as is quite proper, possibly to include the Affairs Committee that this was not really a relevant interception of voicemails that have already been factor when it came to deciding whether or not to opened by the intended recipient. That may of course make and to bring prosecutions? impact on the current investigation being led by my John Yates: I think there is some confusion on this colleague, Sue Akers. point, and the DPP is well able to speak for himself, On the second point he raised, on the issue of opening but I think his letters in 2009 make it absolutely clear a new investigation, it is clear that the sole reason for what the position was. They have refreshed their view; this was the fact that News International provided new that is quite proper and he does not make the law— material to the police in January of this year. So he advises on the law, of course—but he has refreshed whatever the outcome of the future investigations of his view. this nature, the fact remains that during the Mulcaire and Goodman case, and throughout the ensuing period Q6 Chair: He has changed his mind? until October 2010, the legal advice on this matter was unequivocal, and as I said on 7 September, very John Yates: You would have to ask him that, but that prescriptive. is what it certainly looks like to me. I have no The significance of this point, in my view, is very difficulty with that. clear. I have always cautioned on behalf of the original investigation that whilst suspects may have Q7 Chair: That is a fairly significant change. This targeted many people as private investigators, we was the crucial factor determining whether or not— could only actually prove the offence of voicemail John Yates: He has changed his mind now, not in interception in a very small number of cases. If there 2006/2007 when there was a different DPP and is a wider interpretation of what constitutes different legal advice. So I am not surprised; DPPs are interception of voicemail under RIPA and it is now quite entitled to take a revised view. We all learn from applied, then this position of course may change. But the experience of these issues and see what the public that is a matter for the new investigation and it is view and the will of parliament may or may not have clearly inappropriate for me to comment on any of been. He has taken a revised view, but it is in October those matters in terms of the new investigation now. 2010 we have that revised view, not when the original So I hope that helps clarify my position and rebuts the investigation team carried out their original enquiries very important issues that Mr Bryant raised, which I in 2006/2007. My letter is a very lengthy and detailed think he is materially wrong on. letter about exactly what the advice was throughout that period. It is absolutely clear they were Q2 Chair: Thank you. That is certainly helpful. You concentrating on offences that we could prove to show will be aware that this Committee made a formal that it was an unopened voicemail before the recipient recommendation that RIPA be amended so that it was got it. clearly an offence to listen to a message whether or not it had already been listened to. Now, you say that Q8 Chair: Okay. Chris Bryant suggested that a you were very clear in your interpretation of the law meeting was held on 1 October between the CPS and at the time you carried out your investigation, that it the Metropolitan Police. Are you saying that meeting was only an offence if— did not occur? John Yates: Well, you know it was not my John Yates: I think there was a meeting; there was a investigation, but in terms of the legacy that I picked conference around that matter, but there was no formal up in 2009 it was very clear, and it was made warning in the sense that he has adduced in the debate. absolutely clear to me in all the briefings I had and It was the New York Times matter that they were it was my absolute understanding that it had to be considering, and it was simply that they had taken a accessed before— revised view. I think they had sought the advice of a new leading counsel. A new leading counsel took the Q3 Chair: Who gave you those briefings you had? view that, “Well, actually in the future you may wish John Yates: The relevant colleagues and the legal to consider a wider view,” and that is what the DPP advice that I received around that. signalled at that time, as is perfectly proper.

Q4 Chair: The CPS? Q9 Chair: So a meeting did take place— John Yates: Not directly the CPS at that particular John Yates: Indeed, it did. point, but I refreshed from the CPS advice from Chair:—it is likely that the CPS did say that their previously, 2006/2007, so no I did not directly seek at view of the law had changed. that time, as I recall. It could not have been clearer, John Yates: Yes, but there was no warning or Chair, that that was the position, and we even anything of that nature whatsoever. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 3

24 March 2011 John Yates QPM

Chair: Right, but actually they did say it was wrong Q14 Paul Farrelly: Could we have a copy? to claim such an interpretation. It might not have been John Yates: I think they will be privileged, so they phrased as a warning but— are not mine to give away, but you could certainly ask John Yates: From this point here on, yes. But you the CPS on that. cannot judge the view they take in October 2010 to the view that was unequivocally given—and it is set Q15 Paul Farrelly: Okay. I do not want to dwell too out in letters from the DPP—about how the case and much on the original inquiry because you were not the prosecution was conducted, and how the involved in it, although you have clearly reviewed investigative strategy developed in 2006/2007. It is what went on, but when Andy Hayman wrote in The very clear, and you will see it in the letter, that all that Times that the inquiry had “left no stone unturned”, was about you have to have the two ingredients: that was he accurate? a voicemail was sent and it was listened to prior to John Yates: I think you have to look at the context at the intended recipient doing so. the time and where the investigation was focused at the time. It was focused very much on the royal family Q10 Paul Farrelly: The DPP, Mr Starmer, wrote to and very much on the issues surrounding that. The the Guardian and said, “It is regrettable that John context at the time was of course that the arrest of Yates has taken one sentence of my evidence to the Goodman and Mulcaire took place the day before the Culture, Media and Sport Committee out of context.” airlines plot started, which is probably one of the That is wrong, isn’t it? He is wrong. biggest criminal investigations in the Met’s history. John Yates: As far as I am aware, I am in heated Those at the time undoubtedly would have taken agreement with the DPP about these matters now, and decisions about how to use resources in the most I think there has just been some confusion about what appropriate way; that is what we do all the time. he thought he may have been responding to, but you would have to ask him that—not me—and what I was Q16 Paul Farrelly: But he wrote that the inquiry responding to around what Chris Bryant has said in “left no stone unturned”. In your opinion, was that the adjournment debate. I am very clear, as I have said accurate? to you—and I have set out a letter in detail—that John Yates: Well, it is a fairly bold statement to make Chris Bryant was wrong. I believe I have a very about any inquiry, so it is a fairly bold statement to clear factual— make. Paul Farrelly: No matter what— Paul Farrelly: Yesorno? John Yates: Hang on. I have a very clear factual audit John Yates: I think the inquiry— trail that supports that view, and I do not want to get Paul Farrelly: Accurate or not accurate? into a fight with the DPP. It is unedifying; it is John Yates: In terms of how the inquiry was unnecessary. conducted, the outcome achieved—we thought the Mr Watson: You are already in one. law was clarified, and two people went to prison and it had a huge deterrent effect—I think was a good outcome. The experience of the last three years would Q11 Paul Farrelly: Well, he has got into a fight suggest that in some areas perhaps more could have with you. been done, and I am quite happy to reflect the wisdom John Yates: Whatever. We are in agreement now— and maturity of that to say that. We have a new the letters are clear; the DPP’s letters are clear. investigation; I think we should allow them to get on with it, and to talk about victims and all those issues Q12 Paul Farrelly: Let’s be quite clear. No matter now I think is probably unwise. what he wrote to the Chair of the Home Affairs Committee in October and circulated to us, his Q17 Paul Farrelly: After the Guardian article in statement to us in 2009 was absolutely clear, as you 2009, you were brought in to establish the facts, and have referred to. So what he has written in this letter, you made a lengthy statement after a day’s look at that you have taken his evidence to us out of context, what went on. After that, we wrote to you saying how is wrong. Is that not the case? disappointed we were that you had not disclosed these John Yates: It is difficult to see how it could be taken 91 PINs, which were PINs where the factory settings out of context. I think that is probably the safest place had been changed. We understand that you to be. As I say, we have had discussions with me, his commissioned a more thorough review of everything staff and his lawyers, and I think we are clear about that was in the police’s possession afterwards. Before what happened in 2006/2007. I am very clear about our report, briefings were given to Ministers by your what happens hereon; it is a matter for Sue Akers and staff officer, who said at the time minimal work had the new team, and probably best leave it at that. been done on the vast amount of personal data. So when you made that statement after your review of Q13 Paul Farrelly: So we can be clear as to what the day, did you consider that you had indeed was communicated to the Metropolitan Police, were established all the facts? notes taken by the Metropolitan Police of the John Yates: You could never say I had established all conference at the beginning of October? the facts in that day. That was not actually the task John Yates: 2010—yes. In fact, I think they are the set. The task set was, “Is there anything new in the CPS notes, but they were agreed. Guardian article that day that we are unaware of?” Paul Farrelly: They were agreed? The answer was there was nothing new. After that John Yates: Yes. article had been published, it was clear that we needed cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

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24 March 2011 John Yates QPM to do some more analytical work on the vast quantity a particular purpose cannot be released for another of data, and I applied considerable amount of resource purpose without a court order. It is a conveyor belt to that effort, which involved putting it on a proper effect, actually, in the decision is made by a High computer system away from all the reams of paper. Court Judge and not a lowly minion like me, so that As that happens, and as more details became apparent is the way it operates. I know Justice Vos made in terms of the subject you are talking about—91 PINs decisions last week that affect that—fine, that is a or whatever—it is obvious, as that analytical process High Court Judge’s decision and we will follow that. comes through, more information will become So in answering your question: no, I am not involved apparent. What I told you on my first appearance was in decision making about releasing material. what I knew at the time, and I wrote back to you thereafter, Chair, to say actually that issue arose Q21 Paul Farrelly: The police has changed its because of a Freedom of Information request, I approach. The new DAC has said that they will believe, so it was further researched. Back to your release information. Previously, the police put hurdles original point: what was I asked to do? Establish the in the way of people wanting information. For facts. Was there anything new in the Guardian article? It was new to some people, but it was not new to us. instance, that they had to prove the reasons why they Paul Farrelly: We have had this debate. thought they might feature in the documents seized John Yates: I re-read it exhaustively last night. from Mulcaire. Were you involved in any decisions Paul Farrelly: It is semantics. It is a circular on that approach? argument. John Yates: The new—? John Yates: Yes. Paul Farrelly: No, the previous approach. John Yates: It is not an approach; it is a matter we Q18 Paul Farrelly: On 26 January this year, the have adopted since time immemorial. That is the way Metropolitan Police service ordered a new we release documentation, so I cannot comment on investigation to be undertaken by Deputy Assistant what Sue may or may not be doing in terms of that. Commissioner Sue Akers. Paul Farrelly: I am not asking you to. John Yates: Yes. Chair: Paul, you have strayed into the next area. Paul Farrelly: When did you stop being involved in investigations into phone hacking? Q22 Paul Farrelly: I just have a couple more John Yates: It was around that point. As you are questions to finish off this section. After the New York aware, the current hierarchy of the Met is looking Times published its article, you told the Home Affairs slightly different because of Paul’s illness—he is Select Committee that you would like to talk to Sean coming back by the way, very soon. So I moved into Hoare and he was subsequently interviewed. Was he Acting Deputy as well as my day job, which is the interviewed as a witness or under caution? On what Head of Counter-Terrorism and other matters. These basis? issues only ever came to my area before because it John Yates: My recollection is he was interviewed involved the royal family, and we were involved in under caution, although we would not normally the protection of the royal family. It is absolutely discuss these type of matters, but I think it is probably proper that they should be done in the specialist crime a matter of public record that bit. directorate, where they probably have the appropriate resources and scope to undertake an inquiry of this Q23 Paul Farrelly: Why? nature. So it would not be appropriate now for John Yates: We discuss arrest and charge, but prior to counter-terrorism officers to be undertaking these that point it is slightly culpatory on individuals to say, types of inquiries, so it is absolutely the right decision. “You are being interviewed under caution.” We do not I am no longer involved and, quite properly, firewalled on all those issues from how the investigation is being normally name people, so I would be reluctant to go run. So, as I know you are aware, Chair, I cannot through it. comment on it, nor would I want to. Paul Farrelly: But you have talked about him in front of the Home Affairs Committee, which why I am Q19 Paul Farrelly: So although you are the Acting mentioning his name. Deputy Commissioner and therefore nominally her John Yates: I cannot recall the exact details. I think superior, there are no reports arranged for you. he has gone on record saying he was. John Yates: Absolutely no reports and that is very clear on that. Again, Mr Farrelly, that is not unusual; Q24 Paul Farrelly: Why? Why not as a witness? it has happened often around these issues. John Yates: Because I believe he made admissions, even in the media, that suggest he deserves the benefit Q20 Paul Farrelly: To put it mildly, the Metropolitan of a caution to know that if he does say something it Police has been reluctant to release notes and could be used in evidence at some point in time. So it documents from the hoard seized from Glenn is a protection to the individual, which Parliament has Mulcaire to people taking civil action. Have you been thought appropriate and we think it appropriate in involved in any of the decisions about what to release order to give him that protection. I would not read and not to release? anything into that, because, if we did not do it, I think John Yates: I think I have explained to this you and others would be the first people to jump down Committee or other Committees we follow a very our throat, and courts would throw out the evidence strict Court of Appeal ruling that material gathered for because it was produced in an inappropriate way. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

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24 March 2011 John Yates QPM

Q25 Paul Farrelly: Can you tell us: last Autumn, Q30 Mr Watson: Did you or your team examine all before the files passed to the CPS and then no further of the Mulcaire records? action was taken, how many other people were John Yates: At what point? interviewed? Mr Watson: When you were asked to establish the John Yates: There were a number of people. I cannot facts? give you a headcount now, but a number of people, John Yates: No. journalists and others, were interviewed around these Mr Watson: No. matters. John Yates: What you are potentially describing is a Paul Farrelly: Roughly how many? full-scale review. I was never asked to do that and I John Yates: It would be fewer than 10, I think. never did it. It would have taken considerable resources to do so. What I was asked to do—I will go Q26 Paul Farrelly: You mentioned Andy Coulson’s back to Mr Farrelly’s point—was establish the facts. name in front of the Home Affairs Committee—was What was in the Guardian article that day? Was it he one? new? Did it constitute new evidence? John Yates: I think he has agreed he was. To be accurate on these matters I will happily provide you Q31 Mr Watson: So if you have not reviewed the with the details of numbers of witnesses and a evidence, how are you able to say how many people headcount of numbers of people under caution, if you have been hacked on any realistic basis? are happy, rather than the individuals themselves. John Yates: I did not say I did not— Mr Watson: Well, the Met Police did, didn’t they? Q27 Paul Farrelly: Okay, but you mentioned Andy John Yates: We went through a process post July Coulson in the Home Affairs Committee as someone 2009 to put all the material on a computer. you might like to talk to. Did you interview him? John Yates: I would need to see whether we have Q32 Mr Watson: So the names and the numbers given that out in public. I cannot remember whether were distilled into a discrete list? he has. John Yates: Yes. As far as I was aware from the 2006 Paul Farrelly: You mentioned that you would like to investigation, the best of my knowledge at that time see him in front of the Home Affairs Committee. was this was where they thought the best evidence was, where the focus of the investigation was, where John Yates: Can I first assure myself that I am not we could actually adduce the very technically difficult stepping anywhere that I do not want to? I am not evidence of what I discussed with the Chair. So that being defensive; these are witnesses and we have to is where we went then. treat people’s privacy appropriately. Q33 Mr Watson: So all the names and numbers in Q28 Paul Farrelly: When we last talked to you, you the evidence file were decanted into a separate list? told us that perhaps it was a mistake not to interview John Yates: In terms of post July 2009? Neville Thurlbeck and Ross Hindley/Hall at the time, Mr Watson: At any point. but you came to the conclusion that nothing would be John Yates: That has been happening all the way achieved at the time you gave us evidence by through from that point on. interviewing them then. When you were interviewing Mr Watson: But it did not happen in 2006? people after the New York Times article, had you John Yates: Not that I am aware of, no. changed your stance? Mr Watson: Did it happen in 2009? John Yates: As I say, I am not sure it is appropriate John Yates: But all the material was reviewed by the to actually name the people we have interviewed. relevant counsel at that time in that case for Paul Farrelly: No, but had you changed your stance? disclosure purposes. John Yates: There certainly was some value then in trying an interview. Can I just research about whether Q34 Mr Watson: You told the Committee at that is appropriate or not? But had I changed my Question 1903 that Mulcaire had “snippets” of stance? Yes I had, in terms of yes, I think there was information, and that was his job to have them as a some value. Whether we got any value out of it, of private detective. That is misleading, is it not? There course, is a different matter. was lots more than snippets in that evidence from him. John Yates: If you have found the word “snippets” Q29 Mr Watson: Mr Yates, would you describe the then perhaps that does not demonstrate the full scale scale of the evidence that there was to examine when of it, but I was very clear that he had a lot of there were calls for new investigation in 2009? Was it information and had gathered a lot of information a warehouse, a roomful, a filing cabinet full? during the course of his employment, if you call it John Yates: It was bin bags. that. But, as I also said, I think if you go a bit further Mr Watson: And did you and your team—? on, that is what private investigators do, so it does not John Yates: Several. necessarily go into the evidential aspect. The point I Mr Watson: Several bin bags. How many? Half a made was that you would expect private investigators dozen? to have information. John Yates: Two or three. Mr Watson: Two or three—were they full? Q35 Mr Watson: You have known for four years the John Yates: I did not see them. extent of the information that was in the Mulcaire file, cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Ev 6 Culture, Media and Sport Committee: Evidence

24 March 2011 John Yates QPM yet it has only come to light now as a result of civil has been arrested for phone hacking warrants further litigation cases. follow-up or provides evidence? John Yates: Again, I think we risk confusing what is John Yates: You are assuming that that individual— evidence, what is appropriate use of police resources whoever that individual is—has not been interviewed. in terms of gathering that evidence and putting it As I say, that is probably a dangerous area to go into, before a court, and what are other matters in terms of but there has to be a picture built up around the what other individuals will or may want to do in terms evidence, the intelligence and the information. You of civil action against the News International group. come to a view, as police officers, that justifies a It is not our job to investigate civil actions, breach of particular course of action. privacy et al. Q41 Mr Watson: Okay, I take your point, but do you Q36 Mr Watson: Could I show you a piece of the accept that significant evidence in terms of evidence that is in the public domain? It comes from documents, emails, electronic evidence will have been the Sheridan file that has been publicly reported as lost by not seizing documents from Edmondson, a release from the Sheridan trial. You will see that Miskiw and Thurlbeck like you did to Mulcaire and Mulcaire wrote— Goodman? John Yates: Could I have a copy? John Yates: I am not in a position to comment on that Mr Watson: Yes. Jim, can you pass it on, please. You because I do not know which aspects you are going will see in the top left-hand corner that Mulcaire wrote to rely on. the first name of the journalist when he was obtaining the information on the target. Why did the police Q42 Chair: It was the evidence that the News of the ignore this evidence in relation to everyone else other World produced of Ian Edmondson’s emails once they than Goodman? became aware of the information in Mulcaire’s files John Yates: Firstly, there was very clear evidence that has led to the reopening of the police about Goodman in terms of his phone records and investigation. everything else around it. Again, I do not want to get John Yates: We are talking about getting into where into semantics, Mr Watson, but the fact the name is the new investigation is there. I think we have to come on the left-hand corner does not mean he knows how to the point that News International were asked for that information was obtained. It is a huge quantum this information many years back and, for whatever leap to suggest that that is the case. If you go back to reason, they did not provide it. Operation Motorman and *Operation Glade*[0.30.49] Mr Watson: I will come to that. stuff, all the journalists that were interviewed then John Yates: They have now provided it. It is new said, “We thought the information had been obtained material, so I need to be cautious about how I describe lawfully.” it; it is new material and there is a new investigation.

Q37 Mr Watson: Mr Yates, we both know the Q43 Chair: But they were not asked many years ago distinction between information and evidence. Are specifically for information regarding Ian Edmondson. you familiar with the phrase “acting on information John Yates: They were asked for all relevant received”? information about editors and assistant editors. The John Yates: Yes. letter I think I read out to you last time showed that. They chose, for whatever reason, whether they could Q38 Mr Watson: Given that Mulcaire recorded find it or not, not to provide it at that point. every journalist that instructed him, why did you not interview the other journalist named in the evidence Q44 Chair: But they were asked for a blanket trawl, file? not specifically. John Yates: I think you are making the assumption John Yates: We asked for very specific issues. that he has not been interviewed, so you need to be Chair: On Ian Edmondson? careful on that point. John Yates: On editors, assistant editors and the like. I do not have the letter with me; I will re-find the Q39 Mr Watson: Can I ask why the Met did not letter in a second, but it was very clear what was asked arrest or at least interview Edmondson at the time? for and you will know the vagaries of Section 9 John Yates: Because you have to have reasonable production orders and what you can and cannot do, suspicion, Mr Watson. I have not got the bit of paper and whether there is cooperation or not cooperation that you are probably going to refer to next, with from any particular media outlet. In other areas they another name on the left-hand corner, but that is not were cooperating fully, and we had a lot of toing and evidence that justifies arrest at that point. Other froing around contracts and the like. If they said there material may come into play that supports the view was not anything, we had to take that at face value at and adds to that picture—and I do not want to that point. comment on that, and you must not stray into that point. But there has to be reasonable evidence to Q45 Mr Watson: Did they offer any information that support an arrest or an interview. was rejected by the Metropolitan Police? John Yates: I am not aware of any—I am not aware Q40 Mr Watson: So you are saying that you do not of any. believe that the journalist’s first name written in the Mr Watson: But you would be concerned if that was top left-hand corner of a notebook from a person who the situation? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 7

24 March 2011 John Yates QPM

John Yates: It depends what it was. Q50 Mr Watson: If you could let us know a date, but when you learnt of the 91 PINs, why did you not Q46 Mr Watson: Can you suggest any explanation immediately launch an inquiry? for the numerous instructions from Edmondson and John Yates: Because we kept to that very high other journalists to Mulcaire, combined with the notes threshold of what constitutes an offence. We can go of mobile telephones and direct dial numbers, other to and from on this all the time. I have said in my than illegal hacking? opening that I am quite happy to reflect in a mature John Yates: Mr Watson, that is a matter for the new way about the level of resources perhaps put to this investigation. case in 2006/2007. Mr Watson: It was the previous investigation. John Yates: I really cannot comment on it. Q51 Mr Watson: I am asking you to reflect now. Do you think it was appropriate that you did not launch an inquiry? Q47 Mr Watson: Okay. Can you think of any lawful John Yates: An inquiry into which aspect, Mr purpose for assembling a list of 91 mobile phone Watson? PINs? Mr Watson: The fact that 91 PINs were found, John Yates: It would be difficult to think of a lawful suggesting pretty clearly that criminality had taken purpose. place. Mr Watson: Would you say that it is like finding 91 John Yates: Criminality or breach of privacy is a credit cards in someone’s house all in different names? different issue. John Yates: I am not sure that is a parallel. Q52 Mr Watson: Criminality under RIPA. Q48 Mr Watson: Do you think the average John Yates: There is a new investigation going on policeman that works for you would think that that under a new definition, and I think we need to let that would warrant further inquiry? happen. I have reflected on these matters and have John Yates: It is how you focus your resources, Mr been quite happy to agree to you— Watson, in terms of these matters. It is quite proper, Mr Watson: But you have not concluded in front of with the discretion that we have and you know we us yet, though, Mr Yates. You may have reflected, but have, to focus your resources where you are going to you have not concluded. That is what I am trying to get the best evidence and show the broader spectrum get. of criminality in these issues. That is what they did in John Yates: I have reflected about how we could have 2006; that is how the whole prosecution was framed, done more around victims, however you describe a to ensure the court was aware and had the full victim. You can bash me on whatever you want— sentencing powers available to it in order to ensure they could show the full level of criminality. Q53 Mr Watson: Your colleague Mr Williams told You do not go into every matter. It is simply the Committee at Question 1907 that you could not impossible. We do not have the resources to do it. The pursue the “For Neville” email because it was all you Chief of Defence Staff this Monday would have made had, and at Question 1953 you said you had no some very difficult decisions about where his evidence as to whom Mulcaire was doing these resources are because of Libya. What they were doing inquiries for. You told the Committee at 1904 you had before would have been very useful, but he would be no evidence to put before Thurlbeck. These statements moving his resources. That is what happens in are all untrue, are they not? policing. The context of this case, and I do reiterate John Yates: They are not untrue. They were to the it—8 August 2006—is that, in terms of the airline best of my knowledge at the time. I do not know what plot, all the arrests in the airline plot took place the the position is now around these matters because, as I following day. So those that were managing this case say, there is a new investigation, but to the best of my knowledge at the time that was the case and we at that time would have made perfectly proper answered the questions as we knew it at that time. decisions about how those resources were going to be used, and that is what happened. If you applied 100 Q54 Mr Watson: detectives at this, you would find lots more details. It Mr Williams went further. He said that there is nothing that points me to any other would not be, in certain circumstances, the best use of journalist at the News of the World. That is just simply resources because there are other priorities. untrue, is it not? John Yates: But you are making judgments now about Q49 Mr Watson: Mr Yates you have said that; I take the events that have taken place, particularly in the your point. But the devil is in the detail, as we now last few months, that may make those statements not know with the case. In January 2010 you told Mr untrue but in the sense that they are not factually Whittingdale, the Chairman, you did not know about correct now but were then. Events move on. New the 91 PINs when you gave evidence in 2009. Can information comes to light. What I have said you tell us when you learnt about that? throughout this is if new evidence comes to light we John Yates: I cannot remember exactly, but the will consider it and take appropriate action. That is decision to put it on the HOLMES system took a exactly what we have done. number of months and a number of police officers. I think it was about 10 or 12 police officers full time Q55 Mr Watson: Mr Yates, in addition to other for a number of months. documents you had Mulcaire’s notes, which recorded cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Ev 8 Culture, Media and Sport Committee: Evidence

24 March 2011 John Yates QPM

Thurlbeck, Edmondson and others instructing him to Q60 Mr Watson: Did you think that that evidence hack phones. was not significant? John Yates: No, no—hang on. John Yates: Which bit? Mr Watson: Hold on. You were content to sit there Mr Watson: The evidence you had at the time that and let this Committee receive information from Mr we did not know about, but we now do. Williams knowing that it was grossly misleading. John Yates: It is information. They took a view at the John Yates: No, that is not right, and you are doing time that that would perhaps not take them to the areas wonderful leading question in terms of it. I knew no where it would show the full extent of the criminality evidence that the people you have mentioned had and how the prosecution was framed. Armed with new instructed Mulcaire to hack phones. There is no information and new material, provided only very evidence to that that I am aware of. There is a new recently, they may be taking a different view, but I do investigation, so again, at the risk of being boring, that not know that, Mr Watson. has to take its course, but I knew no evidence at the time there were any instructions. It is pretty unfair of Q61 Mr Watson: Why did you not draw the you to suggest that I did. Commissioner’s attention to it? John Yates: Because like the DPP and like senior Q56 Mr Watson: Do you accept that you did not counsel who reviewed it in 2009, we took the view give the Committee the full picture the last time you that there was nothing new there that warranted were in front of us? reopening the inquiry. John Yates: I gave the fullest picture that I knew at the time. That was July. I then applied considerable Q62 Mr Watson: You told us at the time that the resource to it because I was concerned about the level questions you put to the News of the World were put of detail that was there that we needed to properly to their lawyers on a lawyer-to-lawyer basis. Is that analyse and research. I do not think this Committee your usual procedure when dealing with a corporation would expect to receive a running commentary on whose employees are suspected of a crime? how an investigation is developing. John Yates: Certainly, the law absolutely requires us, unless you absolutely know you are going to be lied to and misled, to engage in that way in the first steps. Q57 Mr Watson: You told the Committee that there were no reasonable grounds to question Thurlbeck and Q63 Mr Watson: News of the World, when they gave Hindley. Do you now accept that that was untrue? evidence to us, and you will have noted this, told us John Yates: I already said that we should have repeatedly—they stressed—that in their evidence they interviewed Thurlbeck. allowed the police free rein. Were they lying to us? Mr Watson: You should have interviewed John Yates: We asked them questions; they provided Thurlbeck—did you interview Thurlbeck in 2009 answers. In a number of areas we had some very then? helpful answers, and in a number of areas they said John Yates: Again, I want to come back to what I they did not have any information so we had to accept said earlier in terms of some assurances around that. that on that basis. The law is very clear on this, Mr Watson; you can take a view any way you like, but Q58 Mr Watson: You told the Committee, and you the law is very clear that if you think you are going have told us again this morning, that the principal to get cooperation, you have to seek cooperation first. point in establishing the facts was whether there was any new evidence, but you already knew at the time Q64 Mr Watson: You had available all the evidence that evidence existed that is only now emerging in the that is now emerging in the civil cases, and you chose civil actions. Is that true? not to pursue it. John Yates: Again, at the risk of repetition, it was John Yates: That is not the case; you know that is not about establishing the facts—anything new in the the case. We have had new evidence that has come in Guardian article and there was not. Any new evidence in the last matter of months. As I said in my opening, anywhere? Both I and the DPP, with counsel, that is the sole reason why they have reopened the reviewed it again and he came to the same conclusion inquiry. So that would tend to support the view that about two weeks later. So that is two individuals who there was no material before that that justified have come to the same view. reopening the inquiry.

Q59 Mr Watson: With that evidence in your hands Q65 Mr Watson: Final question: did you and your that we now know about, why did you need new colleagues deliberately suppress the evidence of evidence? wrongdoing by journalists and others working for John Yates: In terms of the new material, new News Group newspapers and its subsidiaries? material can radically change a view of previous John Yates: Absolutely not. material. So I think it is unwise of me to try to comment or analyse that particular question because Q66 Mr Watson: Did you set out to shield News one bit of new material comes in and it can throw a Group newspapers and its journalists? whole different light on old material. I think I need to John Yates: Absolutely not. be absolutely clear that the new investigation must run its course and you are taking me into areas where I Q67 Jim Sheridan: Mr Yates, could I focus on your perhaps should not go. relationship with News International? When you gave cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 9

24 March 2011 John Yates QPM evidence before us on 2 September 2009, you just would not be discussing issues about evidence or explained that the relationship between the Met and other cases. It would be totally inappropriate. I just the News of the World was professional. At that time, would not do it. had you already made arrangements for dinner with the editor of the News of the World? Q75 Jim Sheridan: So what you are suggesting is John Yates: I cannot recall. If you recall, in April that you had this dinner with the News of the World 2009 I took on a new role as the Head of Counter- and at that time phone hacking was topical, but at no Terrorism and I suspect that dinner was arranged with stage did you mention or they mention phone a view of that type of issue in mind. hacking? John Yates: No, and actually— Q68 Jim Sheridan: So you knew when you gave Jim Sheridan: So what was the purpose of the evidence, when you said that your relationship was meeting then? professional, that arrangements had been made for John Yates: I have just told you what the purpose dinner with the editor of the News of the World? of the meeting was. It was to discuss my new role John Yates: I have no idea when the arrangement was potentially. I cannot actually remember, but I am made, but my diary would show arrangements with a looking at the dates: I had become the Head of number of media outlets on a regular basis during the Counter-Terrorism in April, a few months of feet course of my professional working. If policemen only under the table and then I would be engaging with talked to policemen we would be a pretty dull lot people. I think if you look at my list of engagements anyway, but it is part of my role as a senior police and people I have met, there is a very broad officer to engage at all levels—politicians, business, spectrum—Telegraph, ITN, Channel Four, the media, communities—to ensure that I am getting the Guardian—at least three or four occasions. It is broadest possible view of life and how it looks. So I completely normal and I believe acceptable for us, as do not think it is unusual and I do not think there is senior cops, to engage with the media, in the same anything strange about that at all. way as I am sure every one of you in this room does as well. Q69 Jim Sheridan: Could you share with the Committee all the listed dates of meetings or social Q76 Jim Sheridan: So you would still describe your arrangements that you have had with the News of the relationship with News International as professional? World? John Yates: Yes, I would do. John Yates: They are a matter of public record; we put them all on our websites. Q77 Jim Sheridan: How often have you met with Colin Myler? Q70 Jim Sheridan: Could you tell us where you John Yates: I think it is just that once actually. I think went for dinner on that night? it is just that once, but bear in mind he was not the John Yates: I cannot honestly recall. editor at the time of these events anyway. Jim Sheridan: You cannot remember? Jim Sheridan: Just the once? John Yates: No. I could find out, if it helps. John Yates: Not that that makes a difference. Jim Sheridan: Just the one time? Q71 Jim Sheridan: Can you remember who paid? John Yates: John Yates: News International paid. It is declared in I believe so—I believe so. the hospitality register, as they always are. Q78 Jim Sheridan: How would you describe you Q72 Jim Sheridan: So that is recorded as well, is it? relationship with Lucy Panton? John Yates: Yes. We have been doing this for many John Yates: I have known Lucy for a number of years. years, Mr Sheridan, and we always declare them, and I have been around crime and serious crime for the hospitality register is there for anyone to see and probably the best part of 15, 20 years. I have known it is on a public website. Lucy for ages, actually.

Q73 Jim Sheridan: Can I ask you: at this dinner did Q79 Jim Sheridan: Do you have any other friends you discuss the evidence that you gave to the Select at News International? Committee and did you discuss the whole question of John Yates: Currently? phone hacking? Jim Sheridan: Well, even then. Old friends/new John Yates: I just would not do that. friends? Jim Sheridan: So you never discussed— John Yates: Yes, probably—I have to think about who John Yates: I would not— has been there, who has not been there and where they have gone since. No, there would be a number of Q74 Jim Sheridan: So what was the subject of the people I know. Again, I have been around serious discussion then? crime for 20 years; you are going to come across John Yates: I cannot recall—this was two and half journalists in every walk of life. It is not unusual. years ago. I imagine it would be about my new role— a broad view of how I see the world in terms of the Q80 Jim Sheridan: But do you not think it would be current counter-terrorism in order to make sure that unusual, given the circumstances at that time for you media outlets are aware, in the broadest possible to have dinner and social arrangements with people sense, about the temperature and all those issues. I who are being investigated? cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Ev 10 Culture, Media and Sport Committee: Evidence

24 March 2011 John Yates QPM

John Yates: Hang on, News International is a big firm. they became under investigation that is a completely It is like saying someone cannot have dinner with me different matter, but it is like saying that people cannot because a detective inspector in Bromley has been engage with me because a DI in Bromley has been nicked for corruption. It is absurd. If they were nicked for corruption. It is absurd. suspects, absolutely not right, but they were not at that point, as far as I am aware they are not now, and if Q87 Jim Sheridan: Did you ask the commissioner they did become then clearly that makes a huge about the dinner that he had with the deputy editor, difference. Neil Wallis? John Yates: No, I did not. Why would I? Q81 Jim Sheridan: Have you met any of the Jim Sheridan: I would have thought you would have. Murdoch family? John Yates: You need to ask the Commissioner that. John Yates: Not that I am aware of. It is not for me to answer. Jim Sheridan: I think you would remember that, surely? Q88 Jim Sheridan: Finally, Mr Yates, could I ask, as John Yates: I may have been at a do they had been at I have already asked, if you could list all your social somewhere, but I do not think I have met directly a arrangements, dates that you have had with people in member of the Murdoch family, no. the News of the World. John Yates: I am quite happy to. Let me take it away. Q82 Jim Sheridan: And how would you describe My social life is my social life, and my business life your relationship with Rebekah Brooks? is my business life. John Yates: I have met her on a number of occasions Jim Sheridan: I am only interested in your social life probably. Do not forget that The Sun run the Police with News International. I am not interested in what Bravery Awards, so yes. Again, they are all declared. you do in other parts of your life. John Yates: I am very happy to consider it. Q83 Jim Sheridan: Do you declare how much, if any, is paid by newspapers for stories that are given Q89 Mr Watson: Just a follow-up point. Just for out by the police? clarity: was Neil Wallis interviewed or investigated as John Yates: As I think we all know, it is illegal to part of the original investigation? pay for stories from the police, and if we did have John Yates: No. information about it, we would investigate it. Q90 Mr Watson: When did you last meet Mr Wallis Q84 Jim Sheridan: So that does not happen then? for lunch or dinner? John Yates: It has happened in the past on very rare John Yates: I have known Neil for a number of years. occasions, and where we have found out about it, we I cannot recall the last time. have caught them and they have gone to prison. Q91 Mr Watson: Could it be this year? Q85 Jim Sheridan: Can I ask you then, do you think John Yates: Yes. What are we, April? It could easily it is appropriate that the Commissioner and, indeed, be. the Met’s media man had dinner with the News of the World deputy editor, Neil Wallis, in September 2006, Q92 Mr Watson: Could it be February? even though this is only a month after Clive Goodman John Yates: It may well be. had been arrested, and where the police were trying unsuccessfully to get the newspaper to release the evidence? Q93 Mr Watson: Would you have discussed phone John Yates: I think you would have to ask the hacking with him? Commissioner that. I do not think that is for me to John Yates: No. answer, but I suspect he would probably give you the same answer I have just done around it being a big Q94 Mr Watson: He does not work for News organisation; we do engage them. That is for the International now. Commissioner to answer, not for me really, but I John Yates: No. In spite of all of this, we are imagine he would probably give the same response. professional people; we just would not do it.

Q86 Jim Sheridan: So you think it is appropriate for Q95 Mr Watson: In answer to my colleague you said a huge organisation, regardless of the size of it, to that, if you received information about police being have dinner and social events with them? paid for information, it would be investigated. Can I John Yates: I think it is entirely— take it that you then investigated Rebekah Brooks Jim Sheridan: Do you do that with other people who after she told this Committee that she paid police for are under suspicion? evidence? John Yates: They are not under suspicion, Mr John Yates: I think we went through this hoop last Chairman. time. It was 2003 and that is not my responsibility. I Jim Sheridan: They are under investigation. am happy to go back and look at what happened in John Yates: No, they are not under investigation. 2003, but that is eight years ago. Certain individuals within that business were under investigation. That does not mean the rest of them are Q96 Mr Watson: But, to clarify it, you are aware treated as lepers and you do not engage with them. If that the chief executive of News International told a cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 11

24 March 2011 John Yates QPM parliamentary committee that she paid the police for Q107 Mr Sanders: In his statement of July 2009 the evidence. DPP, Mr Starmer, said it was agreed that any potential John Yates: I remember seeing it in glorious victim would be informed of the situation by the technicolour, Mr Watson, yes. police. Do you acknowledge that this was agreed? John Yates: I hope we are not going to get into the Q97 Mr Watson: You have just said that when semantics of what constitutes a victim but, with that information like that— rider, yes. John Yates: I think the actual question I answered to Mr Sheridan—you are right on that point anyway— Q108 Mr Sanders: How many victims were notified was about police officers providing information for by the police in 2006, and how many more were cash, in which case I said we have done in the past; notified in 2009? we have caught them and there have been John Yates: I would have to come back to you with investigations. the exact numbers. I suspect that in 2006 it was a very small number; from 2009 thereon I think I gave Q98 Mr Watson: So, when someone admits to a guarantee that we would look at it to see if we had paying police for evidence it is your view that it done enough and what more we needed to do, and we should be investigated. have been doing that ever since. Now there is a new John Yates: It is my view that there are possible investigation, no doubt they will be taking a revised offences there, yes. view, particularly with the revised view of the law.

Q99 Mr Watson: And they should be investigated. Q109 Mr Sanders: Why did the police not inform John Yates: There are possible offences there, but you all of the victims? have to look at what is appropriate. John Yates: Because it is not as straightforward as it sounds. We run the risk of getting into the semantics Q100 Mr Watson: To get a straight yes or no, should of what constitutes a victim. Certainly, in terms of the they be investigated? small number that I have always referred to, they were John Yates: Obviously, you have to look at the undoubtedly victims in the sense of a breach of the availability of any evidence, the scope of the inquiry law, as in Section 1 of RIPA. As to the other matters, and all those issues. there is not the clearest evidence. They took the view then—I revised the view—that we should do more around that. That is what we have been doing since, Q101 Mr Watson: You are not answering my but I absolutely accept that we could and should have question, which requires a straight yes or no answer. done more around that at that particular time, so there John Yates: I am trying to explain that it is not is no difficulty with that. straightforward. Q110 Mr Sanders: When did the police pass the task Q102 Mr Watson: When that information is to the mobile phone providers? provided, should it be investigated—yes or no? John Yates: I think it was during the course of the John Yates: I am trying to explain that there is not a original investigation. We had some clear straightforward answer to that question, because there correspondence from one of the major companies are a number of other issues you would have to saying they had done absolutely everything expected consider before you launched an inquiry. of them. I think there is some confusion with some of the other mobile phone companies as to who was Q103 Mr Watson: If I said to you in public that I doing what, and we need to get some more clarity had paid police for evidence, would you investigate it? around that. John Yates: We may want to speak to you, yes, and on that basis we would then determine how we would Q111 Mr Sanders: You did not check all of the go forward. mobile phone providers? John Yates: No. My understanding is that we wrote Q104 Mr Watson: Likewise, Rebekah Brook said to all the major providers and indicated that this was that. the bit that we were going to be responsible for and John Yates: I do not know what happened in 2003, that was the bit that they were going to be responsible Mr Watson. for. I am not sure that the follow-up was perhaps as thorough as it could have been. That is what we are in Q105 Mr Watson: You know she told this the process of doing, and have been for some months. Committee that she had paid police for evidence. Should she be investigated—yes or no? Q112 Mr Sanders: So, you did not check all of the John Yates: I am saying there are possible offences mobile phone providers to see that they had done what there. The decision to launch an investigation is not they were asked to do? for me on that one. John Yates: I am not absolutely certain that that circle was completed. Q106 Jim Sheridan: Just for the record, I asked a question about the police in general; I did not ask Q113 Mr Sanders: It seems the problem is that not about the question about police officers. only were victims not informed, they were often John Yates: I do not think it changes my response. misled by the police when they sought information cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Ev 12 Culture, Media and Sport Committee: Evidence

24 March 2011 John Yates QPM following the 2009 revelations. If I give you an Q119 Paul Farrelly: Sure. It is the previous example, on 9 July you told the press there was no investigation and I would like just the numbers. It evidence that Lord Prescott’s phone had been tapped. would be very interesting, given it is on record that You received similar information by letter, and on 2 Mr Hall was not interviewed as a witness but under September 2009 you replied “no” when asked whether caution, as to whether you can break it down into the his phone was tapped. You again said there was no number of people who were interviewed as witnesses evidence when asked about Prescott on the Today or under caution. programme in September 2010. Why did you take John Yates: Can I take it away? I think it would be this position? perfectly possible—I know we have done it before— John Yates: I know you have been spoken to, Chair, to break down numbers of individuals interviewed but I think it would be really unwise for me to get under caution and the number of witnesses seen, into dialogue about that particular individual in this provided it is not so small that it makes it absolutely Committee while a new inquiry is under way. I think obvious that it is a certain individual. We are cautious it would be really unwise. I am sorry. You would not about releasing in the public domain details about want to do anything that would prejudice a future people who have just been interviewed under caution, inquiry, nor would I from this point. I am not ducking because it does not go to their guilt; it goes to their it; I am happy to come back later and answer it, but I protection. think that at this time it would be really unwise to speak on that particular point. Q120 Paul Farrelly: I will leave that with you to Chair: If you feel there is a risk of prejudicing an reflect on it. Given the public interest in this, some inquiry by answering a specific question, then it is people might feel a little surprised when you say entirely your right to say so on that basis. fewer than 10 people were interviewed, because I can list a far greater number of people whose names have Q114 Mr Sanders: On 9 February this year your come into the public domain. replacement, Sue Akers, revealed that there was John Yates: Can I go back and look at it, and provide indeed information in Mulcaire’s documents that you with what I can? It may well be. I can look to my identified Prescott as a victim of phone hacking. Do back to see if I can get a note. you not accept that Lord Prescott was misled? John Yates: I would need to see the quote in terms of Q121 Paul Farrelly: When you looked at this after its context, but I think it is most unwise for me to get the New York Times article, would you have thought anywhere near this. it relevant in that investigation to investigate allegations of destruction of documents at the News of the World when Clive Goodman’s desk was raided? Q115 Mr Sanders: Are you aware that the Met Would that have been relevant to your investigation? admitted to the High Court on 17 February that they John Yates: I doubt it. The New York Times aspect had twice told Kelly Hoppen they had no documents was focused very much on particular areas and, once relating to her from 2005 or 2006 when this appears the articles had been published, particular people to be untrue? came out in public to say certain things, and that was John Yates: I am not certain of those details and I where the scope of that inquiry went. I cannot think cannot comment. All I would say is that there is a of the relevance of going back to what happened in difference between untruth and mistake. I just do not 2006 and Goodman’s documents, or whatever. think you can say it is untrue without the context around what else has been happening. Q122 Paul Farrelly: With allegations in the public domain of the potential destruction of evidence, you Q116 Mr Sanders: I accept that, but poor Kelly are saying it would not have been relevant to look at Hoppen has been told only in the last few weeks that that and establish what might have gone on? her name was in Mulcaire’s case notes. John Yates: If it had been a valid line of inquiry, I am John Yates: If that is the case, it is regrettable. I know sure it would have been pursued. Certainly, that has the new inquiry is focusing on a number of areas. That not come to my attention, and I am sure it would may be one; I am not sure. have done.

Q117 Mr Sanders: Do you wish to apologise for Q123 Paul Farrelly: In re-examining what may have misleading her? gone on, would it have been relevant for you to try to John Yates: I would need to know the context, and I get a copy from Glenn Mulcaire of the five-page am sure you understand that. synopsis of his book called Here to Here: The Inside Story of the Royal Household Tapes and the Murky Q118 Paul Farrelly: I just want to finish off with a World of the Media? few questions on victims, but before I do so perhaps John Yates: Is that a book that has been published? I may complete what I was pursuing before Tom took over. Thank you, Mr Yates, for agreeing to give us a Q124 Paul Farrelly: No; it is a synopsis. Again, it is memo on the numbers, not the names, of people who information that is in the public domain as a title, but were interviewed. would it have been of any interest to you to get hold John Yates: May I do that in concert with the new of that? inquiry people to make sure that will not do John Yates: I am confident that that particular bit of anything—? work done in late 2010 with the CPS would have cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 13

24 March 2011 John Yates QPM followed the relevant lines of inquiry as to what was Q131 Paul Farrelly: To return to victims, you told forthcoming from the New York Times, which, us in previous evidence that potential targets may have understandably, did not want to share their sources run into hundreds but they used that tactic on a far with us. It was fairly limited. smaller number. I do not want to go into semantics that you and we have been through on what Q125 Paul Farrelly: Since the revelation of further constitutes a victim, but on what basis were you able hacking by another individual, Dan Evans, who has to use the phraseology that they “used that tactic”? been suspended at the News of the World, News John Yates: I am not sure whether it was to this International, the organisation, has said that if any Committee or the Home Affairs Select Committee. I such phone hacking is established, any individuals was being pedantic about what constituted the actual will be summarily dismissed for gross misconduct offence, which was that we could prove that the without any compensation. Yet, as we established in voicemail had been intercepted prior to the recipient our inquiry, Glenn Mulcaire and Clive Goodman were accessing it. treated differently. Would it be of any relevance to your fresh look at what happened to investigate why Q132 Paul Farrelly: You were using a very narrow they were treated differently, and why Mr Mulcaire’s definition of “tactic” as well. legal costs are still being paid by the organisation? John Yates: I was using a narrow definition, yes. John Yates: That is a matter for Mr Mulcaire and News International; I do not think it is a matter for Q133 Paul Farrelly: That is pretty semantic, isn’t it? the police. John Yates: We work to the evidence. I do not think it is semantic, but you have your view. Q126 Paul Farrelly: When in the autumn—I think it was in November—you passed the file to the CPS, Q134 Paul Farrelly: When you gave us that and they responded that there was nothing further to evidence, were you aware that previously Detective do, did you make any recommendations to the CPS Superintendent Williams had written a memo to the that they did not act on? Crown Prosecution Service on 30 May 2006 which John Yates: Not that I am aware of. The old days of said: “A vast number of unique voicemail numbers being very prescriptive about where we think the belonging to high-profile individuals have been charges are are in the past. It is a much more identified as being accessed without authority”? Were collegiate approach. The CPS are the final, you aware of that? independent prosecutors, but there is a much more John Yates: I am not aware of that particular memo, collegiate approach around statements of the facts, no. objective analysis and then letting lawyers, who may or may not have conduct of the case, come to a Q135 Paul Farrelly: Did you ask him? decision. We do not recommend because we are not John Yates: Not about that particular memo. the people who lay charges, so there is a much more objective analysis of the facts and evidence, which Q136 Paul Farrelly: You can see quite clearly there allows others whose role it is to ensure they do that. is a conflict between what you said and what he said. John Yates: You will recall that Mr Williams gave Q127 Paul Farrelly: When you passed the file to the evidence with me. I do not think it is a conflict, but CPS, did you reach any conclusions that any further you take a view. action needed to be taken, or anybody needed to be charged? Q137 Paul Farrelly: On 9 and 10 July, when you John Yates: That is a matter for the CPS, not us. issued your statements, you committed to informing people. Yet in supplementary evidence to us in November 2009, after you had given evidence in Q128 Paul Farrelly: Did News International alert person, you said that the number of people actually the Metropolitan Police Service that an employee had contacted by the police was a very low number, and been suspended for a new case of phone hacking none since the 9 and 10 July statements. How do you before it was revealed in the press, in the New York explain that discrepancy between intention and Times and Guardian? Did they tell you? action? John Yates: I am not aware of the timeline. I know John Yates: That is a very fair point. In terms of the they produced new material at a particular point—I length of time it takes to put everything and back think it was in January of this year—and that was record convert huge volumes of material on to the when we came to the view that this merited a new relevant system, there were 10 people working 10 investigation. That was what happened, and it was hours a day for three-plus months to do that. It was a passed over to a new team. slow process, and I am happy to accept that we could have been speedier about much of that. The intention Q129 Paul Farrelly: My question was if they told absolutely remains, and we now need to make sure— you before it came into the public domain in the New the new investigation will be doing it anyway—that York Times and the Guardian? that is committed to in a thorough way. John Yates: I am not sure of the timeline. Q138 Paul Farrelly: In a complaint to the Guardian Q130 Paul Farrelly: Can you check for us? about some of its coverage, you wrote that technically John Yates: I can certainly check it. you proved only one interception, so potentially the cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Ev 14 Culture, Media and Sport Committee: Evidence

24 March 2011 John Yates QPM number of so-called victims could go down to one; Q144 Paul Farrelly: Why was Sienna Miller not then it is 10 to 12; and then there are more as we have contacted by the Metropolitan Police? Why has she seen from the civil cases. Do you recognise that you had to force the production of documents? and the police have difficulty in credibility around John Yates: Sienna Miller? I am not absolutely sure this issue? of the details of that case. John Yates: I would not say “credibility”, but, without straying into areas I should not, there was only one Q145 Paul Farrelly: This is my final point. In your case on the basis of the legal advice given at the time letter to us asking to come here, you say that what that we could technically prove. The other cases that Chris alleged was affecting not only your reputation form the indictment were proved on what you would but that of the Metropolitan Police. I put it to you that call system, method or whatever you want, and there the reputation of the Metropolitan Police has already was a guilty plea, so the law was not tested in that been affected in spades by what has gone on. Let me give you an example. In this inquiry we did a little sense. I have accepted, Mr Farrelly, that we have not what you might call basic police work. We asked the been as clear as we could be. There are different News of the World how many Nevilles it employed at definitions of what is and what is not a victim, who is the time. The answer was one. It is a question that the and who is not affected, and I have accepted we could Metropolitan Police did not ask. Andy Hayman, the have done more on that. I know the new team is officer in charge at the time, wrote in The Times that working and is applying huge amounts of resources to the inquiry had left no stone unturned. Your evidence try to put that right. to us really has not given any flavour of criticism of the scope and nature of the investigation. Would you Q139 Paul Farrelly: I hope you agree that the accept that the reputation of the Metropolitan Police Guardian have done a public service in giving people has suffered throughout this, not just because of the the wherewithal to find out through civil actions that allegations made by Mr Bryant in Parliament? they were indeed targeted. John Yates: I would certainly say that, as to John Yates: Contrary to what they may think—they reputation, it has been challenging for us. We are now are in the room—I have huge admiration for what the working extremely hard to put that right. I did say in Guardian have done. It is a huge story and issue, but answer to one Member—I am not sure which one— police resources have to focus on where the best in relation to “no stone unturned” that investigation evidence is, and that was what happened in 2006. and resources were properly focused on where we could get the best evidence, because that is what we have to do. There are not limitless resources for the Q140 Paul Farrelly: Given that it has been reported police to undertake huge investigations when we can in Private Eye that Messrs Carter-Ruck acting on your focus these matters in a way that presents the best behalf have written to a solicitor, Mark Lewis, and the evidence to a court. But I accept what you said and, Guardian, can you tell me who is paying Carter-Ruck in terms of the victim strategy, we could have done to do that? more. We need to do more on that, and we are doing John Yates: I suspect these are properly matters more. private to me. I have no difficulty with what the Guardian write the vast majority of the time, but I Q146 Mr Watson: I have three brief technical have objected to some of the more colourful assertions questions. First, can you tell me on what date Chris and allegations that go to my integrity. I think you Bryant raised with you his concerns that his phone would expect me to rebut that in a way one has to. may have been tampered with? John Yates: I do not know. Q141 Paul Farrelly: The question is: are you or the Metropolitan Police paying? Q147 Mr Watson: Could you follow that up? John Yates: I think that is a private matter for me. John Yates: Yes, certainly.

Q142 Paul Farrelly: But it is a matter of public Q148 Mr Watson: Second, in the Jonathan Rees case resources if it is the Metropolitan Police. there were a number of audio tapes for which transcripts were provided as part of a murder inquiry John Yates: It is a private matter for me, and it is that has just finished. Will the new team be reviewing probably a question you ought to direct to the police all the audio tapes from that inquiry to help inform authority. the new investigation? John Yates: That is entirely a matter for them. I know Q143 Paul Farrelly: I have two final questions, they are fully aware of the Rees aspect and the links, Chair, you will be glad to hear. In terms of contacting and that is a matter for them. victims, you said several times before the Home Affairs Committee that you would speak to Chris Q149 Mr Watson: Third, we know from the Bryant personally. Why have you not followed Information Commissioner’s inquiry into the through with that? convicted private investigator Steve Whittamore that John Yates: I have offered to. I wrote to Mr Bryant private information about a family member of Milly towards the end of last year—I can get you the exact Dowler was obtained. If it transpires from the review date—and reiterated that offer in writing. He has not of the Mulcaire evidence that, when Sky News were followed it up. broadcasting it round the clock, Glenn Mulcaire was cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:37] Job: 012695 Unit: PG01 Source: /MILES/PKU/INPUT/012695/012695_o001_MP HC 903-i corrected.xml

Culture, Media and Sport Committee: Evidence Ev 15

24 March 2011 John Yates QPM instructed to hack the phones of the family members Q150 Chair: Deputy Commissioner, I thank you for of children killed at Soham, would that warrant an coming before the Committee this morning. I am sorry adequate use of police resources to investigate it? if you have to go through the whole process again John Yates: I am sure it would, but that is the first I next week. This was not my wish or our intention. have ever heard of that aspect. John Yates: No. It does seem slightly odd, Chair. cobber Pack: U PL: COE1 [SE] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 16 Culture, Media and Sport Committee: Evidence

Tuesday 19 July 2011

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Louise Mensch Damian Collins Mr Adrian Sanders Philip Davies Jim Sheridan Paul Farrelly Mr Tom Watson Alan Keen ______

Examination of Witnesses

Witnesses: Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation, and James Murdoch, Chairman, News International, gave evidence. James Murdoch: Mr Chairman, I have a procedural question, if it pleases you. Our understanding was that we would be afforded the opportunity to make an opening statement, and we prepared on that basis. We would like the opportunity to make that statement. Would you allow us?

Q151 Chair: The Committee discussed that earlier. facts, and that was wrong. You essentially admitted We feel that we have a lot of questions, and we hope that Parliament had been misled in what we had been that all that you would wish to say will come out told. Can you tell us to what extent we were misled, during the course of questioning. If you feel that is and when you became aware of that? not the case, you can make a statement at the end. James Murdoch: First, I would like to say as well James Murdoch: In that case, we would also like to just how sorry I am, and how sorry we are, to submit the statement in writing, if it pleases you. particularly the victims of illegal voicemail interceptions and to their families. It is a matter of Q152 Chair: That would be perfectly acceptable. great regret to me, my father and everyone at News [Interruption.] Could we please remove the people Corporation. These actions do not live up to the who are holding up notices? standards that our company aspires to everywhere After that brief interruption, we will begin. Good around the world, and it is our determination to put afternoon, everybody. This is a special meeting of the things right, to make sure that these things do not Culture, Media and Sport Committee. It is a follow- happen again and to be the company that I know we up to the inquiry that the Committee held in 2009 into have always aspired to be. press standards, privacy and libel, during which we As for my comments, Mr Chairman, and my took evidence on the extent of phone hacking that had statement, which I believe was around the closure of taken place in the News of the World. In our report the News of the World newspaper— last year, we stated that we thought it was Rupert Murdoch: Before you get to that, I would just inconceivable that only one reporter had been like to say one sentence. This is the most humble day involved. In the last few weeks, not only has evidence of my life. emerged that I think has vindicated the Committee’s James Murdoch: The statement around the closure of conclusion, but abuses have been revealed that have the News of the World newspaper, where I stated that angered and shocked the entire country. It is also clear we—the company—had not been in full possession of that Parliament has been misled. We are very the facts when certain statements were made to this conscious on the Committee that there is an ongoing Committee, was referring to the emergence of new police investigation, and possible criminal facts, largely that came about at the end of 2010, as proceedings to follow, and this Committee would not the due process of a number of civil trials reached the wish to jeopardise that. However, we are encouraged point where document disclosure and evidence by the statements that have been made by all the disclosure made it apparent to the company and to witnesses this afternoon that they wish to co-operate myself at that time that indeed there was reason to with the Committee and help us to establish the truth. believe that potentially more people had been As our first witnesses this afternoon, I welcome the involved in News of the World illegal voicemail Chairman and Chief Executive Officer of News Corp, interceptions from before. That was new evidence or Rupert Murdoch, and the Deputy Chief Operating new information at the time, which postdated the 2009 Officer and Chairman and Chief Executive of News hearings and that is what I was referring to. Corp International, James Murdoch. I also thank you Subsequent to our discovery of that information in one for making yourselves available to the Committee of the civil trials at the end of 2010, which I believe this afternoon. was the Sienna Miller case—a civil trial around illegal Rupert Murdoch: Thank you, Mr Chairman. We are voicemail interceptions—the company immediately more than prepared to. went to look at additional records around the individual involved. We alerted—the company alerted Q153 Chair: Perhaps I might start with Mr James the police, who restarted on that basis the Murdoch. You made a statement on 7 July in which investigation that is now under way, and since then you stated that the paper had made statements to the company has admitted liability to victims of illegal Parliament without being in full possession of the voicemail interceptions, has apologised unreservedly, cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 17

19 July 2011 Rupert Murdoch and James Murdoch which I repeat today, to those victims, and the this Committee. It is a matter of real regret that the company also set up a compensation scheme facts could not emerge and could not be gotten to my independently managed by a former High Court judge understanding faster. to be able to deal with legitimate claims from victims of those terrible incidents of voicemail interceptions. Q156 Chair: You have made clear that it is the case Those are the actions that were taken as soon as the that information we were given was incorrect. Have new evidence emerged. When I made the statement you established who, as well as Clive Goodman, was about not being in full possession of the facts, it was involved in phone hacking in the News of the World? of those facts that at that point were still in the future, James Murdoch: I am sorry, Mr Chairman, can you and in the due process of the civil trial—the civil repeat that? litigation process—evidence really emerged for us, and we acted. The company acted as swiftly and as Q157 Chair: Who, as well as Clive Goodman, was transparently as possible. involved in phone hacking in the News of the World? James Murdoch: As I think you made clear earlier, Q154 Chair: When this Committee took evidence in Mr Chairman, there have been a number of arrests of 2009, we heard from the managing editor of the News former News of the World employees. These are of the World, Stuart Kuttner; the legal manger of News matters for current criminal investigations and, International, Tom Crone; the News of the World understandably, it is difficult for me to comment in editor, Colin Myler; the former editor, Andy Coulson; particular about some of those individuals. and Les Hinton, the former chairman of News International. All of them told us that there had been a Q158 Chair: Have you carried out your own thorough investigation and no evidence had ever been investigation since the discovery of this information found that anybody else was involved. That clearly to find out the extent of involvement in phone hacking was not correct. Were any of them lying to this in the News of the World? Committee? James Murdoch: We have established a group in the James Murdoch: Mr Chairman, the company relied company, co-operating very closely with the police on on three things for a period of time up until the new their investigation. Their investigation is broad, with evidence emerged. The company relied on a police investigation in 2007; I will recount this to try to take respect to journalistic practices, in particular us back to that area. This is before I was involved. I journalistic practices at the News of the World, and the became back involved in News Corporation and News policy and direction that the company has given them International matters at the end of 2007. In the 2007 is to co-operate fully and transparently with the period, there was a police investigation; successful police; to provide information and evidence that the prosecutions were brought against two individuals, company believes and they believe is relevant to those and the editor of the News of the World resigned. investigations, sometimes proactively, sometimes in The company relied on both the police having closed response to those requests. Again, I think the very fact the investigation and repeated assertions that there that the provision of the new information to the police was no new evidence for them to reopen their in the first place when there was no police investigation. The company relied on the PCC, which investigation ongoing that then led to, in part, the re- had had a report and had said that there was nothing opening, or this new investigation being established more to this at the time. The company relied on the can, I hope, be testament to some proactive action and legal opinion of outside counsel that was brought in transparency with respect to getting to the right place related to those matters, who, with respect to their to find out the facts of what happened, understanding review, had issued a clear opinion that there was no all the allegations that are coming in and moving additional illegality other than the two individuals forward to aid the police in successful completion of involved before. The company relied on those facts, the important and serious work that they are doing. and for the company in 2008 and 2009, it was not clear that there was a reason to believe that those Q159 Chair: Was the departure from your company matters were anything other than settled matters, and in the recent few days of Tom Crone, Rebekah Brooks in the past. and Les Hinton because any of them had knowledge of phone hacking? Q155 Chair: So is it your testimony to this James Murdoch: I have no knowledge and there is Committee that none of the individuals who gave us no evidence that I am aware of that Mrs Brooks or Mr evidence in 2009 knew at that time what had been Hinton, or any of those executives, had knowledge of going on? that. Certainly Mrs Brooks’ assertions to me of her James Murdoch: I do not have direct knowledge of knowledge of those things has been clear. None the what they knew and at what time, but I can tell you less, those resignations have been accepted, but there that the critical new facts, as I saw them and as the is no evidence today that I have seen or that I have any company saw them, really emerged in the production knowledge of that there was any impropriety by them. of documentary information or evidence in the civil trials at the end of 2010. The duration from 2007 to Q160 Mr Watson: Mr Murdoch senior, good the end of 2010 and the length of time it took for that afternoon, sir. You have repeatedly stated that News to come clear and for that real evidence to be there is Corp has zero tolerance to wrongdoing by employees. a matter of deep frustration—mine. I have to tell you Is that right? that I know and I sympathise with the frustration of Rupert Murdoch: Yes. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 18 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

Q161 Mr Watson: In October 2010, did you still Q170 Mr Watson: I will come to you in a minute, believe it to be true when you made your Thatcher sir. Just let me finish my line of questioning and then speech and you said, “Let me be clear: we will I will come to you. What did you personally do to vigorously pursue the truth—and we will not tolerate investigate that after Mr Goodman went to prison? wrongdoing.”? You were obviously concerned about it. Rupert Murdoch: Yes. Rupert Murdoch: I spoke to Mr Hinton who told me about it. Q162 Mr Watson: So if you were not lying then, somebody lied to you. Who was it? Q171 Mr Watson: Okay. In 2008, another two years, Rupert Murdoch: I don’t know. That is what the why did you not dismiss News of the World chief police are investigating, and we are helping them reporter Neville Thurlbeck, following the Mosley with. case? Rupert Murdoch: I had never heard of him. Q163 Mr Watson: But you acknowledge that you were misled. Q172 Mr Watson: Okay. Despite a judge making Rupert Murdoch: Clearly. clear that Thurlbeck set out to blame two of the women involved? Q164 Mr Watson: Can I take you back to 2003? Are Rupert Murdoch: I didn’t hear that. you aware that in March of that year, Rebekah Brooks gave evidence to this Committee admitting paying Q173 Mr Watson: A judge made it clear Thurlbeck police? set out to blackmail two of the women involved in Rupert Murdoch: I am now aware of that. I was not the case. aware at the time. I am also aware that she amended Rupert Murdoch: That is the first I have heard of that. that considerably, very quickly afterwards. Q174 Mr Watson: So none of your UK staff drew Q165 Mr Watson: I think that she amended it seven your attention to this serious wrongdoing, even though or eight years afterwards. the case received widespread media attention? Rupert Murdoch: Oh, I’m sorry. Rupert Murdoch: I think my son can perhaps answer that in more detail. He was a lot closer to it. Q166 Mr Watson: Did you or anyone else at your organisation investigate this at the time? Q175 Mr Watson: I’ll come to your son in a minute. Rupert Murdoch: No. Despite the fact that blackmail can result in a 14-year prison sentence, nobody in your UK company brought Q167 Mr Watson: Can you explain why? this fact to your attention? Rupert Murdoch: I didn’t know of it, I’m sorry. Rupert Murdoch: The blackmail charge, no. Allow me to say something? This is not an excuse. Maybe it is an explanation of my laxity. The News of Q176 Mr Watson: Do you think that might be the World is less than 1% of our company. I employ because they knew you would think nothing of it? 53,000 people around the world who are proud and Rupert Murdoch: No. I can’t answer. I don’t know. great and ethical and distinguished people— professionals in their line. Perhaps I am spread watching and appointing people whom I trust to run Q177 Mr Watson: Do you agree with Mr Justice those divisions. Eady when he said that the lack of action discloses a remarkable state of affairs at News International? Q168 Mr Watson: Mr Murdoch, I do accept that you Rupert Murdoch: No. have many distinguished people who work for your company. You are ultimately responsible for the Q178 Mr Watson: Mr Murdoch, a judge found a corporate governance of News Corp, so what I am chief reporter guilty of blackmail. It was widely trying to establish is who knew about wrongdoing and reported. He says it was a remarkable state of what was involved at the time. If I can take you affairs— forward to 2006: when Clive Goodman was arrested Rupert Murdoch: Why didn’t he put him in jail? and subsequently convicted of intercepting voicemails, were you made aware of that? Q179 Mr Watson: Because it was a civil case. Rupert Murdoch: I think so. I was certainly made Were you aware that News International aware of when they were convicted. commissioned an investigation into News International e-mails by Harbottle & Lewis? Q169 Mr Watson: What did News International do Rupert Murdoch: Was I— subsequent to the arrest of Clive Goodman and Glenn Mulcaire to get to the facts? Q180 Mr Watson: Aware that News International Rupert Murdoch: We worked with the police on commissioned an investigation into News further investigation and eventually we appointed— International e-mails by the solicitors firm very quickly appointed—a very leading firm of Harbottle & Lewis? lawyers in the City to investigate it further. Rupert Murdoch: Yes. I didn’t appoint them, but I James Murdoch: Perhaps I can help here— was told of it happening. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 19

19 July 2011 Rupert Murdoch and James Murdoch

Q181 Mr Watson: You claimed in The Wall Street Q191 Mr Watson: When were you informed about Journal that Harbottle & Lewis had made a major the payments made to Gordon Taylor and Max mistake. Can I ask what mistake you were referring Clifford? to? Rupert Murdoch: No. Rupert Murdoch: I think maybe that’s a question again for James, but there was certainly—well, we Q192 Mr Watson: You were not informed? examined it, re-examined that. We found things that Rupert Murdoch: No. we immediately went to counsel with to get advice on how to present it to the police. Q193 Mr Watson: At no point did you know that Taylor and Clifford were made payments? Q182 Mr Watson: In their written response to this Rupert Murdoch: I never heard of them—the first Committee’s questions, are you aware that News one. International stated that both Jon Chapman and Daniel Cloke reviewed these e-mails before forwarding them Q194 Mr Watson: You never informed the chief to Harbottle & Lewis? executives of News Corp that you authorised payment Rupert Murdoch: No. of £500,000? James Murdoch: Would you like me to answer the Q183 Mr Watson: So nobody in the company told questions now Mr Watson? you that two of your executives had reviewed the e- mails back then? Q195 Mr Watson: I would like you to tell me Rupert Murdoch: I was under the understanding that whether you informed your father that you had everything had been sent to them. authorised payments to Gordon Taylor as a result of him being the victim of a crime. Q184 Mr Watson: Okay. You are aware that Lord James Murdoch: On the settlement with Mr Taylor, Macdonald QC has since reviewed the e-mails again and I am happy to address the matter of Mr Taylor in on behalf of News International, are you not? some detail if you would like, my father became Rupert Murdoch: Yes. aware of it after the settlement was made in 2009, I believe, after the confidential settlement had become Q185 Mr Watson: You are aware that he stated he public, as a newspaper reported on the out-of-court found evidence— settlement afterwards. Please understand that an out- Rupert Murdoch: And he has reported to the whole of-court settlement of a civil claim of that nature and board of News Corporation. of that quantum is something that normally, in a company our size, the responsible executives in the Q186 Mr Watson: He did. And you are aware that territory or country would be authorised to make. That he stated to the board that he found evidence of is the way the company has functioned; it is below indirect hacking, breaches of national security and the approval thresholds, if you will, that would have evidence of serious crime in the Harbottle & Lewis to go to my father as chairman and chief executive of file. the global company. Rupert Murdoch: He did indeed. James Murdoch: Mr Watson please, I can address Q196 Mr Watson: There are other questions I could these in some detail, if you will allow me. ask on this, but there are other colleagues who have specific questions for you, Mr Murdoch, about this Q187 Mr Watson: I will come to you, Mr Murdoch, issue, so I will move back to your father if I can. Mr but it is your father who is responsible for corporate Murdoch, at what point did you find out that governance. I want to ask about what he knew, but I criminality was endemic at News of the World? will come back to you. Who was aware of the Rupert Murdoch: Endemic is a very hard, wide- Harbottle & Lewis findings at News International? ranging word. I also have to be extremely careful not Rupert Murdoch: It went to the senior officials of to prejudice the course of justice, which is taking News Corp. Certainly the top legal officer. place now. It has been disclosed. I became aware as it became apparent. I was absolutely shocked and Q188 Mr Watson: So Tom Crone or Les Hinton? appalled and ashamed when I heard about the Milly Rupert Murdoch: No. They were not the top legal Dowler case, only two weeks ago, eight days before I officers. was graciously received by the Dowlers.

Q189 Mr Watson: Who were the top legal officers? Q197 Mr Watson: Did you read our last report into Rupert Murdoch: You can answer that. the matter, where we referred to the collective amnesia James Murdoch: Mr Jon Chapman was the top legal of your executives who gave evidence to our officer of News International. Mr Crone was the head Committee? of legal affairs at News Group Newspapers. Rupert Murdoch: I haven’t heard that. I don’t know who made that particular charge. Q190 Mr Watson: Were you informed about the findings by your son, Mr Murdoch, or by Rebekah Q198 Mr Watson: A parliamentary inquiry found Brooks? your senior executives in the UK guilty of collective Rupert Murdoch: I forget, but I expect it was my son. amnesia and nobody brought it to your attention. I do I was in daily contact with them both. not see why you do not think that that is very serious. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 20 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

Rupert Murdoch: But you’re not really saying company. Some that were still there—you mentioned amnesia, you’re really saying lying. one—exited the business as soon as evidence of wrongdoing was found. A process was set up in co- Q199 Mr Watson: We found your executives guilty operation with the police to aid them with any of those of collective amnesia. I would have thought that things that they wanted to do, but many of the someone would like to bring that to your attention— individuals that were potentially implicated in those that it would concern you. Did they forget? civil litigations and potentially in these criminal Rupert Murdoch: No. matters had already left the building and were not in the News of the World at this time. In the current News Q200 Mr Watson: While it has been obvious to most of the World, our News of the World executives and observers from the summer of 2009 that phone- journalists at the time—many of whom were not there hacking was widespread, you knew for sure in January in 2006 and 2007, so some of them had already left. of this year that the “one rogue reporter” line was false. Is that right? Q204 Mr Watson: Thank you. Mr Murdoch, why did Rupert Murdoch: I forget the date. you decide to risk the jobs of 200 people before pointing the finger at those responsible for running the Q201 Mr Watson: Why was Edmondson the only company at the time of the illegality—your son and person to leave News of the World last January? Rebekah Brooks? Rupert Murdoch: We have given all our files and all Rupert Murdoch: When a company closes down, it is our knowledge and everything to the police. They natural for people to lose their jobs. We have in this have not given us the Mulcaire diaries, so we do not case made—and I am making this continually—every know what was in that, but there was a page that effort to see that those people are employed in other appeared to be addressed to him. Again, that is my divisions of the company, if they are not part of the son’s— small group—I do not know how big a group it was, James Murdoch: Perhaps it would be helpful to the but whatever group was involved with criminality. Committee—if you would like to go through any of the particular detail around why decisions were made Q205 Mr Watson: Did you close the paper down by the management team at News International and because of the criminality? the precise chronology—if I could answer those questions. As the chief executive of the regional Rupert Murdoch: Yes, we felt ashamed at what had businesses across Europe, I have somewhat more happened and thought we ought to bring it to a close. proximity to it. Mr Watson: I understand the detailed points, Mr Q206 Mr Watson: People lied to you and lied to Murdoch— their readers. James Murdoch: I am simply offering to help to Rupert Murdoch: We had broken our trust with our clarify these matters, Mr Watson. readers; the important point was that we had broken our trust with our readers. Q202 Mr Watson: But your father is responsible for corporate governance, and serious wrongdoing has Q207 Mr Watson: Are you aware that there are other been brought about in the company. It is revealing in forms of illicit surveillance being used by private itself what he does not know, and what executives investigators, which were used by News International? chose not to tell him. With respect to you, I will Rupert Murdoch: Other forms of? pursue my line of questioning and come back to you later. Q208 Mr Watson: Illicit surveillance. Computer Mr Murdoch, why was no one fired in April, when hacking, tracking on cars. News International finally admitted that News of the Rupert Murdoch: No. I think all news organisations World had been engaged in criminal interception of have used private detectives, and do so in their voicemails? investigations from time to time, but not illegally. Rupert Murdoch: It was not our job to get in the course of justice. It was up to the police to bring the Q209 Mr Watson: If it can be shown to you that charges and to carry out their investigation, which we were 100% co-operating with. private investigators working for newspapers in News International used other forms of illicit surveillance like computer hacking, would you immediately Q203 Mr Watson: But in April the company admitted liability for phone hacking, and nobody took introduce another investigation? responsibility for it then. No one was fired. The Rupert Murdoch: That would be up to the police, but company admitted that they had been involved in we would certainly work with the police. If they criminal wrongdoing and no one was fired. Why was wanted us to do it, we would do it. If they wanted to that? do it, they would do it. Rupert Murdoch: There were people in the company who apparently were guilty. We have to find them and Q210 Mr Watson: Finally, can I ask you, when did we have to deal with them appropriately. you first meet Mr Alex Marunchak? James Murdoch: Mr Watson, if I can clarify: most of Rupert Murdoch: Mister—? the individuals involved or implicated in the Mr Watson: Alex Marunchak. He worked for the allegations that were there had long since left the company for 25 years. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 21

19 July 2011 Rupert Murdoch and James Murdoch

Rupert Murdoch: I don’t remember meeting him. I the Thatcher Government and the Conservative might have shaken hands walking through the office, Government that followed. We thought it had got tired but I don’t have any memory of him. and we changed and supported the Labour party 13 Mr Watson: Thank you. years ago, or whenever it was, with the direct loss of 200,000 circulation. Q211 Jim Sheridan: Mr Murdoch senior, I have a number of short questions for you. Why did you enter Q222 Jim Sheridan: Did you ever impose any the back door at No. 10 when you visited the Prime preconditions on either the Labour or Conservative Minister following the last general election? party? Rupert Murdoch: Because I was asked to. Rupert Murdoch: No.

Q212 Jim Sheridan: You were asked to go in the Q223 Jim Sheridan: No preconditions whatever? back door of No. 10? Rupert Murdoch: No. The only conversations that I Rupert Murdoch: Yes. had with them—with Mr Blair that I can remember— were arguing about the euro. Q213 Jim Sheridan: Why would that be? Rupert Murdoch: To avoid photographers at the front, Q224 Jim Sheridan: Mr Blair visited you halfway I imagine. I don’t know. I was asked; I just did what round the world, before the 1997 election. Anyway, I was told. that does not matter. Rupert Murdoch: That was something that Mr Q214 Jim Sheridan: It is strange, given that Heads Cameron arranged—Campbell. of State manage to go in the front door. Rupert Murdoch: Yes. Q225 Jim Sheridan: It is understood that the FBI is investigating 9/11 victims. Have you commissioned Q215 Jim Sheridan: Yet you have to go in the back an investigation into these allegations? door. Rupert Murdoch: We have seen no evidence of that Rupert Murdoch: That is the choice of the Prime at all, and as far as we know, the FBI haven’t, either. Minister, or his staff or whoever does these things. If they do, we will treat it in exactly the same way as we treat it here. I cannot believe it happened from Q216 Jim Sheridan: So was it under the Prime anyone in America. Whether someone at the News of Minister’s direct instructions that you came in the the World or Mr Mulcaire took it on himself to do it, back door? I don’t know. Rupert Murdoch: I was asked would I please come in through the back door. Q226 Jim Sheridan: I will come back to you, James, James Murdoch: I do not think my father would have in a minute. I just want to clarify, if these allegations any direct knowledge of the arrangements that were are in any way true, will you commission an being made for his entry to or exit from a particular investigation into them? building, with respect, Mr Sheridan. Rupert Murdoch: Absolutely.

Q217 Jim Sheridan: Again, Mr Murdoch, have you Q227 Jim Sheridan: You must be horrified by the ever imposed any preconditions— scandal, and the fact that it has cost you the BSkyB Rupert Murdoch: Which visit to Downing Street are transaction and led to the closure of the News of the you talking about? World. Who do you blame for that? Rupert Murdoch: A lot of people had different Q218 Jim Sheridan: It was just following the last agendas, I think, in trying to build this hysteria. All general election. our competitors in this country formally announced a Rupert Murdoch: I was invited within days to have a consortium to try and stop us. They caught us with cup of tea and to be thanked by Mr Cameron for the dirty hands and they built the hysteria around it. support. No other conversation took place. It lasted minutes. Q228 Jim Sheridan: It was your competitors that blocked it, which stopped you— Q219 Jim Sheridan: That is the one when you went Rupert Murdoch: No, I think a mood developed that in through the back door? made it really impractical to go ahead. Rupert Murdoch: Yes. I had been asked also by Mr James Murdoch: Mr Sheridan, we have been very Brown many times. clear that serious allegations of wrongdoing have been levelled at the News of the World. We believed that Q220 Jim Sheridan: Through the back door? the actions of some reporters and people some years Rupert Murdoch: Yes. And my family went there ago have fundamentally tarnished the trust that the many times. News of the World had with its readers. This is a matter of huge and sincere regret—mine, my father’s, Q221 Jim Sheridan: Have you ever imposed any and the company’s. The company’s priority—very preconditions on a party leader in the UK before much so—is to restore that trust, operate in the right giving them the support of your newspapers? way, and make sure that the company can be the Rupert Murdoch: I never guaranteed anyone the company that it has always aspired to be. The removal support of my newspapers. We had been supporting of the proposal to make an offer to the BSkyB cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 22 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch shareholders who are not News Corporation is simply compliance, regulatory compliance, and financial and a reflection of that priority of moving forward. regulatory transparency hugely seriously. It is something that we are very proud of. Q229 Jim Sheridan: I have every sympathy with Chair: We are coming on to some of these questions what you are saying, but do you understand that in more detail. people who have been the victims of the News of the World, based on allegations, will find that a bit Q236 Jim Sheridan: Can I just turn to James? You strange? will be aware of the situation of Tommy Sheridan, the James Murdoch: It is our absolute priority to, with former MSP, who is currently in prison. Bob Bird, those—What happened at the News of the World was whether deliberately or inadvertently, misled the jury wrong. We and I have apologised profusely and in Tommy Sheridan’s perjury trial. Your company has unreservedly for that, and my father has as well. These not disclosed internal e-mails that may aid the appeal are very serious matters and we are trying to establish of Mr Sheridan. Why is that? the facts of any new allegations as they come up. We James Murdoch: I do not have direct knowledge of are working closely with the police to find out where that, Mr Sheridan. I apologise, but certainly if you the wrongdoing was and to hold people accountable. have additional questions on that in the future, I am I think importantly as well, to the victims of illegal happy to supply written answers, but I do not have voicemail interceptions, not just have we apologised, direct knowledge and I am not in a position to answer but we have admitted liability—the company has those questions. admitted liability—and we have set up the appropriate third-party compensation schemes to do that. These Q237 Jim Sheridan: I have a couple more questions. are all matters that we are fully engaged in. James, can you please confirm or deny whether any News Corporation company is the subject of an Q230 Jim Sheridan: May I just return to your investigation by the Serious Fraud Office? father? I know that this is a very stressful time for James Murdoch: I have no knowledge of that at this yourselves, but Mr Murdoch, do you accept that point. ultimately you are responsible for this whole fiasco? Rupert Murdoch: No. Q238 Jim Sheridan: Can you also confirm or deny whether any News Corporation company is the subject Q231 Jim Sheridan: You are not responsible. Who of an investigation by the Financial Services is responsible? Authority? Rupert Murdoch: The people that I trusted to run it, James Murdoch: I do not believe so. Not to my and then maybe the people they trusted. I worked with knowledge. Mr Hinton for 52 years and I would trust him with my life. Q239 Jim Sheridan: Finally, please confirm or deny whether any News Corporation company is the subject Q232 Jim Sheridan: Are you satisfied that the cash of an investigation by HMRC. payments that were made by the News Corporation James Murdoch: Not to my knowledge. We have companies to informants for stories were registered ongoing dialogue with the HMRC and various with the appropriate tax authorities? subsidiaries here but, as far as investigations are Rupert Murdoch: I do not know anything about that. concerned, I have no knowledge of one. Perhaps James can answer. Q240 Dr Coffey: Mr Murdoch, who made the Q233 Jim Sheridan: If people were given money in recommendation to close down the News of the World order to accomplish stories— to the board of News Corp? I assume that it was a Rupert Murdoch: People were given money to— board decision that was made by News Corp. Rupert Murdoch: It was the result of a discussion Q234 Jim Sheridan: In order to get stories—did you between my son and I, and senior executives. Miss notify the appropriate tax authorities about this? Brooks one morning called the whole board of the James Murdoch: All of our financial affairs as a News Corporation to seek their agreement. public company are transparent and audited. The tax jurisdictions that the company works in all around the Q241 Dr Coffey: You have already suggested that it world are worked with transparently and thoroughly. is because you felt ashamed. It is not a suggestion that Tax compliance is an important priority for any it was a commercial decision to decide to close the business, and we comply—the company complies— News of the World. with the laws. Rupert Murdoch: Far from it.

Q235 Jim Sheridan: Would that also include people Q242 Dr Coffey: Moving on to the financial who are on regular monthly retainers registering their governance arrangements for the News Corp. Mr affairs with HMRC? James Murdoch, you suggested earlier that the James Murdoch: I have no knowledge of separate payments to Mr Taylor were not notified at News people on retainers at the company and their own tax Corp level because of the finance threshold. Can you affairs, or their own tax arrangements. I can speak for tell us a bit more about that? I understand that you the company’s tax arrangements and, to the best of had to agree for the payment to Mr Taylor. Was that my knowledge, we are a company that takes tax made at a financial level or a managerial decision? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 23

19 July 2011 Rupert Murdoch and James Murdoch

James Murdoch: I am very happy to discuss it. Thank how much money does a particular company or part you. It is a good question. I am very happy to discuss of the company or department have to spend?” As the matter of Mr Taylor. The out-of-court settlement long as they stay within those guidelines, the belief is with Mr Taylor was related to a voice mail that they should be empowered to make those interception that had occurred previously and was judgments, to spend those moneys and achieve the actually one of the counts, as I understand it, of the ends that they can. I do not have at the tip of my 2007 trial of Mr Mulcaire. It is important to think back fingers the precise financial authorities in that, but I to 2008 to understand what we knew then, what I can discuss with you after the Committee hearing knew then and what the information was and the what exactly you would like to know and whether or context. The underlying interception was not a not it is right to come back to you with that. disputed fact. Further to that, it was the advice and the clear view Q244 Dr Coffey: What level of financial pay-out of the company that, if litigated, the company would would have it have taken to require an authorisation lose that case, that it was almost certain to lose that from the board of News Corp? case because the underlying fact was not in dispute. James Murdoch: I think that, for the full board, it is Thirdly, the company sought distinguished outside in some millions, but I do not know the exact answer counsel to understand that, if the case were litigated there. and if it were to be lost, which was the great likelihood, what the financial quantum would be or Q245 Dr Coffey: Do you know how much has been what that would cost the company. It was advised that, paid out to people, authorised by your executives? with legal expenses and damages, it could be between James Murdoch: Paid out in what way, Dr Coffey? £500,000 and £1 million or thereabouts. I do not recall Dr Coffey: Paid out as settlements. the exact number of the advice. I think that it was James Murdoch: Legal settlements? I do not know £250,000 plus expenses, plus litigation costs— the total number, but around the world it is customary something like that. to reach out-of-court settlements in civil litigations Lastly, this was in a context in the first half of 2008 and civil matters, and, rather than go through the and it was my first real involvement with any of the lengthy and sometimes expensive litigation process, issues where there was no reason at the time to believe with the risk that that often entails, it is customary to that the issue of the voice mail interceptions was try to reach out-of-court settlements in many cases. anything but a settled matter, and that it was in the Rupert Murdoch: I should just add that we have a past after the successful prosecution of the two very strong audit committee at News Corporation, individuals we discussed as well as the resignation of which would know about this. Neither of us are the editor. The out-of-court settlement was made in members of that. They are outside directors, and they that context. It was within the authorities, as I review all these things. understood it, of News International to be able to make those out-of-court settlements in due course Q246 Dr Coffey: Thank you. Building on that then, without going to the global level company. At the how is it possible to make payments to people if they time, I was the regional head of News Corporation for do not invoice you or if they are not an employee of Europe and Asia, and I directed that it was all right New Corps’s subsidiaries? to settle that, but did not get involved in any of the James Murdoch: I am sorry, Dr Coffey? negotiations directly about the settlement. But I do Dr Coffey: How is it possible to transfer cash or some recall, in 2008, that those were the things that were other form of remuneration to people who do not known. invoice you or who are not employees of News Rupert Murdoch: Can I just add that my son had only Corps’s subsidiaries? been with the company for a matter of a very few James Murdoch: I do not know the exact weeks? arrangements of that. I don’t do that myself to tell you James Murdoch: For clarification, it was a few how that is done, but sometimes, in certain instances, months. I had come back to the company at the end it is appropriate for journalists or managers in a of 2007 in the middle of December, and this was certain environment to have the ability to use cash in sometime—I don’t recall the exact date—in the first some instances. It is customary, however, for them to half of 2008. record those, and all of the cash expenses, as well as invoice expenses, should be looked at and recorded. Q243 Dr Coffey: Given you were new to the company—weeks, months, I do not want to have a Q247 Dr Coffey: So things like use of petty cash— father-son argument about that—what level of that could be quite big sums of money or small—at financial payments could other News International the moment you just record that the journalist gave it executives, people like Colin Myler or Tom Crone or to somebody. Rebekah Brooks, have sanctioned without recourse to James Murdoch: Yes, and I don’t have direct you as the chairman? knowledge of all of those arrangements. James Murdoch: Generally speaking, the way that the company will operate, as any company will operate, Q248 Dr Coffey: I was going to ask if payments is within certain financial parameters from a financial could have been made to family members of those planning perspective. We will look at a budget for a alleged to have been hacked and similar, but is it year, much like a house will manage its budget, and possible that other forms of remuneration can be used say, “How much money do we have to spend, and in your company apart from cash and bank transfers? cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 24 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

I am talking of things like travellers cheques, vouchers our journalistic ethics, about what exactly the codes and things that can be redeemed for cash. of conduct should be, not just for News International, James Murdoch: I don’t have knowledge of that. our UK publishing subsidiary, but the industry as a whole, and what sort of governance should be around Q249 Dr Coffey: Just looking at some of your the whole area. corporate governance—page 2 and page 4 of your We welcomed last week the Prime Minister’s own code—it mentions directors, employees and announcement of a judicial inquiry into both officers of News Corporation acting to the principles journalistic ethics and relationships with police and set forth, including consultants, agents, suppliers and politicians. That is a really good thing for the country business partners adhering to the standards. It says, and for all of the interested parties to engage with “We may never ask a third party to perform any act fully. One specific action we have taken to try to be that would violate these Standards.” Can you tell me as proactive as we can around this, is to set up what a little bit more, especially on the financial side, how we call the management and standards committee, that you, as an organisation, try and make that happen? is outside the management of our publishing company Rupert Murdoch: How that would work is that each and reports through the independent directors of our newspaper has an editorial manager—the titles vary. global public board, precisely to look at, first, the They have to approve the expenses claims of every specific issues of how we co-operate with the reporter. A reporter has no authority to pay money on investigations and deal with allegations of his own. wrongdoing and get to the bottom of it. James Murdoch: Just to clarify, the managing editor’s It is also importantly about how we co-ordinate, co- office often manages a lot of the expenses and operate and proactively engage with those judicial budgets, and is directed to do so with propriety. inquiries, and how we start to set a code of conduct and a code of ethics that we and it think can be both Q250 Dr Coffey: Do you require your executives to a paragon for all of our newspapers and all of the make annual statements that they have abided by your industry, but also something that has teeth and can codes of conduct and ethics? I used to work for a hold the company to account. That management and family-owned company. standards committee is independently chaired, and we James Murdoch: Every employee, every colleague think it is going to be a much better way to go in around the world of News Corporation receives the future. We would like over the next six months and code of conduct. It is a pamphlet that has some detail years, to be judged on the actions the company takes in it—not too much, so that people read it. With to put that right and put that in place. respect to what ethical conduct is required— Dr Coffey: Thank you. Rupert Murdoch: We would be happy to make it Rupert Murdoch: I would just like to say, if I may, available to you. that it doesn’t take away at all from what we have James Murdoch: We would be very happy to make it been saying about our apologies or our blame for available to you. It is about ethical conduct, the law, anything, but this country does greatly benefit from breaking the rules and so on. Everyone who becomes having a competitive press and therefore having a an employee is required to do that. Our legal counsel very transparent society. That is sometimes very also internally conducts workshops around the world inconvenient to people. But I think we are better and with staff, from Mumbai to Manchester, around those stronger for it. rules and code of conduct. That is something we try hard to communicate as crisply as we can to everyone Q252 Chair: Before I bring in my next colleague can in the business. I just come back to something Thérèse Coffey raised, which was the closure of the News of the World?Isit Q251 Dr Coffey: I appreciate Mr Murdoch’s your intention to launch a new Sunday tabloid statement at the beginning. Given that you have been newspaper? in the media spotlight and perhaps, I expect, not James Murdoch: No, there are no— appreciated the attention you have had, without Rupert Murdoch: We have made no decision on that. wishing to suppress investigative journalism, will this James Murdoch: There’s no decision on that. make you think again about how you approach your headlines and targets in future? That could be people Q253 Chair: So for the moment there are no plans from Hillsborough 96 to celebrities to others. Will you to have a News International title coming out on think again about what your headlines will say in Sunday at the tabloid end of the market? future? James Murdoch: There are no immediate plans for Rupert Murdoch: I think all our editors certainly will. that. I am not aware of any transgressions. It is a matter of Rupert Murdoch: But no guarantee that we won’t. taste. It is a very difficult issue. We have in this country a wonderful variety of voices and they are Q254 Chair: Fine. You have talked in the past about naturally very competitive. I am sure there are moving to seven-day newsrooms. There was headlines that occasionally give offence, but it is not speculation that the title “The Sun on Sunday” had intentional. been reserved— James Murdoch: It is important to say that one of the James Murdoch: I think we leave all those options lessons, if you will, from all of this for us is, we do open. That is not the company’s priority now. In the need to think as a business as well as an industry in last week it has come up in the company but my this country more forcefully and thoughtfully about father’s direction and my direction is that this is not cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rupert Murdoch and James Murdoch the time to be worrying about that. The company has but I am sure we can provide you with that to move forward on all of these other actions and get information. to grips with the facts of these allegations and understand them as fully as we can. Q257 Mr Sanders: What advice did Tom Crone and Chair: Can I appeal both to the witnesses and, indeed, Colin Myler give you on the payment to Gordon to Members to try to keep brief because we still have Taylor? quite a lot to get through? James Murdoch: The advice from Mr Myler and Mr Crone was as I have described it. The underlying fact Q255 Mr Sanders: Good afternoon. This is to Mr of the case was known because it had come up in the James Murdoch: in your statement of 7 July 2011 you trial of Mr Mulcaire. said, “The Company paid out-of-court settlements approved by me… I did not have a complete picture Q258 Mr Sanders: Were you aware that the case when I did so.” What do you know now that you did involved the criminal act of phone hacking? not know then? James Murdoch: That was my understanding. The James Murdoch: Essentially the new information that litigation was for damages for the illegal voice mail emerged that is critical here is the information that interceptions. came out of the ongoing process of civil litigations in 2010; and at the end of 2010 the presentation of Q259 Mr Sanders: When did you get that advice? evidence, which had not been in our possession James Murdoch: In the first half of 2008. previously from this civil litigation, widened the circle definitively, or at least made it very apparent that it Q260 Mr Sanders: In 2009, Mr Crone and Mr Myler is very likely that the circle was wider than the two informed us that they decided to settle Mr Taylor’s individuals, Mr Goodman and Mr Mulcaire, from claim on the advice of the company’s external legal previously. It was that information that was really advisers. Was that advice from Farrer & Co. critical. If I can go back to my previous testimony just solicitors? earlier today around the settlement with Mr Taylor, James Murdoch: Farrer & Co. has done work for us. the commercial and legal rationality will around that I do not know precisely which external counsel Mr settlement was very, very clear. The underlying fact Crone and Mr Myler engaged on that, but I can was not in dispute. It was a known fact from a clarify it. previous trial. The advice was very, very clear as to what sort of damages could be expected to be paid Q261 Mr Sanders: Did you see the advice, whether and it was quite clear and quite likely that if litigated, it was from Farrer & Co. or anyone else? the company would lose that case. In the context of none of this other information—this is a full year James Murdoch: No. I received the advice orally before some of the new allegations in the press arose from Mr Myler and Mr Crone. from afar, so there was no reason to believe at the time that it was anything other than in the past. Q262 Mr Sanders: What was their advice? Now knowing then what I know now, would I have James Murdoch: It was as I described it. still directed to negotiate to settle that case? I would, actually, but I would have coupled it with the other Q263 Mr Sanders: Simply to settle? actions that we have taken since the new evidence James Murdoch: And that outside legal advice had emerged at the end of September 2010. And that is been taken on the expected quantum of damages. to immediately go and look at whatever we can find Their advice was that the case would be lost and that, internally around the individuals involved; to in the absence of any new evidence—I was certainly immediately contact the police about information that not made aware of any new evidence—it was simply may be of great interest to them; to put in place the a matter related to events that came to light in 2007 process, which took up a little while and we did it in and in the criminal trials before I was there. It was a the early part of 2011, around admitting liability to matter in the past. the civil litigants; putting a process in place to get to The police had also closed their case and said that the bottom of what legitimate allegations there were; there was no new evidence, so the context is of a case apologising unreservedly to the victims of those based on events that were a year old or more and illegal voicemail intercepts, which were absolutely on underlying activities prior to that. That is where inexcusable; and having a system of compensation we were. there. So if I knew then what we know now and with the benefit of hindsight we can look at all these things, Q264 Mr Sanders: Was part of the advice that a high but if I knew then what we know now we would have payment would ensure the matter was kept taken more action around that and moved faster to get confidential? to the bottom of these allegations. James Murdoch: No, not at all. Out-of-court settlements are normally confidential. I do not know Q256 Mr Sanders: Were the settlements paid by of many out-of-court settlements that are not kept News International, by News Corp or by News confidential, although I am sure there are some. Group Newspapers? There was nothing about confidentiality. I think I James Murdoch: I do not recall. I would imagine it understand where you are going with this, Mr was either News International or News Group Sanders, but, no, the amount paid rested on advice Newspapers. I think it was News Group Newspapers, from outside counsel on the amount we would be cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 26 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch expected to pay in damages, plus expenses and Q270 Mr Sanders: It is a term that came up in the litigation costs. Enron scandal. Wilful blindness is a legal term. It states that if there is knowledge that you could have Q265 Mr Sanders: Did you question why such high had and should have had, but chose not to have, you payments were made to Mr Taylor and Mr Clifford? are still responsible. It has been suggested that the figures were £700,000 James Murdoch: Mr Sanders, do you have a and £1 million respectively for invasions of privacy, question? Respectfully, I just do not know what you but the record privacy damages awarded by a court would like me to say. remains £60,000, ironically against News of the World. James Murdoch: I did question the amount, but not Q271 Mr Sanders: The question was whether you in relation to the £60,000. If you recall the chronology, were aware— and I am sure you do, the £60,000 award against News James Murdoch: I am not aware of that particular of the World, which I believe was the Mosley case, phrase. came after we sought advice from senior, distinguished outside counsel on the quantum of Q272 Mr Sanders: But now you are familiar with damages that we could be expected to pay to Mr the term, because I have explained it to you. Taylor and Mr Clifford. Their advice was that the James Murdoch: Thank you, Mr Sanders. damages could be £250,000 plus expenses and Rupert Murdoch: I have heard the phrase before, and litigation costs, which were expected to be between we were not ever guilty of that. £500,000 and £1 million. That is my recollection of it. The chronology is important, because afterwards Q273 Philip Davies: I am not sure whether you we obviously would have had different information, acknowledged this at the start or not, but certainly the but it was not afterwards, it was before. Chairman did: when we had our inquiry in 2009, the evidence given by News International executives was Q266 Mr Sanders: You have since said that when rather hopeless. They came with a game plan, which you approved the Taylor settlement, you did not have was to tell us that they did not know anything, they all the facts. What do you know now that you did not could not remember anything and they did not know know then? anybody who would know anything. I wonder, just so James Murdoch: As I have testified, the key facts and that we can get off on a reasonable footing, what sort evidence came to light at the end of 2010 as the of coaching you have had for today. Who has advised lengthy due process on the civil litigations on the you on how to handle this session and what was matters took its course. It was that process that their advice? unearthed the key evidence. It was really only after James Murdoch: With respect to today, after that that the police said that they should restart the scheduling this appearance, we took some advice investigation. As soon as we had that new around the context of this sort of setting—it is my first information, at the end of 2010, which indicated to time and, I think, my father’s first time, in a us that there was a wider involvement, we acted on Committee meeting like this—mostly on logistics, it immediately. what sort of questions you would ask and so on. We were advised, fundamentally, to tell the truth, and to Q267 Mr Sanders: Tom Crone said last week he did come and be as open and transparent as possible. That not know why he left News Group Newspapers. Can is my and my father’s intent and intention, and we you clarify why he was asked to leave after 26 years hope that we can show you that that is what is of service? happening. James Murdoch: Last week—two weeks ago, I guess—the News of the World published its last paper. Q274 Philip Davies: Mr Murdoch senior, in answer Mr Crone was very involved with News of the World to some questions from Mr Watson, you seemed to matters over the years. The company believed and the indicate that you had a rather hands-off approach to management of the company believed that it was time your company. The point you made was that the News to part ways. I was not involved in those direct of the World was less than 1% of your entire discussions with Mr Crone, and I cannot comment on worldwide business, so you would not really be their nature or their content; I do not have knowledge expected to know the ins and outs of what was going of them. on. Could you just give us an illustration of how many times or how often you would speak to the editor of Q268 Mr Sanders: The New Statesman carried a your newspapers—for example, how often you would story last week that News International subsidised speak to the editor of The Sun or to the editor of the Andy Coulson’s wages after he left your employ. Can News of the World? you shed any light on that? Rupert Murdoch: Very seldom. Sometimes, I would James Murdoch: I have no knowledge of Andy ring the editor of the News of the World on a Saturday Coulson’s wages after he left the company’s night and say, “Have you got any news tonight?” But employment. it was just to keep in touch. I ring the editor of The Sunday Times nearly every Saturday—not to influence Q269 Mr Sanders: Finally, are you familiar with the what he has to say at all. I am very careful always to term “wilful blindness”? premise any remark I made to him by saying, “I’m James Murdoch: Mr Sanders, would you care to just inquiring.” I’m not really in touch. I have got to elaborate? tell you that, if there is an editor that I spend most cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 27

19 July 2011 Rupert Murdoch and James Murdoch time with, it is the editor of The Wall Street Journal, Q282 Philip Davies: But he wouldn’t tell you about because I am in the same building. But to say that we a £1 million payoff? are hands-off is wrong; I work a 10 or 12-hour day, Rupert Murdoch: No. and I cannot tell you the multitude of issues that I have to handle every day. The News of the World Q283 Philip Davies: It is just interesting to perhaps I lost sight of, maybe because it was so small somebody like me. in the general frame of our company, but we are doing Rupert Murdoch: He would expect other people to a lot of other things too. tell me that, if anyone was to.

Q275 Philip Davies: I understand, but perhaps I can Q284 Philip Davies: James, would you acknowledge help you out here. If somebody had told me that you then that in your view you overpaid Max Clifford and would speak to someone like the editor of The Sun at Gordon Taylor? least daily and maybe twice a day, would you James Murdoch: I can’t speak to the arrangements recognise that description or would that be— with Mr Clifford, as I do not have direct knowledge, Rupert Murdoch: No. in terms of—I was not involved in that piece. With respect to the Taylor piece, I made a judgment given Q276 Philip Davies: You wouldn’t historically— the advice of counsel and the advice of the executives traditionally—have spoken to the editor of The Sun involved. Going back and looking at what we knew that number of times? in 2008, looking at that advice, remembering that Rupert Murdoch: No. I’d like to, but no. advice and looking at the context of the time, if we step back those three years, it was a decision that, given that context, I would still stand by, I think. Q277 Philip Davies: You said you speak to the editor of the News of the World, maybe on a Saturday night Q285 Philip Davies: It just seems— before publication—not to influence what they have Rupert Murdoch: Apparently, there was a contract to say, I understand that. I am intrigued as to how with Mr Clifford, which was cancelled by Mr these conversations go. I would have imagined that, Coulson. to the editor of the News of the World, it would go James Murdoch: I don’t know about that. I don’t something along the lines of, “Anything to report?” or know if you have knowledge of that. Mr Davies, “Anything interesting going on?” And the editor of sorry: you were going on? the News of the World says, “No, no, it’s been a Philip Davies: It just seems strange to me that— standard week; we paid Gordon Taylor £600,000”. Rupert Murdoch: I don’t know what was in the Rupert Murdoch: He never said that last sentence. contract, but there was a particular break with Max Clifford. Q278 Philip Davies: Surely in your weekly conversations with the editor of the News of the Q286 Philip Davies: We might ask you to come World, with something as big as that—paying back with details about that. someone £1 million or £700,000—you would have It seems odd to me as a layman that while we are expected the editor just to drop it into the conversation talking about £600,000 or £1 million, Andy Gray had at some point during your weekly chat. his phone hacked and did not get £600,000, £500,000, Rupert Murdoch: No. £200,000 or even £50,000; he got £20,000. It seems bizarre that somebody can have their phone hacked Q279 Philip Davies: You wouldn’t have expected and get £20,000 and somebody else gets their phone them to say that to you? hacked and gets £600,000 or £1 million. Surely you Rupert Murdoch: No. can see that the distinction that most people draw is Philip Davies: So what on earth were you— that one payment was made when it was all out in the Rupert Murdoch: Let me say, I did not really call him open and everybody knew about all these things— weekly, but I would have called him at least once a Andy Gray—and the other was paid when it was month, I’d guess. trying to be kept rather quiet—£600,000. Do you not see that, to most people looking at that, it smells a bit? James Murdoch: Mr Davies, I understand where you Q280 Philip Davies: What would you discuss with are coming from and I understand that these are big them? If things like that were not on the agenda, what sums of money we are talking about—£100,000, was on the agenda? £200,000, £600,000. That is a lot of money, and you Rupert Murdoch: I’d say, “What’s doing?” look at that and say, “Why would a company do that?” Philip Davies: Sorry? I would go back to my answer to Mr Sanders’s Rupert Murdoch: I’d say, “What’s doing?” question, which was, just to be precise about the chronology—I am not a lawyer, and I apologise, but Q281 Philip Davies: And what sort of response my understanding— would you expect? Philip Davies: I got your answer to— Rupert Murdoch: He might say, “We’ve got a great James Murdoch: Mr Davies, I would like to answer story exposing X or Y” or, more likely, he would say, this question. My understanding is that the £60,000 “Nothing special”. He might refer to the fact that judgment in the Mosley case, which was after the however many extra pages were dedicated to the advice given on the Gordon Taylor settlement, is an football that week. important chronology. Courts and judges have set a cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 28 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch different standard here. What we knew, and what I the legal fees of someone who was engaged in knew, at the time was that we had senior distinguished criminal activity and had committed something that outside counsel to whom we had gone to ask, “If this was clearly gross misconduct? case were litigated, and if the company were to lose James Murdoch: Mr Davies, I do not have any direct the case, what sort of damages would we expect to knowledge of the specific legal arrangements with Mr pay?” The company received an answer that was Goodman in 2007, so I cannot answer the specifics of substantial. that question. What I can say—because I have asked the question as well, more recently than that, with Q287 Philip Davies: The answer was £250,000, so respect to whom the company pays and what you settled for £600,000. We will move on— contributions to legal fees the company makes, and so James Murdoch: It is important to be clear, Mr on—is that I have been surprised that it is customary Davies. I apologise, but it is important to be clear. The in here to sometimes make contributions to the legal £600,000 or £700,000 included damages, legal fees costs of either co-defendants or defendants in related and an estimation of what it would have cost matters. This is legal counsel telling me this. I have otherwise, because the other side of the negotiation no direct knowledge of the particular instance that you understands this. So it is damages plus cost that gets mentioned, and if you have any additional specific you to that number. Respectfully, it is important to be questions about that, perhaps, Mr Chairman, we can clear about that. I agree: they are big numbers. follow up with you on that. I am happy to do that. Q288 Philip Davies: I want to concentrate on Q292 Philip Davies: It is all very well, but these are payments that you have made to your staff. Going issues that go back some time. I am surprised that back to the trial of Glenn Mulcaire and Clive Goodman, Clive Goodman pleaded guilty to phone you have not followed up on them already. Were any hacking, a criminal offence. Did News International payments made subsequently to Clive Goodman and pay Clive Goodman’s legal fees for his trial? Glenn Mulcaire after their convictions? Did News James Murdoch: I want to be clear about the International make any payments at all to those two chronology. First, I do not have first-hand knowledge people following their convictions? of those times. Remember that my involvement in James Murdoch: I would like to answer that question. these matters started in 2008. In 2007, up until I think it is a good question, and it is a specific December, I was wholly focused in my role as chief question. To my knowledge, because allegations were executive of a public company. I was not involved in made that legal fees had been paid after that time in those things. 2007 to those people, I asked the question myself and I was very surprised to find that the company had Q289 Philip Davies: Who would know? made certain contributions to legal settlements. I do James Murdoch: I can try to answer the first question not have all the details around each of those—not first. It is customary, in certain instances of employees legal settlements, sorry; legal fees. I was very with litigations, to pay some legal expenses on their surprised to find out that that had occurred. behalf to try to bring all the evidence to a court. That has all been done, since I have had any involvement Q293 Philip Davies: Who authorised them? and knowledge of this, in accordance with legal James Murdoch: They were done, as I understand it, advice about the proper way to do things. But I cannot in accordance with legal counsel and the strong speak to the 2007 arrangements; I do not have first- advice— hand knowledge of those. Q294 Philip Davies: I did not ask who advised them. Q290 Philip Davies: Again, I will try to help out. Who signed it off? Who at News International agreed Clive Goodman employed the services of a QC called to make those payments? Who signed the cheques? John Kelsey-Fry. I do not know whether you have Who agreed to make those payments? come across John Kelsey-Fry or whether he is a James Murdoch: I do not know who signed off lawyer whom News International uses a lot. those payments. James Murdoch: He is not known to me. Q295 Philip Davies: Well, who would? We talked Q291 Philip Davies: He is probably one of the most about corporate governance earlier—you talked about eminent lawyers in the country, certainly one of the the managing editor. Would you expect the managing most expensive ones. He is the sort-of go-to lawyer for celebrities; I think Steven Gerrard used him fairly editor to have made that decision? recently. It seems odd to me that a journalist on the James Murdoch: It would have been the management News of the World who is pleading guilty to a crime of the legal cases, I would think. I am happy to go uses in mitigation probably the most expensive lawyer back and look at that, but it was not something that in the country, which obviously leads most people to came to my attention for approval. suspect that his legal fees were not being paid by himself, but were being paid by News International. Q296 Philip Davies: But who would make that Given that he was pleading guilty to a criminal act— decision? phone hacking—which presumably leads to summary Rupert Murdoch: I would just like to say that figures dismissal over gross misconduct, why on earth would of that amount would certainly not come before, or News International even think or dream about paying have anything to do with, the managing editors. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 29

19 July 2011 Rupert Murdoch and James Murdoch

Q297 Philip Davies: It wouldn’t? Would it have been Q308 Philip Davies: Why did you not accept above the managing editor or below the managing Rebekah Brooks’s resignation when she first offered editor? it? Rupert Murdoch: It would be above. Rupert Murdoch: Because I believed her and I trusted James Murdoch: This would have been on legal her, and I do trust her. advice payments made about how to handle litigations. Again, I do not have direct knowledge or Q309 Philip Davies: So why did you accept it the details about the current status of those, but I can tell second time around? you that I was surprised as you are to find that some Rupert Murdoch: In the event, she just insisted. She of those arrangements had been made. was at a point of extreme anguish.

Q298 Philip Davies: Mr Murdoch senior, I seem to Q310 Philip Davies: Can you tell us how much all be getting further with you, for which I am grateful. these characters have been paid off? How much have Would it have been Les Hinton? Would he have had they been given as a financial settlement on their to sign that off? departure from News International? Rupert Murdoch: It could have been. Rupert Murdoch: No, I can’t tell you, but in the case of Mr Hinton, it would certainly be considerable, Q299 Philip Davies: Would have been or could because there would be a pension for 52 years’ have been? service, and a great deal of thanks. Rupert Murdoch: Could have been. Q311 Philip Davies: Would it be ten million? Five Q300 Philip Davies: Who else could it have been? million? Rupert Murdoch: Those are pounds? I do Rupert Murdoch: The chief legal officer. Are we not know— talking about signing cheques or approval? James Murdoch: Those are confidential. Rupert Murdoch: They are certainly confidential. Q301 Philip Davies: Both. Rupert Murdoch: Signing cheques could be the Q312 Philip Davies: Is there any confidentiality in assistant CFO, or someone, but it would be on the instructions of the chief legal officer. their pay-off that means that they are not supposed to speak about what happened, their time at your company or what they know? Q302 Philip Davies: James, you said that you were not involved in the decision to get rid of Tom Crone. Rupert Murdoch: No. Whose decision was that? James Murdoch: Mr Davies, in the settlement or James Murdoch: The management of the company at compromise agreement when somebody resigns or the time. leaves the business in circumstances like this, there are commercial confidentiality agreements, but Q303 Philip Davies: Who? nothing that would stop or inhibit the executive from James Murdoch: Recently, the chief executive Mrs co-operating fully with investigations, from being Brooks. transparent about any wrongdoing or anything like that. It is important to note that these agreements are Q304 Philip Davies: It was her decision. made on the basis of no evidence of impropriety. If James Murdoch: She is the chief executive of the evidence of impropriety emerges or was there prior to company, and senior-level personnel decisions are that departure, you would have a different piece. That made by them. is an important point to be clear about.

Q305 Philip Davies: Stuart Kuttner left the company Q313 Philip Davies: It seems on the face of it that either the day, or the day after, allegations were made the News of the World was sacrificed to try and protect in The Guardian originally about phone hacking. Was Rebekah Brooks’ position at News International. In that linked? Did he resign? Was he sacked? What effect, instead of her departure being announced, the happened to Stuart Kuttner, and how did he leave the News of the World was offered up as an alternative to company? try to deal with the whole thing. Do you now regret James Murdoch: That I don’t know; that would have making that decision? Do you regret closing the News been at the time a matter for News of the World. of the World to try to save Rebekah Brooks? In Rupert Murdoch: It is for you to ask him. hindsight, do you wish that you had accepted her resignation to start with, so that that paper with a fine Q306 Philip Davies: Why did Les Hinton resign? tradition could continue and all the people who are Rupert Murdoch: Les Hinton resigned, sadly, last now out of work or are struggling to find a job could Friday, following Rebekah Brooks’s resignation, still be in work? saying, “I was in charge of the company during this Rupert Murdoch: I regret very much the fate of period that we are under criticism for, and I feel I people who will not be able to find work. The two must step down.” decisions were absolutely and totally unrelated.

Q307 Philip Davies: Were either Rebekah Brooks or Q314 Philip Davies: So when you came into the UK Les Hinton asked to leave, or did they ask to leave? and said that your priority was Rebekah Brooks, what Rupert Murdoch: They both asked to leave. did you mean? cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 30 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

Rupert Murdoch: I am not sure I did say that; I was Q319 Paul Farrelly: Can you understand that people quoted as saying that. I walked outside my flat and might ask why a company might wish to pay the legal had about 20 microphones stuck at my mouth, so I’m fees of a convicted felon, who has been intimately not sure what I said. involved in the destruction of your reputation, if it were not to buy his co-operation and silence? Q315 Philip Davies: You were misquoted, so to James Murdoch: No, it is not. I can understand that, speak. and that is exactly why I asked the question—when Rupert Murdoch: I am not saying that. I just don’t the allegations came out, I said, “How can we? Are remember. we doing this? Is this what the company is doing?” James Murdoch: Mr Davies, it is important to On legal advice—again, I do not want to be legalistic; remember that the closure of a newspaper with a I am not a lawyer, but these are serious litigations and history of 160-some odd years is a grave and serious it is important for all of the evidence from all of the matter of regret for us and for the company. But much defendants to get to court at the right time. The strong more serious than that is the violation of privacy, and advice was that, from time to time, it is important, and the hurt that certain individuals at News of the World customary even, to pay a co-defendant’s legal fees. I caused to the victims of illegal voicemail interceptions have to rest on counsel’s advice on some of these and their families. I can tell you that I advocated at serious litigation matters. the time that this was the step that we should take. This was a paper and a title that had fundamentally Q320 Paul Farrelly: Is the organisation still violated the trust of its readers. It was a matter of great contributing to Glenn Mulcaire’s legal fees? regret and real gravity, but under the circumstances James Murdoch: As I said earlier, Mr Farrelly, I do and with the bad things that were done at News of the not know the precise status of that now, but I do know World some years ago, it was the right choice for the that I asked for the company to find a way for those paper to cease publication. things to cease with respect to these things. It is important to note, and I want to be clear with the Committee on this, that the company is doing Q321 Paul Farrelly: Will you let us know? everything it can to make sure that we find re- employment, wherever we can, for journalists and James Murdoch: I am happy to follow up with the staff at the News of the World who had nothing to Committee on the status of those legal fees. do with any of these issues and who are completely blameless in any of these things. Many have done Q322 Paul Farrelly: This is a serious question, Mr tremendous work journalistically, professionally and Murdoch senior. Is it not time for the organisation to commercially for the business. The company is being say, “Enough is enough”? This man allegedly hacked as generous as we can under the circumstances, it is the phone of the murdered schoolgirl, Milly Dowler. being as thoughtful and compassionate as we can for Is it not time for your organisation to say, “Do your them and their families to get through this, but it is a worst. You behaved disgracefully. We are not going to very regrettable situation, and we did not take it pay any more of your costs.”? lightly in any way. Rupert Murdoch: I would like to do that. I do not Chair: You have made that clear. Members, I am know the status of what we are doing, or indeed what going to ask for brevity. I don’t want to cut anyone his contract was and whether it still has any force. off, but we have some way to go. Q323 Paul Farrelly: If the organisation is still Q316 Paul Farrelly: I want to return to how John paying his fees, will you give the instruction now that opened the session and the evidence that was given to that should stop? us previously. Mr Davies omitted to ask one key Rupert Murdoch: Provided that it is not in breach of question. Mr James Murdoch, through all the civil a legal contract, yes. actions, have you—not you personally, but your organisation—been paying Glenn Mulcaire’s legal Q324 Paul Farrelly: I want to return to the question fees? of making statements to Parliament without being in James Murdoch: As I said earlier in answer to a full possession of the facts. During our 2009 inquiry, question from Mr Davies—[Interruption.] all the witnesses who came to us testified to being intimately involved in, in particular, a huge trawl of Q317 Paul Farrelly: Let’s keep it short. Yes or no? e-mails after the arrival of Colin Myler. It seems that, It is a yes or no question. over the past few days, they have been rather quick James Murdoch: I do not know the current status of to try to distance themselves from that investigation, this. You asked the question have I paid all Mr according to some of the quotes in the newspapers. It Mulcaire’s legal fees. was stated to us clearly that that trawl, that investigation uncovered no new evidence: it was still Q318 Paul Farrelly: Have you been paying legal a lone rogue reporter. Mr James Murdoch, can you fees for Glenn Mulcaire during the course of the tell us about the file of e-mails, the so-called internal civil actions? report that was discovered, allegedly—we read in the James Murdoch: I don’t know the details of the civil pages of The Sunday Times, a great newspaper—in actions, but I do know that certain legal fees were paid the offices of Harbottle & Lewis. Can you tell us a bit for Mr Mulcaire by the company. I was as surprised more about when that was discovered, when you first and shocked to learn that as you are. came to know about it and what is in it? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 31

19 July 2011 Rupert Murdoch and James Murdoch

James Murdoch: I first came to know about that James Murdoch: The people managing the work on earlier this year, in 2011. behalf of News International from early this year have been led by Mr Lewis. That is correct. Q325 Paul Farrelly: Can you be more precise about the time? You have a great grasp of knowledge. Q331 Paul Farrelly: What is in that file? It has been James Murdoch: It would have been in the spring reported as a collection of 300 e-mails, or a loose-leaf time. I do not remember the exact date when I was binder—what is it? told about it. James Murdoch: As you know, there is an ongoing criminal investigation. I think it would be wrong of Q326 Paul Farrelly: Before April? me to talk about specific information or evidence that James Murdoch: It would have been April or May. I is subject to and could make problems for the police can try to find meeting schedules and what not and in doing the important work that they are currently come back, but it was a few months ago. I can speak doing. a little bit to it, but as to the activity that was carried out in 2007, again I piece this back together from the Q332 Paul Farrelly: I don’t think it is going to cause past—it was before any of my involvement. At the problems for the police if you tell us whether it is A4, company at the time that I think you are referring to, foolscap, e-mails, in a ring binder, loose-leaf—what there was an unfair dismissal case that was brought is it? by Mr Goodman and that was the basis for James Murdoch: It is paper. I think there are some e- conducting—it was right about the time of the mails, some documents— convictions. It was all in that period of time. Q333 Paul Farrelly: Have you read it all? Q327 Paul Farrelly: That was what we inferred, as James Murdoch: I have not read it all, but some e- stated in our report last year, despite the assurances as mails, some things in it have been shown to me. to the other motivations. James Murdoch: It was right at the time Mr Myler Q334 Paul Farrelly: What was your reaction? Was had come in. Codes of standard had been talked there an expletive that you used when you first read about—this was before my time—all of the 2007 some of these e-mails? business was there, and an investigation was done, or James Murdoch: I try not to utter expletives. a fact-finding piece around this. Outside counsel was brought in—it was Harbottle & Lewis—by the Q335 Paul Farrelly: But when you do— company at the time. I understand that the legal occasionally, when you do. executives—I think it was Mr Chapman at the time, James Murdoch: My reaction immediately was to along with Mr Myler, who testified to this effect— agree with the recommendation of the executives involved, which was that this was something that we took a report. From then, the opinion was clear that should bring to the attention of the police with respect as to their review, there was no additional illegality in to their ongoing investigations, and perhaps new ones. respect of phone hacking in that file. As to their review, that opinion was clear. The company really Q336 Paul Farrelly: rested on a number of things from then on. I certainly When was it given to the police? It has been reported as 20 June. know that in 2009, when additional allegations came James Murdoch: I believe it was in June, after we in the summer, the company really rested on a handful informed the board of the company as well. of things. Q337 Paul Farrelly: That date is accurate. Q328 Paul Farrelly: We know this. I want to move James Murdoch: I believe it was June, yes. right up to date to what was discovered in the offices of Harbottle & Lewis and when it was discovered. Q338 Paul Farrelly: The Sunday Times—a great James Murdoch: In 2010, after the civil litigations newspaper—painted a picture on 10 July, from this had put a spotlight on or unearthed, if you will, to file, that a cabal of six so-called gatekeepers on the us, to the company, additional new evidence and new news desk dealt with Glenn Mulcaire. It named them information that had not been there before and the as Alex Marunchak, Greg Miskiw, Clive Goodman, police investigation started off, one of the things that Neville Thurlbeck, James Weatherup and Ian was gone back and looked at—I suppose it was in the Edmondson. Do you recognise that summary from the spring, by senior people at News International—was file that you have had a look at? that file. It was re-looked at; it was opened up and James Murdoch: Mr Farrelly, respectfully, I would looked at, and it was very rapidly brought to our ask you to please understand that detailed questions attention that this was something that would be— about any of the evidence or information that we have passed to the police in relation to their ongoing Q329 Paul Farrelly: When did this happen? When criminal inquiries are difficult for me to answer. I was this looked at? would appreciate it if we could allow the police to James Murdoch: Again, this is between May and— undergo the important work that they are undergoing. April, May and June in that period. There is a process that is important. We are co- operating with it. We are providing information on a Q330 Paul Farrelly: Who looked at it first? It was regular basis—the company is providing information reputedly Will Lewis. on a regular basis, as needed by the police. I really cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 32 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch believe that we have to allow the police to conduct and I cannot tell you the circumstances and the their investigation and hold the people who did wrong conversations that people had with Harbottle & Lewis to account in this area. or the terms of reference of that, but it had been Rupert Murdoch: If we were to comment on anything viewed after the fact that it had been a thorough look now, it could result in guilty people— at information, and based on that review, that opinion was issued. Q339 Paul Farrelly: I fully understand that. I will respect that. Clearly, the descriptions in the press— Q342 Paul Farrelly: Neville Thurlbeck is one they are on the record, including in The Sunday omission that immediately jumps out. Times—mention that the e-mails implicate Andy James Murdoch: Again, in hindsight we can all say, Coulson in knowledge of payments to the police, but “If somebody had looked at this,” or, “If somebody I would not expect you to comment on that. had known something that was not known at the I will turn to the Harbottle & Lewis letter that was time,” but I cannot comment on why the terms and provided to us by Rebekah Brooks as evidence during the scope were what they were. our inquiry that this trawl of e-mails had produced nothing more. That letter from Lawrence Abramson, Q343 Paul Farrelly: The proceedings by Goodman then senior partner of Harbottle & Lewis, mentioned and Mulcaire for unfair dismissal, notwithstanding that e-mails of Andy Coulson, Stuart Kuttner, Ian their criminal conviction, clearly never saw the light Edmondson, Clive Goodman, Neil Wallis and Jules of day because they were settled beforehand, so we Stenson had been reviewed and that nothing had come do not know what they were planning to serve on you. to light that contradicted that it had been a lone, rogue Do you know what sorts of allegations they were reporter working with Glenn Mulcaire. Knowing what making? We can only imagine that they were saying you know now from the other evidence you have that such-and-such a person knew and such-and-such discovered, have you looked back in detail at the basis a person knew. Have you satisfied yourself about what on which Harbottle & Lewis wrote that letter and why allegations they were making? they gave such a clean bill of health? James Murdoch: Many of the individuals you James Murdoch: All I can say is that, having looked mentioned are currently subject to criminal at some of the things in that and the advice of the investigation and some of them have been arrested senior people inside the company who looked at that recently. These are important matters for the police. It more recently, it was the company’s view, self- is important that I do not stray into or that I am not evidently, that it was right to bring this to the attention lead into commenting specifically about individuals or of the police and go forward. That opinion from the allegations made in the past. counsel was something that the company rested on. It was a clear opinion about a review that was done Q344 Paul Farrelly: The question was whether you around those records, and in conjunction with the had satisfied yourself about what Clive Goodman and police continuing to say that there was no new Glenn Mulcaire were alleging in the discussions and evidence and that there was no reason to open a new negotiations that led up to the settlements, if they investigation, and in conjunction with the PCC saying brought industrial tribunal proceedings against you. that it had done its review and its inquiry and that That was the question: not about what they were there was nothing new there, it was viewed that it alleging, but whether you have satisfied yourself about was a settled matter. It was only when new evidence what they were alleging. emerged that those three things began to be James Murdoch: As to Glenn Mulcaire, I am not undermined. aware of allegations at the time and other things. As to Goodman—again, this was in 2007, before I was Q340 Paul Farrelly: In a follow-up to the session, there—it is my understanding that that is what could you provide us with the instructions that were Harbottle & Lewis were helping to deal with, and that given to Harbottle & Lewis, as well as the extent of that opinion did satisfy the company at the time and the information that was given to them out of the we, the company, rested on that opinion for a period totality of information that was available? That of time. information would help us conclude what really happened. Q345 Paul Farrelly: I take it you would like to take James Murdoch: If additional detail is required the opportunity to withdraw this letter as an accurate around those legal instructions, we will consult and portrayal of what really went on at the News of the come back to the Chairman with a way to satisfy you World. with the information that you’d like to have. James Murdoch: Is that the letter of—

Q341 Paul Farrelly: Clearly, we spotted in our Q346 Paul Farrelly: It is the Harbottle & Lewis report that this view coincided not so much with Mr letter. Myler’s arrival, but with the timing of the industrial James Murdoch: I am glad you have asked about it, tribunal actions that Clive Goodman and Glenn actually, because it is a key bit of outside legal advice Mulcaire were planning. That begged the question of from senior counsel that was provided to the company, why these six individuals were named in there. Do and the company rested on it. I think it goes some you know why it was limited to these six individuals? distance in explaining why it has taken a long time James Murdoch: Why it was limited to those six for new information to come out. I would say, Mr individuals, I don’t know. I was not there at the time Farrelly, it was one of the bases for, if you will, the cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 33

19 July 2011 Rupert Murdoch and James Murdoch sort of pushback that the company made against new Q353 Paul Farrelly: Okay. Referring just very allegations. It was one of the pillars of the quickly to the witnesses who came to us, again in environment around the place that led the company to respect of the file that you discovered this year, believe that all of these things were a matter of the regarding Les Hinton, when did he first become aware past and that new allegations could be denied. of this collection of e-mails and paper, as you called it, that clearly rendered the evidence given by him to Q347 Paul Farrelly: Again, the question was us misleading? When did he know? different, Mr Murdoch. I asked you whether this letter, James Murdoch: I cannot speak to Mr Hinton’s which is still lying on the record as evidence given to knowledge. Are you referring to 2011 or 2007? this Committee, has not, for whatever reason—no doubt, you will say it is to do with the criminal Q354 Paul Farrelly: The document that was left— investigation—been withdrawn. Would you like to James Murdoch: In 2007. I cannot speak to his withdraw it? knowledge, but I know that Mr Hinton was aware of James Murdoch: Respectfully, I am not aware of the the work that had been carried out, and I think he has legal technicalities of withdrawing that or of testified to this Committee to that effect. submitting it on the record. I think it is a relevant document in trying to understand how News Q355 Paul Farrelly: Mr Murdoch senior, have you International was thinking at the time. asked Les Hinton whether he knew about this Paul Farrelly: We will ask you the question when— document? James Murdoch: I would say no, but I can come back Rupert Murdoch: No. after taking counsel and seeing if it is a better idea to do it. Q356 Paul Farrelly: Why not? James Murdoch: Which document are you talking Q348 Paul Farrelly: I want to wind up, but I have a about, Mr Farrelly? few more questions. As you have described it, and as Colin Myler described it, the e-mail investigation was Q357 Paul Farrelly: The document that you carried out by the IT department and it was overseen discovered in April or May in the offices of by the director of legal affairs, Jon Chapman, and the Harbottle & Lewis. human resources director, Daniel Cloke. Is that your James Murdoch: I have not asked him, but I also understanding? think—as he has testified—that he, as Chief Executive James Murdoch: Pardon me, what was the question? of News International at the time, would not have Is it my understanding that—? been expected necessarily to read x-hundreds or thousands of emails, but would rely on the opinion of Q349 Paul Farrelly: The investigation itself, which counsel about what they had done. you and Colin Myler have described to us, was carried out by the IT department and overseen by the director of legal affairs, Jon Chapman, and the human Q358 Paul Farrelly: Was Colin Myler aware of that resources—personnel—director, Daniel Cloke. Is that evidence lying with Harbottle & Lewis? an accurate description? James Murdoch: I cannot speak to other individuals’ James Murdoch: That is my understanding. knowledge in the past. I simply don’t know.

Q350 Paul Farrelly: Can you tell us why Jon Q359 Paul Farrelly: Would Tom Crone? Chapman has left the organisation? James Murdoch: I simply cannot speak for them. James Murdoch: Jon Chapman and the organisation decided it was in mutual interest to part ways. I think Q360 Paul Farrelly: And Stuart Kuttner? one of the pieces here as well is for the company to James Murdoch: The same goes, Mr Farrelly. I move forward—I think this is important—and even if simply can’t speak for them. there is no evidence of wrongdoing or anything like that, and no evidence of impropriety, many individuals Q361 Paul Farrelly: And Rebekah Brooks? have chosen that it is time to part ways. I was not James Murdoch: I simply cannot speak for their involved with the discussions with Mr Chapman. knowledge. I know that Mrs Brooks, when she was Chief Executive, was one of the people who brought Q351 Paul Farrelly: You have no evidence of any it to my attention as a new thing. complicity by Mr Chapman to cover up the existence of the file that was belatedly discovered. Q362 Paul Farrelly: I am just going to wrap up this James Murdoch: I do not have that. questioning. We are left now in a situation where you, having looked into this affair and co-operated with the Q352 Paul Farrelly: Can you tell us the employment police, cannot tell us who lodged the file with status of Daniel Cloke? Harbottle & Lewis, who was aware of its contents, James Murdoch: Mr Cloke left the company some and who kept you from being in full possession of the time ago and I don’t know what his employment is. facts—evidence that is clearly now being submitted to He is not in the business. He was the director of the police, but that clearly contradicts all the human resources for a number of years—not that assurances that we were given, not in one but two many, actually; I am not sure—but left over a year Select Committee inquiries. I hope you would agree ago. I can follow up that status with you. that that, frankly, is unsatisfactory. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 34 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

James Murdoch: Mr Farrelly, I can say that the Q366 Paul Farrelly: Mr Murdoch, you either company at the time engaged an outside law firm to haven’t grasped the point or you are not reading your review a number of these e-mails. They were provided own newspapers in the form of The Sunday Times. My to the law firm, as I understand it. They were reviewed final question: given the picture that has been painted and an opinion was issued to the company based on of individuals on the news desk acting as gatekeepers that review by a respected law firm. The opinion was for a private investigator, do you think it is possible clear and the company rested on that. I cannot speak at all that editors of your newspaper would not have to individuals’ knowledge at different times, because known about these activities? Do you think it is I don’t know. What I do know is that the company remotely possible? rested on that, rested on the fact that the police told Rupert Murdoch: I can’t say that, because of the us that there was no new evidence and no reason for police inquiries and, I presume, coming judicial a new investigation, and rested on the opinion of the proceedings. That is all I can tell you, except it was PCC that there was no new information and no reason my understanding—I had better not say it, but it was to carry it further. It was not until new evidence my understanding—that Mr Myler was appointed emerged from the civil litigations that were going on there by Mr Hinton to find out what the hell was going that the company immediately went to the police, on, and that he commissioned that Harbottle & Lewis restarted this, and the company has done the right inquiry. That is my understanding of it; I cannot swear thing in that respect. to the accuracy of it. Paul Farrelly: Thank you. Q363 Paul Farrelly: That was evidence lying in your Chair: I appeal for brevity, because we have been lawyers’ possession all the time. It is not simply going for two hours now. evidence that emerged through litigation. James Murdoch: The Harbottle report was re-looked Q367 Alan Keen: I will be as brief as I can. To at in conjunction with the new and restarted criminal James Murdoch, it is a mystery to us how Sunday investigation. These are serious matters and we take newspapers are run. I am very familiar with the them seriously. When it was looked at and it was engineering industry. Could you try to paint a picture deemed that these things would be of interest to the of a week’s operation at the News of the World? At police, we immediately brought in additional what period were you closely involved in controlling counsel—Lord Macdonald, whom you mentioned the News of the World? earlier, Mr Farrelly—to help advise the company on James Murdoch: My involvement in the business is the appropriate way forward in terms of full overseeing the region of Europe and Asia. Just to be transparency and co-operation with police clear, in 2008, starting in the middle of December investigations. The company took those matters 2007, I was chief executive for Europe and Asia, our seriously. European television business and our Asian television business as well as our UK publishing business, one Q364 Paul Farrelly: I have two questions for Mr title of which is the News of the World, so I cannot Murdoch senior. I have just painted a situation where say that I was ever intimately involved with the we are now here not knowing who at News workings of the News of the World. International and the News of the World was complicit in keeping that file containing however many bits of Q368 Alan Keen: What results would come to you paper. We are nowhere nearer knowing who knew within seven days of publication? Presumably, the what and when about that file—evidence that clearly sales and the advertising income, and you would judge not only contradicts statements given to the Select the newspaper on its profitability week by week. I Committee, but evidence that it would appear led your know that Rupert Murdoch is far removed from that, closest and trusted aide over many years, Les Hinton, but when you were in close proximity— to give misleading evidence. Do you find that a Rupert Murdoch: I certainly get that from all over the satisfactory state of affairs? world, every week. Rupert Murdoch: No, I do not. James Murdoch: These are enterprises; and sales, advertising figures and personnel numbers are Q365 Paul Farrelly: What do you think the company relevant. Managers look at those things. should do about it in a follow-up to this Select Committee inquiry? Q369 Alan Keen: We understand from questions that Rupert Murdoch: Mr Chapman, who was in charge have been answered already that when it comes to of this, has left us. He had that report for a number of legal issues—settlement of claims—that is taken years. It wasn’t until Mr Lewis looked at it carefully outside the day-to-day management of the newspaper. that we immediately said, “We must get legal advice, That is right, isn’t it? see how we go to the police with this and how we James Murdoch: Each group of companies or titles should present it,” etcetera. will have their own legal executives who deal with James Murdoch: My understanding was that the file things such as libel, or other things. They will try to was with the lawyers—it was with the law firm—and check that something does not go into the paper that there would have been no reason to go and re-look at is going to be wrong; sometimes that is gotten right, it. The opinion of it was very clear based on the and sometimes it is wrong. Each has its own legal review that was done. As soon as it was in a new resource and the managing editor’s office is very criminal investigation, it was deemed appropriate to involved in those things as well as the counsel’s office look at it and that was immediately done. in the newspapers. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 35

19 July 2011 Rupert Murdoch and James Murdoch

Rupert Murdoch: To give you an example of my knowledge of these events—to my understanding, son’s typical week, it could well have been a day in when new information came to light—the company Munich, or a day in Sky Italia where he had a acted on it. The company acted on it in a right and particularly difficult situation with a particularly tricky proper way, as best the company could, but it is competitor, if I may say so. He had a lot on his plate. difficult to say that the company should have been told something if it is not known that a thing was a Q370 Alan Keen: I will leave some of the more known fact to be told. mundane issues. It became clear from the first couple I have been asked today about what other people knew of questions to you, Rupert Murdoch, that you have when, and I can only rest on what they have told me been kept in the dark quite a bit on some of these real or what they have told you in previous hearings. I serious issues. Is there no— understand completely your frustration about this. You Rupert Murdoch: Nobody has kept me in the dark. I can imagine my own frustration in 2010, when the may have been lax in not asking more, but it was such civil litigation came to a point where these things a tiny part of our business. came out, to suddenly realise that the pushback or the denial of the veracity of allegations that had been Q371 Alan Keen: I understand that, but obviously made earlier, particularly in 2009, had been too strong. you have come to this point—you would not be here That is a matter of real regret, because all the facts if it was not extremely serious. were not known when that was done. That is a matter Rupert Murdoch: It has become extremely serious. of deep regret, and it is why we are here with you today, trying to be as transparent as we possibly can. Q372 Alan Keen: Are there no written rules that certain things have to be reported straight to the very Q374 Alan Keen: This is, I suppose, really a top. It sounds as if there are no such rules; it is left to rhetorical question—I am sure your answer will be the trust— what I expect—but it is admirable that you have had Rupert Murdoch: Anything that is seen as a crisis such long-term employees who, I am sure, have comes to me. become very close friends over the years. Mr Rupert James Murdoch: Mr Keen, may I? It is important to explained that with his determination to look after know that there is a difference between being kept in Rebekah Brooks, so it is admirable. There was a lot the dark, and a company that is a large company, the of criticism in the financial press at the time—this is management of which is delegated to managers of not a criticism, James, of your ability—that it was different companies within the group, and so on and nepotism to appoint you, in retrospect. That is why I so forth. To suggest that my father or myself were say that it is a rhetorical question and I know what the kept in the dark is a different thing from saying that answer will be. Do you regret, Mr Rupert, that it has the management and the running of these businesses become really a family organisation for all its— is often delegated either to the chief executive of a Rupert Murdoch: Let me just go back over this. different company, an editor, a managing editor or an When the job became available of head of BSkyB, editorial floor, and decision making has to be there. several people applied, including my son. He passed There are thresholds of materiality, if you will, through all sorts of not just board committees but whereby things have to move upstream, so something outside experts, etc. who made the conclusion that he has to be brought to the attention. From a financial was the right person. The press all had a field day. threshold point of view, we addressed that earlier with When he left to go to—when I promoted him to take respect to the out-of-court settlement with Mr Taylor. charge of much wider responsibilities, we had calls But from the standpoint of things like alleged from all the big shareholders, or many big criminality, violations of our own code of conduct and shareholders, saying that it was a terrible thing to take things like that, those are things that the company’s him away because he had done such a great job. internal audit function—the audit committee, as well as the senior executives of the committee—expect to Q375 Alan Keen: I was not disputing James’s ability. be made aware of, as they were in the case of the But the fact that he did not know about so many of criminal prosecutions in 2007. these criminal activities that went on, do you not think that was made more likely because of the sort of Q373 Alan Keen: Whatever efforts were made and family history? I do not just mean James here. I am whatever rules there were, News International has talking about people who were not direct members of reached a crisis point, otherwise you would not be your family but became friends. It is admirable, but here today and the News of the World would not have you don’t think that that has had an effect. been closed. Who really is responsible? Who do you Rupert Murdoch: I don’t think— hold responsible for that failure? You are saying that people should have told you. No, you are really saying Q376 Alan Keen: You don’t think that that is a factor to us now not that they should have told you, but that in the mismanagement, because it has been you let them get on and manage it, but they should mismanaged. have told you, shouldn’t they? What has gone wrong? Rupert Murdoch: I don’t think Mr Hinton misled me James Murdoch: Mr Keen, that is a good question. for a minute, but you must find out for yourself and But that is not to say that we are saying—and I am make your own conclusion. Other people who gave not saying—that somebody should have told me. To the same evidence may well have been misleading my knowledge, certain things were not known. When you but he certainly did not know of anything that new information came to light with respect to my happened. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rupert Murdoch and James Murdoch

Q377 Damian Collins: Before I address my are very clear: breaking the law is a very, very serious questions to the hearing, I just want to make a short matter. People who are lawbreakers should be held to declaration of my own, which is something that I account. In the matter of something like phone previously declared to the Committee. My wife is an hacking or, topically, payments to police and things employee of a company called Edelman, which has like that, we just don’t think they should have any been engaged by News Corporation. She has never place in our business. worked on this account and has no access to information relating to it. I wanted to share that with Q381 Damian Collins: So, James Murdoch, you you before asking any questions. would be very clear that within your company and Mr Rupert Murdoch, you said earlier that we live in a within your organisation, senior people should have transparent society. Do you think it is right that people been very aware that phone hacking was not only in public life can expect total privacy in a society illegal, but totally unacceptable. like that? James Murdoch: I think, particularly in light of the Rupert Murdoch: No. successful prosecutions and convictions of the individuals involved in 2007, it could not be taken Q378 Damian Collins: Where do you think the more seriously. If new evidence emerges, as it has in limits of that lie? I noticed that in the Watergate cases, the company acts on it very, very quickly. investigation, for example, that personal banking and phone records were used, belonging to one of the Q382 Damian Collins: To what extent do you think witnesses, that were relevant to that investigation. To that you have a cultural problem? Rupert Murdoch, if what extent do you think the use of confidential, I may? Do you think you have a cultural problem private information, even phone records and phone within your organisation in that people only tell you hacking, is permissible in the pursuit of a news story? things that they think you want to hear and that even Rupert Murdoch: I think phone hacking is something people who have been your trusted advisers and quite different. But I do believe that investigative worked with you for years simply withhold journalism, particularly competitive, does lead to a information, because they want to curry favour? more transparent and open society, inconvenient Rupert Murdoch: No, not my trusted advisers though that may be to many people. And I think we certainly. You should hear the conversations in my are a better society because of it. I think we are office. They are coming in all the time and arguing. probably a more open society than even the United Most people say I’ve got crazy ideas and fight States. against me.

Q379 Damian Collins: Where do you draw the line Q383 Damian Collins: Forgive me, I am asking with that? Where are the boundaries of legitimate because a lot of your trusted advisers have left your investigation? What is that about? company. Rupert Murdoch: There was a great—well if we’d Rupert Murdoch: We are a very big company. I am done it there would have been a terrible outcry. I’m sure there may be people who try to please me. That sorry to say this and I don’t know your circumstances could be human nature, and it’s up to me to see or those of anyone else around here, but when the through that. Daily Telegraph bought a series of stolen documents of all the expenses of MPs it caused a huge outcry, Q384 Damian Collins: To what extent do you think one which I feel has not been properly addressed. I there is pressure on editors and senior managers to get think there is an answer to it and we ought to look at scoops, to outdo each other and to win favour within the most open and clear society in the world, which the organisation that leads them to take risks and, is Singapore, where every Minister gets at least $1 clearly in the case of News of the World, push million a year, and the Prime Minister a lot more, and boundaries that broke the law? there is no temptation and it is the cleanest society Rupert Murdoch: Can you ask that again? I am sorry. you would find anywhere. Q385 Damian Collins: Do you think there was a Q380 Damian Collins: Good luck in selling that pressure on editors of your newspapers that leads idea. them to take risks and break boundaries? In the News Rupert Murdoch: I mean that seriously. It is of the World, there was illegal action and wrongdoing, ridiculous that people were reduced to doing what and people broke the law in order to get scoops. they did. Rupert Murdoch: No, I think that’s totally wrong. James Murdoch: May I help, Mr Collins? It is a very There is no excuse for breaking the law at any time. good question and I think it is a really important There is an excuse, if I may say so, and I think question. I understand it is going to be one of the rightful, for all newspapers when they wish to, to subjects of the judicial inquiry which the Prime campaign for a change in the law, but never to break Minister announced last week, which as a company it. we immediately welcomed and look forward to. This I just want to say that I was brought up by a father question of public interest and the question of what who was not rich, but who was a great journalist, and is acceptable and what isn’t in terms of investigative he, just before he died, bought a small paper, techniques is an important one. But let me be very specifically in his will saying that he was giving me clear, the codes of conduct of News Corporation the chance to do good. I remember what he did and globally, for our employees, journalists or otherwise, what he was most proud of, and for which he was cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 37

19 July 2011 Rupert Murdoch and James Murdoch hated in this country by many people for many, many any place in our organisation, and they are things that years, was exposing the scandal at Gallipoli, which I we are unreservedly and sincerely sorry for. We have remain very, very proud of. not seen the end of this in terms of the ongoing police investigations. As you know, Mr Collins, a number of Q386 Damian Collins: I think that all students of people have been arrested. We don’t know what is history are well aware of that. going to happen in the future around those things, but Rupert Murdoch: That just addresses the question of given the breach of trust and given the allegations that it being a family business. I would love to see my were emerging at a rapid pace, it was clear to me, sons and daughters follow if they are interested. and the future will bear this out—without any specific knowledge of the future, obviously—that it was the Q387 Damian Collins: If I may, Rupert Murdoch, right thing for the paper to cease publication. you said earlier on that you have had frequent meetings with Prime Ministers during your career. Q390 Damian Collins: Your father said in his Wall Rupert Murdoch: I wish they would leave me alone. Street Journal interview that you, Mr James Murdoch, Damian Collins: In the period after the arrest of Clive “acted as fast as he could, the moment he could.” Goodman—you said earlier that you were aware of Does that suggest that you were held back at any the situation when he was sent to prison and you were point? Have you been frustrated in this process over aware of the case at that stage—where there were the past few weeks? numerous reports, investigations and hearings of this James Murdoch: As I said to the Committee earlier— Committee, about which we have heard a lot today, I cannot remember to which Member; my apologies— did any senior politicians that you were in contact this has been a frustrating process. My frustration— with during that period of time raise this as an issue my real anger—to learn that new evidence was with you, raise concerns about phone hacking or— emerging as late as the end of 2010 was real, and is Rupert Murdoch: Absolutely never. The politician I real. What I have done, and what the company has met most in those days was Mr Brown when he was tried to do, is take new information, adjust our course, Chancellor of the Exchequer. His wife and my wife behave with propriety, behave quickly, behave in a struck up quite a friendship, and our children played humble way with respect to what has happened and together on many occasions. I am very sorry that I am with respect to trying to put it right. That is what we no longer—I thought he had great values, which I are trying to do. shared with him, and I am sorry that we have come It was enormously frustrating. That does not mean that apart. I hope one day that we’ll be able to put it I have any knowledge of anyone intentionally together again. misleading me and the company. I don’t, which makes it doubly frustrating. We are where we are. New Q388 Damian Collins: One final question, you said information emerged through the legitimate due in your interview that you gave to The Wall Street process of a civil trial. The company acted on it as Journal that you thought that your fellow executives fast as could possibly be expected. Actually, still new at News Corporation had handled this crisis very well information, or new allegations are emerging, and we with just a few minor mistakes. Do you stand by that are trying to deal with them in as right a way as we statement or do you believe the level of mistakes was can and in the best way possible. far greater than that? Rupert Murdoch: They seem very big now. What we Q391 Louise Mensch: The good news is that I am did was terrible, but you’re talking about handling the your last questioner. I would like to ask you a few crisis—I am sorry, my son has just told me not to very specific questions. gesticulate. I don’t believe that either he or Mr Hinton Starting with you, Mr James Murdoch, I know we made any great mistakes. Were mistakes made within have been over at length the differences in the size of the organisation? Absolutely. Were people that I the Taylor settlement and the other settlements of far trusted or that they trusted badly betrayed? Yes. less monetary value. Can you tell me whether the Taylor settlement included a confidentiality clause and Q389 Damian Collins: Finally, to James Murdoch, it whether the other settlement did not? [Interruption.] was reported that when Rebekah Brooks spoke to staff Chair: The sitting is suspended for 10 minutes. to announce the closure of News of the World, she said On resuming— that in a year’s time they might understand why the Chair: I understand that we are now broadcasting paper had to close. I won’t ask you to comment on proceedings again. However, we are going to continue what she thought in saying that, but what is the in private, with the press and others able to watch in significance of the period of time of a year? Do you the overflow rooms outside. May I at this stage say expect there to be significantly more revelations that, that both of you have been very co-operative to this with hindsight, made the closure of News of the Committee and we have appreciated that. You have World inevitable? answered questions for a long time and I would like James Murdoch: I can’t speak to what she was to apologise on behalf of the Committee and specifically referring to. She made those comments Parliament for the way you have been treated. I will herself when she was saying goodbye, sadly, to the make a report to Mr Speaker, and I assure you that staff. I can say that what happened at the News of the we will take action to try and find out how that was World—the events leading up to the 2007 affairs and able to occur. But it is extremely good of you to agree prosecutions and what we know about those things to continue the session and to allow my colleague, now—were bad. They are things that should not have Louise Mensch, to finish her questions. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 38 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

Rupert Murdoch: Thank you very much, Mr you become aware that the phone of the murder Chairman. victim, Milly Dowler, had been hacked? James Murdoch: Thank you, Mr Chairman. James Murdoch: The terrible instance of voicemail Louise Mensch: If I may start by saying, Messrs interception around the Milly Dowler case only came Murdoch, that I said on Sky News when discussing to my attention when it was reported in the press a your initial appearance that it would show guts and few weeks ago and it was— leadership for you to show up today and answer questions. I must say that it shows immense guts, Mr Q395 Louise Mensch: So only when The Guardian Rupert Murdoch, for you to continue answering reported it. questions now under the circumstances and after such James Murdoch: I can tell you, it was a total shock. a lengthy evidence session. I thank you for it. That was the first I had heard of it and became aware Rupert Murdoch: Thank you. of it.

Q392 Louise Mensch: My questions will be just as Q396 Louise Mensch: Is that the same for hacking tough as ever they would have been had that of other victims of crime? In other words, have you unfortunate incident not occurred. Mr James been made aware prior to the Milly Dowler story Murdoch, may I just take you back briefly to before breaking that your reporters hacked into the phones of we were so rudely interrupted and the question of the any other crime victims? disparity between the settlements? Could you please James Murdoch: No, I had not been made aware of tell me whether or not the Taylor settlement to your that. knowledge involved a confidentiality clause that was not present in the settlement for the lesser amount of Q397 Louise Mensch: money? Okay. Just for the record— though you answered my colleague, Jim Sheridan, James Murdoch: I can tell you that the Taylor settlement was a confidential settlement. As to other earlier, you will be aware that it is of lively interest to settlements post that and more recent settlements, I regulators in the United States—the actor Jude Law is believe that some have been confidential and some apparently alleging that his phone was hacked on US not. I don’t believe any have been confidential soil. Given that allegation, are you absolutely settlements, but I can certainly follow up as to confident that no employee or contractor of News whether or not there have been any. It is customary in Corp or any of its properties hacked the phones of 9/ an out-of-court settlement of this nature for both 11 victims or their families? parties to agree. There is nothing unusual about an Rupert Murdoch: We have no evidence of that at all. out-of-court settlement being made confidential and being agreed to be confidential, but it was—with Q398 Louise Mensch: Have any credible respect to the basis of the question, which I think was allegations—? I see you hesitating, Mr James about the disparity in the amount of money involved, Murdoch. there was nothing in the Taylor settlement, with James Murdoch: No, I was just going to say that respect to confidentiality, that spoke to the amount of those are incredibly serious allegations and they have money. The amount of money was derived, as I come to light very recently. We do not know the testified earlier, from a judgment made about what the veracity of those allegations and are trying to likely damages would be and what the likely expenses understand precisely what they are, and any and litigation costs would have been had the company investigations—I remember well, as all of us do, the taken the litigation to its end and lost. September 11 attacks. I was in the far east, living there at the time, and it is just appalling to think that anyone Q393 Louise Mensch: Yes, you have been very clear associated with one of our papers would have done about that. That is your explanation for the size of the something like that. I am aware of no evidence about settlement. I merely put it to you that an inference that. I am well aware of the allegations and will could be drawn if the larger settlements contained eagerly co-operate with any investigations or try to confidentiality clauses and the smaller settlements did find out what went on at that time. These are very, not. Despite what you say about it being a pragmatic very new allegations—just a few days old, I think— decision based on the costs to the company of not but they are very serious and that sort of activity settling, an inference could be drawn that silence was would have absolutely no place; it would be appalling. being bought by the presence of the confidentiality clause in the larger settlements. Q399 Louise Mensch: From the information James Murdoch: And that inference would be false. provided to you so far—I noted that Mr Rupert Murdoch’s answer was emphatic, but your answer, Mr Q394 Louise Mensch: Okay, fair enough. Many James Murdoch, was somewhat more nuanced—have people—I think this is the nub of it—will find it quite you received any information that gives you cause for hard to believe that two executives, who nobody concern that employees of News Corp or contractors would regard as passive, had such little knowledge of of News Corp may have indulged in that kind of widespread illegality at one of your flagship papers. hacking? Can I ask you very specifically—Mr James Murdoch James Murdoch: No. Not at this moment. We have first—when did you become aware that the phones not only seen the allegations that have been made in the merely of celebrities and members of the royal family press—I think it was in The Mirror or something but of victims of crime had been hacked? When did like that. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 39

19 July 2011 Rupert Murdoch and James Murdoch

Q400 Louise Mensch: So no internal documents, any questions at all about phone hacking. As a former records— editor of the Daily Mirror, he said in his book The James Murdoch: We are actively trying to know Insider recently that that “little trick” of entering a exactly what those allegations are and how to “standard four digit code” will allow “anyone” to call understand anything about them. a number and “hear all your messages”. In that book, he boasted that using that “little trick” enabled him to Q401 Louise Mensch: You have seen no internal win scoop of the year on a story about Sven-Goran documents, memos or records or received any verbal Eriksson. That is a former editor of the Daily Mirror reports that any employee of News Corp hacked into being very open about his personal use of phone the phones of 9/11. hacking. Yesterday, in Parliament, Paul Dacre— James Murdoch: No, definitely not. Paul Farrelly: And News of the World.

Q402 Louise Mensch: Fine, thank you. Have you as Q405 Louise Mensch: And indeed he was a former a result of a wider review—clearly, this has been a News of the World executive. He was boasting about shock to your corporate culture—heard from any of a story that happened when he was the editor of the your employees of papers in other countries that Daily Mirror. Yesterday, Paul Dacre of Associated phone hacking, blagging or illegal practices may have Newspapers said to a Committee of Parliament, in my been happening in those territories, for example, in view risibly, that the Daily Mail has never in its your Australian properties or in any territory, indeed, history run a story based on phone hacking or where New Corps owns media properties? Are you blagging in anyway. Yet Operation Motorman, of doing a global review and have you heard of any which I am sure your advisers, Mr James Murdoch, allegations of phone hacking in your other territories? will have made you aware, found that the Daily Mail James Murdoch: I am not aware of any allegations had 50 journalists paying for 902 pieces of in any of those other territories. I haven’t heard of information obtained by the private investigator, Steve those allegations. But I would go back to the code of Whittamore, who had been found to have used ethics and code of conduct that all of our colleagues some—shall we say?—unorthodox methods. You told at News Corporation globally—be they journalist or me earlier, Mr Murdoch, that your advisers in management—are required to have. When they join prepping you to come before the Committee had told the company and are briefed on those things, it is a you simply to tell the truth, which was excellent matter of real seriousness—the journalistic ethics of advice. Is it not the fact—the truth of the matter—that any of the newspapers or television channels within journalists at the News of the World felt entitled to the group. Certainly, it is something that, on a global go out there and use blagging, deception and phone basis, we want to be consistent with and we want to hacking, because that was part of the general culture be doing the right thing. When I say that illegal of corruption in the British tabloid press, and that they behaviour has no place in this company, that goes for didn’t kick it up the chain to you, because they felt the whole company. they were entitled to use the same methods as everybody else? Isn’t that the plain fact of the matter? Q403 Louise Mensch: Mr Rupert Murdoch, you are James Murdoch: the Chairman and Chief Executive of News Corps. Mrs Mensch, I am aware of those You are the head of the global company. The buck reports and the questions around other newspapers and stops with you. Given these allegations, indeed, when their use of private investigators. But all I can really you opened the session, you said that this was the speak to in this matter is the behaviours and the most humiliating day of your life— culture at the News of the World as we understand it Chair: Humble. and how we are trying to find out what really Louise Mensch: Oh, I’m sorry—humble. I beg your happened in the period in question. Importantly, it is pardon. That was a mistake. You said that it was the not for me here today to impugn other newspapers, most humble day of your life. You feel humbled by other journalists or other things like that. these events. You are ultimately in charge of the company. Given your shock at these things being laid Q406 Louise Mensch: I am asking you if the News out before you and the fact that you didn’t know of the World felt inured to engaging in these illegal anything about them, have you instructed your editors practices, particularly phone hacking, because it was around the world to engage in a root-and-branch so wide in British tabloid journalism. Did they see it review of their own news rooms to be sure that this as not as evil as it was because it was so widespread? isn’t being replicated in other News Corps papers James Murdoch: Mrs Mensch, I don’t accept that; if around the globe? If not, will you do so? journalists on one of our papers, television channels Rupert Murdoch: No, but I am more than prepared to or internet news operations feel that they don’t have do so. to hold themselves to a higher standard, I think it is important that we don’t say, “Listen, everyone was Q404 Louise Mensch: Thank you. Two final doing it, and that’s why people are doing this.” At the questions. The first is, you touched earlier, Mr James end of the day, we have to have a set of standards that Murdoch, very briefly on the general culture of phone we believe in, and we have to have titles and hacking, blagging and illegal practices that have in the journalists who operate to the highest possible past happened in this country. If I could put a couple standard. We have to make sure that, when they don’t of things to you. You do not appear to have asked live up to that, they are held to account. That is the Piers Morgan, who is now a celebrity anchor at CNN, focus for us. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 40 Culture, Media and Sport Committee: Evidence

19 July 2011 Rupert Murdoch and James Murdoch

Q407 Louise Mensch: Mr Rupert Murdoch, have Q412 Louise Mensch: Why not? you considered suing Harbottle & Lewis? You said in Rupert Murdoch: Because I feel that people I the past—in one of your first answers to my colleague, trusted—I am not saying who, and I don’t know what Tom Watson—that the reason you did not do an level—have let me down. I think that they behaved internal investigation is that you relied on the disgracefully and betrayed the company and me, and investigation by the police, the investigation by the it is for them to pay. Frankly, I think that I am the Press Complaints Commission and the investigation best person to clean this up. undertaken by your solicitors, Harbottle & Lewis, Louise Mensch: Thank you, Mr Murdoch. As I said, under whose care this enormous pile of documents I very much appreciate your immense courage in was found. There is an old saying, that if you want having seen this session through, despite the common something doing, you should do it yourself. In this assault that just happened to you. Thank you. case, you relied on three sets of people, all of whose Chair: I will allow Mr Watson a very brief question. investigations were severely lacking. Have you considered suing Harbottle & Lewis? Q413 Mr Watson: James—sorry, if I may call you James Murdoch: Any future legal claims or actions James, to differentiate—when you signed off the in any matter are a matter for the future. Really, today Taylor payment, did you see or were you made aware is about how we actually make sure that these things of the full Neville e-mail, the transcript of the hacked do not happen again. I won’t comment or speculate voicemail messages? on any future legal matters. James Murdoch: No, I was not aware of that at the time. Q408 Louise Mensch: Okay. The file of evidence: you were asked by my colleague Mr Farrelly whether Q414 Mr Watson: But you paid an astronomical you had read it yourself, and you said no. In the sum, and there was no reason to. circumstances, where you have relied on other people James Murdoch: There was every reason to settle the and advisers and they have severely let your company case, given the likelihood of losing the case and given down, do you not think, Mr Murdoch and Mr Rupert the damages—we had received counsel—that would Murdoch, that you ought to take the time and read be levied. through everything in that folder personally? James Murdoch: For clarity, Mrs Mensch, I did say Q415 Mr Watson: If Taylor and Clifford are that I did read some of the contents—they were shown prepared to release their obligation to confidentiality, to me—and what I saw was sufficient to know that will you release them from their confidentiality clause, the right thing to do was to hand them over to the so that we can get to the full facts of those particular authorities to help them with their investigations. cases? James Murdoch: I cannot comment on the Clifford matter at all. I was not involved in that matter. As to Q409 Louise Mensch: I understand that, but you the Taylor matter, it is a confidential agreement. I do were shown a representative sample, which can be not think that it is worth exploring hypotheticals. tricky. In the circumstances and given the enormous reputational damage which I am sure you will be the Q416 Mr Watson: The facts of this case help us get first to admit has been done to News Corp, do you not to the truth. If he removes himself from an obligation, think that, as senior executives of the company, you if he allows his papers to be released, will you let— should take the time and read through the entire file, James Murdoch: Mr Watson, it is a hypothetical so that you are completely apprised of what happened scenario. I am happy to correspond with the Chairman and are not reliant on everyone else? about what specifically more you would like to know James Murdoch: I am happy to do so. I think I have about those settlements, other than the detailed seen a bit of it. testimony I have given you today.

Q410 Louise Mensch: Okay. My last question is for Q417 Mr Watson: Why? Do you want me to carry you, Mr Rupert Murdoch. You said that your friend of on with a few more questions so that I can get to the 52 years I think, Les Hinton, had stepped down and end of this? resigned because he was in charge of the company at Chair: I am getting galled. We have covered this at the time. In other words, he said that he was the some considerable length. captain of the ship, and therefore he resigned. Is it not Mr Watson: Actually, Chairman, we have not, but I the case though, sir, that you in fact are captain of the respect you. Mr Murdoch, your wife has a very good ship? You are the Chief Executive Officer of News left hook. Corp, the global corporation— Rupert Murdoch: Of a much bigger ship, but yes. Q418 Chair: Mr Murdoch, you did ask if you could make a closing statement. The Committee are entirely Q411 Louise Mensch: It is a much bigger ship, but content for you to do so. you are in charge of it. As you said in earlier Rupert Murdoch: Thank you, Mr Chairman. questions, you do not regard yourself as a hands-off Members of the Committee, I would like to read a Chief Executive; you work 10 to 12 hours a day. This short statement now. My son and I came here with terrible thing happened on your watch. Mr Murdoch, great respect for all of you, for Parliament and for the have you considered resigning? people of Britain, whom you represent. This is the Rupert Murdoch: No. most humble day of my career. After all that has cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rupert Murdoch and James Murdoch happened, I know that we needed to be here today. conduct and neither has any place in any part of the James and I would like to say how sorry we are for company that I run. what has happened, especially with regard to listening But saying sorry is not enough. Things must be put to the voicemail of victims of crime. right. No excuses. This is why News International is My company has 52,000 employees. I have led it for co-operating fully with the police, whose job it is to 57 years, and I have made my share of mistakes. I see that justice is done. It is our duty not to prejudice have lived in many countries, employed thousands of the outcome of the legal process. I am sure the honest and hard-working journalists. I own nearly 200 Committee will understand this. I wish that we had newspapers of very different sizes and have followed managed to see and fully solve these problems much countless stories about people and families around the earlier. When two men were sent to prison in 2007, I world. At no time do I remember being as sickened as thought this matter had been settled. The police ended when I heard what the Dowler family had to endure— their investigations, and I was told that News which I think was last Monday week—nor do I recall International conducted an internal review. I am being as angry as when I was told that the News of the confident that when James later rejoined News World could have compounded their distress. I want to Corporation, he thought the case had closed, too. thank the Dowlers for graciously giving me the These are subjects you will no doubt wish to explore, opportunity to apologise in person. and have explored today. I would like all the victims of phone hacking to know This country has given me, our companies and our how completely and deeply sorry I am. Apologising employees many opportunities. I am grateful for them. cannot take back what has happened. Still, I want I hope our contribution to Britain will one day also be them to know the depth of my regret for the horrible recognised. Above all, I hope that we will come to invasions into their lives. I fully understand their ire, understand the wrongs of the past, prevent them from and I intend to work tirelessly to merit their happening again and, in the years ahead, restore the forgiveness. nation’s trust in our company and in all British I understand our responsibility to co-operate with journalism. I am committed to doing everything in my today’s session as well as with future inquiries. We power to make this happen. Thank you. now know that things went badly wrong at the News Chair: Thank you. On behalf of the Committee, I of the World. For a newspaper that held others to thank you for giving up so much of your time this account, it failed when it came to itself. The behaviour afternoon to come here. I would like to apologise that occurred went against everything that I stand again for the wholly unacceptable treatment that you for—and my son, too. It not only betrayed our readers received from a member of the public. and me, but also the many thousands of magnificent Rupert Murdoch: Thank you, Mr Chairman and all professionals in other divisions of our company Members. around the world. Let me be clear in saying: invading James Murdoch: Thank you, Mr Chairman. people’s privacy by listening to their voicemail is Chair: The Committee will now have a break of five wrong; paying police officers for information is minutes, before we move to the next part. wrong. They are inconsistent with our codes of

Witness: Rebekah Brooks, former Chief Executive, News International, gave evidence. Stephen Parkinson, Solicitor, Kingsley Napley, was in attendance.

Q419 Chair: We now come to the second part of our own personal apologies to the apologies that James session. I would like to welcome Mrs Rebekah and Rupert Murdoch have made today. Clearly, what Brooks, until recently the chief executive officer of happened at the News of the World and certainly the News International. I thank you for your willingness allegations of voicemail intercepts of victims of crime to come before the Committee. We are very much is pretty horrific and abhorrent. I just wanted to aware that there is an ongoing police investigation that reiterate that. I was also very keen to come here and could lead to criminal proceedings, and we will bear answer questions today. As you know, I was arrested that in mind, but we also appreciate your statement and interviewed by the police a couple of days ago, when you resigned from the company that you want so I have legal representation here just so I don’t to be as helpful as possible to various inquiries that impede those criminal proceedings, which you would are under way. expect, but I intend to answer everything as openly as May I start? News International issued a statement I can and to not use that, if at all possible. I know you when you were chief executive in July 2009 saying have all had a briefing around the same. that “there is not and never has been evidence to support allegations that News of the World journalists Q420 Chair: We are grateful for that. Perhaps I can have accessed the voicemails of any individual”, or invite you to comment on whether you now accept that they “have instructed private investigators or that the statement issued saying that News of the other third parties to access the voicemails of any World journalists had not accessed voicemails, or individuals”, or that there “was systemic corporate indeed instructed investigators to do so, is actually illegality by News International”. Would you accept untrue. now that that is not correct? Rebekah Brooks: Again, as you have heard in the last Rebekah Brooks: Thank you, Mr Chairman. First, few hours, the fact is that since the Sienna Miller civil before I answer that question, I would like to add my documents came into our possession at the end of cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson

December 2010, that was the first time that we, the very regrettable decision to close the News of the senior management of the company at the time, had World after 168 years, Tom Crone had predominantly actually seen some documentary evidence actually been a News of the World lawyer. His status as NI relating to a current employee. I think that we acted legal manager, because of the situation at the News of quickly and decisively then, when we had that the World, he predominantly spent most of his time, information. As you know, it was our evidence that in fact, pretty much 99% of his time, on the News of opened up the police inquiry in January 2011. Since the World. The rest of the company and the rest of the then, we have admitted liability on the civil cases and titles had appointed new lawyers and there wasn’t a endeavoured to settle as many as possible. We have job for Tom once we closed the News of the World, appointed Sir Charles Gray, so that victims of phone and he left. hacking, if they feel they want to come directly to us and don’t want to incur expensive legal costs, can Q424 Mr Watson: Someone is still dealing with the come directly and be dealt with very swiftly. As you News of the World legal cases though. know, the court process is taking its time and those Rebekah Brooks: Sorry? cases are not going to be heard until, I think, January Mr Watson: Someone is still dealing with the News 2012, so the compensation scheme is there in order of the World legal cases though, presumably. for people to come forward. So, of course there were Rebekah Brooks: Yes. The civil cases are being dealt mistakes made in the past, but I think and I hope that with by—as I said, the first one is the standards and you will agree, since we saw the evidence at the end management committee that we’ve set up. You’ve of December, that we have acted properly and quickly. seen the announcements on that recently, so I won’t go over them. I know that James and Rupert have Q421 Chair: So until you saw the evidence that was talked about it. But also Farrers, who’ve been doing produced in the Sienna Miller case, you continued to the civil cases all along. We’ve got some test cases believe that the only person in the News of the World coming up before the judge in January, and there are who had been implicated in phone hacking was people dealing with that. Tom Crone’s role was as Clive Goodman. hands-on legal manager of News of the World, and Rebekah Brooks: Just the sequence of events. I think obviously when we closed the paper there wasn’t a 2009 was the first time that all of us—I know some job there. members of the Committee have spent a long time on this story and looking at the whole sequence of events, Q425 Mr Watson: I must have misunderstood what so I know that you all know it pretty well, but just James Murdoch said. He implied that you sacked him, to reiterate, in 2009, when the Gordon Taylor story but I may be—it has been a busy day. appeared in The Guardian, I think that that is when As a journalist and editor of News of the World and information unravelled, but very, very slowly. We The Sun, how extensively did you work with private have conducted many internal investigations. I know detectives? you have spent a lot of time talking to James and Rebekah Brooks: On The Sun not at all. When I was Rupert Murdoch about them, but we had been told by editor of News of the World, as you know, I came people at the News of the World at the time. They before this Committee just as I became editor of The consistently denied any of these allegations in various Sun in relation to “What price privacy now?” and internal investigations. It was only when we saw the Operation Motorman, as it’s called. Back then, we Sienna Miller documentation that we realised the answered extensively questions about the use of severity of the situation. private detectives across Fleet Street. As you know, a Just to point out, one of the problems of this case has chart was published. I can’t remember where the News been our lack of visibility and what was seized at of the World was on it, but I think it was fourth, and Glenn Mulcaire’s home. We have had zero visibility. I think The Sun was below Take a Break Magazine. Part of the drip, drip effect of this is because we only Certainly in the top five were The Observer, The see it during a civil procedure, and then we act on Guardian, News of the World, Daily Mail— that accordingly. Q426 Paul Farrelly: Chairman, may I interrupt? I Q422 Chair: But it is now your view, on the basis declare that I used to work for The Observer, but left of that evidence, that certainly you were lied to by in 2001. The Observer was not in the top four. senior employees. Rebekah Brooks: Perhaps the top six. Rebekah Brooks: Well, I think, unfortunately, because Paul Farrelly: The Observer had four instances. of the criminal procedure, I am not sure that it is Rebekah Brooks: But it was on the table. possible for me to infer guilt until those criminal proceedings have taken place. Q427 Mr Watson: To answer my question, you Chair: I understand. extensively worked with private investigators. Is that the answer? Q423 Mr Watson: There are many questions I would Rebekah Brooks: No. What I said was that the use of like to ask you, but I will not be able to do so today private detectives in the late ’90s and 2000 was a because you are facing criminal proceedings, so I am practice of Fleet Street, and after Operation Motorman going to be narrow in my questioning. Why did you and “What price privacy now?” Fleet Street reviewed sack Tom Crone? this practice and in the main the use of private Rebekah Brooks: We didn’t sack Tom Crone. What detectives was stopped. Don’t forget that at the time, happened with Tom Crone was, when we made the as you are aware, it was all about the Data Protection cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson

Acts and changes that were made. That’s why we had Q437 Mr Watson: In your letter to us in 2009, you the committee in 2003. said that you did not recall meeting Glenn Mulcaire. You will appreciate that this is an inadequate answer Q428 Mr Watson: For the third time, how in the circumstances, and that we require a specific extensively did you work with private detectives? response to our questions. Did you ever have any Rebekah Brooks: The News of the World employed contact, directly or through others, with Glenn private detectives, like most newspapers in Fleet Mulcaire? Street. Rebekah Brooks: No. None whatsoever.

Q429 Mr Watson: So it’s fair to say that you were Q438 Mr Watson: Would your former diary aware of, and approved payments to, private secretary, Michelle, be able to confirm that? detectives. Rebekah Brooks: Michelle? Rebekah Brooks: I was aware that News of the World Mr Watson: Your former diary secretary. used private detectives under my editorship, yes. Rebekah Brooks: I’ve had a PA for 19 years called Cheryl. Q430 Mr Watson: So you would have approved Mr Watson: Okay. Would your PA be able to payments to them. confirm that? Rebekah Brooks: Absolutely. Rebekah Brooks: That’s not how it works, but I was aware that we used them. Q439 Mr Watson: Does she hold your diary for the last 19 years? Q431 Mr Watson: Who would have approved the Rebekah Brooks: No, she probably doesn’t. We don’t payments? keep that for 19 years, but she may have something Rebekah Brooks: The payments system in a from back then. I don’t know. newspaper—this has been discussed at length—is simply that the editor’s job is to acquire the overall Q440 Mr Watson: Would it be in a paper format or budget for the paper from the senior management. an electronic format? Once that budget is acquired, it is given to the Rebekah Brooks: I did not meet Mr Mulcaire. managing editor to allocate to different departments. Mr Watson: I am talking about your diary. Is it in Each person in that department has a different level electronic format or a paper format? of authorisation, but the final payments are authorised Rebekah Brooks: It would have been in a paper by the managing editor, unless there is a particularly format until very recently. big item such as a set of photographs or something that needs to be discussed on a wider level, and then Q441 Mr Watson: Okay. Do you think Glenn the editor will be brought in. Mulcaire would deny that he ever met you? Rebekah Brooks: I am sure he would, although—yes; Q432 Mr Watson: So Stuart Kuttner would have it’s the truth. discussed some payments to private detectives with you? Q442 Mr Watson: Were you aware of the Rebekah Brooks: Not necessarily, no. We are talking arrangement that News Group Newspapers had with about 11 years ago. He may have discussed payments Mr Mulcaire while you were the editor of News of the with me, but I don’t particularly remember any World and The Sun? incidents. Rebekah Brooks: No.

Q433 Mr Watson: You don’t remember whether you Q443 Mr Watson: So you didn’t know what he did? would have discussed any payments at all? Rebekah Brooks: I didn’t know particularly that Rebekah Brooks: I didn’t say that; I said in relation Glenn Mulcaire was one of the detectives that was to private detectives. I was aware that the News of the used by the News of the World, no. World used private detectives, as every paper in Fleet Street did. Q444 Mr Watson: You didn’t know he was on the payroll? Q434 Mr Watson: So you don’t recall whether you Rebekah Brooks: In fact, I first heard Glenn authorised payments or talked with Stuart Kuttner? Mulcaire’s name in 2006. Rebekah Brooks: The payments of private detectives would have gone through the managing editor’s Q445 Mr Watson: Did you receive any information office. that originated from Glenn Mulcaire or his methods? Rebekah Brooks: What to me, personally? Q435 Mr Watson: You can’t remember whether Kuttner ever discussed it with you? Q446 Mr Watson: You as editor. Did anyone bring Rebekah Brooks: Sorry. What? you information as a result of Glenn Mulcaire’s methods? Q436 Mr Watson: You can’t remember whether Rebekah Brooks: I know it is an entirely appropriate Kuttner ever discussed it with you. question, but I can only keep saying the same answer: Rebekah Brooks: I can’t remember if we ever I didn’t know Glenn Mulcaire. I had never heard the discussed an individual payment, no. name until 2006. There were other private cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson investigators I did know about and had heard about, Q455 Mr Watson: Do you know what he was doing but he wasn’t one of them. at that time? Rebekah Brooks: I don’t. I’m sorry—no. Q447 Mr Watson: We will come on to that. Now that you know what you know, do you suspect that Q456 Mr Watson: Did you not ask? you might have received information on the basis of Rebekah Brooks: Well I was the editor of The Sun at stuff gathered by Glenn Mulcaire? the time and I didn’t know they had rehired him. I Rebekah Brooks: Now I know what I know—this is have only found that out recently. one of the difficulties. Obviously I know quite an extensive amount now, particularly from the past six Q457 Mr Watson: When you were chief executive months of investigating this story. Glenn Mulcaire, I of the company, did you not wonder what he did in am aware, worked on and off for the News of the 2005–06, given that you have a hacking scandal World, I think, in the late ’90s, and continued through breaking around you? until 2006 when he was arrested. Obviously, if he Rebekah Brooks: Absolutely, and I have the worked with the News of the World for that time, he information that “Panorama” had, that Jonathan Rees was involved. I think the judge said in 2007—again, worked as a private investigator. The “Panorama” we may disagree with that now—that when Glenn programme said that he was conducting many, many Mulcaire was convicted, he had a perfectly legitimate illegal offences—that is what I saw, as you did. Also, contract with the News of the World for research and he used to work for “Panorama”. He worked for many investigative work. The judge said that quite newspapers, presumably before his conviction, as you repeatedly throughout the trial. So that is what I can say, and then he was rehired by the News of the World. tell you. Q458 Mr Watson: Do you believe that he conducted Q448 Mr Watson: Did you ever have any contact illegal activities on behalf of News of the World? directly or through others with Jonathan Rees? Rebekah Brooks: I can only comment on what I Rebekah Brooks: No. know, and I don’t know that.

Q449 Mr Watson: Do you know about Jonathan Q459 Mr Watson: What is your belief? Rees? Rebekah Brooks: I don’t know. Rebekah Brooks: I do. Again, I have heard a lot recently about Jonathan Rees. I watched the Q460 Mr Watson: “Panorama” programme, as we all did. His wasn’t a You don’t know what he did? name familiar to me. I am told that he rejoined the Rebekah Brooks: I don’t know what he did for the News of the World in 2005 or 2006, and he worked News of the World—I’m sorry. with the News of the World and many other newspapers in the late 1990s. That is my information. Q461 Mr Watson: Do you not think that people will just find it incredible that, as chief executive of the Q450 Mr Watson: Do you find it peculiar that, company, you don’t know? having served a sentence for a serious criminal Rebekah Brooks: It may be incredible, but, again, it offence, he was then rehired by the paper? is also the truth. I heard about Jonathan Rees’s Rebekah Brooks: It does seem extraordinary. rehiring by the News of the World through an investigation conducted by “Panorama”. Q451 Mr Watson: Do you know who hired him? Rebekah Brooks: No I don’t. Q462 Mr Watson: Did you ever have any contact, directly or through others, with Steve Whittamore? Q452 Mr Watson: Do you know who signed his Rebekah Brooks: Yes. contract? Rebekah Brooks: No. Sorry. Q463 Mr Watson: What did you do with him? Rebekah Brooks: Steve Whittamore was one of the Q453 Mr Watson: If you have been conducting an private detectives, as I said, who formed, I think, the investigation for six months, did you not take the time major part of Operation Motorman. to find out? Rebekah Brooks: The investigation that we have been Q464 Mr Watson: I don’t want to know what Steve conducting over the six months is particularly around Whittamore did; I would like to know what you did the interception of voicemails, as you know. The with him. management and standards committee at News Rebekah Brooks: Sorry? International is going to look at Jonathan Rees, and we already do have some information. As to the Q465 Mr Watson: I would like to know what you conclusion of that investigation, I do not know. did with him. Rebekah Brooks: In the main, my use of private Q454 Mr Watson: What information do you have? investigators while I was editor of the News of the Rebekah Brooks: We have information that, as I said, World was purely legitimate and in pursuit in the Jonathan Rees worked for many newspapers in Fleet main, as you know, of the addresses and whereabouts street in the late ’90s, and then he was rehired by the of convicted paedophiles through Sarah’s law. That News of the World sometime in 2005, maybe 2006. is my majority—if not almost my exclusive—use of cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson private investigators. But I respect that the News of the Rebekah Brooks: Of course I have regrets. The idea World also used private investigators for other stories. that Milly Dowler’s phone was accessed by someone being paid by the News of the World—or even worse, Q466 Mr Watson: Are you aware that Steve authorised by someone at the News of the World—is Whittamore conducted two ex-directory look-ups on as abhorrent to me as it is to everyone in this room. It the Dowler family in Walton-on-Thames? is an ultimate regret that the speed at which we have Rebekah Brooks: I was not aware of that until two found out, and tried to find out, the bottom of this weeks ago. investigation has been too slow. James and Rupert accepted that earlier. We—they, now that I have left Q467 Mr Watson: You are now. the company—are endeavouring to continue to Rebekah Brooks: Yes, I am. investigate. But of course there are regrets.

Q468 Mr Watson: Why did you hold a mobile Q478 Louise Mensch: I would like to draw you out conversion from Steve Whittamore? on a question that I put to Mr James Murdoch at the Rebekah Brooks: As I said, it was 11 years ago. I end of our last session. On the wider culture of have answered this question many times, but just to hacking, blagging and private detectives in Fleet repeat, a mobile conversion is finding an address from street, to what extent did the News of the World feel a mobile phone, and it can be got through legitimate justified, in its internal culture, in using those practices means. In fact, in the story that you refer to, the because everybody was doing it? mobile phone number was a business number and the I put to him that Piers Morgan—now a celebrity address was widely known. anchor on CNN—said openly in his book, which, clearly, was published before this controversy broke, Q469 Mr Watson: So you can remember what the that he had hacked phones. He said that he won scoop story was. of the year for a story about Ulrika Jonsson and Sven- Rebekah Brooks: I have just said to you that I can— Goran Eriksson. He actually gave a tutorial in how one accesses voicemail by punching in a set default Q470 Mr Watson: What was the story you were code. Clearly, from the account that he gives, he did working on? it routinely as editor of the Daily Mirror. It was Rebekah Brooks: I read it in The New York Times. something that happened at the Daily Mirror; he was, of course, also an ex-employee of News International. Q471 Mr Watson: Was it a paedophile that you were We have been talking about Operation Motorman, and after then? the different amount of use that was made of Steve Rebekah Brooks: It would be unfair to the person Whittamore by various members of Fleet street. I went concerned, because he has been named by The through the Information Commissioner’s report and Guardian and The New York Times. But I am saying added them up. For transactions in the Daily Mail’s that the very few occasions on which I used private Associated Newspapers Group, there were 1,387 detectives were on Sarah’s law. transactions with Mr Whittamore, used by 98 journalists across titles and supplements in that group. Q472 Mr Watson: Can you name other private Is it not obviously the case that blagging, hacking and detectives you worked with? the use of private investigators for licit and illicit Rebekah Brooks: No. purposes was an absolute culture on Fleet street, and that the News of the World participated in its illegal Q473 Mr Watson: You cannot remember them? activities, maybe with a sense of entitlement—the Rebekah Brooks: No. same sense of entitlement that Mr Morgan shows in his book—because everybody else was doing it. Is Q474 Mr Watson: Are you aware that the paper used that not the case? other detectives, though? Rebekah Brooks: We have heard a lot over the past Rebekah Brooks: Sorry? 10 years, but particularly this Committee held an inquiry into Operation Motorman that was incredibly Q475 Mr Watson: Did the paper use private extensive. Every editor on Fleet street, I think, was detectives other than Steve Whittamore, Jonathan called to this Committee. As far as I was concerned, Rees and Glenn Mulcaire? the failings of all newspapers in not understanding the Rebekah Brooks: He was the one that I was aware of extent of the use of private investigators across Fleet at the time. As I said, the first time I heard about street was held to account then. There were many Glenn Mulcaire was when he was arrested in 2006. changes to the Data Protection Act 1998, because of Operation Motorman. Although I accept Mr Farrelly’s Q476 Mr Watson: Is it your belief that the paper knowledge of The Observer—it is going to be far used other private investigators, and you just cannot better than mine—they wrote a good editorial on this remember them today? about three months ago, re-addressing that climate Rebekah Brooks: No, it isn’t that I cannot remember. then and how different it is now. You have the same information as I have, which is from Operation Motorman. Q479 Louise Mensch: The Committee in 2003 concluded that there was widespread evidence of Q477 Mr Watson: One last question: do you have despicable practices across the media, including any regrets? blagging and payments to the police. I appreciate the cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson legal sensitivities involved in this question, but I will Motorman. In other words, you appeared to put it to you anyway. In your evidence to the emphasise, that whatever had happened at the News Committee in 2003, you were asked if you had paid of the World, it was part of this wider culture. If you the police, and you clearly said, “We have paid the seem to know or imply that these practices were going police in the past.” May I suggest to you that the on elsewhere, how could you not be aware that they manner in which you said that implied that so do all were going on endemically at the News of the World, tabloid newspapers? I am not asking you to make and do you not regret that you did not yourself specific allegations, but in your general knowledge, undertake some kind of root and branch investigation were payments to the police widespread across Fleet into the News of the World, rather than waiting for street, or were they confined to News International these things to drip out over the fullness of time? titles? Rebekah Brooks: Just going back to 2002–03, with Rebekah Brooks: If you remember, in the evidence all the changes to the Data Protection Act, the fact is that I gave in 2003, I was going to explain my there was a root and branch change as a result of the comment. As you know, Mr Bryant asked me to Select Committee inquiries and a result of the explain my comment, and the session ended. In 2003, information officer’s report into “What Price straight after my comment about payment to police, it Privacy?” There was a fundamental change there was clarified. I think Les Hinton, who was the across most newspapers and particularly, like I said, I chairman at News International, at the 2007 inquiry was then editor of The Sun. I can say, absolutely, that clarified it again, and I clarified it recently to the The Sun is a very clean ship and has a great Home Affairs Committee, at the end of March I think. newsroom. In particular, Operation Motorman I can say that I have never paid a policeman myself; referred to the News of the World, and The Sun was I have never knowingly sanctioned a payment to a not part of it. police officer. At the time of the recent Home Affairs Louise Mensch: Thank you. Committee, there were various crime editors from Fleet street discussing that in the past payments had Q482 Jim Sheridan: Ms Brooks, Rupert Murdoch in been made to police officers. I was referring to that his evidence session said quite clearly that the wide-held belief not widespread practice. In fact, in responsibility for the closure of the News of the World my experience of dealing with the police, the lay fairly and squarely with senior management of that information they give to newspapers comes free of paper, which I assume would include you. Is that the charge. case? Rebekah Brooks: I may have missed that part of the Q480 Louise Mensch: Mr Dacre, in evidence to a evidence, but I think Mr Murdoch said it exactly how parliamentary Committee yesterday, stated that to his it was. It was a collective decision. We all talked knowledge, the Daily Mail has never published a story together. Mr Murdoch was abroad at the time at a based on hacking or blagging. That from a group that conference, so we all talked together. Operation Motorman identified made 1,387 transactions across its titles. Do you think it credible Q483 Jim Sheridan: Is that Mr Murdoch senior? that all those 1,300-plus transactions were licitly Rebekah Brooks: Sorry, yes, Rupert Murdoch. obtained? Or is there this wider culture of hacking and blagging, of which your paper was a part? Q484 Jim Sheridan: I thought you were about to say Rebekah Brooks: I did not see Mr Dacre’s evidence. something else. You will have seen that, out of all media groups in Rebekah Brooks: No. this country, News International has been the one openly to welcome the Prime Minister’s public Q485 Jim Sheridan: To follow up from that, when inquiry into, I think, all Fleet street practices. We have you were advising your staff that the paper was not got the parameters yet. closing during the private session, I think you said I am not here in a position to comment on other something like there was more to come. Would you newspaper groups. Like I said at the beginning, things like to expand on what you meant by that? went badly wrong at the News of the World, and we Rebekah Brooks: What I said was that when I went are doing our best now to sort it out. I accept that it down to the newsroom to explain the decision, clearly is not at the speed that the Committee would have and quite rightly the journalists on the News of the wished and that mistakes have been made, but we are World—very honourable journalists, who had been trying to put them right. On Operation Motorman, it putting out a newspaper under this scrutiny for a long is important that there was a Select Committee inquiry time with great exclusives and with great pride in their into it. It is properly right that the code of conduct of newspaper—were very sad and baffled by journalists and the ethics of journalism are in constant management’s decision to close the paper. What I was review. If there is not constant review of conduct and saying to them is that right now you may not be able ethics, the freedoms that this press enjoys, which I to right in this moment understand why we have done believe in very strongly, are at risk. it, but as the months go by—I think I said in a year’s time—I think you will come to the realisation that we Q481 Louise Mensch: One final question: your actually did the right thing. Once you have broken the previous letters to the Committee when you refused trust with the readers, there is not much going back. to attend placed great emphasis on your being willing Unfortunately, the News of the World used to lead the to attend as part of a panel of newspaper editors, all headlines for the right reasons—the cricket scandal of whom had been identified with Operation recently—but for the last few months and probably cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 47

19 July 2011 Rebekah Brooks and Stephen Parkinson for the last few years, it has been leading the headlines Jim Sheridan: The e-mails have since been retrieved, for the wrong reasons. Once that trust was broken, we but Tommy Sheridan’s defence team has still not felt that that was the right decision. Of course, it received them. Have you any idea why not? wasn’t the right decision for the hundreds of Rebekah Brooks: I think that the clarification from journalists who worked there, who had done nothing the Information Commissioner was that what in fact wrong and who were in no way responsible. Many of happened was the editor of the Scottish News of the them were at the News of the World for many years, World made a comment during the trial that was have spent years at the News of the World and are not interpreted as you are saying now, but when he looked culpable for anything. We have endeavoured to find into it and asked News International for an them jobs—every single one of them will be offered explanation, it was actually a problem with our a job. suppliers in India, and there was no such retrieval.

Q486 Jim Sheridan: I accept that, but it wasn’t just Q492 Jim Sheridan: Have you had any contact with journalists, was it? It was secretaries, engineers, Andy Coulson during the Sheridan case? drivers or whoever they may be. Are they all expected Rebekah Brooks: I think Andy Coulson was in to find jobs as well? Downing Street during the Sheridan case, so I would Rebekah Brooks: Everybody. Not just in News have had some contact. International, but across News Corporation. Jim Sheridan: So you had no direct contact—no e- mails or letters? Rebekah Brooks: I said I would have had contact. Q487 Jim Sheridan: So what do you anticipate will Jim Sheridan: Yes, but there were no e-mails—just happen in a year that you don’t know now? a conversation? Rebekah Brooks: As I have said, part of the problem Rebekah Brooks: It would have been mainly to do with this story is the lack of visibility of the with work, by e-mail or by telephone. documentation seized from Glenn Mulcaire’s house in 2006. We have no visibility on it; you have no Q493 Jim Sheridan: I have a couple of final visibility on it; only the police have visibility on it, questions. Why was News of the World paying Andy and they are conducting their new inquiry. I am sure Coulson’s legal fees and Glenn Mulcaire’s legal fees that they will go through the thousands and thousands during the Sheridan case when they are only cited as of documents that they say are there. I think we will, witnesses? in a year’s time—maybe even longer—actually get to Rebekah Brooks: As I understand it—I know James a final position on what exactly happened. Murdoch addressed this—when Andy Coulson left News of the World, he had an agreement that all Q488 Jim Sheridan: Could I ask you a couple of matters relating to this, his legal fees, were paid. I questions? You will be aware of Tommy Sheridan, the think the same for Clive Goodman. On Glenn former MSP. Mulcaire, I think his legal fees would be paid when Rebekah Brooks: Yes, I am. in fact he was a co-defendant in the civil cases.

Q489 Jim Sheridan: May I put a question to you Q494 Jim Sheridan: Finally, are you aware of any that, unfortunately, James Murdoch could not answer? payment to police officers in the East Lothian force, Bob Bird, during the course of last year’s Sheridan the Edinburgh force? trial, gave evidence under oath on two occasions that Rebekah Brooks: No. e-mails relating to his case showing contact between News of the World and Crown witnesses, private Q495 Damian Collins: I would like to ask questions detectives, surveillance and phone hacking could not about the Milly Dowler case in particular. For the be retrieved, as they were lost in some black hole in record, Mrs Brooks, you were editor of News of the Mumbai. That is not the case. They have now been World during the period of Milly Dowler’s abduction found, I am told. Do you know anything about that? and her subsequent murder. Rebekah Brooks: I think that what actually happened Rebekah Brooks: That is correct. was that he was referring to an issue that we had had with our suppliers, and I think I am correct in thinking Q496 Damian Collins: I have some specific that the Information Commissioner has put out a questions I would like to ask you about this, but could clarification to that and explained that there was no you paint a picture for us of how a newspaper like issue and that they were entirely comfortable with News of the World goes about reporting such a big News International’s response to that. story? What would be the level of the editor, deputy editor and senior reporters in putting together and overseeing a story like that? Q490 Jim Sheridan: Do you know who gave him Rebekah Brooks: Any big story and, for the purpose the advice that the e-mails were lost somewhere? of process, most stories start out with the reporter. Rebekah Brooks: I don’t know. That reporter may be being asked by the news editor to go to investigate a story, or they may have brought Q491 Jim Sheridan: Also, his defence team has still information about a story from their own contacts to not received these retrieved e-mails. Have you any the news editor. It is at that stage in a newspaper when idea why not? the reporter and news editor discuss the veracity of Rebekah Brooks: Sorry? the information, go out and check the allegations and cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 48 Culture, Media and Sport Committee: Evidence

19 July 2011 Rebekah Brooks and Stephen Parkinson come back with a more considered view. You can legislation that we got through on Sarah’s law, and imagine that every newspaper gets a lot of information campaigning for those to be put forward. to the news desk and only a percentage—a very small percentage—makes it actually to publication. So there Q500 Damian Collins: When you gave evidence to are many layers, from reporter to assistant news editor the Committee in 2003, you referenced the Milly to news editor. Finally, the story will go to the back Dowler case as an example of how you thought that bench, which is the people who will oversee the the press had worked particularly well with the police subbing of the story, and the sub will often talk to the and the family liaison officers, and it was a view that reporter directly, with questions and amendments to was supported by Andy Coulson, who gave evidence the copy. The lawyers are involved at this stage, and with you on that day. I appreciate that this is quite a throughout the process, and the final decision on long time ago, but is that something you stand by publication will be made by the editor—and where it now? You spoke about it when you gave evidence, but is and how prominent it is. Obviously, Milly Dowler’s did you have a particular knowledge of the details of disappearance was a terrible news story. It will have the case? been covered by all newspapers, and for a very long Rebekah Brooks: When I spoke about it in 2003, I time. The trial only finished—last month? was unaware of what I now know. However, in 2003, as far as I was concerned—which in the light of what Q497 Damian Collins: But for something like this, we believe the allegations are now might sound, quite would it be normal to expect that it would have been frankly, ridiculous, but at the time I believed it—both the editor, a senior member of the editorial staff on on the Milly Dowler case and in the Soham cases, duty that day or the lawyers who would sign off on the press had exercised huge caution, and had tried anything written about it because of the incredible to respect the privacy of the families. For example, I sensitivity of the material? remember that in Soham one member of the Press Rebekah Brooks: That is probably true, yes. On any Association was sent to go to the village. I was story, but particularly as you say on such a sensitive referring to the fact that Fleet Street had actually come together and used the Press Complaints Commission story, the lawyers would be heavily involved, talking code and adhered to it to respect the privacy of the to the reporters and the news editors—the news families. Clearly, these allegations that came out two editors are the executives on the news desk—as to weeks ago, if true, are appalling and obviously where the information came from or on the veracity contradict the statement that I made. of that information. Q501 Damian Collins: As you say, in the context of Q498 Damian Collins: How involved were you what we now know, it does appear ridiculous, to use personally in the Milly Dowler case, as editor of the your word. When were you first aware that Milly News of the World? Dowler’s phone had been hacked? Rebekah Brooks: As I say, the story ran for a very, Rebekah Brooks: I think it was last Monday or the very long time, so I will have been involved in the Monday before. story over the many years, even when I was editor of The Sun. The Milly Dowler investigation and the Q502 Damian Collins: That was the first knowledge pursuit of justice for Milly Dowler have been in the you had of it? news for many, many years—nine years. Rebekah Brooks: I heard of it when the story first broke in the media, I think, on Monday evening. Q499 Damian Collins: The phase of your time at the News of the World is particularly pertinent to our Q503 Damian Collins: Nothing was ever said to you hearing today. Would you say that the Milly Dowler at News of the World to suggest that Milly Dowler’s case was a story you were more heavily involved in phone had been hacked, and that that may have been than other stories that took place during your carried out or authorised by an employee of News of editorship, simply because of the magnitude of the the World? events and people’s real shock and horror at what Rebekah Brooks: Of course not, no. had happened? Rebekah Brooks: Not particularly more or less Q504 Damian Collins: When were you aware that involved. The one thing that I would say is that under people at the News of the World gave information my editorship we had a series of terrible and tragic about what was on Milly Dowler’s phone to the police news stories, starting with Sarah Payne, Milly to support their investigation? Dowler’s disappearance and subsequent murder and Rebekah Brooks: At the moment—again, I will have then of course the Soham cases. As you know, part of to be slightly careful, but I want to be as open as the main focus of my editorship of the News of the possible. We saw the story at the same time that you World was convincing Parliament that there needed to all saw the story. My instant reaction, like everybody be radical changes to the Sex Offenders Act 1997 else’s, was one of shock and disgust that a family who which came to be known as Sarah’s law and were very had suffered so much already had heard these similar to laws imposed in America under Megan’s allegations that clearly added immeasurably to their law. So I suppose, if I had a particular extra suffering. The first thing I did was write to Mr and involvement in any of those stories, then it would Mrs Dowler with a full apology to say that we would have been on the basis that I was trying to push and get to the bottom of the allegations, and whether campaign for readers’ rights on the 10 pieces of anyone, either representing the News of the World or cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 49

19 July 2011 Rebekah Brooks and Stephen Parkinson authorised by a professional journalist at the News of the end of last week, which is that because it was part the World, which I still find staggering to believe, was of a criminal investigation, they couldn’t help me. involved. If we find out that is true, I have every confidence that News International and the police will Q507 Damian Collins: One of the points that I am get to the bottom of that, which they should, as a trying to get to is that it would seem to us incredible priority. that, potentially allegedly, someone employed by News of the World would take the decision themselves Q505 Damian Collins: I appreciate your statement. to pass information to the police that, however But what I asked was when were you aware that the obtained, was the result of a newspaper investigation information that was passed to Surrey police resulted of which they were part, and that they did not consult from the hacking of Milly Dowler’s phone? Are you the editor or senior members of staff. That seems saying you were not aware of that until it was reported incredible. recently in the newspapers? Rebekah Brooks: Is your allegation that someone on Rebekah Brooks: Yes. the News of the World knew that they had themselves, Damian Collins: If it is the case that employees of or authorised someone, to access the voice mails of the News of the World were personally sanctioned to Milly Dowler, and that they then told the police that hack Milly Dower’s phone, essentially deleting e- they had accessed Milly Dowler’s phone and passed mails from it; if they withheld that information from on that information? Is that the allegation? you, and then decided of their own volition to pass that information on to the police, that is what you are Q508 Damian Collins: Is there a chain of events that asking us to believe? Am I right in saying that? links the alleged hacking of the phone by someone at Rebekah Brooks: Can you explain about passing it on News of the World or authorised by News of the World to the police? to the passing to the police of information regarding Damian Collins: Yes, if information held by what was on Milly Dowler’s phone, and also, we have employees of the News of the World relating to the subsequently heard, the deletion of messages? That is hacking of Milly Dowler’s phone was passed to the what I was asking about. police to support their investigation, you said the first Rebekah Brooks: On the allegations, either someone you knew about that was when it was reported in the from the News of the World or someone authorised on newspapers. But it must be the case, therefore, that the News of the World had accessed the voice mails someone, without your knowledge, who was an of Milly Dowler is an allegation, an incredibly serious employee of yours at News of the World, decided, allegation, and one that appals us all. That is being without consulting the editor, to pass that on to the investigated right now. When I first heard of it, it was police. From your position, is that the case? Is that the two weeks ago. I’m sorry; that just how it is. chain of events as they must have existed? Rebekah Brooks: I understand the question. I think it Q509 Damian Collins: It seems incredible that you, is important to say that obviously the Milly Dowler as editor, were so unaware of such fundamental issues news story went on for many years and I had been to do with the investigation. editor of both the News of the World and The Sun Rebekah Brooks: In some ways, I think the opposite. while that investigation was ongoing. What you asked I don’t know anyone in their right mind who would me, and what I thought you were referring to, was authorise, know, sanction or approve of anyone when did I first hear an allegation that Milly Dowler’s listening to the voicemails of Milly Dowler in those phone or voice mails had been intercepted by either circumstances. I just don’t know anyone who would someone working for the News of the World or think it was right and proper thing to do at this time, authorised by someone at the News of the World. The or at any time. I know we know a lot more now, but first time I ever heard that was two weeks ago. that is all I can tell you.

Q506 Damian Collins: But with regard to Q510 Damian Collins: This is potentially something information being passed to the police about the that happened under your watch, as ever, so if it is hacking of the phone? proven that it was the case, would you take personal Rebekah Brooks: I wrote to Surrey police responsibility for what happened under your immediately. My first port of call was to send Milly editorship of the newspaper? Dowler’s family an unreserved apology on behalf of Rebekah Brooks: I would take responsibility, News International and to assure them that we would absolutely. I really, really want to understand what get to the bottom of it. Representatives then met with happened. I think all of us do. Out of everything that the Milly Dowler family lawyer almost immediately I have heard of this case, I think that is probably the to try to get some more information, to see if there most shocking thing I had heard for a long time, and was anything we could do, look for or assist in this certainly the most shocking thing I had heard about case. The third thing I did was write to Surrey police potential journalists who worked for News to say that, obviously, in the last nine years, if they International. had come across any information that supported these allegations, could they please either give it to the Q511 Paul Farrelly: I have a couple of questions that Metropolitan police’s inquiry or share it with the have still been left hanging in the air about Milly management and standards committee at News Dowler. First of all, I wanted to clarify one bit of International. I had a response from Surrey police at curiosity. I was at The Observer before 2001, when I cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 50 Culture, Media and Sport Committee: Evidence

19 July 2011 Rebekah Brooks and Stephen Parkinson was elected, but it wasn’t covered at that time so I rogue reporter, and the second was that Mulcaire was can’t speak for The Observer. not really active or doing this sort of stuff until 2005. One thing that I know has not changed is that there is You had gone by then, and the myth was not to make no publicly issued directory of mobile phone numbers. any link between the two activities—his activities and From your evidence that there are ways of converting the sorts of activities that were going on under mobile numbers to addresses by legal means, Motorman. The Milly Dowler case comprehensively including web search, the person would have had to demolished both of those myths, didn’t it? put their number on the internet. Otherwise, if the Rebekah Brooks: If you remember, at the time when private investigator had secured it from a mobile Clive Goodman and Glenn Mulcaire were arrested in phone company or through the police, he would have 2006, it was the belief of News International on the to have a public interest defence for doing so. Can you basis that it was the belief of the police that they remember whether you had a public interest defence if would be thoroughly investigating this. In fact, you were challenged? previous to the arrest of Glenn Mulcaire and Clive Rebekah Brooks: Like I said, many people disagreed Goodman, they had been investigating this situation with the campaign, but I felt that Sarah’s law, and in order to make the arrest. I understand why you are the woeful Sex Offenders Act 1997 that needed to be using the language of myth, but for all of us then, that changed to protect the public, I felt was absolutely in was the reality. We were told in the trial in 2007 that the public interest. However, on that particular case— Glenn Mulcaire’s pre-disclosure before sentencing and don’t forget, I only remembered it when I was re- stated categorically that he did not start accessing presented with it—I know at the time my use of voicemails until 2004—it wasn’t 2005; it was 2004. private detectives was around Sarah’s law. That was That is what he said. That is what he told the trial. my own personal— After 2007, there were Committee hearings, News International conducted the internal investigation that Q512 Paul Farrelly: But was that particular you covered extensively in the previous session, and suspected mobile, line 547 of the blue book held by the police closed the inquiry. From my own the info commissioner, where your secretary Cheryl’s knowledge, in 2006, because my own voicemail, as extension 4406 is a contact point, was that a everyone knows now, was accessed by Glenn suspected paedophile? Mulcaire on a regular basis, I had the same knowledge Rebekah Brooks: I can only assume it was, but as this that everyone else had. Whether or not you can say it person has been named and interviewed extensively is a myth now, clearly we have now seen evidence now by the media and has said, quite openly, that he that that is not the case. But it wasn’t a myth; it was is not guilty of any wrongdoing and that he cannot what everyone believed at the time. understand why any of us were looking at him at the time, then I have to accept that. I do not think that the Q515 Paul Farrelly: Thanks to a partial leak—a inquiry led to publication about him, but at the time good description of the paper that was left in the safe we used private detectives in order to track down the in the office of Harbottle & Lewis—we have had an many convicted paedophiles that were living in the account through The Sunday Times in the last few community. days that there were a number of gatekeepers on news desks both in your time at the News of the World and Q513 Paul Farrelly: So you would have had a public under Andy Coulson. The names were Alex interest defence in that particular case. You feel that it Marunchak, Greg Miskiw, Clive Goodman, Neville was not just a question of employing Steve Thurlbeck, James Weatherup, and Ian Edmondson— Whittamore on a no-questions-asked basis? if The Sunday Times is accurate—and yet we are still Rebekah Brooks: No, absolutely not. I think, as you being asked to believe that you, as a hands-on editor, say, you were not at The Observer at the time, and and Andy Coulson simply did not know what your you left in 2001? news desk was up to. Paul Farrelly: It was 2001, for better or worse. Rebekah Brooks: I cannot comment on what others Rebekah Brooks: But The Observer had used private knew, when they knew it and how they knew it. I can detectives before 2001. It was not a new practice at only tell this Committee what I knew while I was The Observer in 2001. In your time at The Observer, editor of the News of the World and subsequently private detectives were used, as they were used across editor of The Sun, and as chief executive I can account Fleet street, and I am sure that you, like I, thought for my actions in trying to get to the bottom of this they worked from legitimate means. Clearly, when we story. In 2006, from my own personal point of view, had “What price privacy?”, when we had the Select I was the editor of The Sun. I had been approached by Committee inquiry and, as Louise has mentioned, the the police to explain the nature of access on my own subsequent conclusion of that, the governance around voicemails and I reported that back to the company private detectives was found to be wanting, and the and was therefore ring-fenced from any of the industry, on the back of this Committee’s inquiry, subsequent investigations. I just remained editor of changed their ways. The Sun. When I became chief executive in 2009, that was when I started to pick up much more Q514 Paul Farrelly: Let me move on to the link with responsibility of how we acted in getting to the bottom Milly Dowler. After the arrest and conviction of of this story. Goodman and Mulcaire, two myths were being peddled, and News International was at the forefront Q516 Paul Farrelly: I will suspend my incredulity of peddling both of them. One was that it was just a again. Can I just move on to Milly Dowler? After the cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Culture, Media and Sport Committee: Evidence Ev 51

19 July 2011 Rebekah Brooks and Stephen Parkinson

Milly Dowler story, which was the straw that broke facilitate the police with any information they the camel’s back finally, your company, acting on your requested or anything that we could proactively find behalf, I assume, was very quick to distance you from to help them. As part of that disclosure and as part of being anywhere on the premises at the time that the references made to the internal investigation into particular story was run. It said, and it has been quoted Harbottle & Lewis, the police asked the management in the newspapers, that you were on holiday at the and standards committee about Harbottle & Lewis. time. Is that the case? We went off to look for evidence. We then found it. Rebekah Brooks: It is slightly irrelevant where I was. As I think James Murdoch said in his session, we took I was the editor at the time. If this happened, then it counsel about it and we handed it over to the police is appalling. I didn’t know it was happening. on 20 June.

Q517 Paul Farrelly: It is not irrelevant because they Q524 Paul Farrelly: This trawl did not just involve distanced you from it. They put out a statement or News of the World people because it was overseen by talked to the press. It has been reported that you were News International people—people who reported to on holiday at the time. you as chief executive. In particular, Jon Chapman. Rebekah Brooks: There were no statements put out Can you remember what conversations you had with about me being away at the time. John Chapman after this evidence came to light? We heard from Rupert Murdoch that, to use his words, Q518 Paul Farrelly: If you do the clips, you will John Chapman sat on that file for years. find that it is reported and sourced to the company. Rebekah Brooks: The original inquiry in 2007 was, I Rebekah Brooks: Yes, but you said a statement. We believe, instructed by Les Hinton— didn’t put out a statement. The actual fact was that I was away for the story that they are talking about, but Q525 Paul Farrelly: Yes, we know the background. I feel as editor that is irrelevant. I was the editor of I am just asking you what happened when the the paper, and therefore, ultimately, it happened on evidence came to light through your committee. John my watch. Chapman is a News International legal director who reports to you. Can you remember what conversations Q519 Paul Farrelly: Who would have been editing you had with him? the paper when you were away? Your deputy? Rebekah Brooks: Yes, I can. Obviously, we discussed Rebekah Brooks: The deputy or the associate editor. it. As soon as it came to light—I was told about it at the end of April, I think—Mr Chapman was asked for Q520 Paul Farrelly: Who was the deputy? his knowledge of it, where the file had been and why Rebekah Brooks: I had a deputy, Andy Coulson, and it had not come to light before. an associate editor, Harry Scott. Q526 Paul Farrelly: What was his response to you? Q521 Paul Farrelly: So, Andy Coulson would have Rebekah Brooks: His response to us at the time was been editing it while you were away? that he was asked to do an investigation into the illegal Rebekah Brooks: Presumably, but I don’t absolutely interception of voicemail. He felt that the Harbottle & know. Lewis recommendation, which was the letter that you have— Q522 Paul Farrelly: I don’t want to take too long. You saw the exchanges over the e-mail—the sheaf of Q527 Paul Farrelly: A very misleading letter. paper that was residing for a long time in the offices Rebekah Brooks: As our legal adviser, he felt that the of Harbottle & Lewis that gives the lie to the evidence letter from Harbottle & Lewis— that we received previously about the results of a huge e-mail trawl after Colin Myler arrived. Clearly, that Q528 Paul Farrelly: Got you off the hook? was still sitting there when you became the chief executive in 2009. It was all commissioned before Rebekah Brooks: No. He felt that it was an accurate your watch, but it was sitting there on your watch. review of the Harbottle & Lewis file. That is James Murdoch said that he first learned about it in something, as you clearly have heard today, that either April or May and then it was passed to the neither James Murdoch nor I thought it was, on police in June. When did you first learn that that closer examination. evidence was there? Rebekah Brooks: Just before James Murdoch, and I Q529 Paul Farrelly: Did he just do that off his own then went to tell him what we had found. bat? Rebekah Brooks: Do what, sorry? Q523 Paul Farrelly: Did Will Lewis report the find to you? Q530 Paul Farrelly: Get Harbottle & Lewis to issue Rebekah Brooks: As you know we have this a misleading letter, or a letter that may not have been management and standards committee that we set up misleading to them at the time, and to sit on evidence after the police reopened their investigation in January that gave a lie to what we were told. Did he just do 2011. Obviously, it was our investigation that led to that off his own bat? the opening of that inquiry—the information that we Rebekah Brooks: Harbottle & Lewis is a very handed over to the police. We subsequently set up respected law firm. I am not sure that it is fair of you a management and standards committee in order to to accuse it of— cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

Ev 52 Culture, Media and Sport Committee: Evidence

19 July 2011 Rebekah Brooks and Stephen Parkinson

Q531 Paul Farrelly: I am not. I am asking about Jon Q538 Paul Farrelly: Finally, do you recall a Chapman, who reported to you. conversation with Boris Johnson, during which he Rebekah Brooks: You asked if Jon Chapman— asked you what you wanted out of this, and your response was for Alan Rusbridger to go to down on Q532 Paul Farrelly: Did he take the decision not to his knees and beg for your forgiveness? Do you recall disclose anything any further? that conversation? Rebekah Brooks: You asked if Jon Chapman had Rebekah Brooks: Absolutely not. asked Harbottle & Lewis— Q539 Dr Coffey: I had assumed that my colleague Q533 Paul Farrelly: No, I asked you what he said Mr Watson would ask you about this earlier. In his to you. intervention in the House on 6 July, he suggested that Rebekah Brooks: Yes, but you also asked whether Jon the News of the World wrote that there was a “left… Chapman asked Harbottle & Lewis to write a message on her voicemail after the 13-year-old misleading letter. My response to that question is that vanished at 4pm on March 21… on March 27—six I think Harbottle & Lewis is a well-respected legal days after Milly went missing in Walton-on-Thames, firm, and I am sure that that wouldn’t be the case. Surrey…the employment agency appears to have Jon Chapman has been a respected lawyer at News phoned her mobile.” Given the importance of the International for many years, and I am sure that he Milly Dowler story, the seriousness of which has would absolutely not have done that. However, in already been alluded to, did you ask how you light of what we know now, when I and the managed to get that information? management and standards committee at News Rebekah Brooks: As I’ve said, the most important International saw that file, we felt that it, from our thing in the case of Milly Dowler is that we get to the perspective, put a new light on information that we truth of the allegations as quickly as possible. Those had had in the past, and we handed it over to the who are culpable, if it turns out to be true, should face police. not only opprobrium, but correct justice through the legal system. I am very mindful that I have to be careful of what I Q534 Paul Farrelly: I didn’t ask that question, but it say because of what I know and because of the would have been a good question to ask, so thank you. criminal investigations. The fact is, and I can only Why did Jon Chapman leave the employ of News keep saying this, the suggestion that Milly Dowler’s International? voicemails were intercepted by someone working for Rebekah Brooks: As you heard in the previous the News of the World, or someone on the News of the session, Jon Chapman wanted to leave. We felt that World, is unknown to me. It is abhorrent to me, which under the circumstances, that was the right course of is all I can tell you. action. Q540 Dr Coffey: I accept that, but I will press a little Q535 Paul Farrelly: Because Jon Chapman has further. Given that there is a specific reference in the come out strongly as the fall guy from this session. story, I am surprised that more questions were not He acted alone, did he? asked at the time. I fully accept that you find it Rebekah Brooks: I think that at the time, if you called abhorrent. Jon Chapman, who was a corporate lawyer, and Rebekah Brooks: Just accept that, perhaps, nine years Daniel Cloke, who was our head of HR, to this ago, when the story was run—I am told now that the Committee, they would say that in their experience story you are referring to was a single column on page and knowledge, when they looked at the file, they felt 9—I am sure questions were asked about where that that the Harbottle & Lewis letter was correct. information came from. They will have been asked of the reporter or they will have been asked of the news Q536 Paul Farrelly: I have a couple of final editor. The night editor and the lawyer would have questions. One thing that struck many people was the checked them, and there would have been a process silence across Fleet street, apart from a few around every story, whether it was a single column or newspapers—The Guardian of course, The the front page, to determine where the information Independent and the FT, and then the New York came from. I can tell you now that it would not have Times—in the coverage of the affair. Can you been the case that someone said, “Oh yes, that came remember calling any editors after The Guardian’s from an illegal voicemail interception.” It seems now story in July 2005 to discuss how they might or might that it is inconceivable that people did not know this not cover the story in order to downplay the coverage? was the case, but at the time it wasn’t a practice that Rebekah Brooks: In 2005? was condoned or sanctioned at the News of the World under my editorship. That is all I can tell you. Q537 Paul Farrelly: In 2009, after The Guardian broke the story. Do you remember calling around Q541 Dr Coffey: Mr Watson went on to suggest that editors such as Paul Dacre to, in some way, encourage you were “present at a meeting with Scotland Yard them not to give the story any play? when police officers pursuing a murder investigation Rebekah Brooks: No. I don’t remember calling him provided her with evidence that her newspaper was about it, but he and I would talk about industry interfering with the pursuit of justice.” He particularly matters on occasion. I only knew what I had read in mentioned the name of another senior executive, Alex The Guardian. Marunchak, and also said: “At the meeting, which cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson included Dick Fedorcio of the Metropolitan police, who either still works at News International or has left she was told that News of the World staff were guilty its employ in the last month? It seems there has been of interference and party to using unlawful means to a team that’s pulled together. Who could you say, yes, attempt to discredit a police officer and his wife.” Can done that? you tell us more about that meeting? Rebekah Brooks: The process of the criminal Rebekah Brooks: I can tell you something about it. I investigation started when we handed over was recently asked, by Channel 4, I think, to recall a documentation that we had found. All that meeting that I had had at Scotland Yard in 2002. My documentation has been shared with the management recollection of that meeting was entirely different. My and standards committee of News International that, recollection is that the meeting was on a completely as James and Rupert Murdoch referred to, report in different subject. I am only going on what I was told directly to the board of News Corporation, and they by Channel 4. They say it was a meeting was in are independent from News International for that November. That is what was put to me. I checked my particular reason. Obviously, all the legal team diary as much as possible, and there was no meeting working on this know about it, and also the police are in November. However, there was a subsequent aware of everything that we are aware. meeting in very early January. It may be that it was that meeting, but that is not my recollection of the Q547 Dr Coffey: Just to clarify, would that group meeting. On the other hand, because of the Sarah’s of people include anyone who has previously given law campaign, I had pretty regular meetings at evidence to our Committee, or predecessor Scotland Yard, mainly with the paedophile unit there. Committee? People like Colin Myler or Les Hinton? They are the names that I can think of off the top of Q542 Dr Coffey: Rupert Murdoch said he relied on my head. his lieutenants, people he trusted. He referred to Les Rebekah Brooks: Actually, probably not, no. Because Hinton as someone with whom he would trust his life. the management and standards committee was about Who would you trust who worked for you? the current management—so chief executive and my Rebekah Brooks: I think the newsroom of any current executives would know about. newspaper is based on trust. If you think about—I am sure that Mr Farrelly will agree with this—the way Q548 Dr Coffey: Final question from me: do you that a story gets published, of course it is on trust. You have any regrets about any of the headlines that you rely on the people who work for you to behave in a have done, now that you have been in the spotlight proper manner, and you rely on the clarity of yourself? You have been subject to quite a lot of information that you are given at the time. That is why media spotlight. Does this make you regret any one I can be so absolute with the Committee today about at all? the interception of Milly Dowler’s voicemail, from Rebekah Brooks: I don’t think that you would find my own personal view—again, not commenting on any editor in Fleet Street who did not feel that with what other people knew at the time. So when you say, some headlines that they had published, they had “Who do I trust?”, the whole newsroom and the whole made some mistakes, and I am no different to that— basis of the newsroom is based on trust. For example, there have been mistakes. On the other hand, despite, at The Sun, if Trevor Kavanagh, who was my political as you say, being in the spotlight recently and having editor when I was editor of The Sun, came to me with read lots of criticism that is justified and lots of a story, I knew it to be true. I didn’t need to ask which criticism that was totally spurious, I would defend the MP or which Cabinet Minister had leaked him the right of a free press from my entire career. I think it story, I just knew it to be true because of the standing is vital to us and, yes, it hasn’t been particularly that Trevor Kavanagh has, and his experience as a pleasant. It was one of the main reasons that I wanted journalist. Again, you could say that is based on trust, to leave, because I felt that I was detracting from the but that is how it works. amazing journalists and media executives and all the people who work in News International. I felt that I Q543 Dr Coffey: Mr Mulcaire seems to have was detracting from their incredibly good work. We implicated himself in his own public statements about have a very robust and diverse press in this country, the Milly Dowler situation. covering all spectrums and all opinions. I think the Rebekah Brooks: Yes. freedom of that press should be ensured for ever more. I hope that Parliament continues to do that. Q544 Dr Coffey: Who else, from what you now know that you didn’t know before, do you believe is Q549 Philip Davies: How many times would you likely to be convicted of crimes? speak to Rupert Murdoch when you were chief Rebekah Brooks: Well again, I think that would be— executive of News International? Rebekah Brooks: I would speak to Mr Murdoch and Q545 Dr Coffey: I have just been told I cannot ask James Murdoch much more regularly since I have that. become chief executive than I did when I was editor. Rebekah Brooks: I was just going to say, I think that would be slightly—none of us here should be judge Q550 Philip Davies: Once a day? Twice a day? and jury. I don’t think I should answer that. Rebekah Brooks: James Murdoch and I have offices next to each other, although he has his travel schedule Q546 Dr Coffey: Many of us are called on to serve because of his wide responsibilities, and I would talk on juries. Okay. Who else knows what you now know, to Rupert Murdoch quite regularly. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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Q551 Philip Davies: Once a day, twice a day—can is the allegation. But that is nothing that you would you give me any kind of idea? know anything about? Rebekah Brooks: On average, every other day, but Rebekah Brooks: I don’t know about that, but most pretty regularly. journalists who work as crime editors or crime correspondents have a working relationship with their Q552 Philip Davies: You said that everyone at News particular police force. of the World was going to say that everyone was working hard to get them a job and make sure that Q558 Philip Davies: When our report was published they did not lose it, which is perfectly admirable. Why in early 2010, when you were chief executive of News is that not the same for Tom Crone? You said that the International, there were certain things that we reason he left the employment was because his job obviously reported. We found that the evidence from sort of no longer existed at News of the World, and he the people from News International was wholly was doing that, so if you are busily trying to find a unsatisfactory. We referred to the collective amnesia job for everybody at News of the World, why are you in our report, and we felt it was inconceivable that not going to find a job for poor old Tom Crone? Why Clive Goodman was a rogue reporter, as had been has he got the Spanish archer? passed on to us. We referred to the “for Neville” e- Rebekah Brooks: There are some people who did not mail in there—all that kind of stuff. When you were want a job. In the case of Tom Crone, Tom’s title was chief executive of News International, at the time the News International legal manager. It was not, as Mr report was published, did you read the report that we Sheridan pointed out, just journalists; it was drivers published? and secretaries—many people to find jobs for at News Rebekah Brooks: Yes, I did. I’m not saying that I read of the World. In the case of Tom, as I explained, for every single word, but I read a large majority of it. I the last few years he had predominantly worked as the particularly read the criticisms that were addressed to legal manager for News of the World; in fact there are the company, and I can only hope that, from the legal teams on all the other newspapers. That was the evidence you have heard from us today, you know current situation with Tom. that we have really stepped up our investigation. Rupert and James Murdoch have been here today, Q553 Philip Davies: Can I just ask you about Neville being very open and very honest with you as a Thurlbeck? Did you know when you were editor of Committee. I was very willing to come, despite the News of the World that he was somebody who was an fact that there are some legal issues around what I informer to the police? say. I hope that you think that when we saw the civil Rebekah Brooks: No. disclosure in December 2010 we acted swiftly and promptly to deal with it. The police investigation Q554 Philip Davies: You did not know that he was would not be open now—there would not be a new a police informant? criminal inquiry—if it had not been for the Rebekah Brooks: No. Is that true? information that News International handed over. I am not saying that we have not made mistakes, but the Q555 Philip Davies: Well, it is in the Evening Metropolitan police have repeatedly said, as you heard Standard. They have quoted court reports dating back last week—or the Home Affairs Committee heard last to 2000, when he said himself, after a case: “The week—that there was no need for a further criminal police were very impressed about the type of investigation. So I think that everyone involved in intelligence I was coming up with and that was 2007 would say now that mistakes were made. But I revealed in court. The judge said it was a substantial hope that you feel that we have responded volume of information that was extremely useful to appropriately and responsibly since we saw the police.” It says also that sources close to Thurlbeck information in 2010. said that “people right at the top of News International were aware of his role” with the police. Q559 Philip Davies: So when you read the report did Rebekah Brooks: I was not aware that Neville that make you think, “Well blow me, there are some Thurlbeck was a police informant. things that don’t stack up. We might not have any evidence, I might not know anything about these Q556 Philip Davies: So, that comes as a complete people, but there is clearly something that is not quite shock to you? right here”? Did that prompt any activity on your part Rebekah Brooks: You’re telling me now, but I am not as chief executive of News International to say, “Well, even sure what it means, particularly. If you’re asking you know, let’s go back over this because there is me whether members of the press and members of the something not right here”? police force have a symbiotic relationship of Rebekah Brooks: Everyone at News International has exchanging information for the public interest, then great respect for Parliament and for this Committee. they do, but I am not quite sure what the word “police Of course, to be criticised by your report was informant” means. something that we responded to. We looked at the report. It was only when we had the information in Q557 Philip Davies: The allegation is that he passed December 2010 that we did something about it. But I on a substantial volume of information that was think you heard today from Rupert Murdoch, who said extremely useful to Scotland Yard, and in return Mr that this was, you know, the most humble day. We Thurlbeck received dozens of items of confidential come before this Committee to try and explain, openly information from the police national computer. That and honestly, what happened. Of course we were very cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson unhappy with the criticisms that this Committee found Minister would think that The Sun was not fighting against the company. We aspire daily to have a great for the right people. In fact, The Sun continues to fight company, and your criticisms were felt. for the right people.

Q560 Philip Davies: Could you tell us how often you Q564 Philip Davies: How often would any of those either spoke to or met the various Prime Ministers that Prime Ministers ask you—if ever—as either editor or there have been since you have been editor of News chief executive, not to publish a story? Would they of the World,ofThe Sun, and chief executive of News know that something was coming in the news and International. How often would you speak to or meet would they ask you to spike a story? Would that Tony Blair, Gordon Brown and David Cameron happen? respectively? Rebekah Brooks: I can’t remember an occasion where Rebekah Brooks: Gosh. On Prime Minister David Prime Ministers asked us to not run a story. Cameron, I read the other day that we had met 26 times. I don’t know if that is absolutely correct. I can Q565 Philip Davies: Or politicians generally? Is that do my best to come back to you on an exact number. something that would happen? I am sure that it is correct if that is what the Prime Rebekah Brooks: No. I would say that I can Minister’s office say. The fact is I have never been to remember many occasions when a Cabinet Minister, Downing Street while David Cameron has been Prime a politician, or a Prime Minister, was very unhappy at Minister, yet under Prime Minister Gordon Brown and the stories we were running, but not that they have Prime Minister Tony Blair, I did regularly go to ever pleaded directly for one not to run. Downing Street. Q566 Philip Davies: And if they had, you would not Q561 Philip Davies: How regular is regular? have been interested anyway, presumably? Rebekah Brooks: On Prime Minister Gordon Brown, Rebekah Brooks: As long as the story was true and in the time that he was in Downing Street and also accurate, or was part of a campaign, then no. There is while he was Chancellor, I would have gone maybe no reason for a Prime Minister—that is exactly why six times a year. we have a free press.

Q562 Philip Davies: And with Tony Blair, Q567 Philip Davies: This is my final question. There something similar? has been a feeling that, in some way, you had a close Rebekah Brooks: Probably similar. Maybe in the last relationship with the current Prime Minister. The few years a little more, but if you want the exact allegation goes—it seems to me that it is no different numbers I can do my best to get that. Strangely, it was to your relationship with previous Prime Ministers, under Labour Prime Ministers that I was a regular but just for the benefit of what people may perceive— visitor to Downing Street and not the current that you had a close relationship with the Prime Administration. Minister, which was helpful to him, and certainly News International’s support was helpful to him Q563 Philip Davies: Do you think that there was a politically, but that in return News Corporation was change of emphasis when you were either editor of hoping that that would in some way grease the wheels The Sun or chief executive of News International? It for the takeover of BSkyB. Was any of that part of always struck me when I was growing up that The the wider strategy of News Corporation? Were you Sun and the News of the World—The Sun,in encouraged to get closer to the Prime Ministers with particular, always struck me as being a rather anti- that in mind? establishment publication. It seemed to be the paper Rebekah Brooks: No, not at all. I have read many, that was on the side of the little person fighting the many allegations about my current relationship with establishment. Would you say that when you became the Prime Minister, with David Cameron, including editor—obviously with your relationship with those my extensive horse riding with him every weekend up Prime Ministers—that there was a shift, and actually in Oxfordshire. I have never been horse riding with News International became part of the establishment, the Prime Minister. I don’t know where that story as opposed to being anti-establishment? came from. I was asked three days ago to disclose the Rebekah Brooks: Well, considering the amount of racehorse that I owned with the Prime Minister, which complaints I used to get from both Prime Ministers I do not, and I was asked a week ago to explain why about the coverage in The Sun I would think that if I owned some land with the Prime Minister, which I they were here now they would say that that is not the do not. I am afraid, in this current climate, many of the case. Throughout my editorship of The Sun, as you allegations that are put forward I am trying to answer know, one of the main campaigns that we have had is honestly, but there is a lot out there that just isn’t true, for “Help for Heroes”. I think The Sun is absolutely and particularly around this subject of my relationship the paper for the military, and that caused us to have with David Cameron. The truth is that he is a very, very uncomfortable conversations, particularly neighbour and a friend, but I deem the relationship to with Prime Minister Gordon Brown. One of the issues be wholly appropriate, and at no time have I ever had that still is apparent today, as it was back then, is the any conversation with the Prime Minister that you in lack of awareness of other aspects of the media and the room would disapprove of. of Parliament to acknowledge that currently we have soldiers fighting a war in Afghanistan, and people Q568 Mr Sanders: On that point, a newspaper seem to forget that. I would not say that any Prime reported the other day that you had advised David cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson

Cameron on whom to appoint as a press spokesman politicians to News of the World and News and suggested that it should be Andy Coulson. International? Rebekah Brooks: Yes, I also read that. Rebekah Brooks: I think the public’s concern overwhelmingly, on the interception of voicemails, is Q569 Mr Sanders: What was your reaction to that the idea that anybody could intercept the voicemails story? of victims of crime. I think that is their Rebekah Brooks: I think it is a matter of public overwhelming concern. knowledge that it was the Chancellor George Osborne’s idea that when Andy Coulson left the News Q577 Paul Farrelly: But there has been a lot of of the World they should start discussions with him on concern voiced over the closeness of police and whether he would be an appropriate person to go into politicians and News of the World and News Tory HQ. The first time I heard of him being International; would you agree, as a matter of fact? approached was from Andy Coulson and not from the Rebekah Brooks: I have seen that the News of the Prime Minister. World has been singled out for that closeness. I think if you were going to address it—you know this more Q570 Mr Sanders: So you had no conversation with than anyone on the Committee because of your career David Cameron, who was not Prime Minister at the as a journalist—it is wholly unfair in discussing the time? closeness of police and politicians to the media to Rebekah Brooks: The piece that you—no. The single out the News of the World. answer is that the allegation, which I have read, is that I told the Prime Minister to hire Andy Coulson, and Q578 Paul Farrelly: Okay, but it is a fact that this that is not true and never was true. The idea came has been a criticism, yet you, on your watch as chief from George Osborne. executive of News International, manage a triple whammy, because you employ the former Director of Q571 Mr Sanders: So you had no conversation with Public Prosecutions to advise you on your approach David Cameron about Andy Coulson being suitable to evidence and handing it over to the police. While for that position? he was the DPP, and along with his successor, Ken Rebekah Brooks: No. Macdonald was not above criticism for frankly Mr Sanders: None whatsoever? rubber-stamping the complacent police approach to the inquiry. Do you think that was an error of Rebekah Brooks: No—obviously, you are talking judgment given the circumstances? before his appointment? Rebekah Brooks: Just to clarify the Ken Macdonald issue, which I think is important: he was hired by Q572 Mr Sanders: Yes. News Corporation and he has been rigorous in his Rebekah Brooks: No. separation of payments to police and the illegal interception of voicemail. He has not commented in Q573 Mr Sanders: You would presumably in a any shape or form on the illegal interception of social context swap gossip with David Cameron when voicemail, and if that conversation has arisen, he has you meet, and that gossip could have been obtained withdrawn himself from the room and the by illegal means. Are you satisfied that, in your conversation. I hear what you say but— dealings with David Cameron before and after his becoming Prime Minister, the sort of gossip that you Q579 Paul Farrelly: But you can forgive people for might share was above board? shaking their heads, can’t you? Rebekah Brooks: I hope my earlier assurance was Rebekah Brooks: Well, I can forgive people for that any social encounters that I have had with the shaking their heads if they believe that the question Prime Minister and any conversations were wholly you put to me was true, but I think if people appropriate both to my position as editor of The Sun understand that he was hired by News Corporation, or chief executive and his position as Prime Minister. not News International, that he is reporting directly into the board and that he is only discussing payments Q574 Mr Sanders: Did you approve the subsidising to police officers, then I do not think people would of Andy Coulson’s salary after he left News of the shake their heads. He has been rigorous in not World? involving himself in the illegal interception of Rebekah Brooks: Again, that's not true, so I didn’t voicemails. approve it. Q580 Chair: I think we should call a halt there, Q575 Mr Sanders: So the New Statesman report, unless you have anything else you’d like to add. like the Daily Mail report, is inaccurate? His salary is Rebekah Brooks: Just one thing really. I know you’ve not being subsidised by News International. heard unreserved apologies from Rupert and James Rebekah Brooks: That is correct. They are incorrect. Murdoch. I just want to reiterate my own. The most Chair: I have one final very small question from Mr important thing that I feel going forward for the Farrelly. investigation is to discover the truth behind the allegations, particularly for Milly Dowler’s family, but Q576 Paul Farrelly: Thank you, John. Would you for the other allegations of victims of crime too. agree, Ms Brooks, that part of the public concern here Again, I would like to make just one request to the is about the closeness of the police and now Committee—that when I am free from some of the cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG02 Source: /MILES/PKU/INPUT/012695/012695_o002_db_Corrected transcript CMSC 19 July 2011.xml

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19 July 2011 Rebekah Brooks and Stephen Parkinson legal constraints that I am under today, you will invite your willingness to come and for the way in which me back so I can answer in a more fulsome way. you have answered our questions? Chair: I think the Committee would be very happy to Rebekah Brooks: Thank you, Chairman. accept that offer. In the meantime, can I thank you for cobber Pack: U PL: COE1 [SE] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 58 Culture, Media and Sport Committee: Evidence

Tuesday 6 September 2011

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Louise Mensch Damian Collins Mr Adrian Sanders Philip Davies Jim Sheridan Cathy Jamieson 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- what we were going to do about the letter. As an HR up session for the Committee’s inquiry into press director I was quite clear that there were two issues standards, privacy and libel where we are continuing here. One was whether the fact that Clive Goodman to examine, specifically, the illegal activities that took had intercepted voicemail messages was gross at the News of the World several years ago. I would misconduct, which I thought it was. So that was an like to welcome this morning for our first session Mr employment issue. Obviously he had made allegations Jon Chapman, the former Director of Legal Affairs at about other members staff and so we should look at News International, and Daniel Cloke, the former those almost as a separate issue. There were two Group HR Director. If I might begin, Mr Cloke, this issues that I think he was raising. So I agreed that Committee became aware a few weeks ago of the approach with my colleagues and we subsequently letter that was sent to you, dated 2 March 2007, by started the appeals process. Clive Goodman in which he set out a number of grounds on which he wished to challenge his Q586 Chair: And did all of those you discussed it dismissal. Were the contents of that letter a surprise with express similar surprise that Clive Goodman was to you? making these suggestions? Daniel Cloke: Yes. I had not been involved with any Daniel Cloke: Yes. That is my recollection. of the activities in relation to Clive Goodman and the criminal charges brought against him so the first Q587 Chair: So Les Hinton had no knowledge of knowledge I had of the situation was that letter which this before the letter and nor did Stuart Kuttner? I received. Daniel Cloke: No. I did not discuss the matter with Stuart Kuttner at that time. The letter had been copied Q582 Chair: So, Mr Goodman’s suggestion that the to Stuart, but the people we were discussing it with in practice of phone hacking had been carried out by terms of the appeals process were Jon Chapman, Les others and that there were a number of people at the Hinton and Colin Myler. News of the World who were aware that it was taking place—you had no idea that he was making those Q588 Chair: But you did not say to Tom Crone, suggestions until you got his letter? “According to this letter you’ve been attending all his Daniel Cloke: No, not until I got the letter. legal meetings. Why have you not told us before that this was his suggestion?” Q583 Chair: Right. In his letter he said that he was Daniel Cloke: No. I interviewed Tom Crone, along very surprised because Tom Crone had attended with Colin Myler, basically to ask Tom for his almost every meeting of his legal team where, recollection of events. Tom said that this was a presumably, if this was his defence, that was surprise to him, as it was to everybody else. discussed. Daniel Cloke: It was not discussed with me. Q589 Chair: He said to you that it was a surprise. So he had no knowledge? Q584 Chair: So, Mr Crone never said to you, “He’s Daniel Cloke: Yes. That is my recollection. It was probably going to challenge it on the basis that he has four and a half years ago and I do not have the notes told us”? I made at the time in front of me, but that is certainly Daniel Cloke: No. The first conversation I had with my recollection. Tom Crone was after I received the letter from Mr Goodman. Q590 Chair: So despite his attending virtually every meeting of Mr Goodman’s legal team, Mr Crone said Q585 Chair: Right. And when you received this that he did not know that this was going to be the letter, which was copied to Les Hinton and Stuart defence? Kuttner, it must have come as a surprise to you, Daniel Cloke: Yes, that is right therefore, to discover that he was saying that this was a widespread activity. So what did you do? Q591 Chair: May I turn to Mr Chapman? You will Daniel Cloke: First of all I discussed it with Jon and have perhaps watched, or certainly heard about since, also with Les Hinton and Colin Myler in terms of the sitting that this Committee had with Rupert cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 59

6 September 2011 Jonathan Chapman and Daniel Cloke

Murdoch, in which we discussed with him the Jonathan Chapman: We looked carefully at the e- exercise that you undertook to examine the e-mails of mails, and we came to the conclusion, having carried those individuals who were named by Clive out that exercise carefully and taken quite a long time Goodman. Rupert Murdoch said, “Mr Chapman, who on it, that there was nothing there that indicated was in charge of this, has left us. He had that reasonable evidence of the matters that we were report”—we understand that there wasn’t actually a looking for, which was knowledge of or complicity in report—“for a number of years. It was not until Mr voicemail interception. Lewis looked at it carefully that we immediately said, ‘We must get legal advice’”. What is your reaction to Q595 Chair: What about other illegal activities? the suggestion, which Mr Murdoch appears to make, Jonathan Chapman: We were looking for voicemail that something that was immediately obviously to interception. In terms of other illegal activities, I am Will Lewis escaped you throughout the time that you well aware that Lord Macdonald mentioned stuff to had these e-mails? the Home Affairs Select Committee in July. What I Jonathan Chapman: I do not know whether it was can say on that is that I have no recollection of immediately obvious to Will Lewis or whether that is specific e-mails at the time that would have led me to correct. The only interface that I had in respect of the that conclusion, but I am at a disadvantage, of course, e-mails was with a firm called Burton Copeland, because he has seen those e-mails and I haven’t seen which was acting for News International earlier this anything subsequently. If I were to look at those again, year in relation to the Metropolitan police inquiry, so I could give my reaction, but I cannot recollect I cannot comment on that. specific e-mails that led me to that conclusion. In terms of the e-mails themselves, my reaction was one of surprise. We did what I thought was a careful Q596 Chair: So essentially you are saying that you and diligent exercise back in 2007. It is hard for me to emerged from the exercise that you carried out happy comment on individual e-mails at this stage, because that there was no evidence to support any serious nearly four and a half years have elapsed, but I would allegation of illegal activities. maintain that Daniel and I carried out a thorough Jonathan Chapman: What our brief was at the time, exercise then and passed on the file to Harbottle and Mr Whittingdale, was to look for evidence of Lewis, which came up with the report that you and voicemail interception linked to Mr Goodman’s your members have seen. appeal process, so that is what we were looking for. Now, if, by the by, we had come across something Q592 Chair: When you carried out your exercise, else that we clearly recognised to be evidence of some did you see anything that suggested to you that illegal other illegal activity, then my reaction at the time activity had been taking place? would have been that we would have to go through Jonathan Chapman: It is hard for me—I can’t really the correct procedure on that. What I am saying is that recollect individual e-mails. There were certainly we did not find anything that amounted to reasonable some e-mails where Daniel and I would confer with evidence of voicemail interception, and my each other just to ensure that our understanding of recollection is that that was it. There was no other them was correct, but we looked at everything in the illegal activity that stood out at the time. context of a very long string of e-mails. The thing about e-mail conversation, as you will be well aware, Q597 Chair: For instance, you do not recall seeing is that it is quite chatty, and sometimes there is any suggestion in the e-mails that payments were exaggeration and so on in it. So it is important to look being made to police officers. at e-mails, when doing this sort of exercise, in the Jonathan Chapman: I can’t recall that. context of a string of e-mails, rather than individual ones in isolation. The Harbottle e-mails that have Q598 Louise Mensch: Just to recap on what you subsequently come to light were ones that were pulled have just said, you said that your brief was to look for out of context. So I would say, as I sit here today, four voicemail interception, but if there was anything else and a half years on, that it is difficult for me to illegal, that would have to go through a proper recollect individual e-mails, but I know that we did— process. I still maintain that this is the case—a thorough Jonathan Chapman: Indeed. exercise at the time. Q599 Louise Mensch: Are you saying now that, to Q593 Chair: But Mr Murdoch’s suggested that Will the best of your recollection—I understand that you Lewis immediately said, “We must go to the police cannot pick out individual e-mails, but in the string as with this.” Presumably you would recall if you had a whole—there was no widespread illegal blagging had a similar reaction on examining any specific e- activity that jumped out at you, no payments to police mails. officers and nothing to give you, as the legal director, Jonathan Chapman: That is correct, and I don’t any cause for concern? recall having that reaction when examining the e- Jonathan Chapman: To my recollection, as we sit mails in 2007. here today, there was nothing that gave me cause for concern or that needed to be escalated. Q594 Chair: Do you recall whether you saw anything that suggested to you not necessarily that Q600 Louise Mensch: Okay. Mr Cloke, you have Clive Goodman was correct, but simply that illegal just said that Mr Hinton, yourself and others were activity had been taking place? entirely shocked at Clive Goodman’s allegations that cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 60 Culture, Media and Sport Committee: Evidence

6 September 2011 Jonathan Chapman and Daniel Cloke everybody knew that this was going on and that it had were your terms of reference for picking out the e- been authorised by many people at the News of the mails that constituted the basis of this review? World. You said that you made Les Hinton aware of Daniel Cloke: Essentially, Clive Goodman had it. Given that you have said now that it came as a specified in his letter that he would like to see e-mails complete shock to all the senior executives at the between certain individuals, from, I think from company with whom you discussed it, was this kicked memory, about six months prior to his conviction. any further up the chain at News Corp to your They were the parameters. What happened then was knowledge? Was it kicked up to James or to Rupert that we asked the IT department to retrieve all of the Murdoch? e-mails under that search criteria that could be Daniel Cloke: Not to my knowledge, no. I am not retrieved. aware of the conversations that Les Hinton might have had with those two gentlemen. Q609 Louise Mensch: So you went through e-mails between individuals from a specified set of dates. Q601 Louise Mensch: When you discussed this with Daniel Cloke: Yes. Les Hinton—you say that he had no knowledge of it—did he express shock and dismay? Q610 Louise Mensch: You did not look through your Daniel Cloke: From what I recall, he was upset about general e-mail files and say, “This looks a bit dodgy, it. There was never any question but that we were going to have a look at this, because they were we’re going to kick it back for review.” They were serious allegations. literally e-mails between individuals at the paper within dates, and those were your search parameters. Q602 Louise Mensch: Did he ever express to you at Daniel Cloke: Yes. The search parameters, to be any time that this was such a serious matter that he really clear, were specified. What we did was we would consider referring it up the chain to more senior followed Clive Goodman’s request. I think that he executives at News Corporation? requested e-mail correspondence between him and Daniel Cloke: Not that I can recall. four or five other people. They were the parameters of the search. Q603 Louise Mensch: And that never came up in any subsequent internal discussions over this matter Q611 Louise Mensch: You have also stated that as or review with Mr Chapman or others to your part of your review, you questioned the individuals knowledge—specifically that it was going to be named by Mr Goodman as well as reviewing the e- referred up the chain? mails. In that questioning, did anything arise that Daniel Cloke: Not that I can recall, no. caused either one of you concern that laws had been broken by executives or reporters at the News of the Q604 Louise Mensch: What about you, Mr World, other than by Clive Goodman? Chapman? Daniel Cloke: No one, when we spoke to them, Jonathan Chapman: I do not recall that. I did not admitted any wrongdoing at all. have dealings with Mr Hinton on the letter that came from Mr Goodman. Q612 Louise Mensch: And when you spoke to them in those interviews, as part of this review—not just Q605 Louise Mensch: And Mr Crone never looking at the e-mails but also talking to the expressed that this was so serious a matter that he was individuals—no one, other than Clive Goodman, said going to refer it up the chain for corporate governance that anybody else had been involved in phone hacking to have a look at? Anything of that sort? and the interception of voicemails at the News of the Jonathan Chapman: I think that is probably a World. question for Mr Crone. Daniel Cloke: Not that I can recall, but I do not have the notes of those conversations in front of me. Q606 Louise Mensch: But not to your knowledge? Jonathan Chapman: Not to my knowledge. Q613 Louise Mensch: But presumably, since that was the focus of your investigation, it would be Q607 Louise Mensch: You selected that you were something that would stick out in your mind had it going to have a review of a certain number of e-mails. happened. There are approximately 2,500 e-mails in the dump Daniel Cloke: Yes. 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? Q614 Louise Mensch: What about you, Mr Jonathan Chapman: I did not choose them. The Chapman? parameters for the e-mail review were set by claims Jonathan Chapman: I was not involved in the made by Mr Goodman in the context of his appeal. questioning. It was carried out by Mr Myler and Mr Cloke. Q608 Louise Mensch: So just describe to me the process by which you said, “Okay, these are relevant Q615 Louise Mensch: Did you see a review or notes to Mr Goodman in the context of his appeal.” Did of the questioning after it happened? you wish to examine all correspondence between the Jonathan Chapman: No, I did not. I had a editors of the paper between particular dates? What conversation with Mr Cloke after it had happened in cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 61

6 September 2011 Jonathan Chapman and Daniel Cloke which he recounted to me, I think in fairly broad- looking for stuff that stood out as potential reasonable brush terms—it would be fair to say, Daniel—that evidence in the context of an employment tribunal and nothing had come up in it. not a criminal case.

Q616 Louise Mensch: One last question for you, Mr Q622 Damian Collins: You said in your written Chapman, which will relate to questions I am going evidence to the Committee, and you have touched on to be asking Mr Crone later. You had duty legal this already in part, that “it is very easy to presume, managers at the News of the World whose job it would without the benefit of that context”—i.e. the context be to sign off on individual stories. As part of your of an e-mail exchange—“that all or many of them review to find out whether there had been widespread point to something sinister.” I wonder if you would hacking, did you ever talk to any of your duty legal say a little bit more on that, because to me, that managers—the lower level legal managers—to ask suggests that a layman, or Will Lewis, or the them if they had signed off on or had concerns about Metropolitan police reading these e-mails now would stories that may have been obtained by voicemail think they do point to something quite serious that hacking? warrants further investigation. Jonathan Chapman: My involvement in the e-mail Jonathan Chapman: I am not going to comment on review was as the employment lawyer for News individual e-mails, as I have said, because I do not International. The duty lawyers at the News of the have the benefit of the e-mails that were reviewed, or World would be Tom Crone’s responsibility, so it even the Harbottle and Lewis archive, in front of me. would be for him to have done that. What I would say is that—to explain our position— when we were doing this exercise, we looked at a Q617 Louise Mensch: What about you, Mr Cloke? whole string of e-mails, chronologically ordered and Did it occur to you that you might want to ask your in context. The setting of the context allowed us to in-house lawyers if they had ever flagged up any take views on e-mails, as to whether they constituted concerns that stories were based on phone hacking? reasonable evidence of something that might perhaps Daniel Cloke: No. As far as I was concerned, this was not be the case without that context. That is what I an employment matter that I was looking at from an was trying to say. HR perspective. I am not an investigator in that respect. Q623 Damian Collins: Mr Abramson, in his letter to the Committee, suggested there were about a dozen or Q618 Louise Mensch: That does seem an obvious so e-mails, from their point of view, where they felt line of inquiry for an internal investigation of this sort that there was enough concern to discuss them in to have pursued. Thank you for your answers. some detail with you. He says that he was satisfied by you that those e-mails “fell outside the scope” of the Q619 Damian Collins: Mr Chapman, from your brief that you had given Harbottle and Lewis. Was evidence that you submitted to us subsequent to the that the reason for setting them to one side and not Murdochs’ appearance before the Committee, and also believing they warranted any further investigation? from evidence that we have received from Lawrence Simply, that they fell outside of the remit of the Abramson and from Harbottle and Lewis, do you investigation Harbottle and Lewis were undertaking. think that it is fair to say that actually there never was Jonathan Chapman: When I had the conversations— a full, wide-ranging investigation into phone hacking my recollection of the conversations with Mr at the News of the World following Clive Goodman’s Abramson is that he had concerns about some e-mails, letter? just as Daniel and I did, and we discussed those. He Jonathan Chapman: Subject to what Mr Crone might looked at the e-mails in context, thought about them be able to tell you about the Burton Copeland further and was able to issue his report. exercise—about which I know very little—I am not aware of anything other than the Burton Copeland Q624 Damian Collins: He says that. He says, “In exercise. one specific case, Jon Chapman told me to look at News’ server myself to put the e-mail in” context, but Q620 Damian Collins: But in terms of the work you he refers to a dozen or so e-mails. The only reason were involved with, that was not a wide-ranging they were set aside was because they fell outside of investigation. the remit of the investigation—they fell outside of the Jonathan Chapman: No, and it was never intended terms of the employment process dispute you were to be. In a sense, it was reactive. It occurred because going through with Mr Goodman—not that they were of a specific set of circumstances, which was Mr not interesting in their own right. Is that a fair Goodman’s disciplinary appeal, and it was a reaction reflection? to that, rather than a proactive inquiry. As I hope Jonathan Chapman: If that’s a suggestion that there Harbottle and Lewis and myself have made clear were some that indicated criminal activity other than previously, it was quite limited in its scope. voicemail interception, I do not think he is trying to say that. I do not really understand that sentence—I Q621 Damian Collins: Am I right in saying as well have not had the benefit of looking at his evidence. that no one with any criminal law experience was involved in reviewing any of those 2,500 e-mails? Q625 Damian Collins: In the evidence Harbottle and Jonathan Chapman: The 2,500—correct, because it Lewis presented to the Committee, they go in some was an employment-related exercise, so we were detail into the discussions between yourself and cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 62 Culture, Media and Sport Committee: Evidence

6 September 2011 Jonathan Chapman and Daniel Cloke

Lawrence Abramson about the wording of the opinion investigation has now been blown open by the that they gave— Metropolitan police— Jonathan Chapman: Yes. Jonathan Chapman: Yes.

Q626 Damian Collins: And in particular Lawrence Q633 Damian Collins: And there are investigations Abramson’s view that he could not support something that suggest that there was more in those e-mails than you had added. I will read out that last sentence for was shared with people at the time. That is a subject the benefit of people who have not seen it. You had of great interest to not only this Committee but other suggested adding, “Equally, having seen a copy of people as well. When you concluded the review, you Clive Goodman’s notice of appeal of 2 March 2007, and Mr Cloke obviously discussed that and you we did not find anything that we consider to be discussed it with Harbottle and Lewis. Mr Cloke, did directly relevant to the grounds of the appeal put you then brief Les Hinton on the outcome of the forward by him.” review? Jonathan Chapman: Yes. Daniel Cloke: Yes.

Q627 Damian Collins: That is a much broader term Q634 Damian Collins: Did you say to him, “Good than that included in the opinion. news; nothing to worry about”, or did you give him a Jonathan Chapman: Yes. flavour of what the e-mails contained? Daniel Cloke: No; from what I recall, I actually Q628 Damian Collins: Again, that does suggest that showed him the letter from Harbottle and Lewis. If I there may have been some things there that were a can be frank, it did not feel like good news at the cause for concern and may have warranted further time actually, because someone had made some very investigation, and which therefore meant that serious allegations, the e-mail review had not brought Harbottle and Lewis were not prepared to give such up anything at all and the people who had been carte blanche to the review. accused cannot prove their innocence, so to some Jonathan Chapman: I think the grounds for appeal extent you are in middle ground. I would certainly of Mr Goodman were related to voicemail interception have communicated the result of the letter to him, but activities, be it complicity in them from other I don’t think I would have said, “Good news”. individuals or knowledge of them by other individuals, so I was trying it on there, to tell you the Q635 Damian Collins: Colin Myler, in his evidence truth, to see if I could get a wider opinion from him. says: the phrase I believe “used by Mr Cloke was… It was very much limited, as the wording suggests, to ‘good news; there is no smoking gun or silver bullet his appeal, which was limited to voicemail in the emails’.” Do you recall saying that? interception matters. That does not cover, to my mind, Daniel Cloke: I do not recall saying that. Again, I’m anything else nor was it ever intended to, because pretty sure I showed Colin the Harbottle and Lewis nothing else was in contemplation at the time other letter, but, as I said, it did not feel like good news. We than voicemail interception. 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 Q629 Damian Collins: To use the legal term, was it was good news that we had not found anything, but Harbottle and Lewis’s view that you were simply to some extent there is still that suspicion, if you like. trying it on? Jonathan Chapman: Yes. Q636 Damian Collins: So am I right in saying that all Les Hinton knew about the outcome of the review Q630 Damian Collins: They just struck it out— was the opinion letter from Harbottle and Lewis that Jonathan Chapman: It is a strange process, and I am you showed him? He was not told anything else not sure that those outside the hallowed portals of the about it. legal profession will necessarily know this, but when Daniel Cloke: Yes, that is right. He knew the review you get a report or an opinion from external counsel, was happening and, as far as I recall, I showed him your job is to get it as wide as possible if you are in- the letter as a result of the review. house, and their job is to cut it back as far as possible and thus limit their liability subsequently, you might Q637 Damian Collins: Okay. Do you think, based say. There was a normal to-ing and fro-ing, and I on your knowledge of what the e-mails contained, that would say that, as usual, Mr Abramson won on that that was enough, although you had satisfied yourself one and I lost. We got to the final form of the report in terms of the employment dispute you had had with that he gave and it was very close to what he wanted Clive Goodman, the purpose of the review and the to give. reason you had briefed Harbottle and Lewis. Did either of you consider that there may have been Q631 Damian Collins: Yes, and was very narrow in enough suggestion, maybe just insinuation, of other its— activity that would have at least warranted getting Jonathan Chapman: Yes, very narrow. someone with expertise in criminal law to have a look—to have a check—as well, to see whether there Q632 Damian Collins: But, without wishing to be should be a further investigation of what the e-mails seen to be splitting hairs on this, I think it is of the contained? Is that something you ever discussed? utmost importance because your very narrow Jonathan Chapman: Not to my knowledge. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 63

6 September 2011 Jonathan Chapman and Daniel Cloke

Daniel Cloke: Not that I can recall, no. earlier, frankly I would not have been involved in it, because I do not have those investigative skills. Q638 Damian Collins: In your opinion, there was absolutely nothing there at all that might warrant Q641 Damian Collins: When the review was further investigation, beyond the remit of the very concluded, was anyone else at News International or specific employment dispute you had with Mr News Corporation made aware of the contents of the Goodman. e-mails themselves, or was all that was shared with Daniel Cloke: If I can talk as an HR person, the people within the company simply the letter from reason why I was anxious to get the e-mails reviewed Harbottle and Lewis, which offered their opinion by a third party was to give us comfort on this about the conduct of the review? employment matter that the review Jon Chapman and Daniel Cloke: Yes, that is my recollection. I carried out was accurate, and that is why we sent it to a third party. Q642 Damian Collins: So you two alone in the company understood what had been in those e-mails Q639 Damian Collins: But going back to the and the discussions you had had with Harbottle and question I asked Mr Chapman, clearly there was a Lewis external counsel. Any concerns, debates, doubts discussion about e-mails that were a cause for or question marks remained within your knowledge concern. Harbottle and Lewis were assured that those and no one else in the company. e-mails were outside the remit of their inquiry, but Daniel Cloke: Yes. that does not mean to say that they were not of Jonathan Chapman: Yes. interest. Harbottle and Lewis have said, and Mr Chapman has said, there were no criminal lawyers Q643 Damian Collins: With hindsight, do you think involved in this investigation; it was purely an that was a good idea? employment dispute. Do you not think there were Daniel Cloke: Hindsight is a wonderful thing, but all some grounds perhaps to get a third party to check I can say is that you had a director of legal affairs and from a criminal law point of view whether this a director of human resources look through 2,500 e- suggested further wrongdoing beyond the very narrow mails, and we also sent them out for a third-party terms you had set Harbottle and Lewis? review. In the context of an employment dispute, I Daniel Cloke: If I can take us back to the events of think that they are reasonable steps to take. 2007, at that particular moment in time this was one employee—ex-employee—making allegations about Q644 Damian Collins: In the context of News others. As a result, we interviewed those people, and Corporation’s codes of practice for employees, they we also looked at around 2,000 to 2,500 e-mails and state that employees should promptly raise any then took it to a third party. I think at the time I had concerns about any actual or potential violations of comfort that taking it to a third party actually was a policies with the appropriate people in the company. reasonable step to take. In the light of that, I wonder whether it would have been appropriate for you to have had a conversation Q640 Damian Collins: Going back to 2007, it with either Colin Myler or Les Hinton and said, “We follows on the back of the judge’s remarks at the don’t have a problem in terms of the employment sentencing of Mr Goodman that he believed there dispute. We are satisfied with the opinion there, but were other people at News of the World who there are other things that have come out of this e- commissioned material from Glenn Mulcaire. It mail review that may not be hard proof of wrongdoing comes on the back of Colin Myler’s appointment, but that suggest there may be further investigation. where he and Les Hinton were so concerned about That should be handled by an external party and practices at the News of the World that there was a should involve someone with criminal law expertise, full-scale review of the way people work, with because we need to satisfy ourselves that there is seminars being set up and attempts to re-educate and nothing there.” Maybe if that had been done at the retrain people. In the context of that particular time, time, you would not be in the place you are now. I if there was anything in the e-mails that suggested wonder whether you feel your behaviour was something that should be investigated further, I am consistent with the wording of the News International amazed that that was not considered, and I am amazed codes of practice for members of staff. that you did not discuss that with Mr Hinton—the Daniel Cloke: Yes. I can only repeat what we did. We possibility that maybe further work should be done. had an ex-member of staff and it is not unusual for ex- Daniel Cloke: We had a situation where an ex- members of staff who have been dismissed for gross employee was making allegations against other misconduct to make allegations. We did not sweep members of staff. We interviewed those people; we them under the carpet. We interviewed the people who held the appeal; we trawled through 2,500 e-mails—I that person had alleged were also aware of their did it separately on two occasions, and I know Jon wrongdoing and we trawled through 2,500 e-mails, on Chapman did as well—and we sent it out to a third- three occasions internally, and once externally. I think party review. That gave me comfort as an HR director in the context of an employment law dispute, they are that we had covered the bases and done the proper reasonable steps to take. thing in terms of investigating these claims, bearing in mind that this was an employment dispute. If there Q645 Damian Collins: We are talking about two had been a more wide-ranging inquiry, in addition to different things. You keep talking about the Goodman the Burton Copeland one that has been referred to case and settlement and that was the reason why the cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 64 Culture, Media and Sport Committee: Evidence

6 September 2011 Jonathan Chapman and Daniel Cloke e-mail review was commissioned. Everyone Cloke just said earlier that you only looked at the e- understands that. But what I am asking is, outside of mails that were requested by Mr Goodman. Can you the very narrow remit in which you set yourself and explain why you felt that you could not look at any you set Harbottle and Lewis, were there other things of the other things? If you are saying that now, in those e-mails, and I think there is a suggestion from perhaps in hindsight, in order to do a full job, why Lawrence Abramson and from Harbottle and Lewis didn’t you do some of the things that you suggested that there may have been, that may have given cause could have been done? for concern? They were set outside the very limited Jonathan Chapman: Absolutely, Dr Coffey, but my review and nothing was ever done about that. There brief here was as an employment lawyer. I did not was no opinion taken from any criminal law person. have responsibility for the editorial and journalistic No one else within News International was given any side of the business there. I was asked to assist on this information at all about the fact that there may have in a relatively limited and narrow way, as was Daniel. been some things that suggested other wrongdoing So it was not for us to suggest at that time that the that should have been further investigated. You are inquiry should go further. We were 10 months after content that that risk was not there and you did not the events of August 2007 and we were looking at this discuss it with anyone else. Putting the context of the in a reactive way in the context of an employment Clive Goodman case to one side, I wonder whether appeal. you think that you should have done that. Daniel Cloke: I can only refer you to the comments Q650 Dr Coffey: The impression I have taken from that I made earlier. I would have hoped that if an some of the letters is that it was Mr Cloke who independent third party had thought that there was decided what would be looked at internally in reaction definite evidence of criminal activity, that that lawyer to the claims by Mr Goodman. Could you confirm my would have told us. And that lawyer did not tell us view on that? that. Jonathan Chapman: Yes, I think we had discussions on it. But basically what I did was to look at the letter Q646 Damian Collins: But there is definite evidence, that Clive Goodman had sent and then discuss with definite proof, and you keep using those terms. But my colleagues, saying, “Okay, I think we need to look there may have been a grey area which suggested at these documents.” further investigation and there never was any further investigation. Q651 Dr Coffey: So you specifically chose to narrow Daniel Cloke: No. it solely to the e-mails that Mr Goodman had requested. If you can go back in your mind, why Q647 Damian Collins: Do you think that was right? would you only do it for that and perhaps not delve a Daniel Cloke: I can only refer you to the comments I little bit wider to, for example, Mr Mulcaire, to the made earlier. private investigator? Daniel Cloke: I think we did look at some other Q648 Dr Coffey: So talking of the comments made documents as well. I think, from memory, we did look earlier by Mr Chapman, you said that nothing stood at invoices. I think Mr Myler and his team looked at out to, in a way, answer what Mr Collins just asked. I those. In terms of some of the other— appreciate that you are not a criminal lawyer, but what would it have taken for something to have stood out? Q652 Dr Coffey: So you think Mr Myler and his Jonathan Chapman: It is a matter of common sense team looked at those. to some extent, seasoned with legal knowledge. If I Daniel Cloke: Yes. I think, from memory, Mr Myler had seen stuff which I thought was indicative of and his team looked at invoice payments. Some of activities that were criminal, I would have felt under the other documents Mr Goodman had requested were an obligation to report that. I do not think you need matters of public record, such as Les Hinton’s remarks necessarily to be an expert criminal lawyer to do an to the Committee and those sorts of things. So I think e-mail review and pick up stuff that looks suspicious. we did look at more than just the e-mails. We were not looking for anything else. There was no suggestion at the time of any other illegal activities Q653 Dr Coffey: That leads me on nicely. As you apart from voicemail interception. That is what we say, Mr Goodman asked for several things. He asked were focused on. But if something had stood out to for e-mails relating to his transfer from one budget to me and looked suspicious then I would have done another and e-mails between specific individuals, but something about it. also mobile phone records and payment information. Based on what Mr Goodman was trying to base his Q649 Dr Coffey: So just to clarify, on the written appeal on, is there any reason why you two would not evidence you have sent to us, Mr Chapman, you talk have looked at all those different story payments and about how you were tasked with looking at evidence that kind of level of detail? for the employment appeal. I understand that. You Daniel Cloke: No. I did not look at the story payment also suggest on page 4 that there could have been a details. As I said, I think in terms of the payments and further investigation. It did not examine e-mail traffic invoices, that was Mr Myler and his team. I looked at between Mr Goodman and several other senior a lot of the other documents, and I think it is probably reporters and editorial executives. It did not examine worth pointing out in the context of this that what we e-mails to and from Mr Mulcaire. As you say, it was appeared to be having at the time was someone who just a review of e-mails. I understand from what Mr was almost on a fishing expedition and requesting a cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 65

6 September 2011 Jonathan Chapman and Daniel Cloke huge amount of documentation in terms of almost like Daniel Cloke: I do not know. a discovery process from a court perspective. Jonathan Chapman: I do not know. You will have to However, in actual fact, the central issue that I, as an ask Mr Crone, because that is a matter for the HR director, was looking at was whether his conduct newspaper lawyer. was gross misconduct and whether the company was within its rights to dismiss him. That was the central Q658 Philip Davies: The thing is we asked Mr Crone issue that I was dealing with. Then, in terms of the back in 2009, and he said that he did not know. If he other aspects, we decided to look at those as well, but did not know, and you do not know, who would know it was not a forensic, wide-ranging investigation. It who authorised it? In that context, it seems was purely within the context of that employment extraordinary that those legal fees would be paid for dispute. the most expensive lawyer in the country. You are the HR director, surely you have some involvement in Q654 Dr Coffey: Finally—I do not want to stray too such things. much into what Mr Davies will do, Mr Chairman— Jonathan Chapman: I had no involvement in that or could you let me know when you first became aware in the decision. that Mr Goodman was going to plead guilty and why procedures were not initiated then for gross Q659 Philip Davies: If you had been asked, would misconduct? you have suggested that it was an appropriate thing Daniel Cloke: I was not aware that Mr Goodman was for the company to do? going to plead guilty. The first involvement that I had Jonathan Chapman: It is appropriate for the with this matter was when I received Clive company to do that only if it has a purpose. If, for Goodman’s appeal letter. example, there is a vicarious liability issue through which the company could be held liable for something Q655 Dr Coffey: So it is fair to say that Mr Crone in the context of civil litigation, it might be did not inform you that—there were suggestions made appropriate, in certain instances, to look at an by Mr Goodman that Mr Crone was present at individual defendant’s position. But in that meetings and knew he was going to plead guilty, but circumstance, I have no idea. I am afraid that I cannot Mr Crone withheld that information from you. answer the question. Daniel Cloke: I do not recall speaking to Mr Crone on that at all until after we received Clive Goodman’s Q660 Philip Davies: Your view is that Tom Crone appeal letter. would know, despite my saying, “We asked him Dr Coffey: Thank you. earlier, and he didn’t know”? Jonathan Chapman: Yes, I think you should ask Mr Q656 Jim Sheridan: Briefly, can you give us an idea Crone. of what period of time this review of e-mails, invoices and other documents was over? What period of time Q661 Philip Davies: Going through the papers we would it take you to carry out this review? received, I want to explain how I saw them and my Daniel Cloke: From memory, I think it was about six reaction, because it seemed quite an extraordinary weeks from start to finish. This was four and a half situation. Here is a man who has pleaded guilty to a years ago and I do not have any of my notes, but it criminal offence, gross misconduct; summary was about six weeks. I think there was a break, dismissal. He has left the company. He receives a because there was Easter and those sorts of things, but letter from Les Hinton explaining to him that he was it was that sort of time. being summarily dismissed, but in that the letter it said—I am summarising here—that he had been a Q657 Philip Davies: May I go back a bit to the start? good egg for many years for the paper. He had worked I think you said at the start, Mr Cloke, and you just for many years without a blemish on his character repeated it to Dr Coffey, that you had no involvement and, even though the company were not obliged to do at all in the Clive Goodman case until you received anything at all, in lieu of his previous work for the his letter of appeal. Given that this chap had company they would, as a gesture of good will, pay committed a criminal offence and was bringing the him a year’s salary, which seemed to be in the region company into shame, it seems quite extraordinary that of £90,000. Who decided that it was a good course of the group HR director would have had no involvement action to pay him a year’s salary, based on the fact at all in the decision to sack him or other decisions. that he had committed a criminal offence? Can I just go back? It seems that during his trial, when Daniel Cloke: I think that is a question you will have he was pleading guilty, he employed the services of to ask Mr Hinton. As I have said, I was not involved John Kelsey-Fry to represent him in court. He was until the appeal process. one of the most expensive lawyers in the country, if not the most expensive lawyer in the country. It now Q662 Philip Davies: Mr Chapman, were you not appears that News International paid for his legal involved at all in deciding? representation in that case. Who authorised News Jonathan Chapman: Mr Hinton asked me to help him International to pay for Clive Goodman’s legal costs with that letter. He indicated that he was going to pay at a trial where this chap is pleading guilty to a 12 months’ salary, and he said that he wanted to do it criminal offence that means a summary dismissal and on compassionate grounds because of Mr Goodman’s is bringing the company into shame. Who authorised family situation. That is all I can recall, but it is a that News International will pay his legal fees? question for Mr Hinton. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 66 Culture, Media and Sport Committee: Evidence

6 September 2011 Jonathan Chapman and Daniel Cloke

Q663 Philip Davies: Did you not express any decision to dismiss it as a result of—you were happy surprise that this was a strange precedent for the that the company made the right decision. company—paying people a year’s salary for Daniel Cloke: As an HR person, I think if you are committing a criminal offence? convicted of a criminal offence, the company is within Jonathan Chapman: It could be seen on the outside its rights. I probably would have dealt with the as a strange thing to do, but it was Mr Hinton’s process slightly differently, but in terms of the broad decision. decision—yes.

Q664 Philip Davies: Did it not seem a strange thing Q669 Philip Davies: Absolutely, I think we’d all to you, on the inside? agree with that. What then is bizarre in the extreme to Jonathan Chapman: I can see both sides of it. I can a layman like me is given that if Clive Goodman had see that, viewed externally, it looks strange, but I can gone to a tribunal, the upper limit of what he could also that if you have someone who has a hitherto be given was £60,000, and having said that you were unblemished record and they have a family, to throw absolutely adamant that the right decision had been them straight out with no financial support for the taken—there was nothing to support his allegations— family is a tough thing to do. I can see both sides. so you could have defended yourselves at the tribunal, that didn’t happen. You two took the decision, Q665 Philip Davies: But you did not raise any according to James Murdoch, not to defend yourselves objection to this as a strategy? at a tribunal, but to pay off Clive Goodman, not to the tune of £60,000, but to the tune of £140,000 plus Jonathan Chapman: Mr Hinton had decided to do it. £13,000 costs. If you’d made the right decision, and there was absolutely no basis for Clive Goodman’s Q666 Philip Davies: As I read this letter that has allegations, what on earth were you doing paying him gone out to Clive Goodman: “Here’s a year’s salary. a further £140,000 on top of the £90,000 he’d already You’ve committed a criminal offence, and we don’t been given as a year’s salary? How on earth could have to do anything at all, but you’ve been a good you justify that? egg. Here’s £90,000.” Then it says afterwards, “You Jonathan Chapman: May I answer that? We didn’t have 28 days in which to appeal against this decision.” take the decision. The decision was taken by Mr I am reading this letter thinking, “My God, £90,000 Hinton that it should be settled, following our work for committing a criminal offence. There is no way on it and recommendation, having been told to try to this chap is going to appeal. He’s going to take the get a reasonable settlement figure. The position is that money and run. He must be the luckiest man on it was a stark choice: settle at a reasonable figure or earth.” The next letter I read in the file is Clive end up in tribunal. The tribunal proceedings would Goodman saying, “Too right, I want to appeal. For all have been several months down the line. At the these reasons—”. tribunal proceedings, Mr Goodman would have been You have explained in some detail the extent to which able to make a number of allegations, which we did you checked the veracity of Mr Goodman’s claims. not believe, having done our exercise, had any You have gone through that, and I do not want to go foundation, but he would have been able to make over that kind of ground. The bit I struggle with is those allegations in a public forum. There was a—this that earlier you seemed to say that you could not find is a pragmatic, commercial business decision, to my any evidence to back up Clive Goodman’s claims in mind, and can be characterised as that. Many his appeal letter. Did I hear you right? You could not companies, particularly big companies, pay out on find any grounds. Clive Goodman was taking his case employment claims of little or no merit for pragmatic to a tribunal. You had looked at all of this information reasons, because they do not want stuff to be raked and had done what you thought was above and beyond up. Even if allegations that are unfounded are made the call of duty in terms of an employment matter. If in the context of a tribunal, those who wish to believe Clive Goodman had pursued his case to a tribunal and those allegations will believe them. won, can you clarify what was the maximum amount Clive Goodman could have been awarded? Q670 Philip Davies: You’ve paid a quarter of a Jonathan Chapman: Notice and up to about £60,000 million pounds to this man. A quarter of a million compensatory award, unless he was able to bring a pounds for committing a criminal offence. claim under the Public Interest Disclosure Act—the Jonathan Chapman: I was asked to settle the matter whistleblowing Act—in which case the compensation when the appeal process had finished and we got is unlimited. lawyers’ letters. The £90,000, I have to leave to Daniel or Mr Hinton to explain, because that was Q667 Philip Davies: But generally, £60,000 was the outside my brief and I don’t really have any upper limit of the tribunal powers. recollection of how that fitted into it. It is not part of Jonathan Chapman: A compensatory award, plus the settlement—the £90,000. I also don’t believe it contractual awards. was actually paid in February as indicated in Mr Hinton’s letter; I have a recollection that Mr Q668 Philip Davies: Absolutely. As far as you were Goodman’s family said they didn’t want it then, so the concerned, there was no basis in his appeal because history of that £90,000, I can’t— you had checked out all of this information and could find no supporting evidence, so there was no basis. Q671 Philip Davies: So what was your advice? You were quite confident that you had made the right When you got Clive Goodman’s letter, and you had cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 67

6 September 2011 Jonathan Chapman and Daniel Cloke done your investigation and decided that there was no Q677 Philip Davies: But did you recommend that merit in these allegations, what was your advice as the they settle? Was that your recommendation? legal director and the HR director as to what you Jonathan Chapman: Given that the imperative was should do? Was it that you should pay that money? to try to settle at a reasonable amount, I said, “This is Was that your advice to Les Hinton? as good as we are probably going to get”. There was Jonathan Chapman: I was asked to try to reach a quite a significant negotiation. It was not a short reasonable settlement with Mr Goodman’s lawyers on process. this. As I’ve said, I believe that there was no basis on which we were trying to cover up anything. We had Q678 Philip Davies: You said that you did not want carried out an e-mail review and a number of to cover up anything. It was not an issue of covering executives had been interviewed by Mr Cloke and Mr up anything. That seems to me exactly what it was Myler, as Mr Myler told us in his evidence in August, because you have just made it clear that the reason so my job was to see if we could reach a reasonable you were prepared to settle at such a high figure was settlement. We got to a figure that would have been, simply to stop it from being raised in open forum at a in my mind, potentially acceptable from our point of tribunal. That was the motivation: to try to cover it view for a settlement, which was based on notice and up—from these allegations being made more £40,000 out of the maximum £60,000 compensatory widespread—wasn’t it? award. I went back to Mr Cloke with that. Then that Jonathan Chapman: What we were trying to do was went to Mr Hinton and that was accepted. to stop the reputational effect of a tribunal claim where allegations, which we believed to be Q672 Philip Davies: How was the £140,000 made unfounded, having carried out investigations, would up? be made and those who wished to give currency to Jonathan Chapman: It is essentially notice— those allegations would do so.

Q673 Philip Davies: Another year’s salary? Q679 Philip Davies: There was a confidentiality Jonathan Chapman: Yes. agreement as part of the payments as well, was there not? Q674 Philip Davies: So you did not take the first Jonathan Chapman: The standard compromise year’s salary that had already been given into account? agreement confidentiality clause, yes. Jonathan Chapman: As I said, my brief at that time, having come into this exercise after the appeal Q680 Philip Davies: Which also helps to cover it up? proceedings and being asked to deal with Mr Jonathan Chapman: My view on confidentiality Goodman’s lawyer, was to settle the matter. On the clauses is that if in the context of a tribunal or court £90,000 payment, I don’t know the circumstances of someone tries to plead a compromise agreement’s that, I’m afraid, but it was not part of the settlement. confidentiality clause, you would be hard pressed to It was gratuitous, in other words. It was not part of a do so. For an employer to try to bring an injunction settlement agreement. in the context of court proceedings would be strange.

Q675 Philip Davies: When you say you were tasked Q681 Philip Davies: My final question is this. After to make a reasonable settlement, what constituted a you made this extraordinary settlement to Clive reasonable settlement? What was the upper limit that Goodman of almost a quarter of a million pounds for you had in your mind that you would have baulked committing a criminal offence, who knew within at? What level would you have got to where you News of the World, News International, News would have said, “Well no, we’ll take this to a Corporation, that that scale of payment had been tribunal”? made? Who would have known that? Jonathan Chapman: A traditional settlement will be Daniel Cloke: I think it would have been Mr Hinton, the contractual notice period, which here was between Mr Myler. They would probably be the two people as £90,000 and £100,000, and an element to represent well as Jon, myself— the compensatory award that a tribunal would grant to the claimant. So here we had £140,000. I thought that Q682 Philip Davies: Would Mr Kuttner have given that there was a desire to settle the case for known? pragmatic, commercial business reasons, that was Daniel Cloke: I do not know. potentially an acceptable outcome. But to say how far we would have gone: probably not much further. Q683 Philip Davies: But Mr Myler would have known? Q676 Philip Davies: It strikes me as bizarre that you Daniel Cloke: I believe so. knew that he had already had a year’s salary and you didn’t actually say, “You’ve already had your year’s Q684 Philip Davies: So when I said to Mr Myler salary, so now we are talking about the tribunal bit”. back in 2009, “Was any payment subsequently made It seems to me bizarre that you would agree to another to Clive Goodman” and Mr Crone said, “I am year’s salary on top of that. That seems a most certainly not aware of it,” would that be right? extraordinary thing in the circumstances. Daniel Cloke: If that is what Mr Crone has said, yes. Jonathan Chapman: It was not me agreeing to that, it was not me having a say on that finally. It was Mr Q685 Philip Davies: Mr Myler said “Again, Hinton. I don’t have a final say on any settlement. likewise, I am not aware of any payment” either. You cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 68 Culture, Media and Sport Committee: Evidence

6 September 2011 Jonathan Chapman and Daniel Cloke are quite clearly saying that he would have known that the process of getting the payment through and not a payment had been made when, quite clearly, he said, the actual prior authorisation of the settlement. back in 2009, that he wasn’t aware of any payments that had been made. Q691 Cathy Jamieson: Does it not seem strange Daniel Cloke: I cannot comment on the specific though that only that information would be given to question you had asked him, but certainly, Colin the Committee, rather than the information that has would have known a settlement had been reached. been brought to the Committee here this morning, in terms of the wider involvement of people at News Q686 Philip Davies: Of that kind of figure. International? Daniel Cloke: I do not know whether he knew the Daniel Cloke: Could you repeat the question for me? actual amount. Q692 Cathy Jamieson: If the question was, “Who Q687 Cathy Jamieson: Can I just take a moment or authorised the payments?”, surely Mr Murdoch would two to follow up on a couple of points, just for have understood that we did not want to know who absolute clarity? In written evidence, it appears that had actually signed the cheque or filed it in accounts. James Murdoch did state that Clive Goodman was We wanted to know who had taken the decision. paid the amounts “£90,502.08 in April 2007 and Daniel Cloke: I understand the question now. I think £153,000 (£13,000 of which was to pay for his legal that is a question for Mr Murdoch. fees) between October and December 2007. The first payment was approved by Mr Daniel Cloke, Director Q693 Cathy Jamieson: Can I also double-check? of Human Resources…The second was approved by You made reference earlier to your trying to Mr Cloke and Mr Chapman, Director of Legal negotiate—or you had the authorisation to negotiate— Affairs…These payments were”—as we have heard— a settlement, and you probably could not have gone “in the context of an unfair dismissal claim”. Why much more. Presumably, someone spoke to you and would he couch the answer to the question of who said at some stage, “You are authorised to negotiate authorised the payment in those terms? You are telling up to X amount”. What was that amount that you were us this morning that a whole range of other people authorised to negotiate up to? knew and had involvement in that process. Jonathan Chapman: I believe the amount would have Daniel Cloke: In terms of the first £90,000, I was not been very close to what we finally settled at, because it is within the normal parameters on a compromise even aware that that had been paid, because the letter claim. I would feed back—typically, in these was—I think—in February, and I did not know of any circumstances, I would work with HR. I would be of this until the appeal process came. called in when it became contentious to try and deal with the other side’s lawyers. I would then liaise with Q688 Cathy Jamieson: So you are stating that you the person in HR who was dealing with the file—or did not authorise that £90,000 payment. in this case, Daniel—and feed back to them on where Daniel Cloke: No, because it was in Les Hinton’s we getting on the to and fro of negotiation. letter of—I think—February 2007, and I had not even seen that until the appeal meeting took place with Q694 Cathy Jamieson: Again, just to be absolutely Clive Goodman. clear, in terms of who, or which group of people, finally took the decision on those payments, before it Q689 Cathy Jamieson: And in terms of the second was sent down to you guys to sign off the process— payment, when it says that it had been authorised by who was that? both of you? Jonathan Chapman: The process would have been Daniel Cloke: The second payment—I remember me saying, “I believe we have reached the end of the agreeing to the recommendations we had from our road if we are going to get a negotiated settlement on legal team, but the final authorisation was Les Hinton. this.” I would have spoken to Daniel about that, and Les Hinton had been the person who had taken the then that went to Mr Hinton. decision to dismiss Clive Goodman and, as is usual, you would get that person’s approval before the Q695 Cathy Jamieson: So it is Mr Hinton, settlement was reached. absolutely, who had the final decision, and you would then have expected him to report to anyone else or Q690 Cathy Jamieson: So is Mr Murdoch simply simply to take that decision. wrong in stating— Jonathan Chapman: Yes, as he chose. Jonathan Chapman: May I just intervene here? What I think has happened here is that Mr Murdoch’s team Q696 Mr Sanders: On confidentiality clauses, you have looked at internal financial approval records. presumably have a standard confidentiality clause for They have gone to accounts, and certain people within the eventualities of employees having to have their News International had certain limits. So, typically for contracts terminated. Did the confidentiality clause for a settlement of a compromise agreement, I would have Mr Goodman deviate at all from your standard just initialled it—because unfortunately, as a poor confidentiality clause? lawyer, I had virtually no ability to authorise anything. Jonathan Chapman: No, it did not. Then that would have been authorised by someone who had a higher financial limit signing it, and that Q697 Jim Sheridan: May I follow up the would have been Daniel, but we are talking here about questioning by Mr Davies? In a past life, I had the cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 69

6 September 2011 Jonathan Chapman and Daniel Cloke misfortune to represent people at industrial tribunals, badly and commits a crime, I think there was also a and I must say that I would have been delighted to go feeling that, yes, they have done a terrible wrong, but to a tribunal chaired by your good selves. If I, at any their family should not suffer. I am not sure that moment, had gone into a tribunal and said, “Not only applies through the business to the rather newer do I want 12 months’ pay for this convicted criminal, commercial side at News International. but I want an additional payment on top of it,” I would have been told to go away and sober up. That is just Q702 Jim Sheridan: It certainly does not apply to incredible. You are asking us to believe that is the politicians and the effect on politicians—you do not case. Is that precedent now set for every employee in think about their families when you do these things. News International? If a cleaner gets sent to prison, Can I just get a flavour for what you were doing at when he or she comes out do they get a year’s salary News International, Mr Chapman? How long did you and a top-up payment? work there? Daniel Cloke: Shall I answer that, because I think Jon Jonathan Chapman: I worked there for eight years, has answered this question. The company at the time Mr Sheridan. had a choice to make. If I can take us back to 2007, what had happened was that someone had been Q703 Jim Sheridan: Who did you report to? convicted and had gone to prison. As a result, we had Jonathan Chapman: I reported initially to the chief lost a successful and popular editor. A new editor had financial officer, and there was a period of time during been appointed and essentially was putting in place which I reported to a US lawyer who was in charge of policies and procedures and, if you like, getting the News Corporation Europe and Asia. Latterly, before I ship back on an even keel. left, I reported to the chief financial officer. Then, several months later, from left field comes a series of allegations, which we investigated and did Q704 Jim Sheridan: Who did you work for prior to not believe were substantiated. Then the company had a very simple choice to make. Bearing in mind that News International? things, if you like, had just been starting to return to Jonathan Chapman: I started off at Clifford normal, do we allow this matter to proceed to an Chance—a large law firm—as a mergers and employment tribunal, where the proceedings are very acquisitions and corporate finance lawyer. I then widely reported and potentially unsubstantiated moved to Enron Europe, which has been a source of allegations can be made, which will be widely some hilarity in the press, where I was an reported, or do you try and make a reasonable infrastructure projects lawyer. I ended up being head settlement? Those sort of commercial judgments are of HR there before I left, and I had another human made very frequently by lots of companies and lots resources role for a short period of time in the energy of individuals. industry before going to News International.

Q698 Jim Sheridan: The question I am asking is Q705 Jim Sheridan: Why did you leave News whether that is company policy. International? Daniel Cloke: No. Jonathan Chapman: Really for personal reasons. It sounds strange to say, but I wanted to do other things. Q699 Jim Sheridan: So you treat people differently I am a deals lawyer, really, so I do buying and selling depending on what level they are in the food chain. companies, projects and investments, and that sort of Daniel Cloke: You would look at the merits of the work had dried up completely at News International case that you’ve got. In this particular case, as I think over the last year or two. In a fit of mid-life crisis I you know, we felt that we were exposed in terms of decided to leave and see if I could find something else procedural grounds and that we would probably lose rather than looking for a job within— at an employment tribunal on procedural grounds, so it becomes a matter of commercial judgment. Q706 Jim Sheridan: What are you doing now? Jonathan Chapman: Nothing. Q700 Jim Sheridan: Can I ask both of you whether, Jim Sheridan: You are not working? in the unlikely event that both of you went to prison, Jonathan Chapman: No. you would expect to be treated the same way as Mr Goodman? Q707 Jim Sheridan: You said in your statement that Jonathan Chapman: It is a tough question. I do not you do not wish to suggest that anyone intentionally think that I would be, no. misled Parliament on 19 July. Are you seriously now suggesting that James and Rupert Murdoch and Q701 Jim Sheridan: Why not? Rebekah Brooks did not know what was going on? Jonathan Chapman: One thing that Daniel has not Jonathan Chapman: What I think, Mr Sheridan, is mentioned is that there—I have noted that on the that their evidence, in so far as it related to me and editorial side at News International, there has certainly Daniel on 19 July, related to the 2007 e-mail review. always been more of a feeling of family compassion None of them had any first-hand knowledge of that. and humanitarian stuff, which, as a person on the Mr Murdoch junior and senior were out of the country, commercial side at News International, I am not sure and had not taken on executive obligations then—in that I would enjoy. I do not think that there is anything Mr James Murdoch’s case—and Rebekah Brooks was sinister in that; I just think there is quite a big feeling still editor then. In order for them to be able to of family on newspapers. When someone messes up comment in any way on what happened in 2007, they cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 70 Culture, Media and Sport Committee: Evidence

6 September 2011 Jonathan Chapman and Daniel Cloke would be reliant on briefings from others, and I Q717 Jim Sheridan: Were you informed of the terms believe those briefings were incorrect. of the Mulcaire settlement? Daniel Cloke: No, not the terms. I knew a settlement Q708 Jim Sheridan: You say they had no direct had been reached, but not the terms. knowledge of what was going on. Did they have any indirect knowledge of what was going on? Q718 Jim Sheridan: Why do you think you were not Jonathan Chapman: I suspect not much. informed of it? Daniel Cloke: Glenn Mulcaire was not an employee Q709 Jim Sheridan: Is that a yes or a no? of the company, so I would not have been involved Jonathan Chapman: Probably not. in that. Q710 Jim Sheridan: They did not know anything was going on? Q719 Jim Sheridan: It was not because News Jonathan Chapman: I am talking about the 2007 e- International had something to hide? mail review specifically, and how it was carried out Daniel Cloke: No. Glenn Mulcaire was not an and what its parameters were. I do not think any of employee of the organisation. them would have direct knowledge of it, because Rebekah Brooks was an editor at the time, Mr James Q720 Jim Sheridan: Finally, did you have any Murdoch was out of the country doing other things discussion with Mr Crone about the allegations made and Mr Rupert Murdoch was in the States, so to the by Mr Goodman? extent only that Mr Hinton told him what was going Daniel Cloke: Yes, we did. 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 Q721 Jim Sheridan: What did he say? parameters were and so on. Daniel Cloke: He denied them.

Q711 Jim Sheridan: I do not mean to be offensive, Q722 Mr Watson: Mr Chapman, other than yourself but you probably realise that people will find it and Mr Cloke, Mr Myler and Mr Hinton, was there incredible that this was going on and senior anyone else in the company aware of the Harbottle management knew nothing about it. and Lewis investigation/review? Jonathan Chapman: The e-mail review? Our e-mail Jonathan Chapman: The exercise. Yes, I reported to review? the CFO at the time, who I would have told as part of Jim Sheridan: Yes. Everything that was going on in my normal reporting process what was going on but News of the World. without any great level of detail. Jonathan Chapman: Mr Hinton knew about the e- mail review, because he commissioned us to do it. Q723 Mr Watson: Who was the CFO? Jonathan Chapman: It was a guy called Stephen Q712 Jim Sheridan: Mr Cloke, can I ask you as Daintith. well, how long did you work at News International? Daniel Cloke: About seven years. Q724 Mr Watson: Would Mr Hinton have raised that Q713 Jim Sheridan: And who did you report to? with his bosses in America? Daniel Cloke: First Les Hinton, then James Murdoch Jonathan Chapman: I think that may be a question and finally Rebekah Brooks. for Mr Hinton, Mr Watson.

Q714 Jim Sheridan: And are you currently Q725 Mr Watson: Mr Cloke, you said that Mr Myler employed? and his team reviewed the invoice payments. When Daniel Cloke: Yes. you say his team, who would that be? Daniel Cloke: I do not know. I know that Colin was Q715 Jim Sheridan: Who by? looking at those payments, and I do not know who he Daniel Cloke: Vodafone. asked to do that.

Q716 Jim Sheridan: Can I put it to you that these Q726 Mr Watson: But there would be other people large payments to Goodman would suggest that phone helping him do that. hacking was rife at News of the World and you didn’t Daniel Cloke: Yes, that would be my assumption, want anyone to know? Would that be an accurate from memory. description of what was going on? Daniel Cloke: No, not at all. To respond to that question, we had an ex-employee making serious Q727 Mr Watson: Mr Chapman, just to follow on allegations. At the time, that was all that was from my colleague on the left, when you said you occurring; we didn’t know what we know now. We were trying it on with Mr Abramson on the thing he looked at those allegations, we went through 2,500 e- refused to put his name to, did you then follow that mails and we sent it out to an independent review. up with any other conversations, other than e-mail? That is not conducive with trying to cover something Did you phone him or have face-to-face conversations up. with him about that? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 71

6 September 2011 Jonathan Chapman and Daniel Cloke

Jonathan Chapman: I think our conversations and Jonathan Chapman: Given that we had a commercial our interaction are set out in the Harbottle and Lewis imperative to settle if we could at a reasonable cost, statement, as I recall. for the reasons Daniel set out, I recommended, given that commercial imperative, and given the brief I had Q728 Mr Watson: Do you accept that it was wrong to try and settle, that we settle. But it is not my of Rupert Murdoch to blame Harbottle and Lewis for decision; it is never my decision to say we’ve failing to investigate phone hacking properly, as that absolutely got to settle. There have been several was not their remit? occasions—quite high-profile cases—in the past Jonathan Chapman: I think that Mr Murdoch did not where Daniel and I have recommended settlement, have his facts right when he did that. It goes back to and the business has gone against us. what I said to Mr Sheridan—I do not think he had been briefed properly. Q732 Philip Davies: Final question to you, Mr Cloke. In our previous session with Tom Crone and Q729 Mr Watson: So do you accept that he was Colin Myler, when Paul Farrelly asked about wrong to say that? payments to Glenn Mulcaire, Mr Crone replied that Jonathan Chapman: I think it was wrong to set the some payments were made, but it was in relation to Harbottle and Lewis exercise out— employment law. He was not an expert, but as he understood it, the law meant that if you do so many Q730 Mr Watson: Answer the question. Was he hours a week, there are certain employment rights that wrong? come with that and that that was why there was a Jonathan Chapman: Yes, he was wrong. reason to pay off Mr Mulcaire. Now, you have just Mr Watson: Thank you very much. said you had no dealings with that because he was not Chair: Final question, Philip Davies. a News International employee. Does somebody in his position have any employment rights? Q731 Philip Davies: There seems to be a bit of Daniel Cloke: I do not know how often Glenn shifting the blame going on here. Let me just to try to Mulcaire worked for the organisation; I do not have clarify the situation. Back in 2009, I asked Les Hinton his records. about the payments to Clive Goodman, and he said in answer not that it was his decision, or that he was Q733 Philip Davies: You were never asked for any initiating the decision, but that he did not have much advice as to whether he would have had any experience in this field. He said, “The employment employment rights? law was complicated and I was told that we should Daniel Cloke: No. settle and I agreed to do it.” Is that right? Did you tell Chair: I think that is all the Committee has. Thank him that you should settle, and he agreed to it, or did you very much. he say he wanted to settle and got you to agree to it?

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 Q736 Chair: So, in your mind this changed the session, I welcome back to the Committee Tom Crone, picture entirely. Until you were made aware of this e- the former legal manager of News Group Newspapers, mail, there was not reason to settle. This e-mail was and Colin Myler, the former editor of the News of the produced and you said, “Right, everything is now World? Can I start with asking you about what has different. We’re going to have to settle.” become known as the “for Neville” e-mail, which is Tom Crone: Yes, that was the decision or the advice essentially the main reason why we first wished to ask that was formulated in consultation with the outside you to come? You made a statement, following this lawyers after sight of that e-mail transcript. Committee’s session with Rupert Murdoch and James Murdoch, in which essentially you gave a different Q737 Chair: This was therefore a pretty devastating account of what had occurred. Can I first of all piece of evidence. It was going to cost the company establish that both of you are certain in your mind that you were working for the settlement with Gordon you told James Murdoch about that e-mail when you Taylor of £600,000, and a great deal more. came to discuss the terms of the settlement with Tom Crone: It was a piece of evidence that meant we Gordon Taylor? had to settle the Gordon Taylor case, yes. How much was effectively up for grabs through negotiation. Tom Crone: I am certain. It was never referred to as the “for Neville” e-mail. That is quite significant, Q738 Chair: Because when you appeared before the I think. Committee in 2009, when we examined this and we Colin Myler: Me, too. I am as certain as I can be. discussed the e-mail, you said that Neville Thurlbeck didn’t remember it, Ross Hindley didn’t remember it. Q735 Chair: Perhaps I could just explore that. I You hadn’t managed to find evidence that it had been think, Mr Crone, you have said that essentially it was sent anywhere else from the servers operated by the the sole reason for settling with Gordon Taylor. newspaper and therefore it didn’t seem to be that Tom Crone: That’s correct. important. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 72 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler

Tom Crone: I don’t think I ever said it wasn’t Q743 Chair: Even the Committee was given a important. severely redacted version. Tom Crone: But not by Gordon Taylor. Q739 Chair: No, but you said all the previous Chair: No, indeed. things—that the person it was supposed to get to Tom Crone: By The Guardian. didn’t remember it. Tom Crone: We made it absolutely clear to this Q744 Chair: It was by The Guardian, but, Committee how important that e-mail was on the last presumably, you could have shown him a sufficient occasion. Mr Myler said that there were three things amount to demonstrate how important it was, that needed to be discussed. The third item he without necessarily— identified was the e-mail. He effectively dispensed Tom Crone: I cannot remember whether I showed it with the other two because one was irrelevant—that to him or not—I certainly did not make a copy of it— was Operation Motorman—and the other was the but I know that I discussed it with him. evidence given to the Committee previously by Les Hinton. Mr Myler made it clear that he thought that Q745 Chair: Mr Myler, what is your recollection of that was Mr Hinton’s truthful account as he then knew those events? it. He said that leaves only one issue to be dealt with Colin Myler: Mr Crone came to me in the morning, here today and that is the documents that had arisen— probably after conference, and explained the situation and one of them was the “for Neville” e-mail. He said regarding the evidence presented to us by Mr Taylor’s that is the reason we are here, to answer questions legal team. It was clearly something that we would about that. So we did not—we did not—underestimate need to take to the chief executive. I told him that I or mislead you in any way whatsoever about the did not know whether James Murdoch was available. importance of that e-mail. As it turned out, he was in the country and was in the office that day. My secretary called his office, and, in Q740 Chair: Okay. So do you regard the mere the mid or late afternoon, Mr Crone swung by my existence of the e-mail as evidence that phone hacking office and we went down to see him. was taking place beyond Clive Goodman? Tom Crone: I said that to the Committee on the last Q746 Chair: May I turn to the letter that Clive occasion. It was evidence clearly. That was the first Goodman sent on 2 March 2007 appealing against his piece of evidence that we had seen that it went beyond dismissal? In that letter, he suggested that the grounds Clive Goodman. on which he was appealing should not come as any surprise because you, Mr Crone, had been at all of the Q741 Chair: Given it was so significant, clearly it meetings of his legal team. Were you aware, therefore, must have featured pretty large in your conversation that his argument was going to be that others were with James Murdoch? doing it? Tom Crone: Listen, it was the reason that we had to Tom Crone: No. I did not know anything about his settle the case. And in order to settle the case we had letter until quite recently. I think Daniel Cloke came to explain the case to Mr Murdoch and get his to ask me questions about points that he was raising authority to settle. So, it would certainly have been in his appeal against dismissal, but I certainly was not discussed. I cannot remember the detail of the aware that it was all contained in a letter, nor did I conversation and there isn’t a note of it. The have sight of the letter, to the best of my recollection. conversation lasted for quite a short period—I would think probably less than 15 minutes, or about 15 Q747 Chair: But one of the key points that he makes minutes. It was discussed, but exactly what was said in the letter is, “This should not come as any shock, I cannot recall. because Tom Crone has been involved in all of the discussions I have been having.” Q742 Chair: But given that it was such a significant Tom Crone: He certainly makes that suggestion, but piece of information, surely you would have shown it it is not true. to him. Mr Murdoch would have said, “Well, can I see this?” Q748 Chair: It is not true? Tom Crone: Not necessarily. Actually, I have been Tom Crone: It is not true. reminded since that there is a very good reason for that, which I had forgotten: when we were given Q749 Chair: Did you attend meetings of his legal copies, when the copy of the e-mail came into our team? building to me—I think just to me—I had to sign a Tom Crone: I attended one full legal conference, the written undertaking, which was required either by the first one, but on the second occasion he said that he Metropolitan police or by Gordon Taylor’s lawyers, did not want me there for the entirety of the meeting. or possibly by both, that I could not make any copy That was relayed to me through his solicitor, but the of the document. I was very restricted in what I could solicitor said that I could come in at some stage. I sat say about it to other people. That was probably outside the meeting for quite a long time, and I went insisted upon by Gordon Taylor, because the in for the last 20 minutes. document contained Gordon Taylor’s personal information, and his lawyers were very sensitive about Q750 Chair: So, “Attended virtually every meeting where that information went. of my legal team,” is simply wrong? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 73

6 September 2011 Tom Crone and Colin Myler

Tom Crone: Yes. It is also wrong to say that, in the he had served his sentence, paid his fine, done his one-and-a-half legal meetings that I attended, I ever community service, served his prison sentence or heard him say anything about, “Everyone else is doing whatever it was, he—Mr Coulson—was hoping that it. It is common practice.” That was not mentioned he could persuade the company that Clive Goodman at all. could come back and work for the company, albeit not Chair: Presumably, however, when Mr Cloke in a reporting capacity but perhaps as a sub-editor, a received the letter— book filleter or in such a capacity. Tom Crone: Nor, most relevantly, was it put forward When I spoke to Clive—either during the legal in court, so it was not part of his defence at all. meetings or before and after them while we were hanging around—I relayed that to him. Clive Q751 Chair: Indeed. On receiving the letter in which Goodman was obviously in a fairly depressed state you are named as having been involved in all of those about everything. He foresaw the worst. He foresaw discussions, did Mr Cloke not come and say, “I have that he might be going to prison, and that was by no received this letter in which he says you knew all means the outstanding or the total opinion of his legal about it”? team because they thought that he might be able to Tom Crone: I cannot remember him saying, “I have avoid that. He was quite pessimistic, depressed and had this letter,” but we did have a conversation at worried about his family for obvious reasons and his some stage about Clive raising an allegation in his future. Now, I was able to say to him, “Andy Coulson appeal against dismissal. There seem to be two is hoping that he can find a way that you can come allegations in that letter, as far as I can tell: one is that back to the company. It is not absolutely certain that I am supposed to know that he was saying that you are going to lose your job over this—“ everyone was doing it; and the other is that I am Chair: But the chairman of the company— supposed to have effectively said to him, “If you keep Tom Crone: “Once you have served whatever your mouth shut, you’ll keep the job.” I cannot sentence—if there is a sentence—is going to be remember whether both allegations were mentioned, imposed upon you.” or which allegation was mentioned, to be perfectly honest. But he came to talk to me about at least one Q757 Chair: The chairman of the company had sent of those allegations, and I said that I did not believe in a letter saying, “You are summarily dismissed.” it was true. Tom Crone: Afterwards, yes. After sentencing. When I saw that letter—and Stuart Kuttner actually showed Q752 Chair: Can I come on to the second me a draft—I was very annoyed. suggestion, which you have just referred to? I quote: “Tom Crone and the editor promised on many Q758 Chair: So these conversations took place occasions that I could come back to a job on the before the sentencing of Clive Goodman. newspaper if I did not implicate the paper or any of Tom Crone: All the way through, from arrest in its staff in my mitigation plea.” Is that true? August to sentencing in January. Tom Crone: No. It’s not true. Q759 Chair: And this was entirely Andy Coulson Q753 Chair: Mr Myler, is that true? feeling sorry for Clive Goodman and wanting to help Colin Myler: I wasn’t there at the time. These are him. conversations that allegedly took place. I arrived at Tom Crone: The conversation was entirely Andy the newspaper at the end of January 2007, I think Coulson and myself. almost days after the trial had finished and Mr Goodman and Mr Mulcaire had been sent to prison. Q760 Chair: Did you have any knowledge as to Q754 Chair: But nobody ever said to you, “Well, whether or not Andy Coulson had raised this, for actually we’ve said to him that he can have his job instance, with Les Hinton? back”? Tom Crone: No, I didn’t. Colin Myler: Not at all. Q761 Chair: Do you think he did? Q755 Chair: There was never in your mind any Tom Crone: I think one other phrase he said was, suggestion that you would rehire Mr Goodman? “I’m hoping I’ll be able to persuade Les.” Colin Myler: No. Q762 Chair: Did you say to Andy Coulson that you Q756 Chair: At any point? thought that that was something he might succeed in Colin Myler: No. or did you say, “You must be barmy”? Tom Crone: Can I try and clarify this? I don’t think Tom Crone: I don’t think I expressed any opinion at the editor being referred to is Mr Myler. all about that to be perfectly honest. I felt quite sorry Chair: No. I realise that. for Clive actually and the position he was in. Tom Crone: It was Mr Coulson. How this might have arisen is through a conflation of two issues. I have no Q763 Chair: The fact that you mentioned it to Clive idea what Mr Coulson said to Mr Goodman along the Goodman and said you were aware that Andy Coulson way, but Mr Coulson had conversations with me on at had this view at least suggests that you thought it was least two or three occasions when he said that, at the not impossible. end of it all, if Clive was guilty and sentenced, when Tom Crone: No. I thought it was possible. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 74 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler

Q764 Chair: So you thought the company might Tom Crone: I can’t say it sounds right if I don’t have relented and taken him back? remember. I am sorry. Tom Crone: Once he had served his sentence or paid whatever penalty was imposed upon him. Q775 Mr Watson: You are not aware of making a part 36 offer to Taylor’s lawyers? Q765 Mr Watson: When did you tell the editor that Tom Crone: I think we would have at some stage, yes. Clive Goodman was guilty? Tom Crone: I am not sure that I came away from the Q776 Mr Watson: Are you not familiar with the first legal meeting knowing the decision as to whether Taylor case, Mr Crone? he was going to plead guilty or not—in fact, definitely Tom Crone: Mr Watson, apart from coming and not. At the second legal meeting, which was quite talking to you people about it in July 2009, the last some time afterwards, yes, I think I knew that he was active involvement I had with Taylor was when it was going to plead guilty. It would have been after that settled in 2007. meeting I think that I would have relayed that. Q777 Mr Watson: When did you last review the Q766 Mr Watson: When did you think that he was Taylor file? guilty? Tom Crone: Before coming here in 2009. Tom Crone: Probably at the second meeting when he said he was going to plead guilty. Q778 Mr Watson: So you have not read the Taylor file since 2009? Q767 Mr Watson: What date was that? Tom Crone: I don’t think so. Tom Crone: I can’t remember. Mr Watson: That would have been in autumn— Q779 Mr Watson: What on earth were you doing for Tom Crone: I think it was before he pleaded guilty, two years, Mr Crone? The entire focus of public probably in November before the hearing. inquiry has been on the Taylor payment. You were the legal director of News Group Newspapers. Are you Q768 Mr Watson: One way of settling litigation is a seriously telling me that you have not reviewed that part 36 offer is it not? file in over two years? Tom Crone: Yes. Tom Crone: Not in any detail, no. Individual documents from it might have been relevant, but what Q769 Mr Watson: And that involves the has happened since then is that various other pieces complainant. If he does not accept the offer and of civil litigation have commenced. Each of those subsequently recovers less than the offer, he pays all were being dealt with on an individual basis and that’s the costs of both sides from then on, even if he wins. was where the focus was going. Is that right? Tom Crone: Twenty-one days after not taking that, I Q780 Mr Watson: Let me take you back to the part think that’s right. 36 offer that the company lawyers assure us you made and which you cannot remember. Given the record Q770 Mr Watson: So to refuse a part 36 offer means damages at the time, the part 36 offer would have a complainant taking the risk of paying possibly afforded News Group a great deal of protection in hundreds of thousands of pounds in costs, even if he respect of costs, wouldn’t it? wins the case? Tom Crone: If it was successful. Tom Crone: He would take the risk of paying the costs, yes, whatever they were. Q781 Mr Watson: And as a result, Taylor’s lawyers would have advised him that if he did not accept he Q771 Mr Watson: When you met with James would be at risk for both sides’ costs of possibly many Murdoch in June 2008, the highest ever privacy award hundreds of thousands of pounds. was £3,500 to Naomi Campbell. When you settled Tom Crone: I assume they would have. with Taylor, the highest award ever made in a British court for breach of privacy was £60,000, in July 2008. Q782 Mr Watson: So if you had settled using part So it was on that basis that Farrer and Co advised you 36 though, the details of the case would not have been to offer Taylor £50,000 was it not? kept secret, necessarily, would they? Tom Crone: I can’t remember offering £50,000 to be Tom Crone: Can you repeat that? I’m sorry I did not perfectly honest. catch all of that.

Q772 Mr Watson: That is what Farrer have told us. Q783 Mr Watson: If you had settled with a part 36, Tom Crone: Okay. the details of the case would not necessarily have been secret? Q773 Mr Watson: So that offer was rejected and you Tom Crone: It depends on whatever happened when therefore offered £150,000 plus costs, by way of a the part 36 was accepted and whatever negotiations part 36. Is that right? took place. Tom Crone: I can’t remember. Q784 Mr Watson: But the same would obviously be Q774 Mr Watson: Does it sound right? true if the claim came to trial and the documents cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 75

6 September 2011 Tom Crone and Colin Myler became public. It would not have been secret, would could get was quarter of a million, you settled at it? nearly double that. Tom Crone: Not if it became public, no. Tom Crone: Leading counsel can advise about that, but I think he had a huge range of potential damages, Q785 Mr Watson: In this case it was the defendant, so there’s nothing written in stone about that. was it not, who required confidentiality? That is quite unusual. Q796 Mr Watson: So if you were not concerned Tom Crone: That is not my recollection, no. I think, about the adverse publicity that would result from the as I said last time, that it was raised by the other facts of the case becoming public, i.e. that phone side first. hacking at News of the World extended beyond the rogue reporter, you would not have increased it to Q786 Mr Watson: Did you require confidentiality? £425,000, would you? Tom Crone: We were quite happy with it. Tom Crone: The context of the Taylor case was that during the prosecution sentencing of Goodman and Q787 Mr Watson: Did you discuss that with Mulcaire, when they pleaded guilty, five more charges anyone? were levelled against Mulcaire, and Taylor was one of Tom Crone: The terms of the settlement would have those charges. Mulcaire subsequently pleaded guilty been discussed internally and with our outside to all five of those as well as to the hacking of royal lawyers, yes. employees. In the aftermath of the sentencing hearing, only one of the five issued civil proceedings against Q788 Mr Watson: Was it not the case that Taylor’s News Group Newspapers, and that was Mr Taylor. solicitors knew that you would want confidentiality, My job at News Group and News International was which is why they asked for an unprecedented £1 to manage litigation in the most cost-effective and million plus costs? efficient manner. Part of that management is that if Tom Crone: I don’t know where you got that figure you can avoid litigation coming in, then you take steps from, Mr Watson. 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, Q789 Mr Watson: From Farrer. with enormous cost. If we have to pay way over the Tom Crone: Well, I did not know that. odds for Mr Taylor, especially if there is a confidentiality clause, which was asked for by him Q790 Mr Watson: You did not know that they asked and agreed by us—or mutually asked for—that is a for £1 million. good course of action. If it is £415,000 or £425,000 Tom Crone: No, I did not know that you got it from to settle one case, thereby avoiding being sued by four Farrer. other people who might have similarly high demands and huge legal costs, that is the right decision to take Q791 Mr Watson: Well, did you know they asked from my point of view. for £1 million? Tom Crone: Yes. But normally I would say that that Q797 Mr Watson: So you do now accept that is obviously part of the whole confidentiality— confidentiality was part of the deal to settle with Taylor. Q792 Mr Watson: So would it be reasonable for Tom Crone: I’ve never not accepted that. If you read Taylor’s lawyers to assume that you wanted the evidence from last time, you will see that that is confidentiality and then ask for an astronomical sum the case. like £1 million from you? Tom Crone: They would certainly assume that we Q798 Mr Watson: In 2009, at question 1333, you would want confidentiality and I think it is fair to say categorically denied that confidentiality was a factor we assumed they wanted confidentiality. in settling the claim. That was the last time you gave evidence to this Committee. That was the last time Q793 Mr Watson: So despite this demand, and you reviewed the file, Mr Crone. having received advice from leading counsel that the Tom Crone: I’d have to see the sequence of questions most Mr Taylor could possibly hope to recover was and answers. £250,000, you agreed to pay Mr Taylor £425,000 in damages, plus his costs. Q799 Mr Watson: So would you accept that you Tom Crone: I don’t think so. Was it £425,000 or was misled the Committee in 2009? it £415,000? Tom Crone: Not without seeing the sequence of questions and answers. Q794 Mr Watson: Well, Farrer tells us £425,000, but Philip Davies: It’s there. it could have been £415,000. You remember that figure, do you? Q800 Mr Watson: Isn’t it the fact that the reason Tom Crone: I thought it was £415,000, is all I’m you paid— saying. My colleague has it in front of him. Would you read it out? Q795 Mr Watson: Right, but despite the fact that a Tom Crone: “Was the size of that payment greater in leading counsel had told you that the maximum they order that the proceedings should be kept secret?… cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 76 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler

Absolutely not as far as I am aware…No…On what Q806 Mr Watson: Would Mr Murdoch know what a basis was it decided to keep the proceedings secret?… part 36 offer is? ‘Secret’ is not the word I would use.”—secret is not Tom Crone: I have no idea. the word I would use—“This was an action against us Mr Watson: You have had many meetings with him for breach of confidence and privacy. We get quite a talking about settling cases— lot of those now since the privacy law has expanded Tom Crone: In my entire time at News International somewhat in the last five years. Every single case I had probably two meetings with him. against us for breach of privacy—unless the information is already out within the public domain— Q807 Mr Watson: Would you have told him that you results in a very strict term of confidentiality at the could have settled for less, but that would have meant end of the case. When you think about it, there would that you couldn’t provide secrecy or confidentiality? be absolutely no point in anyone suing us to stop their Tom Crone: At the time we spoke to him, the privacy being revealed if they did not at the end of settlement figure had not been arrived at. The demand the case tack on an absolutely strict and binding was relayed to Mr Murdoch, I believe. What we were confidentiality term, and that is what happened in this seeking was authority to begin negotiations to reach case…Was it at Gordon Taylor’s request?…Actually I whatever best figure we could achieve from the Taylor think he mentioned it first…He mentioned it first?… lawyers. I can’t remember whether he said that he It was raised by him before it was raised by us, but wanted to know what that figure was before absolutely we fell in with it. We always fall in with it, being authorising it. I think he certainly authorised us to privacy”— settle at the best figure we could reach. Mr Watson: I think that’s enough now, Mr Crone. Tom Crone: “because if the litigant goes in front of Q808 Mr Watson: Wasn’t it the case that you said the judge”— you would have to settle at a much larger sum to keep phone hacking secret? Mr Watson: Mr Crone, that’s enough. Tom Crone: No. Tom Crone: “the judge will order the injunction Mr Watson: And to keep the pretence that Clive immediately—so certainly when we have accepted Goodman was a single rogue reporter. that there was a breach.” Tom Crone: Not at all.

Q801 Mr Watson: So we now accept that the facts Q809 Mr Watson: But at the time you knew that you gave us in 2009 differ from the facts you’ve given Goodman was not a rogue reporter, didn’t you. You today. Are you misleading us today or did you mislead had seen the “for Neville” e-mail. us in 2009? Tom Crone: Correct. Tom Crone: Excuse me, I gave evidence that confidentiality was a clause in the settlement. Q810 Mr Watson: Did you ever raise that with Mr Murdoch? Q802 Mr Watson: You said it had absolutely no part Tom Crone: Well, I explained the “for Neville” e-mail in your judgement in making— to him, yes. Tom Crone: Sorry, secrecy. I think there is a difference between secrecy and confidentiality. What Q811 Mr Watson: Did you look to prove that others we were keen to avoid, certainly from my point of were involved in criminal wrongdoing on the paper? view, were four other actions coming in from the other Tom Crone: What I explained to him—I cannot give four victims identified at the Old Bailey. it in clear accurate detail because I cannot remember—but there was only one reason we settled Q803 Mr Watson: Isn’t the reason you paid many the Taylor litigation. There was one reason therefore hundreds of thousands more to the Taylor settlement that we went to him to seek authority to settle the because you were trying to conceal widespread Taylor litigation, and that was the emergence of a criminality at News of the World? document which consisted of an e-mail transcript Tom Crone: No. being sent by one of our junior reporters to Glenn Mulcaire. That transcript consisted—apparently consisted, from looking at it—of voicemail messages Q804 Mr Watson: This is the reason that they agreed left to and by Gordon Taylor. to the confidentiality clause—because they could get a higher payment from you. That’s it isn’t it? Q812 Mr Watson: So he would have been aware that Taylor’s lawyers. another member of staff had transcribed an intercepted Tom Crone: They agreed to the confidentiality clause voicemail message—that is what you told him. in order for everyone to keep quiet about widespread Tom Crone: I would have explained what the criminality at News International. Is that what you document was, yes. are saying? Q813 Mr Watson: Did he then apply the company’s Q805 Mr Watson: When you went to Mr Murdoch zero tolerance to wrongdoing policy and suspend that and raised this matter with him, did you explain that staff member? a relatively modest part 36 offer could settle the case Tom Crone: No. and reduce the costs? Tom Crone: Not to my recollection. Q814 Mr Watson: What did you do about that? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 77

6 September 2011 Tom Crone and Colin Myler

Colin Myler: Well it was left with the lawyers to the situation as far as four other potential litigants continue the negotiations for a settlement, and that is were concerned, and get on with our business. what happened. Q824 Mr Watson: He knew full well that to settle Q815 Mr Watson: So here is someone that you for that amount of money would conceal the “for know has intercepted a transcript message, an illegally Neville” e-mail, didn’t he? hacked phone by the criminal private investigator Tom Crone: We couldn’t reveal the “for Neville” e- Glenn Mulcaire. You have explained to the chief mail, because it had been given to us under strict executive of the company that you want to settle a undertakings of confidentiality imposed, almost case for hundreds of thousands of pounds more than certainly, by Mr Taylor, but also by the Metropolitan you could have got with a part 36 offer, and none of police. There is nothing covering up. May I make you do anything about it, including James Murdoch. clear something that seems to be missed very Tom Crone: The document wasn’t evidence that the regularly, possibly by this Committee? The junior reporter had intercepted phone calls. It was that provenance of the document was the Metropolitan he had transcribed, presumably from a tape or a disc, police. It was a Metropolitan police document coming a number of voicemail messages. Therefore, it meant out of their files. How can we be accused of covering that evidence of Mulcaire’s illegal activity in up something that has reached us from the police? accessing Gordon Taylor’s voicemail messages had passed through our office. Therefore, News of the World was implicated, certainly at least with Q825 Mr Watson: Are you aware that the previous knowledge that Glenn Mulcaire had done that. legal guy from the company, Mr Chapman, said that in any case a confidentiality clause wouldn’t stand up Q816 Mr Watson: That others were aware of phone to a row of beans when it comes to a criminal hacking, other than Clive Goodman. investigation? So how could Taylor’s lawyers enforce Tom Crone: Yes. you to confidentiality on an e-mail that suggested more criminal wrongdoing? You must have known Q817 Mr Watson: And nobody did anything. What that. You are a lawyer yourself. did James Murdoch say when you put that to him? Tom Crone: Well, I’m just telling you there were Tom Crone: I can’t remember. We settled the case. strict—What confuses me is that you seem to be missing what I’ve just said. This document came from Q818 Mr Watson: You remember telling him that the police. It’s not as if it hasn’t been looked at, that was the case, but you can’t remember what his considered or had experts pay close attention to it in reply was. the appropriate area—the police forces of this country. Tom Crone: I would have explained the background to the litigation. I would have explained the stance we Q826 Mr Watson: The police will have questions to had taken up to the emergence of this document, and answer, but you knew that if a crime had been then I would have explained what this document was committed, Taylor’s lawyers could not hold you to a and what it meant. confidentiality clause. You knew that, didn’t you? You’re a media lawyer; you’re a barrister. Q819 Mr Watson: Why did James Murdoch agree Tom Crone: If there is a confidentiality clause agreed to settle? by both sides in a piece of civil litigation, the norm Tom Crone: That was the advice he was certainly would be to stick to the confidentiality clause, I’m getting from me and from the outside lawyers. afraid. That’s what’s called straight dealing.

Q820 Mr Watson: Which outside lawyers were Q827 Mr Watson: Did James Murdoch set you any they? limit on the amount you could settle? Tom Crone: Farrer and counsel. Tom Crone: I can’t remember that, but we certainly came away with, I think, authority to settle for the Q821 Mr Watson: And he was talking directly to best figure we could get to. Farrer? Tom Crone: I am not aware that he was, but I have certainly discussed it in great detail with them, and I Q828 Mr Watson: So it was an open-ended figure. passed on their advice to Mr Myler and then to Mr Tom Crone: Yes, and again I can’t remember whether Murdoch. there had already been some talk that he would take half a million, and we managed to get it down from Q822 Mr Watson: Why did he agree to settle for so there to—I thought—£415,000. much money? Tom Crone: To get out of the case. Q829 Mr Watson: Were there any other civil cases in which James Murdoch gave you an open-ended Q823 Mr Watson: Isn’t it the case that he was well agreement to settle for any figure? aware that you would buy the silence of Gordon Tom Crone: I think I’ve met James Murdoch twice in Taylor if you settled for £425,000? my life. Once was about Taylor and there was another Tom Crone: As I said, the imperative or the priority one. I can’t remember what it was about, but it wasn’t at that time was to settle the case, get rid of it, contain about this series of cases. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 78 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler

Q830 Mr Watson: You can’t remember was the Tom Crone: On the record, publicly, I challenge second meeting was. Could it have been Max anyone to read the transcript, because I do not agree Clifford? that that is the case. Tom Crone: No. Absolutely not. Chair: The transcript remains on the record.

Q831 Mr Watson: Did you keep him in the loop? Q838 Mr Watson: Was it your job to see that Did you e-mail him, phone him or send him memos? endemic criminal phone hacking at News of the World Tom Crone: No. I don’t remember doing so. was concealed? Tom Crone: No. Q832 Mr Watson: You don’t remember, but they may exist. Q839 Mr Watson: You did that by paying Tom Crone: I can’t remember doing so. Goodman’s expensive lawyers, and you continued to pay him even when he pleaded guilty and was on Q833 Mr Watson: Given that there was no apparent remand. investigation into phone hacking, do you accept that Tom Crone: It is not remotely surprising that we paid you lied to us when you told us you investigated this for Clive Goodman’s lawyers. At the time he was and were satisfied with the explanations you received? arrested, we had no idea whether he was or was not Tom Crone: No. I didn’t lie to you about that. guilty—whether he would plead guilty or would not plead guilty. You are certainly going to start off by Q834 Mr Watson: At the time, you told us that there supplying him with legal representation; that is the was a Harbottle and Lewis inquiry, and a Burton proper, decent and correct thing to do. Now, at some Copeland inquiry. They both said— stage he then indicated that he would plead guilty. The Tom Crone: What I do—it goes with the territory, but financing of his representation continued to be paid the Chairman has also suggested that we lied to the by News International. I do not think that is a bad Committee on the last occasion. You, Mr Watson, step thing, to be perfectly honest. out to College green and say that fairly frequently. You do it when a new development has occurred, or Q840 Mr Watson: Was it right to pay him even you see a new piece of paper that is evidence that when he was in prison, when he had been found guilty is put before this Committee, and then say that it is by a court? devastating evidence of a cover-up, and Mr Chairman Tom Crone: Pay what? says it means that the Committee was clearly misled Mr Watson: Pay his salary in prison. last time, or it’s clearly contradictory to the evidence Tom Crone: I have nothing to do with how his salary on the last occasion. It wasn’t a contradiction in any was paid. I did not even know it was being paid. way, shape or form, as I explained in my letter to you. I don’t know whether you will now accept that, but I Q841 Mr Watson: And all this despite gross hope you will. It was not contradictory. We did not misconduct—hacking into the voicemails of the royal contradict ourselves when we put out that statement family. It was right to pay him then. in terms of the evidence we gave the Committee on Tom Crone: Pay him a salary? the last occasion. Mr Chairman, I invite you to say whether you agree with that. Q842 Mr Watson: Was it right to pay him a £240,000 pay-off? Q835 Chair: I have reviewed what you have told us, Tom Crone: I had nothing to do with employment but there is no question in my mind but that the or salaries. evidence from you and the other witnesses from News of the World in 2009 suggested to us that there was Q843 Mr Watson: What do you think about that? no real evidence to suggest anybody other than Clive What is your view of that? Goodman was involved. That was what we heard Tom Crone: My view is irrelevant, Mr Watson. repeatedly. Tom Crone: But there is the clearest possible answer Q844 Mr Watson: The truth is, you did not see it as I gave you very early on in the proceedings that until gross misconduct, did you? You just thought it was a the “for Neville” e-mail there was no evidence that reporter’s job at News of the World. went beyond Goodman. Clearly, when the “for Tom Crone: That is absolute nonsense. Neville” e-mail came through, that evidence existed. You asked me what I did as a result, and I said we Q845 Mr Watson: And as far as you are concerned, settled the case. the only problem was that he got caught. Tom Crone: That is nonsense. Q836 Chair: Yes, but you also said that you could find no record of it being forwarded to anybody. You Q846 Mr Watson: So now you had to conceal the said that the reporter did not remember it, and you crime. said that Neville Thurlbeck did not remember it. Tom Crone: That is nonsense. Tom Crone: That is true. Q847 Mr Watson: You were desperate to ensure that Q837 Chair: The impression you sought to give to it did not become known that hacking was standard us was that actually, this did not really amount to very practice at News of the World, weren’t you? much, since nobody seemed to have any memory of it. Tom Crone: That is not true. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 79

6 September 2011 Tom Crone and Colin Myler

Q848 Mr Watson: And that is why you told Tom Crone: I would have thought so, yes. Goodman that he could have his job back, if he did not implicate the paper or any of its staff— Q859 Mr Watson: Why have you not settled Tom Crone: Mr Watson, since confidentiality in these already? legal discussions seems to have been waived by Tom Crone: I think most people have not settled Farrer, at least, it may be that if you ask the other already. There is something called a consultation lawyers who were present during the legal meetings, period, which is supposed to be for 90 days, and that they will tell you that the allegation that you have just is still going on. made, which was originally made by Clive Goodman, has no truth at all. Q860 Mr Watson: So are there provisions about what you can and cannot say to this Committee? Q849 Mr Watson: You promised him his job in Tom Crone: No. Provisions where? order to suppress evidence of criminality at News of the World. Q861 Mr Watson: Have you discussed giving Tom Crone: That is not true. evidence to this Committee with News International lawyers? Q850 Mr Watson: And that was why James Tom Crone: No. Murdoch agreed to pay the Taylor settlement, wasn’t it? Q862 Mr Watson: Have you ever been in contact Tom Crone: That is not true. with Jonathan Rees? Tom Crone: I do not think I have had any discussions Q851 Mr Watson: It was for the same reason that with News International about anything since I have you sanctioned the payment of Glenn Mulcaire’s legal left. fees, wasn’t it? Tom Crone: I don’t know whether I did sanction it. Q863 Mr Watson: Have you ever been in contact His legal fees were not paid in his criminal with Jonathan Rees? representation at the Old Bailey, but when the civil Tom Crone: I met Jonathan Rees many, many years cases started he was not co-operating with us in any ago. way, shape or form. He had to have lawyers, and it was agreed, I think, that his lawyers would be Q864 Mr Watson: When was that? financed in the hope that we would actually get from Tom Crone: Many, many years ago. Probably 10 him—the one person who could tell us the full story— years ago. the full picture. Q865 Mr Watson: What was that to do with? Q852 Mr Watson: Who agreed it? Tom Crone: He was doing occasional work for the Tom Crone: I can’t remember. News of the World. Sometimes on under-cover investigations, there would be the need for someone Q853 Mr Watson: Do you now accept that it is false to play the role of a chauffeur or body guard. He and to say that you had not reviewed articles where it was his partner were used by the then news desk to clear that information can only have been obtained perform those roles. from phone hacking? Tom Crone: Yes. Q866 Mr Watson: Were you aware of his surveillance of DC Dave Cook? Q854 Mr Watson: Did you arrange for the lawyers Tom Crone: No. of phone hacking victims to be monitored by private detectives? Q867 Mr Watson: Were you aware that he was Tom Crone: No. contracted to work for News of the World in 2004 and 2005? Q855 Mr Watson: Did you arrange for a dossier to Tom Crone: No, I was not. be kept on them and follow up on their private lives? Tom Crone: No. Q868 Mr Watson: Are you aware now? Tom Crone: I have seen what was revealed on the Q856 Mr Watson: How much have you received in “Panorama” programme. your package terminating your employment? Tom Crone: Nothing. Q869 Mr Watson: Have you ever been in contact Mr Watson: Nothing? with Philip Campbell Smith? Tom Crone: I have not had a package terminating Tom Crone: No. my employment. Q870 Mr Watson: Were you aware of any civil Q857 Mr Watson: Are you still in negotiations? claims against The Sun as a result of phone-hacking? Tom Crone: There have not been really any Tom Crone: No. negotiations, but I am hoping there will be shortly. Q871 Mr Watson: Have you any indication that The Q858 Mr Watson: You are expecting a package, are Sun is implicated in the Glenn Mulcaire evidence file? you? Tom Crone: No, I have no indication of that at all. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 80 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler

Q872 Mr Watson: Is it your belief that The Sun may Q883 Mr Watson: Did you ever order surveillance? have commissioned Glenn Mulcaire? Did you ever commission private investigations to do Tom Crone: No, I do not have that belief. any surveillance at all? Tom Crone: No, I don’t think I did actually. Q873 Mr Watson: Why did you tell the Committee that Burton Copeland carried out a detailed and Q884 Mr Watson: Have you ever received or thorough investigation and that their remit was to go commissioned reports on the civil case lawyers that through everything and find out everything that had involved private investigators? gone on when Burton Copeland have told us that they Tom Crone: Let me just think about that last question. carried out no investigation into phone hacking I may have in litigation—certainly not in the last few whatever? years, but a long time ago maybe—I might well have Tom Crone: When Clive Goodman and Glenn used, I probably did in fact use private investigators Mulcaire were arrested in August 2006, I was on a on various things like tracing, maybe a bit of week’s holiday. When I came back the following surveillance and something else, I cannot remember. It Tuesday, which would have been exactly seven days is not unusual for lawyers to use private investigators. after the arrests, at the first meeting I went to Burton Copeland were sitting there. They were clearly Q885 Mr Watson: Did you ever sanction News instructed by News Group to liaise with the police and International journalists to contact civil claimants to to deal with whatever inquiries or requests that the persuade them to settle their claims? police put forward. They were actively involved in Tom Crone: No. that role throughout the period until late autumn, I would probably think. Q886 Mr Watson: Are you aware of any of your former colleagues who may have done that? Q874 Mr Watson: How many times have you met Tom Crone: No, I am not aware of that. Glenn Mulcaire? Tom Crone: Never. Q887 Mr Watson: Are you aware that Rebekah Brooks might have contacted civil claimants to ask Q875 Mr Watson: How much contact did you have them to stand down their claims? with his lawyers while you were negotiating the Tom Crone: No, I am not aware of that. Clifford proceedings? Tom Crone: With his lawyers? Q888 Mr Watson: Did you advise Clive Goodman to plead guilty? Q876 Mr Watson: Yes. Tom Crone: No. Tom Crone: I doubt if I had any contact. That would have been handled by our outside solicitors, Farrers. Q889 Mr Sanders: May I pick up one thing that you mentioned in relation to Mr Coulson? I want to get Q877 Mr Watson: Would they have kept you abreast this absolutely right. After Clive Goodman pleaded of negotiations with his legal team? guilty of illegal interceptions, Mr Coulson was Tom Crone: I am not sure that there was much in the looking for ways for him to come back when he had way of negotiations. completed his sentence. Tom Crone: Mr Coulson’s theme on this was that he Q878 Mr Watson: Did you advise Glenn Mulcaire felt that the company had a duty of care to Clive and his legal team on the disclosure strategy? Goodman. That is the phrase he used in all of our Tom Crone: Not me, no. conversations, which were about three in all. He felt that Clive Goodman, if he was guilty and was Q879 Mr Watson: Would Farrers have done that? sentenced, once he had paid his penalty and served Tom Crone: The disclosure strategy, did you say? his sentence—he hoped that he could persuade Les Hinton that Clive Goodman could still come back, so Q880 Mr Watson: Yes, the disclosure strategy in the that he was not effectively thrown on the scrap heap, civil cases. in a different role. Tom Crone: I have never heard of a disclosure strategy. Disclosure is disclosure. You have to disclose Q890 Mr Sanders: He was a sort of believer in a whatever is relevant. second chance. Tom Crone: Yes. It is quite a good policy actually. Q881 Mr Watson: So when Justice Vos instructed Glenn Mulcaire to name the people from News of the Q891 Mr Sanders: In that context, because we heard World who instructed him in March 2010, did Glenn evidence before you came in that it was Les Hinton Mulcaire tell you or Farrers who the people were? who felt a duty of care in order to ensure that Tom Crone: He certainly did not tell me and I am not Goodman was looked after, do you think Andy aware that he told Farrers. Coulson had something to do with that? Tom Crone: I have no idea. I very much doubt it, Q882 Mr Watson: Were you aware that anyone in because he left on the day of sentencing. the company was told who at that time had instructed him? Q892 Damian Collins: I want to go back, Mr Crone, Tom Crone: No. to the meeting with James Murdoch. There are a cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 81

6 September 2011 Tom Crone and Colin Myler couple of things that I want to clarify, particularly with ambiguity in something that should have been regard to the written evidence that James Murdoch incredibly clear. submitted to the Committee subsequent to his Tom Crone: Well, Mr Myler was there as well. appearance. He says in that evidence, “Neither Mr Perhaps he can help. Myler nor Mr Crone told me that wrongdoing extended beyond Mr Goodman or Mr Mulcaire. There Q901 Damian Collins: I will come to Mr Myler in a was nothing discussed in the meeting that led me to minute, but I would like to— believe that a further investigation was necessary.” Is Tom Crone: I have answered. I cannot remember the that an accurate reflection on that meeting? exact phrases that were used, but I am certain that I Tom Crone: Yes, it is. explained to him that the case had been running on this basis up to the production of that document. This Q893 Damian Collins: Okay, so that seems to be document meant that it was clear that News of the slightly contrary to what you said before to my World had a wider involvement, and therefore we had colleague Mr Watson and to the Chairman, where get out of it. there was an indication that, from what you told Mr Murdoch in that meeting, he must have been aware Q902 Damian Collins: But you cannot be sure that that wrongdoing extended beyond simply Clive you did explain to James Murdoch that wrongdoing Goodman in terms of personnel at the News of the extended beyond Clive Goodman at the News of the World, but you are now saying that that was not the World. case. Tom Crone: In fairness, and with respect, I think I Tom Crone: Perhaps I misunderstood what you said have just answered that question. 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. 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 Q894 Damian Collins: And Glenn Mulcaire. correct that he was not told. Tom Crone: Yes, but Glenn Mulcaire did not work for News International. Tom Crone: In that case, I misunderstood what you have just said to me. I am sorry. Q895 Damian Collins: Was it? Tom Crone: He was made aware of that—well he was Q904 Damian Collins: Okay. So your view is that made aware, as I have said, of the document. you did tell him. Your view is that, on his part, there should have been no ambiguity as to whether this Q896 Damian Collins: Okay. This is quite evidence—the settlement in the Taylor case—meant important, because he is saying that he was not made that wrongdoing extended beyond Clive Goodman. aware that wrongdoing extended beyond Clive Tom Crone: I cannot tell you whether, on his part, Goodman. Is that right? there was ambiguity. I can only tell you that I Tom Crone: That is what I understand you are explained that this document meant there was wider saying, yes. News of the World involvement.

Q897 Damian Collins: Is that your recollection of Q905 Damian Collins: Mr Myler, what was your what you said to him? Is he right in making that recollection of this conversation? statement? Colin Myler: As I have said, I think there is no Tom Crone: My recollection, which I have said quite ambiguity in the significance of the document that the a few times today already, is that I told him about the police had provided to Mr Taylor’s legal team. document, and the effect of that document clearly is Outside senior counsel, outside junior counsel, our that it goes beyond Clive Goodman. outside lawyers, and Mr Crone all agreed that the significance of this document meant that there were Q898 Damian Collins: That I think we all essentially two choices: either settle the case or fight understand, but there is an important connection here. the case, and fighting the case would have meant In that meeting, did you make clear to him what the going to a trial. So, in that respect, I do not believe full significance of that document was—not just in there was any ambiguity. The significance of the terms of the Taylor case, but what it meant for the document being produced was, I think, quite clear, to newspaper? be fair. Tom Crone: The document clearly suggests that there is News of the World involvement— Q906 Damian Collins: What you are saying is that there is no ambiguity in the document; I think we all Q899 Damian Collins: I know what the document agree on that. What I am trying to get at is, was there suggests, but what did you tell him? any ambiguity in what was explained to James Tom Crone: I cannot remember the phrases that I Murdoch? Was it made absolutely clear to him, not used. I am sorry, but I just cannot, and it is because it only that this document meant you had to settle the was over three years ago. case, but that this document was in effect proof that there were more journalists at the News of the World Q900 Damian Collins: I am afraid that I find this who had been involved in phone hacking than purely difficult, because there seems to be a huge amount of Clive Goodman? cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 82 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler

Colin Myler: I think there was evidence to show that Colin Myler: I did not leave the room with any clearly at least one potential journalist may have been ambiguity about what decision had been taken. implicated, but at the time, when Mr Crone talked to Mr Thurlbeck, he denied any knowledge of this Q912 Damian Collins: I am not talking about the document. decision that had been taken. There are two issues here: there is the settlement of the case and what the Q907 Damian Collins: I know, but just to go back settlement of the case meant for the company. It is to the meeting, the document is very clear and it is very unclear as to whether that was ever property also very clear that he was not shown the document communicated at all, or whether you left the meeting in the meeting. He relied on your explanation—of Mr and that was just up in the air. Neither of you have Crone and Mr Myler—as to this document existing at been able to convince me that you made that all and what it meant. Was it absolutely clear to him, absolutely clear to him—that beyond the settlement, as a result of your discussions in that meeting, that there were wider issues for the company that existed not only did the case have to be settled—we have from that “for Neville” document. gone through that in some detail—but that this was Colin Myler: With respect, Mr Murdoch was the chief evidence that wrongdoing extended beyond Clive executive of the company. He is experienced. I am Goodman? experienced in what I do. Mr Crone is experienced as Colin Myler: Based on the fact that, as I said, outside a legal manager. I think everybody perfectly senior counsel, outside junior counsel, external understood the seriousness and significance of what lawyers— 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. Q908 Damian Collins: I am sorry, but we are going I cannot get inside—he was probably dealing with a over the same ground again. million and one things, as we were. Colin Myler: With respect, Mr Collins, it is important, because you do not rush into these things. You take Q913 Damian Collins: The significance is clear time by getting outside advice, as well as external— from Mr Murdoch’s testimony. He said, “Neither Mr internal external advice, as it were. With respect, it is Myler nor Mr Crone told me that wrong-doing significant that that was the advice that they gave. extended beyond Mr Goodman or Mr Mulcaire… There was nothing discussed in the meeting that led Q909 Damian Collins: Of course it was, in terms of me to believe that a further investigation was settling the case, but in terms of an understanding of necessary.” He is very clear on his recollection of that the broader issues and what this actually meant, I do meeting: you are not. That is my question. think this is absolutely crucial. James Murdoch has Colin Myler: I am sorry but I am clear that there was been very clear in his written evidence to us, and if no ambiguity about the significance of that document that is wrong, that is a very serious matter, and your and what options were there for the company to take. recollection of this meeting is very, very important. One was to settle, and one was to fight the case. The On this crucial second part, was he clear that this decision was taken to fight the case, so I am sorry but meant that there was further wrongdoing within the as far as I am concerned there was no ambiguity— News of the World, as a result of the existence of this and there was no suggestion then or now that anybody document? had tried to conceal anything. That was a document Colin Myler: It seemed to be clear to other people that was produced by the police. that were involved. Q914 Damian Collins: We are not talking about that. Q910 Damian Collins: I am not asking about other Your view would have to be that you could not people. I am asking about him. support James Murdoch’s recollection of that meeting; Colin Myler: Obviously, I cannot speak for Mr that he has misremembered what was discussed or Murdoch’s recollection of this, and I cannot speak for interpreted it in a different way. Mr Murdoch’s view that he took away from that Colin Myler: The reason why the clarification was put meeting. What I took away from that meeting was that out in the first place was simply because it was there was an agreement to settle, and that is what alleged, wrongly, that, as a result of what Mr Murdoch happened. had said, we were guilty of concealing or covering up a sequence of events. That had to be clarified, because Q911 Damian Collins: I would have thought in your it was not factually correct. position—and Mr Crone, in your position—that you would have been extremely clear as to the seriousness Q915 Damian Collins: He said that there was no of this, and you would have made it absolutely clear discussion about further investigation. This is a to him that not only would you have to settle, but serious matter. Was it ever reflected on afterwards that there is evidence here of further wrongdoing that is of there should be a full internal investigation, with great significance for the company, and that has to be outside lawyers, really looking to get to the bottom of dealt with. I would have thought you would have been this, because it is highly significant information? extremely clear about that. There would have been no Colin Myler: It was never suggested to me, but with room for ambiguity; you would not have left the room hindsight we now know how devastating the evidence uncertain whether he had understood that or not. You was that the police had had gathered from Mr would have known for sure. Mulcaire in August 2006, which was not followed up. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 83

6 September 2011 Tom Crone and Colin Myler

We now know that evidence gathered from an internal provide any evidence that the police required. I think investigation e-mail at News International, which was that was primarily a position of transparency, so that handed over to the police in January this year, led to nobody could accuse News International of the reopening of the police inquiry. There are lots of prohibiting, or of being an obstacle to, what the police things that have come to light from different areas; if were requiring from them, be it paperwork or anything we had known then what we know now things would else. If you look back also, you will see from Mr have been massively different for everybody. Coulson’s testimony and from Mr Hinton’s testimony at the time of the arrests that it was made clear that Q916 Damian Collins: Let us compare it with the they had to try to get to the bottom of what was company’s response to the Clive Goodman letter. happening. There was a process. Les Hinton was copied on the So, Glenn Mulcaire and Clive Goodman pleaded letter and it was discussed with Mr Cloke; there was guilty, they were tried, they were convicted. When I a decision that there would be a review of the came in, I instigated several reforms and changed the evidence that Clive Goodman insisted had existed. protocols and system within the business. The first You and Mr Cloke conducted interviews with thing I did was I sent an e-mail to staff within a week, members of staff, and there was the review of the and to freelancers, I believe, explaining the 2,500 e-mails. It may have been too limited in scope, significance of their responsibility within the PCC but there was a process. code. In this case, you had a highly significant meeting with James Murdoch where he should have been made Q918 Damian Collins: Mr Myler, you have aware—you are saying that you think he was made previously given evidence on this in some detail, and aware—that the significance of the Taylor settlement I was not disputing any of that in my question, and the “for Neville” e-mail document meant that because I know that that is what you did. My question wrongdoing existed, but there does not seem to be was about the investigation into wrongdoing, because any kind of process following on from that, where the no investigation into wrongdoing was conducted by company decided to have a further investigation to get any external party. Very specific, tight briefs were to the bottom of what really happened. given to external firms, and you may have done some Colin Myler: That is the result of what happened, but interviews, but there never was a big investigation I don’t think that anybody underestimated the internally. seriousness of the document, and nobody was Colin Myler: Well, here we are in September 2011, underestimating the seriousness of the decision that and I am going back to January 2007. I certainly had to be taken to settle the case. believe that there had been more of an investigation than, perhaps, I was led to believe. Q917 Damian Collins: May I go back to when you joined News of the World? When Les Hinton gave Q919 Damian Collins: Are you referring to the evidence to the Committee in September 2009, he said police investigation with the assistance of Burton that you had come with a clear remit to do two Copeland? things—to ensure that any previous misconduct was Colin Myler: With Burton Copeland. Harbottle and identified and acted upon, and that the prospect of any future misconduct would be ruled out. On the second Lewis we will probably come on to later. The other of those points, you previously gave evidence to the thing to remember is that the police inquiry, as I Committee about the reforms that you instigated when understood it, was, at the time, I thought, very you became editor of the newspaper. thorough. That clearly was not the case; I think they On the first point, to ensure that any previous have accepted that. So, yes, clearly the police inquiry misconduct was identified, the evidence that the was not as thorough as I believed it to be. Forgive me, Committee has received so far suggests that there but if the police take away three bin-liners of evidence never was a broad investigation into wrongdoing at from Mr Mulcaire’s house, I would have assumed that the News of the World as a result of the Goodman trial had they wanted to talk to anybody else who may and conviction. Specific tasks were commissioned by have been implicated in criminal acts, they would Harbottle and Lewis and Burton Copeland, but there have interviewed them, and they chose not to. The was never a broad wide-ranging review. Do you think only member of staff who was interviewed from the you were remiss in the brief that Les Hinton gave News of the World was Clive Goodman. I might be you? Do you think that you should have done more? guilty of assuming too much, but I am journalist—I Colin Myler: I take personal responsibility for my am not a detective and I am not a lawyer. If you look actions, and I am very comfortable with what I did. back at what Mr Andy Hayman, the assistant As I said, hindsight is important given what has commissioner who led the inquiry, said at the time, I emerged from the police evidence that they did not think the phrase he used was that no stone was left act upon and the internal evidence provided by News unturned. We might look back at that and say that International subsequently. If I may, I shall clarify clearly wasn’t the case—it wasn’t the case. what happened when I did come in and what I Damian Collins: By some measure. understood the situation to be. Colin Myler: By some measure, and I think they have When Glenn Mulcaire and Clive Goodman were acknowledged that. But as I said, I did what I thought arrested—I think if you look back at my testimony, I had to do, and I did what I did—yes, other things you will see that I understood this—Burton Copeland may have been necessary, but at the time, I genuinely were brought in to be a bridgehead, as well as to did believe that, because of what the police did in cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 84 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler their inquiry, or what they did not do. I did not know him or any other senior executive at News about that then. Corporation you might report to, suggesting that there should be further investigation within the newspaper, Q920 Damian Collins: But going back to Mr Hinton, suggesting what you had done, or that maybe there he said he gave you a very clear remit to make sure should be an external investigation into wrongdoing any previous misconduct was identified. Did that at the News of the World involving phone hacking, as suggest that, in his mind, there may have been things a result of the “for Neville” e-mail, as had been that the police investigation had not uncovered and discussed at that meeting? that he wanted you, as the new editor coming in on Colin Myler: At that particular time, I did not have the back of Andy Coulson’s resignation and Clive any specific conversations with anybody relating to Goodman’s conviction, to do things to really get to that. Any other issues relating to this, I have always the bottom of this? reported to my superiors. Colin Myler: I did. When Clive Goodman appealed, I have to say I thought it was quite an extraordinary Q924 Damian Collins: So it was never discussed and surreal experience when I was first told about it— again? I thought, “On what possible grounds could he believe Colin Myler: The “for Neville” stuff? that he was unfairly dismissed?” But as the new editor, I was told by the human resources director that Damian Collins: Yes. Never discussed again. I had to sit and listen to his appeal. As a consequence Colin Myler: I never discussed it again with James of the allegations that he made, which were Murdoch, I believe. unsupported, and without any evidence whatever—he was asked many times, “Do you have any evidence Q925 Damian Collins: Or anyone else at a senior to support your allegations?”—the so-called 2,500 e- level that you might report to, above your grade? mails were instigated and looked at. At the time, I There aren’t many, you work with a few, I appreciate have to say, I thought 2,500 e-mails seemed a lot. As that. a direct result of the allegations that Mr Goodman Colin Myler: Through the course of the past 18 made against certain individuals, I sat down with Mr months, two years or so, a lot of discussions have Cloke and talked to them about the allegations, and taken place because of what has emerged. they denied every single one of them. In the absence of any evidence to put before them—now we know Q926 Damian Collins: My final question is going that potentially—I don’t know—that maybe evidence back to this situation: do you not think it is slightly did exist. These are only allegations: there are x extraordinary that you and Mr Crone sat in this people who have been arrested by the police. I don’t meeting with James Murdoch, the agreement was know how this is going to resolve. made to settle the Taylor case, and from your view— you have been clear—everyone understood the Q921 Damian Collins: If I may, because we have significance of what James Murdoch was being told, already gone into that in some detail, and I have a and yet it was never discussed again? The idea of couple of short questions and appreciate that other investigating that, getting to the bottom of it, the colleagues want to come in. Finally, on the Harbottle consequences for the company—you never went back and Lewis review, did you understand that the remit to Mr Murdoch to say, “Are we doing anything about they had been given was very limited and was purely this?” You never volunteered that maybe something to the employment tribunal in effect, and was not a should be done. Do you not think that is wider investigation into whether there was evidence extraordinary? of phone hacking? Colin Myler: No, I do not think it is extraordinary, Colin Myler: I had no involvement, no contact with Mr Collins. I think that the responsibility regarding Harbottle and Lewis whatsoever. I had no interaction the corporate governance of a company goes beyond with them. my pay grade. Therefore, if anybody wanted to talk to me about my performance—what I was doing or Q922 Damian Collins: But in terms of how this was not doing—they would have come to me pretty clearly explained to you by Mr Chapman and Mr Cloke. Did they explain to you that the review they conducted— and said, “Sorry, we don’t think you are doing the the e-mail review and the checking by Harbottle and right job. You are not doing the job at all and we want Lewis—was very narrow in focus? to remove you.” An editor’s life is a bit like a football Colin Myler: I had hardly any contact with Jon manager’s job. You stay when you perform and you Chapman through this process. My main point of go when you don’t. It is very clear; there are no grey contact was Daniel Cloke. Mr Chairman, if I may, I areas. It is black and white. If anybody was not happy would like to clarify one point that Mr Cloke made. I with my performance, either editorially, dealing with played no part in either any conversation or the staff, with the budgets, with any other issues, they negotiation regarding any financial settlement that was would have told me, and rightly so. made with Mr Goodman, none whatsoever. Q927 Cathy Jamieson: I have three questions to Mr Q923 Damian Collins: If I may put one final Crone. In his notice of appeal, Clive Goodman asserts question, going back to the meeting with James that you had full access to the files held by the CPS, Murdoch that we have already discussed. Subsequent giving evidence of phone hacking at the News of the to that meeting, did you have any conversations with World. Did you indeed have such access? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

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6 September 2011 Tom Crone and Colin Myler

Tom Crone: No, that is completely wrong. He refused was gathered in by someone pretending to be someone me access to the files. His lawyers will probably he was not and, if you like, blagging. We would not confirm that; or maybe they will not be allowed to. call it blagging as a matter of fact; we call it undercover journalism. Q928 Cathy Jamieson: Thank you for that clarification. You made a remark earlier in response to Q931 Cathy Jamieson: Can I just ask a final a question from Mr Watson, that at some stage you question in relation to that? Again, this is just so that may have been in the past at some unspecified time, people understand the kind of practices that you involved in a bit of surveillance. Could you describe would perhaps think are routine. Would people under what you mean by that? your employment be allowed to freelance on that Tom Crone: In civil cases, people are suing us for basis, or would they have to have that authorised by libel. We run a story saying they’re having an affair their management? or something like that. If you believe that they are Tom Crone: Freelance reporters do come to us with a having an affair, the obvious thing to do is to keep an journalistic package, saying, “This is what I’ve been eye on them for a few days and see what happens. working on for the past three weeks. It’s a story I’ve Cathy Jamieson: I am sorry if you feel it is a trivial got from going undercover somewhere.” That would question. come to us without us having any knowledge of what Tom Crone: No, I don’t think it’s a trivial question. they have been doing, so it would not be pre- authorisation. If they come to us and say, “Look, I’m Q929 Cathy Jamieson: Just in terms of the way you in a position where I think I can get x, y and z, which responded to it. I think that ordinary people watching would be a story of interest to you, and I can do it by this Committee will want to know what the kind of posing as something or other,” we would look at what activities are that you perhaps feel are fairly run of was being proposed to us and either give the authority the mill or routine but they may not have experienced. to go ahead with it, or not, as the case may be. I think it would be helpful if you could explain exactly what you meant by a bit of surveillance and those Q932 Cathy Jamieson: And you would at that stage activities. look at the extent to which that was within the law or Tom Crone: As I said, I think most legal firms outside of the law? involved in litigation on a regular basis will have used Tom Crone: Absolutely. private investigators to check out what they believe to be true but do not have any evidence to prove it is Q933 Philip Davies: Mr Crone, I think you issued us true. One of the things is obviously the personal with a challenge midway through the session, which relationships with people. In the history of divorce law was to try to demonstrate where what you said back and divorce proceedings in this country, it is very often someone going in the box, saying, “I am a in 2009 might not be wholly accurate. I think Mr private investigator and I was commissioned by the Watson has already done that ably by pointing to husband’s lawyers to watch his wife over a period of question 1333 about whether the size of the payment a week, and this is what I saw.” That is quite normal was kept greater in order that the proceedings should in litigation. It does not have to be affairs of the heart. be kept secret. Both you and Mr Myler said, “No”, It can be other things where you think someone is and, “Absolutely not”, which we now know was not involved in an activity that they are suing you over the case. for suggesting that they are involved in it. You think Can I put a few others to you? With the settlement of it is right and you think it is something that, if they are Gordon Taylor, you said back in 2009 to Mr Watson watched for a while, you may well get the evidence to that you had agreed with the outside advice that was prove your case. It is that sort of context. given. Well, quite clearly that was not the case either, was it? The letter from Farrer and Co makes it clear Q930 Cathy Jamieson: Can I ask specifically if it that the outside advice that you were given was that would include routinely the activities that are now the award would be about £100,000 or possibly commonly known as “blagging”? In other words, £250,000. trying to obtain information, perhaps by people Tom Crone: The advice we were given after the “for purporting to be individuals or to hold a post that they Neville” document came to our attention—it was do not. revealed to us by Mr Taylor’s lawyers and, ultimately, Tom Crone: Going undercover is something that by the Metropolitan police—was that we should settle investigative journalists certainly do. They pretend to the case. Not long afterwards, we realised that Mr be someone else in order to get information which one Taylor was asking for a very large sum of money. Mr would hope is in the public interest to reveal. That is Watson pointed out that it was £1 million; that is as old as journalism actually. For example, probably correct. The outside lawyers certainly suggested we the greatest story I have ever been involved in was should get out of the case and settle for the best figure last year. I can’t say too much, but I will tell you in we could arrive at. general terms. It was the Pakistani cricket corruption story that ran last summer. It revealed that, during the Q934 Philip Davies: They didn’t suggest you settle course of the Lord’s test, England against Pakistan, for £425,000. That was a decision you took, wasn’t it? Pakistani players were, through an agent, prepared to Tom Crone: I am absolutely clear that they said we do things on the field—bowl no-balls—knowing that needed to settle this case, and if it took a lot more people were placing money on it. That information than we would normally expect to pay, we should still cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 86 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler get on and settle it, partly because of the other cases Q940 Philip Davies: I will rely on you to go back that might be waiting in the wings. and point out where that was. I certainly cannot find it. I have read it about four times, and I cannot find it. Q935 Philip Davies: In a further question that Mr Tom Crone: Okay. Well, maybe have another re-read. Watson posed to you back in 2009, the reason that you gave was that if the case had gone to court, it Q941 Philip Davies: Maybe you should too. Who could have ended up costing more than you were would have authorised the payment to pay his legal settling for. That really was not the case at all, was it? fees? You know that that was not the case. You knew that Tom Crone: I can’t remember. Les Hinton was the you were settling for— chief executive at the time. I would imagine that he Tom Crone: If the case had gone to court and been would have authorised it. fought for two weeks, it would undoubtedly have cost us more than we settled for. Q942 Philip Davies: Well, quite. Tom Crone: But, I think, for perfectly proper reasons. Q936 Philip Davies: Three million pounds? Q943 Philip Davies: But when I put that to Les Tom Crone: Potentially. Possibly. It would probably Hinton, I asked who knew about the legal fees being have had to go on a bit longer than two weeks for paid. He said, “If we paid their legal fees the company that. I have had at least two cases in the last four years would know; I do not.” So who authorised your where the length of the case was a week and a half or decision to pay those legal fees? two weeks and the damages were not particularly Tom Crone: I don’t know, I’m sorry. I can’t high—less than £100,000—and we came out of it with remember. a bill of £1.5 million to £2 million. Q944 Philip Davies: Well, who would you have gone Q937 Philip Davies: Can I ask a question to follow to? You must know who you would have gone to. on from Damian Collins? I am rather confused about Tom Crone: I’ve answered. Les Hinton. It’s possible the meeting that you both had with James Murdoch. that Andy Coulson could have done it, as the editor at The bit I struggle with is that you are both adamant the time. that James Murdoch knew the full extent of what you were telling him about the “for Neville” e-mail, but Q945 Philip Davies: On what basis? In your last that meeting lasted, at the absolute maximum, 15 evidence, in 2009, you were at pains to stress on a minutes. If you were telling James Murdoch, number of occasions that you were in no way an “Actually, we have evidence here that shows that employment lawyer and therefore could not be other people at the News of the World were involved expected to know about those matters. If you were in phone hacking; that’s what we’ve got in our deciding whether or not to pay the legal fees of an briefcase here, and that’s why we must settle this employee who was being dismissed for gross case,” I cannot imagine how you could go through all misconduct, surely that would have been discussed that and the implications of it in less than 15 minutes. with the director of HR to see whether or not you had Tom Crone: Well, that is my recollection of how long any legal obligation to do that, or the legal manager the meeting would have taken. I cannot speak for what for employment law. Mr Murdoch understood at the time or not. I have Tom Crone: He was dismissed in February 2007. He seen what he has said since. I am absolutely prepared needed legal representation when he was arrested in to accept that he has got his recollection wrong, but I August 2006. Legal representation was supplied to am certain that I explained to him that this document him at the cost of News Group Newspapers in had emerged, what it was and why it meant that the August 2006. defence that we had lodged in the case couldn’t be run any further and we needed to get out of it. Q946 Philip Davies: He was pleading guilty to a criminal offence which would have— Tom Crone: At the end of November 2006, he Q938 Philip Davies: Can I move on to the payments pleaded guilty. to Clive Goodman? Mr Crone, what you did not tell us back in 2009, and what you seem to be saying now, Q947 Philip Davies: So when John Kelsey-Fry was is that—correct me if I am wrong—you authorised the employed, no doubt at great expense, he pleaded fact that Clive Goodman’s legal fees were paid by guilty to a criminal offence which came with a gross News International. misconduct, summary dismissal, why did you not Tom Crone: It would have been authorised above me, check with either the director of HR or the but certainly I would have had discussions with employment lawyer at News International whether it people who authorised it. was still a proper thing to be paying his legal fees? Tom Crone: Well, I think it was generally understood Q939 Philip Davies: But you knew that at the time. that his legal fees in the criminal proceedings were You didn’t tell us that in 2009, but you did know it at being paid for by us. It was generally understood the time. internally. Tom Crone: Well, are you sure I didn’t tell you in 2009 that his civil costs were being looked after by Q948 Philip Davies: Internally by whom, because us? whenever we put this to anybody— cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 87

6 September 2011 Tom Crone and Colin Myler

Tom Crone: By the editor of the News of the World as I have explained both to the Committee in 2009 at the time and, I think, almost certainly higher up and elaborating on it today. If I have fallen short, I from that. If someone felt that as soon as he pleaded will take responsibility for that and you will not find guilty he should have the plug pulled on the payment me falling short in any kind of humility. of his legal fees, then someone would have told me that, but they did not. Q953 Philip Davies: But you did not ask about what had happened to that case? You did not question what Q949 Philip Davies: So as far as you are aware, had happened and you had no idea that any Andy Coulson and Les Hinton knew that News payment— International were paying his legal fees up to and Colin Myler: It was a case that I inherited. Quite including the court case? frankly, my focus at that time was trying to get the Tom Crone: I am certain that Andy Coulson knew paper back on track, to sort the paper out, to try to that and I am fairly sure that Les Hinton knew, but I change the culture within the paper, to change the can’t be absolutely certain. systems within the paper, the protocols within the paper, and that is what I thought I was doing. Q950 Philip Davies: Mr Myler, you said not too long ago, if I heard correctly, that you disputed what Mr Q954 Philip Davies: Can you think of any reason Cloke had said in the previous session, when he said why Mr Cloke would say that you did know about that you were aware of the payments that were made those payments when you say you didn’t? to Clive Goodman, subsequent to his guilty plea, his Colin Myler: No, I don’t. Those decisions were sentence and his dismissal. He made it clear that you clearly, again, way above my pay grade. were aware of those payments. You may not have authorised them, but you were aware that they had Q955 Philip Davies: Just one final thing, in your been made. evidence in 2009, when I put it to you that the idea Colin Myler: I was not aware of any financial that it was one rogue, maverick journalist appears now settlement that was made between the company and to be a somewhat discredited theory, your answer was, Mr Goodman at any stage. “No evidence, Mr Davies, has been produced internally or externally by the police, by any lawyers, Q951 Philip Davies: You were not aware that a to suggest that what you have said is the truth.” You payment had been made—not the figure or anything have been saying today that as far as you were like that? You are saying quite categorically that you concerned, the “for Neville” e-mail was absolutely were not aware that any payment whatsoever had categorical evidence that the one, rogue maverick been made? journalist theory was discredited. What you have said Colin Myler: I was not aware of any payment and today and what you said back then—surely you nor was I involved in any negotiation, conversation or cannot reconcile those two? meeting. Let me point out if I may, Mr Chairman and Colin Myler: No, as Mr Crone has pointed out, the Mr Davies, that as an editor, as I said before, I found existence of the “for Neville” e-mail was made known it quite extraordinary that I had to hear this appeal, to Mr Taylor’s lawyers by the police. The police had but I did what I did, because I am not a human this information and had this evidence. resources lawyer or expert. So there were several parts to this. I was sitting there as the editor because that is Q956 Philip Davies: I said that it was discredited. what I had to do. I listened to the appeal with Mr You said that no evidence has been produced to Cloke. I then spoke to the executives whom Mr suggest that what you have said is the case. That’s not Goodman had made allegations against. The e-mail the case, is it? search was authorised. Mr Chapman dealt with the Colin Myler: I made the point very clearly in my outside firm of Harbottle and Lewis. Mr Cloke and opening statement to that hearing that the “for Mr Chapman dealt with the e-mails. Whatever action Neville” e-mail was clearly a significant development. was taken, all I know, as I said in my letter to the Chairman and the Committee was that Mr Cloke said Q957 Philip Davies: Mr Crone, finally to you: the to me after a period of time, “Good news, there is no payments to Mr Mulcaire. You said back in 2009 that, smoking gun or silver bullet in the e-mails.” I yes, apparently some payments were made, and that remember that quite clearly. I respect Mr Cloke’s your understanding was that, because he had worked recollection, but it is not something I would have said for so long doing work for the company, you weren’t if I did not remember it or recall it. an employment lawyer but you did think that you understood that the law meant that that person would Q952 Philip Davies: But you see, you are a have certain employment rights and that’s why he was journalist. I would have thought that journalists by paid off. Who gave you the advice that he had those nature were quite inquisitive characters. Did you not employment rights? ask why on earth Clive Goodman had dropped his Tom Crone: I think right at the beginning I asked claim and his threat to go to an employment tribunal? Farrer about it. Did you not say, “What happened to that Clive Goodman case?” Q958 Philip Davies: Did you not think to ask the Colin Myler: Again, with respect, Mr Davies, Mr director of HR in News International what the Cloke is an experienced human resources director. I standing in terms of employment rights were for am a journalist. I played the part in this whole episode somebody in that position? Given the nature, you cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 88 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler would think that it was such an important matter that Dr Coffey: It doesn’t to me, on that particular point. you got it right. Colin Myler: It has a significance. If, as has been Tom Crone: No, you misunderstand who was doing published, some of those e-mails related to criminal what. I had absolutely nothing whatsoever to do with behaviour, and Mr Goodman is relating to invoices Mulcaire and his employment claim, except at the that support that allegation, I am not aware of those very beginning. It was notified to me and I passed invoices, and that specifically was what was being it on. looked at, at the time.

Q959 Philip Davies: So who dealt with his sort of Q965 Dr Coffey: So you undertook no review of bogus employment claims? invoices in any way? Tom Crone: HR dealt with it and I think Jon Chapman Colin Myler: I undertook a very wide-ranging review dealt with it. of practices within the newspaper, including essentially not banning cash payments, but reducing Q960 Philip Davies: But the director of HR made it and changing the protocol and the system of how cash abundantly clear that he didn’t know about that and payments would be paid. I reduced it by, I think, he didn’t— between 82% and 89%. Specifically on the invoices Tom Crone: Jon Chapman certainly dealt with it, and that Mr Chapman is referring to, I will need a little I can’t imagine HR didn’t get involved through some more information before I can answer that. way, whether it was Daniel Cloke or someone else. Q966 Dr Coffey: Okay. Just to put aside slightly Q961 Philip Davies: So you would question the what Mr Chapman said, in the appeal process, there points Mr Chapman and Mr Cloke made about his was no investigation of invoices undertaken by you or payment? anybody who worked for you? Tom Crone: Well, I am not actually clear what they Colin Myler: I am not saying that it didn’t take place. did say. The main thrust—

Q962 Dr Coffey: Mr Myler, during the appeal, it was Q967 Dr Coffey: Can you tell me what you did do, suggested by Mr Chapman earlier that you and your apart from the review of the e-mail, in regard to other team looked at invoice payments for things that were information or interviews that you may have referred to by Mr Goodman in his appeal. Can you undertaken? tell us more about that please? Colin Myler: The main thrust of Mr Goodman’s Colin Myler: I am not sure what he’s referring to. allegations was of other executives and people within Forgive me: there were a lot of allegations being the newsroom being aware of what he was doing. As spread around at the time, so I don’t have that exact a result of the e-mail search and as a result of his note at the time. I would have to be reminded of that. allegations, I sat down with Mr Cloke and spoke to If Mr Chapman said that we looked at invoices, I am the individuals Mr Goodman had named. They denied sure we did, but specifically what they were and what all knowledge of his allegations. That is what the system was, I cannot be clear about what that was, happened. That was specifically in relation to the to be honest. allegations that he made.

Q963 Dr Coffey: Reflecting on that, it seems unusual Q968 Dr Coffey: From that, I am taking away from to me that when you were deciding the appeal that today that you, or somebody working for you, did not you cannot recall activities you undertook yourself. go and look at specific invoices. Colin Myler: You may have more information than I Colin Myler: No, I am not saying that. That may have have about what the allegation was that Mr Goodman happened. What I am saying is that you need to be was making specifically about invoice payments. If specific. you could help me with that. Q969 Dr Coffey: That is what I am trying to Q964 Dr Coffey: Sure. Earlier, in a letter of appeal, understand. What did you do in terms of looking at Mr Goodman made various accusations about financial transactions? activities and subsequently asked for a series of Colin Myler: evidence, including authorisation of payments, that I changed the whole system. kind of trail of history—invoices, mobile phone records, copies of e-mails—which led to the Q970 Dr Coffey: That is not what I am talking about. subsequent review that you are fully aware of. It has You are talking about changing the practice. been suggested today, in evidence to this Committee, Colin Myler: I am sorry if I am missing the point. that Mr Myler and his team looked at those invoice payments. Q971 Dr Coffey: I am talking about a review of the Colin Myler: First and foremost, the contents of the appeal that was put forward by Mr Goodman. Did you 2,500 e-mails were never shared with me. look at any financial transactions as a consequence of Dr Coffey: I am not referring to that. the appeal made by Mr Goodman? Colin Myler: Can I explain? Colin Myler: I do not recall any financial transactions Dr Coffey: You don’t need to explain; I understand that were being investigated. that perfectly. Colin Myler: With respect, it has a significance. Q972 Dr Coffey: That is what I wanted to clarify. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 89

6 September 2011 Tom Crone and Colin Myler

Colin Myler: But if we could go back to any notes three of you at the meeting, and the purpose of the that were taken at the time, or if Mr Chapman or Mr meeting was to say, “This e-mail has been revealed Cloke could elaborate about which particular invoices now and we therefore, with our external advice, Mr Goodman was referring to, I think we can clarify believe that there is no point in trying to defend the that. If that was asked of me, it would have been done, case. We should settle, and this is kind of the area in and if not by me personally it would have been done which we need to settle.” by the managing editor’s office. Colin Myler: I think that that is a bit of an over- simplification, with respect. This was not decided in Q973 Dr Coffey: Mr Crone, I am just trying to clear 15 minutes. Conversations had been taking place for this up in my own mind. You were referring to the weeks between lawyers and Mr Taylor’s legal team. “for Neville” document. You suggested that four other Dr Coffey: I understand that. people would potentially have sued if that had been Colin Myler: Outside senior counsel, outside junior made public. Have any of those people since sued or counsel, Farrer and Mr Crone would not have come settled? to the decision that they did and said, “We’re going to Tom Crone: No, not if that was made public. do that” in 15 minutes. These will have been Obviously, if you have a class of four perhaps, all of conversations that have taken place over a matter of whom are in the same sort of circumstances—in other days and weeks. words, they were victims of Mulcaire accessing their voice mails—and four of them don’t take any legal Q978 Dr Coffey: I understand that. The 15 minutes action but one does—but the other four probably don’t referred to the meeting that the two of you had with even realise that that person is taking legal action Mr Murdoch, when ultimately he had to make the because there is no publicity about it at any stage as decision, as has been suggested, that you would agree far as I can remember—and they suddenly learn that to settle. What I am confused about is that that was this person has not only sued us but has been paid a the only recollection I thought you offered. The substantial sum of money, it is almost inevitable that impression I have got from Mr Crone’s evidence to us they will sue us to get the same result. today is that Mr Murdoch was clear that there were other aspects to the e-mail that implied wrongdoing Q974 Dr Coffey: Right, so there were four other was more than Mr Goodman and Mr Mulcaire. That people suggesting that they had been hacked? is not your recollection that I have taken away today, Tom Crone: It was a matter of record. Mulcaire had and that is what I am trying to clarify in my mind. Of pleaded guilty to five individuals, one of whom was course, I will look at the transcript in detail, but can Gordon Taylor, in five separate charges at the Old you clarify? Was there a discussion about other people Bailey. apart from Clive Goodman and Glenn Mulcaire in that conversation with Mr James Murdoch? Q975 Dr Coffey: For my own understanding, I just Colin Myler: The discussion was really about the “for want to go back to the meeting. I know Mr Collins Neville” document. There was not, as far as I and Mr Davies and others have gone back to it. What remember, a discussion about anybody else, because I heard you say earlier, Mr Myler, is that your there was no evidence to support anybody else being recollection of that meeting is that James Murdoch allegedly involved. heard that he needed to settle—or that was the Dr Coffey: That is very helpful. I now turn to Mr recommendation and that is what he agreed. I do not Crone. recall you saying that any of the recollection of that Colin Myler: Sorry if I sounded vague. meeting was what Mr Collins was referring to. You Dr Coffey: I am just trying to get it right in my mind. did not seem to state that you had a recollection that Of course, you were at the meeting and we are trying there was a discussion that other people were involved to understand. in illegal practices. You only suggested earlier that Colin Myler: Yes, of course. your recollection of that meeting was that Mr Murdoch had agreed basically to do the settlement. Q979 Dr Coffey: Mr Crone, I inferred from what you Colin Myler: No, the purpose of the meeting was said earlier that you felt other things were discussed perfectly clear. at that meeting and that it was not simply about the settlement and that Mr Goodman and Mr Mulcaire Q976 Dr Coffey: The purpose of the meeting was to were involved. Have I misinterpreted what you said? discuss the settlement. Tom Crone: The meeting was all about settling the Colin Myler: The purpose was to discuss the case on the basis of the document that arrived that development that had been presented to Mr Taylor’s showed that the News of the World was implicated in legal team. That development was the fact that the the Gordon Taylor accessing, which up to then we had police had handed over the so-called “for Neville” e- not seen any evidence of. mail. That was the purpose for outside counsel— Dr Coffey: You are being very careful about the News external counsel—Mr Crone and eventually my view of the World. to present to the chief executive, Mr James Murdoch, Tom Crone: Clive Goodman was not charged with that they were the grounds to either settle or not and Gordon Taylor; he was charged with the royal go for trial. There was no ambiguity about that. accessing. Gordon Taylor was exclusively a Glenn Mulcaire charge. We had no evidence that the News Q977 Dr Coffey: There is ambiguity in my mind. of the World or News Group Newspapers were What I am trying to get at is this. There were just involved in that matter. Mulcaire had pleaded guilty cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 90 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler to it, but we had seen no evidence that NoW was Q988 Louise Mensch: Just a further point of implicated. As I made clear on the last occasion, the clarification—I’m sure you’re sick of them now—do first we saw of that was the “for Neville” e-mail that I take it from what you’re saying that it was clear that reached us in spring 2008. That document was the it had gone beyond one rogue reporter in the meeting reason that we decided to settle the case. We needed you had about the “for Neville” e-mail? Have we authority to do that, so we went to see Mr Murdoch moved on to two rogue reporters? and it was explained to him that this document had Tom Crone: I’m sorry? emerged and what it meant, and he gave us authority Louise Mensch: Have we moved on from one rogue to settle. reporter to two rogue reporters, Neville Thurlbeck and Clive Goodman, or did you in this meeting suggest to Q980 Dr Coffey: Have you been involved, Mr Mr James Murdoch that evidence had been brought to Crone, with the subsequent actions with Sienna Miller your attention that hacking was widespread and other people? throughout the News of the World? Tom Crone: I was until, I would say, just over three months ago. Tom Crone: No. Louise Mensch: Or, might you be able to say that Q981 Dr Coffey: Referring to the Select Committee there were just two rogue reporters? on Home Affairs investigation, back in the original Tom Crone: What the document showed and what I investigation of 2005–06, Peter Clarke had suggested relayed in the meeting was that it—a transcript of that News International did what it could to thwart the Gordon Taylor voicemails—had passed through our investigation. Were you involved in that? office, actually back by e-mail, to Glen Mulcaire. Tom Crone: I would not say so, no. That was the Clive Goodman had not been charged with that. role—not thwarting I hasten to add—that Burton Louise Mensch: I’m not interested in Clive Copeland were brought in for: to liaise with the Goodman. Let me try to be more specific. police, to deal with what the police were asking for Tom Crone: I know what your question was. That is from us, to come back to us and say, “This is what what I explained and that is what was relayed to Mr they’re asking for” and to give us specialised criminal Murdoch, the difference that this document made was legal advice on what was needed. that it implicated the News of the World in Gordon Taylor without any doubt at all, because it had passed Q982 Dr Coffey: From your recollection— through our office. admittedly it is five or six years ago—were you directly involved in interviews with Peter Clarke and Q989 Louise Mensch: It implicated the paper, but in the team? terms of the widespread nature, or the narrow nature, Tom Crone: No. I did not meet the police. I had nothing to do with them. of hacking at the paper, was everyone doing it? Tom Crone: It proved— Q983 Chair: May I just clarify one point? You said Louise Mensch: It proved that the paper as a that you explained to James Murdoch what the e-mail corporate body had knowledge, but did it prove that meant. Did you accept that it was a genuine e-mail there were many reporters at the News of the World from a News of the World reporter to Glen Mulcaire? involved? Tom Crone: Yes. Tom Crone: No. It had proved that it had gone through the computer system of a junior reporter. Q984 Chair: So, you agreed that it implicated a Louise Mensch: Okay. That doesn’t sound— junior reporter, Ross Hindley. Tom Crone: The obvious inference that can be drawn Tom Crone: Yes. from that is that others—an other, or others—knew of it, because the junior reporter clearly wasn’t doing this Q985 Chair: You said that you had never talked to off his own bat because he was just told to transcribe Mr Murdoch about it, in terms of it being the “for it. Neville” e-mail. Tom Crone: No. Q990 Chair: The obvious inference is that Neville knew about it because his name was on the top of it. Q986 Chair: Did you tell Mr Murdoch that the e- Louise Mensch: Indeed. mail had Neville’s name on the top? Tom Crone: Neville’s name was on it, but Neville Tom Crone: I can’t remember. doesn’t accept that he knows anything about it. Chair: The fact that the chief reporter of the News of Chair: Indeed. 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 Q991 Louise Mensch: May I ask you about the be certain. concept of on-duty lawyers? Mr Chapman told me they would be your responsibility—that they would Q987 Chair: So, you probably told him, “Our chief report to you. How many on-duty lawyers would there reporter happens to be called Neville, and the e-mail be at the News of the World on any given day or night? says it’s for Neville.” Tom Crone: One each evening, except for Saturdays, Tom Crone: It’s got “for Neville” on it, yes. and quite often there would be someone in during the Chair: Okay, thank you. Louise Mensch. afternoon as well. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

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6 September 2011 Tom Crone and Colin Myler

Q992 Louise Mensch: What happened if a story Q1001 Louise Mensch: The reason I ask about that came in on Saturday night? Who would check that Saturday night is because stories about the murder legally if it was required to be changed or altered? victim Milly Dowler were published on that Saturday Tom Crone: If I am around, me—or at home. night, 13 April. A story came out in The Wall Street Journal on 20 Q993 Louise Mensch: But there would always be a August, subsequent to the Committee’s previous lawyer available to check stories if it was felt that evidence session, that made some very serious there was some legal risk? allegations about the Milly Dowler story. Previously, Tom Crone: Yes. the focus had been on the story that appeared in most editions of the News of the World on Sunday 14 April, Q994 Louise Mensch: If the in-house lawyers had which contained a passing reference to a voicemail received a query from a reporter or they were left on Milly Dowler’s phone. Early editions of the checking a story and there was something legally paper published in Scotland under one byline, that of dodgy about it and they ordered that changes be made Sarah Arnold, and in England under a different byline, to the story, would they subsequently make a report that of Robert Kellaway, contained a very different to you, as the legal director of News International? story with detailed phone messages left on Milly Tom Crone: If it was of any significance. They look Dowler’s phone. One of the messages said, “Hello at stories and quite often they have some sort of legal- Mandy, give me a call because we have started risk side to them, which can be eliminated by saying, recruiting.” That was from an employment firm called “Well, that paragraph could get us into trouble with Epson in the Midlands. The story goes on to discuss contempt of court or potentially a libellous allegation the fact that Neville Thurlbeck authorised reporters to that can’t be stood up by the evidence available,” and stake out the Epson factory to discover whether Milly they would suggest either saying it in a different way Dowler was still alive and had taken a job in the that removed the risk, or just removing the paragraph Midlands. When it was discovered after three days or paragraphs. That’s quite routine. There’ll be half a that she had not, he called it off. Did you have any dozen or a dozen of those per evening. knowledge that Mr Thurlbeck had authorised that stakeout of the Epson factory? Q995 Louise Mensch: You were the legal director of Tom Crone: I cannot remember that at all. I am sorry. News International on 13 April 2002, were you not? I know it is a very serious subject, and I am sorry, but Tom Crone: The title is legal manager, and yes, I I cannot remember it. I am not even sure it rings bells would have been. now, but I have read about it since. Louise Mensch: Sorry, you would have been legal manager. That was a Saturday night, so your Q1002 Louise Mensch: The story about the stakeout recollection is that— Tom Crone: I am sorry. Could you give me that date of the Epson factory was never published. The story again? that was published in the first editions on the Sunday morning, and which would have been filed on the Q996 Louise Mensch: Saturday 13 April 2002—you Saturday night, was pulled and replaced by a different will see where I am going with this in a second. It story. Somebody, therefore, flagged up the first story was a Saturday night, and you were the legal manager as being legally dangerous and said that it ought to in charge. There would not have been— have been pulled. Who would have done that? Tom Crone: I don’t know whether I was in the office Tom Crone: I don’t know. If you showed me the two or on holiday, but yes, at the time I was legal manager. reports, maybe I could familiarise myself with them. Louise Mensch: But there would not have been an I cannot find them, being outside the company. on-duty lawyer because it was a Saturday night. That Damian Collins: These are the documents published was the one night a week— by The Wall Street Journal. That is the early English Tom Crone: Unless I was on holiday, in which case edition, and that is the early Scottish edition, which is there would be an on-duty lawyer. the same. And that is the final edition of the story. Louise Mensch: In the first edition of the story, which Q997 Louise Mensch: Would you have records was published in the early English and Scottish stating whether you were on holiday that night? editions, there was a story that concentrated on Tom Crone: I doubt it. voicemails and referred to three specific voicemails. The first was that she had been offered a job and asked Q998 Louise Mensch: Would you be able to supply her to come in for an interview at the Epson factory. that to the Committee? The second was from somebody who said, “Hey there, Tom Crone: Not going back that long. I very much Piggo baby.” And the third, although the article did doubt it. not say what the words were, was an intimate voicemail that they could not understand. All these Q999 Louise Mensch: Would there be employment references were excised from subsequent editions of records of when you took your vacations? the story that came out on 14 April. Furthermore, the Tom Crone: Not then, no. two separate journalists to whom the same story was ascribed, Robert Kellaway in England and Sarah Q1000 Louise Mensch: The News of the World Arnold in Scotland, deny that they had anything to do would not record when you went on vacation? with the story, that they filed it or that their bylines Tom Crone: No, it would not. Absolutely not. were correctly ascribed to it. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

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6 September 2011 Tom Crone and Colin Myler

I am sure you will agree with me, Mr Crone, that that Tom Crone: Yes. is pretty much prima facie evidence that some lawyer at the News of the World instructed the editor to pull Q1008 Louise Mensch: You are suggesting that the the first edition of the story on legal grounds and police would have intercepted these phone messages replace it with another edition. Do you have any and then leaked them to the News of the World. The knowledge of that whatsoever? words that are in the first story—it is not a generic Tom Crone: I have no recollection of giving that story—are actually the words used in the phone advice or of seeing that story. messages. You are suggesting to me that it is possible that the police would have been listening to Milly Q1003 Louise Mensch: Can you categorically deny Dowler’s messages and passed them on word for word that you gave such advice? This is Milly Dowler—I to a reporter at the News of the World, who would cannot believe that it would not have stuck in your have put them in a story, which the news editor would mind. have subsequently pulled. Tom Crone: I can only remember to the best of my Tom Crone: Taking that one point at a time, I think it recollection. I absolutely promise you that I cannot is almost inevitable that the police investigating her remember that particular story. I certainly have no disappearance would have gone to whatever was recollection whatsoever of legally advising on it. available on her mobile phone, which presumably is with the network. I do not know that—I am not an Q1004 Louise Mensch: You will forgive me, Mr investigator—but I assume that the police would have Crone, if I put it to you that, since we are talking had that information and they would have thought it about the murder victim Milly Dowler, on whom all very important. If that is the case, reading this, one media attention has been focused, it is literally not assumes that the police have released it for some credible that you do not remember whether you did or reason to do with the investigation. Now, it is not in did not spike a story about voicemails on her phone the subsequent edition, and one explanation for that, on Saturday 13 August 2002. especially as I do not remember a legal involvement Tom Crone: Since I cannot remember it, I do not think with this, which means it probably did not happen, is I did, to be perfectly honest. I am very well aware of that the police would have seen the first edition or how serious this is. I am not trying to underplay it. It become aware of what was in the first edition and is hugely serious, and it is quite disgusting if what was said, “No, that’s not what we intended. Let’s get rid published came about as a result of illegal accessing. I of it.” That contact would have been with whomever feel quite strongly about that, but I have no the police contact was or straight into the news desk, recollection of advising on that story. and the news desk said, “Get it out of the subsequent edition. It shouldn’t be there because the police don’t Q1005 Louise Mensch: If it was not you, Mr Crone, want it there.” it would have been a lawyer at the News of the World who advised pulling it. Q1009 Louise Mensch: Would any records have Tom Crone: Not necessarily. Absolutely not been kept of police involvement in leaks of this sort necessarily. that would have been passed on to the duty lawyer? Would this have been passed on to your duty lawyer? Q1006 Louise Mensch: Who else might it have Tom Crone: No, it would not. Well, it was a Saturday, been? so it probably would be me, but the changes later on Tom Crone: Look, this story—at first glance, this would have taken place at a time long after I had left story would appear to come from police sources. Now, the building. If I was involved, that would have been that is not unusual. In a murder investigation or any a phone call, and I certainly have no recollection—I other big investigation, a reporter will perhaps get would probably have remembered a phone call more some information from a police officer—hopefully in than most things—so I do not think I was involved. a proper way, incidentally. Perhaps, a police officer— Louise Mensch: Forgive me— Q1010 Louise Mensch: In any parallel circumstance Tom Crone: Allow me to finish, please—this is where the police might have leaked something very important. The police, for their own intelligence detailed to the News of the World and then requested reasons, might think it is important to put messages that it be pulled, would that have been reported to the out there in pursuit of their investigation. Now, the on-duty lawyer? detail on this story suggests it is a police briefing of Tom Crone: No, not necessarily. some sort, either only to the News of the World or in a more general way. What could have happened is that Q1011 Louise Mensch: Not necessarily. It would the police see the first edition and they say, “No, I have gone directly to the reporters. Is that your didn’t mean you to identify it in that way.” They experience too, Mr Myler? Does this sound credible would ring in and say, “That’s ridiculous. You to you? shouldn’t have done that.” Then, the news desk would Colin Myler: It is impossible for me to say. This was just pull it out. 2002.

Q1007 Louise Mensch: Forgive me, but perhaps I Q1012 Louise Mensch: Okay, clearly you were not am misunderstanding. The first story is not based on there at the time. tip-offs or information about Milly Dowler, but on Colin Myler: I was not working there at the time. I phone messages. was not in the same country at the time; I was working cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 93

6 September 2011 Tom Crone and Colin Myler away. I do not know. You have to talk to the people News of the World. That is the key question, not the who were on duty that evening to find out about what settlement over Gordon Taylor, but whether he— happened. There could be many reasons why the story James Murdoch—knew that it was wider. was pulled. Tom Crone: It is a very narrow point, but since the description he got about the e-mail was that it was Q1013 Louise Mensch: I am not asking that, Mr prepared by a junior reporter and sent back to Myler. I am asking whether, in your experience as an Mulcaire, then it is quite clear that it goes beyond editor of the News of the World, the scenario that Mr Clive Goodman. Crone has just outlined is plausible and whether the police might leak something word for word to the Q1017 Louise Mensch: You have said that there are News of the World, see it in an early edition and ask many things you cannot remember about this meeting. for it to be pulled. You have said you cannot remember if you showed Colin Myler: I think it is plausible that the police talk him the e-mail or not—that would seem to be a fairly to crime correspondents and journalists they know significant piece of information you cannot remember. about all manner of things during different The other thing I note is that you have not said that investigations. As Mr Crone said, nobody can defend James Murdoch himself commented in any way. You what happened in this case; it is absolutely appalling. have said nothing about what he said. Tom Crone: All I am doing is answering your Q1014 Louise Mensch: I am not asking that. I am questions. asking you if it is likely that they would have leaked a specific story and then said, “Can we pull it?” Q1018 Louise Mensch: Did James Murdoch say at Chair: We are getting into speculation. any point during the meeting, “Clearly, this has been more widespread; we must do something about it.” Q1015 Louise Mensch: Fair enough. Let me put In other words, did he acknowledge himself in his something to you, Mr Crone. I do not know whether comments to you during the meeting that hacking had I speak for others on the Committee, but for me, the been more widespread than Clive Goodman? I am evidence you have given—this is the reason you were asking if he could say that he did not understand what originally called here, as the Chairman started out by you were trying to tell him. saying—contradicts Mr James Murdoch’s testimony Tom Crone: Since he gave us the authority we were about whether he was made aware of the “for Neville” asking for in the context of what we had said to him, e-mail and its broader consequences. As Mr Collins I would take it that he understood— said, his evidence was crystal clear that he was not made aware that there was any wider involvement of Q1019 Louise Mensch: He gave you authority to other reporters, but I have to say, sir, that your settle the case? evidence really has been as clear as mud on this point. Tom Crone: For the first time he realised that the You have been clear that you were discussing a News of the World was involved and that involvement settlement, but there appears to be no clarity involved people beyond Clive Goodman. On that whatsoever that he was made aware that there was basis, he authorised a settlement. wider involvement with the News of the World. The Chair: I think we have covered this issue at meeting took 15 minutes, there was no subsequent considerable length. review at the paper, there was no subsequent action, and nobody said, “Hey, this is widespread, we should Q1020 Louise Mensch: Okay. Last question: would carry on”. If Mr James Murdoch was sitting here you not admit, Mr Crone, that your credibility has might he not be able to say, “I’ve been totally clear. been somewhat damaged by the question that my They’re completely muddled. The meeting lasted 15 colleague Tom Watson put to you when you clearly minutes. There was no subsequent action. I stand by stated in evidence to the Committee in 2009 that my testimony.” confidentiality was not a factor in the Taylor Tom Crone: There was only one reason for the settlement and now you are trying to parse the words meeting. We had pursued a course of conduct in our “confidentiality” and “secrecy”? action, which was defence, because we had seen no Tom Crone: There was no hiding this. Last time the evidence that there was News of the World Committee knew very well that there was a involvement in the Gordon Taylor matter, as opposed confidentiality clause in the agreement. They knew to solely Mulcaire involvement in the Gordon Taylor very well that the deal was—clause by clause—pay matter. We were then given some evidence in the form him some money, agree confidentiality and pay his of that document. The advice was to settle the action costs. Of course it was a factor, and we have never and we went to Mr Murdoch to get his authority for hidden that, but it was not, “secrecy gets more settling the action. It is absolutely inconceivable that money”. it was not explained to him that this document had Louise Mensch: It seems to be plainly contradictory. arisen—had come to our attention—which showed Thank you. News of the World had an involvement and were Chair: We have a couple more questions and then implicated in Gordon Taylor. we’ll be done. Jim Sheridan.

Q1016 Louise Mensch: Sure, everybody gets that; it Q1021 Jim Sheridan: Mr Myler, it has been a long is whether he understood that the guilt in the Gordon day and I hope that my recollection of facts is correct. Taylor matter meant that there was wider hacking at In response to Mr Davies, you said that you did not cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Ev 94 Culture, Media and Sport Committee: Evidence

6 September 2011 Tom Crone and Colin Myler know anything or want to get involved in any under since 2006—your own inquiries with the Select individual payments to people, is that right? Committee, the police inquiry and the Leveson Colin Myler: I was not involved in any negotiation or inquiry—I would doubt very much indeed whether conversations about Mr Goodman’s post. anything remains under wraps. I think everything, rightly, will emerge. Hopefully, one day it will. Q1022 Jim Sheridan: In fact, the only question you posed, as I understand it, was about why you were Q1027 Jim Sheridan: Given your flippant attitude to making a payment at all. surveillance tactics, Mr Crone, what do you think this Colin Myler: No, I did not pose any question. I am letter contains? just trying to put the record straight from my point of Tom Crone: What do I think what? view about my lack of involvement in any negotiation or conversation regarding what payments Mr Goodman received. Q1028 Jim Sheridan: Why was this letter sent to members of the Committee that is investigating, given Q1023 Jim Sheridan: I am sure the transaction will your flippant attitude towards surveillance tactics? show that, but as I understand it, you said the only Tom Crone: I am not flippant. If I came across as question, “ I posed was, ‘Why were we making any flippant, I apologise. I did not intend to come across payment at all?’” What I am trying to get at is, who as flippant. I do not know who the letter is from, and did you pose that question to? I do not know whether it is genuine. You have quoted Colin Myler: I think that the question I posed at the a line from it. The history of how this matter has beginning was that I felt it was a pretty extraordinary unfolded involves two sources of information. One is, sequence of events that a man who had pleaded guilty first and foremost, everything that was seized by the and served a prison sentence then had the opportunity police from Glenn Mulcaire. Bit by bit, that has to appeal against his dismissal. As I said, I am not emerged in the civil litigation, case by case. We have an employment expert, but I found that quite found out about it when it has emerged through the extraordinary, but of course he had every right to do civil litigant lawyers. The other source of information that and that is why the process was followed. is the internal e-mail system at News International, which was properly investigated, it seems, quite Q1024 Jim Sheridan: Who did you make your views recently. That was done under police supervision, and clear to then? they are seeing what is coming out of that. I do not Colin Myler: I said to Daniel Cloke—I think I almost know what is in there; I have not seen what has come said to him—“Are you serious?” out of it. Q1025 Jim Sheridan: And what was his response? Q1029 Mr Watson: Did you see dossiers on the Colin Myler: He was incredibly serious, because—I think this was touched on in the last hearing in 2009— private lives of claimant lawyers? employment law and human resources are now Tom Crone: I saw one thing in relation to two of the increasingly something that executives have to lawyers, except I do not know whether it was a understand. We actually sent our executives on dossier. It involves their private lives. seminars to understand the process of complaints and everything surrounding this, because it is an absolute Q1030 Mr Watson: Did you feel the need not to minefield. However extraordinary I felt the decision answer that question when I had a round of questions was that we had to hear Mr Goodman’s appeal after with you earlier? he left prison, the reality was it was something that Tom Crone: Didn’t you ask whether I had ordered we had to do. He had every right on his side to say surveillance, or something like that—whether I had that he felt he had been unfairly dismissed. ordered a private investigator? Q1026 Jim Sheridan: I just have one final, brief Q1031 Mr Watson: You gave me a lawyer’s answer, question, but before I ask it I will read a paragraph from a letter that I received—I do not know whether and now you have given me an accurate answer. Do other members of the Committee have received it— you know the origin of those dossiers? from a rather senior former member of News Tom Crone: Freelance journalists, I think. International, who says: “for all kinds of reasons…I wish to remain Q1032 Mr Watson: Employed by News International? anonymous. I hope you will understand this. You are Tom Crone: Freelance journalists employed by News dealing with highly sensitive, complex matters and International, yes. incredibly powerful, well connected and ruthless individuals who will do anything to keep the real truth Q1033 Mr Watson: And do you know who under wraps because the truth could well blow apart commissioned them to produce those dossiers? their global empire.” Why do you think a member of this Committee who Tom Crone: I know who contacted the freelancers. is investigating what is going on should be sent that letter? Q1034 Mr Watson: Who was that? Colin Myler: I have no idea, but I think given the Tom Crone: I don’t think we should do that because forensic scrutiny that the News of the World has been of the police investigation. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG03 Source: /MILES/PKU/INPUT/012695/012695_o003_db_Corrected Transcript CMSC 06 Sept 11.xml

Culture, Media and Sport Committee: Evidence Ev 95

6 September 2011 Tom Crone and Colin Myler

Q1035 Mr Watson: Are you aware of any members Tom Crone: Not if it had come from the authorities, of this Committee who were the subject of covert no. In retrospect, in 2002 I was not aware that phone surveillance? hacking existed, to be perfectly honest, so looking at Tom Crone: No, I only know about that one thing that that, the only source that I could have seen for those I have just referred to. messages would have been the police.

Q1036 Mr Watson: In the 2009 inquiry, you were Q1040 Damian Collins: In this case, if the journalist not aware that either freelance journalists or private had said it was from a police source, that would have investigators were commissioned to follow or been enough. surveille any Member? Tom Crone: Yes. Tom Crone: That is news to me. Q1041 Damian Collins: If they were not able to say Q1037 Mr Watson: Are you aware of any civil or that, would it have been referred to a lawyer before criminal cases that involve the use of computer printing? hacking or Trojan devices put on computers? Tom Crone: If they were not able to say it? Tom Crone: No, not at all. Q1042 Damian Collins: Yes; given that it could Q1038 Mr Watson: Are you aware of the use of potentially be illegally obtained information. tracking devices in any of the civil cases or criminal Tom Crone: You would certainly have to ask the cases? question, “Where did you get the information from?” Tom Crone: No. Or the desk would have to.

Q1039 Damian Collins: One last question; I Q1043 Damian Collins: It does not seem to have appreciate that we have gone over the Milly Dowler always been very rigorously asked. story in some detail, but it is really just about process. Tom Crone: The desk would ask that information, and The difference between the two stories that my if it involved going and asking the lawyer, that would colleague Louise Mensch described and I put in front happen thereafter. of you is that obviously there are quotes from phone messages in the early version, and there are not any Q1044 Damian Collins: In other news organisations, in the later version. As a matter of process, if a it seems that if there is any question that the material journalist was seeking to write a story and wished to that is about to be used may have been sourced use in it direct quotations from messages left on the illegally, it may be necessary for the story, but that voicemail of someone’s mobile phone—given that would normally have a legal referral. phone hacking is a criminal offence—is that the sort Tom Crone: That would be right. That is why I of thing that would have been referred to a lawyer on assume that it came from the police. the newspaper before it was published? Damian Collins: Thank you. Chair: We have done. Thank you very much. cobber Pack: U PL: COE1 [SE] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 96 Culture, Media and Sport Committee: Evidence

Wednesday 19 October 2011

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Louise Mensch Damian Collins Mr Adrian Sanders Philip Davies Jim Sheridan Paul Farrelly Mr Tom Watson ______

Examination of Witnesses

Witness: Julian Pike, Partner, Farrer & Co., gave evidence.

Chair: Good morning. This morning’s sitting of the Q1053 Mr Watson: Okay. Do you know what a Committee is a further session as a part of our material contract is? investigation into whether the Committee was Julian Pike: A material contract? previously misled in the evidence we received relating Mr Watson: Yes. to phone hacking and the News of the World.Weare Julian Pike: Explain to me. focusing specifically on the Gordon Taylor settlement, which perhaps triggered our earlier re-examination in Q1054 Mr Watson: Well, you are not aware of what 2009. In the first part, I would like to welcome Julian it is, as a lawyer? Pike of Farrer & Co. Tom Watson is going to start. Julian Pike: I am not sure what context you are talking in. Q1045 Mr Watson: Thank you, Chair. Before I begin, can I declare, if it is relevant, that I have just Q1055 Mr Watson: Well, let me just ask you this: secured a proxy shareholding vote at the News Corp are you aware of the phrase “material contract”? AGM on Friday? That is so that there is full public Julian Pike: Not particularly, no. disclosure. Mr Pike, you did not write the letter submitted by Q1056 Mr Watson: So you would not know whether Farrer on 2 September. Gordon Taylor’s settlement was material, in that it Julian Pike: No, I did not. should be put in some kind of accounts. Julian Pike: No, I would not. Q1046 Mr Watson: It was written by Gavin Bacon—is that correct? Q1057 Mr Watson: You do not think it was Julian Pike: That is correct, yes. significant enough for shareholders to be made aware of that particular payment. Q1047 Mr Watson: Did he speak to you before he Julian Pike: That is probably something for a sent it? Julian Pike: Yes, he did. corporate lawyer, who would probably know that, but I do not. I would not know that would need to go into accounts. Q1048 Mr Watson: So you were aware of the text that he would use? Julian Pike: I agree; that is right. Q1058 Mr Watson: So you do not think that it should have been put in the contingent liabilities of Q1049 Mr Watson: Can I ask why he did not just News Corp’s accounts. put in the letter, “Julian Pike says that he never said Julian Pike: I would not know the answer to that you were dealing with Murdoch”? question. Julian Pike: Well, that is the case—I did not say that—but in a sense, it is perhaps lawyer-speak that it Q1059 Mr Watson: Would any of Farrer’s lawyers is written in those terms. have advised on that? Julian Pike: No. Q1050 Mr Watson: So to be absolutely clear: you did not say to Mark Lewis, “You are dealing with Q1060 Mr Watson: News Corp would never have Murdoch.” sought your advice. Julian Pike: No, I didn’t. Julian Pike: That is correct.

Q1051 Mr Watson: So Mark Lewis has either got Q1061 Mr Watson: Okay. Would the settlement the wrong recollection or he is lying. Is that correct? have had to have been approved by a director of Julian Pike: Correct. News International? Julian Pike: As far as I am aware, no—I mean, in the Q1052 Mr Watson: Which is your view? sense that I am aware that James Murdoch’s authority Julian Pike: Well, I didn’t say it, so you ask me to was given for the settlement negotiations, and then it put myself in his shoes. I am just saying to you that I was my role to advise and carry out those would not have said that. negotiations. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 97

19 October 2011 Julian Pike

Q1062 Mr Watson: How many years did you work that was not published. Does that not strike you as for News International at Farrer’s? unusual? Julian Pike: I have been at Farrer’s for 21 years and Julian Pike: It is certainly an unusual case, I agree. for the majority of that time I have worked for News Group. Q1070 Mr Watson: Is that because you knew the company would not want the phone hacking Q1063 Mr Watson: So you would know whether a allegations to be made public? director would have to authorise a payment of that Julian Pike: Let me take a step back here. You need size or not. Presumably you knew what the scale of to understand the way in which this case unravelled payments was and the approval— and negotiations took place. Back in May 2007, when Julian Pike: No. I know that in this particular case, Gordon Taylor had no evidence to support his case, he because it was anticipated that damages would reach demanded £250,000. Having then received evidence a level which Mr Crone did not have authority to sign which supported his case, it was obvious that he was off on, then, as he told me at the time, he would need not going to settle the case for less than he had to go and get Mr Murdoch’s approval. demanded when he had no evidence, so immediately you are starting from a point that he was not going to Q1064 Mr Watson: But you did not know what the resolve the case for less than £250,000. You know level of that settlement was. that the parameters of any negotiations have changed. Julian Pike: I don’t believe I did, no. Clearly in this instance all the negotiating strengths were with Mr Taylor and not with News Group, so Q1065 Mr Watson: Before the settlement agreed the negotiating and bargaining positions were very with Taylor, what was the previous highest privacy different. Mr Taylor had the ability to negotiate a very pay-out that you had been involved in? strong settlement. He demanded £1 million, so we Julian Pike: It is difficult to be precise, but probably were negotiating against that sort of backdrop. not more than about £30,000 to £40,000. Q1071 Mr Watson: You were discussing the case Q1066 Mr Watson: And would that have been for a with members of the company. You obviously knew story that was published? that Crone was aware of the “for Neville” transcript. Julian Pike: Probably, yes. Was it discussed with the finance director of News International? Q1067 Mr Watson: So a published story gets Julian Pike: I am not aware that it was discussed with £30,000 to £40,000 and Taylor, for a story that does her, no. not get published, gets £425,000. Julian Pike: Well, those are the facts, yes. Q1072 Mr Watson: Were you aware that Crone had discussed it with any other staff member? Presumably Q1068 Mr Watson: Why was that? you discussed it with Neville Thurlbeck, given that he Julian Pike: I think there was a number of reasons. was a staff member alleged to have been in receipt of You have to be mindful that the process of negotiation the illegally transcribed voicemail interception? in this particular case was such that I think it drove Julian Pike: I do not know if Mr Crone discussed the the damages to the level they were at. Also, one of settlement negotiation with Mr Thurlbeck, but I do the things that is perhaps being slightly confused in know that, obviously, he discussed it with Colin Myler this Committee is the timings— and James Murdoch. Mr Watson: Sorry, could you speak up, into the microphones? Q1073 Mr Watson: But at no point did Crone tell Julian Pike: I said that one of the things that might you that he would have to raise it with Thurlbeck? be confusing with this issue in this Committee—I read Presumably he was wondering what this transcript some of the previous sessions—is that this was taking was at the time. He had not seen it before; it appears place before the Mosley decision was made public, in disclosure. The thing he would naturally have done while you were looking at things from the post- is go to Thurlbeck and ask him what the hell was Mosley period as well. So in this instance, pre- going on. Mosley, there was no precedent for this sort of case, Julian Pike: He did discuss it with Neville Thurlbeck and yet, while I am quite aware that damages awarded in other cases were relatively small, there was no like in May or June. case here. Obviously, we had an instance in which the claimant was claiming general damages, aggravated Q1074 Mr Watson: So Thurlbeck would have had to damages and exemplary damages, and obviously give his case to Crone. Is that right? therefore the risk of it being more than what you had Julian Pike: That is right. seen prior to that was greater, and it was all happening before Mosley, when there was a ceiling. Q1075 Mr Watson: Presumably Crone would have explained that he would have to say to James Q1069 Mr Watson: You have not really answered Murdoch that he had raised it with Thurlbeck as well. my question, Mr Pike—or not adequately for me, Julian Pike: I am sure he would have done, yes. though you might think you have answered my question. A story that was published gets £40,000 and Q1076 Mr Watson: Okay. Why is it that News you advise Crone to settle for £425,000 for a story International used you, Mr Pike? I only say that cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 98 Culture, Media and Sport Committee: Evidence

19 October 2011 Julian Pike because people tell me that you have a reputation for July 2008, so while I appreciate that you have that being a tough guy lawyer. Is that right? information in front of you now, it was not available Julian Pike: That is a hard question for me to in May and June 2008. Having offered £350,000 on 3 answer—to say what my reputation is among other June 2008, I also said on the telephone to the assistant people. at George Davies that if the matter could be resolved quickly and with confidentiality, there was probably a Q1077 Mr Watson: Have you ever been accused of little bit more on the table for Mr Taylor. being a bullying lawyer? Julian Pike: No. Q1087 Philip Davies: At what point would you have said to Gordon Taylor, “That’s it then. This has broken Q1078 Mr Watson: No one has ever said that you down. We’ll let somebody else decide this”? What are a bully? level were you going to get to before you got to that, Julian Pike: No. or were you told to settle at any price? Julian Pike: No to the latter. I think we were actually Q1079 Mr Watson: Not ever? pretty close to saying, “No. We’re not paying you any Julian Pike: No. more.” I did not believe that he would get more than £350,000 from a judge, but the economics of litigation Q1080 Mr Watson: Not even in a suicide note? are that, even at this level, you probably pay more Julian Pike: In a suicide note, no. simply because you have saved yourself an awful lot Mr Watson: Okay. Thank you very much. of costs.

Q1081 Mr Sanders: In your view, how accurate was Q1088 Philip Davies: Can you just explain clearly the advice given by leading counsel that, if taken to exactly what your brief was? Was it to settle the case tribunal, News Corp, News Group Newspapers would at the best possible price? expect to pay Gordon Taylor a sum at any level from Julian Pike: Correct. £25,000 to £250,000, or possibly even more, although this was extremely unlikely? Q1089 Philip Davies: The thing that I have a Julian Pike: I think that was perfectly possible. problem with there is that if you are told to settle the Again, to go back, you were being given that advice case at the best possible price, that indicates to me in 2008, before Mosley, when there was not any that there was, in effect, a bottomless pit of money, comparable case to the present one. Therefore there and that your job was simply to get it to the lowest was a risk that a judge might take a very, very dim possible point. You were not given an approach of, view of what had happened. “Go to this, and if it reaches this level, we will see them in court.” You are not explaining. You are saying Q1082 Mr Sanders: That is interesting. The Mosley that what you had to do was settle the case at the best case was about privacy. possible price. That is very different to saying, “We’ll Julian Pike: That is right. go up to a certain amount, and after that we’ll see them in court.” Q1083 Mr Sanders: The Taylor case was also Julian Pike: I think it is a combination of both, about privacy? actually. I was given instructions to settle the case, but Julian Pike: Correct. clearly if the demands had remained, for example, at £1 million, I do not think that I would have been Q1084 Mr Sanders: If the likely maximum award instructed to pay £1 million. then at the tribunal would have been £250,000, why would News Group Newspapers have agreed to settle Q1090 Philip Davies: Was any figure mentioned at £425,000? beforehand as to what you could go up to? Julian Pike: As I explained, we knew that he was not Julian Pike: Half a million pounds. going to settle for less than £250,000, so, following counsel’s advice, as you have just read it out, I was instructed to offer more by way of a Part 36 on 3 Q1091 Philip Davies: Half a million pounds was the June 2008. That is a perfectly standard approach. You figure that you were authorised to go up to? would offer more than you think the case is worth, Julian Pike: Yes. because it gives you greater protection, in terms of the part 36 regime, with regards to costs. Q1092 Paul Farrelly: As a solicitor, on a know- your-client basis, do you just follow instructions, or Q1085 Mr Sanders: But this was an unprecedented do you ever ask why? sum of money for a comparable case, was it not? Julian Pike: I always ask why, but it depends on what Julian Pike: Certainly, but it was an unprecedented the instructions are. case full stop, so there was no other case alongside it to consider. Q1093 Paul Farrelly: So in this case, for a story that was unpublished, did you ask why the limit was up to Q1086 Mr Sanders: You said that the Mosley case half a million pounds? was similar. Julian Pike: No, because I knew why. I could see Julian Pike: But the Mosley case did not come to why we were going to have to pay more than, as I just fruition—there was no judgment on that—until 24 explained, I thought the case was worth. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 99

19 October 2011 Julian Pike

Q1094 Paul Farrelly: Tell us why. Q1100 Paul Farrelly: Right, and what did you do, as Julian Pike: As I have just explained— a professional lawyer, about that? Paul Farrelly: Tell us again. Julian Pike: To be honest, I have not done very much. Julian Pike: Okay, fine. In 2007, Mr Taylor has no evidence to support his case, and yet he demands Q1101 Paul Farrelly: You did not do very much at £250,000. A year later, in April 2008, the “for all. You did not, for professional standing, complain Neville” e-mail and the other evidence was disclosed to your client that what they were telling this to us. Clearly, the fact that he had now got this Committee was not the truth, even though you say that evidence means that he is not going to settle for less you were aware that they were not telling the truth. than £250,000. That is also very evident from the Julian Pike: It is not a question of complaining to conversation that I had with his lawyer, who says that them— he wants to be vindicated or made rich, that he wants to hurt News Group Newspapers, and that he wants Q1102 Paul Farrelly: In whichever words you £1 million. Clearly, you are negotiating with choose, did you make any representations to them? somebody who is understandably very vengeful about Julian Pike: Not at the time, no. what has happened and who wants £1 million. Therefore, to settle the case, what you are negotiating Q1103 Paul Farrelly: Is that very professional on is within the realms of £250,000 up to £1 million. your part? Even when you are talking about those sums of Julian Pike: I do not think it has caused me any money, the economics of litigation are such that the professional embarrassment in that sense, no. gap is— Paul Farrelly: I am not surprised.

Q1095 Paul Farrelly: So the evidence was simply Q1104 Jim Sheridan: Have you any idea whatsoever the “for Neville” e-mail, was it? how far up the food chain in News International these Julian Pike: That was the critical piece of evidence. negotiations and the ultimate settlement went? Would Absolutely. Rupert Murdoch or any of the senior directors on the board be aware of this? Q1096 Paul Farrelly: The company’s defence at the Julian Pike: I am not aware that Mr Murdoch time, in front of this Committee, was that this was senior— something that was transcribed by a junior reporter; it Jim Sheridan: Rupert Murdoch? never got to who it was intended for, and this was a Julian Pike: Yes. I am not aware of him being rogue private investigator. Did you delve into the involved, but I do know that James Murdoch knew of reasons why the “for Neville” e-mail might have been the Taylor matter, obviously. so significant that you were instructed to settle for up to £500,000? Q1105 Jim Sheridan: Would this have gone to the Julian Pike: I am not sure your account is absolutely board of directors? right, but on the point of your question, it was quite Julian Pike: No. I am aware that there were a number clear, having seen the “for Neville” e-mail—there was of meetings with James Murdoch about it. also the previous contract, you remember, from February 2005—that there was involvement of News Q1106 Jim Sheridan: But no one else? of the World journalists other than Goodman. That Julian Pike: I am not aware of anybody else. clearly indicated that in this instance you were going to have to settle the Taylor case, because there would Q1107 Dr Coffey: Could Mr Pike just repeat that, be no question of liability. It was always going to be and just say who he felt was aware at News Corp found in Mr Taylor’s favour, but it also indicates that before the settlement was agreed? Did you say Rupert there was wider involvement in phone activity than Murdoch was aware? Mr Goodman. Julian Pike: No. Dr Coffey: Okay, that is what I could not hear. Q1097 Paul Farrelly: So it was quite clear to you at Q1108 Louise Mensch: I asked Mr James Murdoch the time that the “one rogue reporter” defence that the at our session in July whether one of the discrepancies company was still maintaining, including in front of between the large amount paid to Gordon Taylor, and this Committee, was not true. the lesser settlements that the company had made in Julian Pike: That is correct. cases that did not include a confidentiality clause, was the issue of confidentiality, and whether an inference Q1098 Paul Farrelly: I will finish with this one could be drawn that confidentiality had played a role question now, and I will come in later. You follow the in the size of the settlement. He replied, “And that proceedings of this Committee, presumably. inference would be false.” He has since written to this Julian Pike: Yes, I have. Committee to correct that part of his testimony, and said that he was unaware at the time when he testified Q1099 Paul Farrelly: At what stage did it become that confidentiality had played a part in the size of the clear to you that the line that we were being given Taylor settlement. Your letters to the Committee—or was not the truth? the firm’s letters to the Committee—state that you Julian Pike: It would have been at the point it was could not put an exact figure on confidentiality, but given to you. that it was a key part of the settlement. Can you cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 100 Culture, Media and Sport Committee: Evidence

19 October 2011 Julian Pike expand on how important keeping this confidential significance of the “for Neville” e-mail and that was to the size of the settlement you were authorised hacking had gone further, did you not advise your to make? clients that, if this were to become public, many other Julian Pike: Clearly, confidentiality was very hacking victims might come forward and also sue important for News Group. I am not quite sure that their company, so it would be very good to settle, and you can marry that importance up directly with the confidentiality would be absolutely crucial to that money, because the negotiation, as I have been settlement? explaining to you this morning, gets you to the figure Julian Pike: What we advised at the time was that that you arrive at, and as I said a few minutes ago, confidentiality obviously was important to them, when I telephoned George Davies on 3 June 2008, I because it would assist in protecting the company’s said, “Here’s £350,000, which is a part 36 offer. If we reputation generally speaking. It was not known to us can resolve this quickly and with a basis of at that time whether or not there were a large number confidentiality, there is a little bit more on the table.” of other potential claimants. We were obviously aware of those other people who had been victims in the Q1109 Louise Mensch: You requested criminal case, but it was not known then—unlike confidentiality. Previously, people have said to us that now—whether or not there were lots of other people confidentiality was part of the negotiations because out there. Mr Taylor had also requested confidentiality, but you are now saying that you specifically said, “If this can Q1114 Louise Mensch: Just to expand on the be kept confidential, there is more money on the question from my colleague, Mr Farrelly, what struck table.” me greatly about Mr Crone’s testimony to the Julian Pike: Confidentiality was first raised—as Mr Committee is this. After the meeting in which he said Crone told you, I understand—when he had a meeting that Mr Murdoch was aware of the “for Neville” e- with George Davies in 2007. I did not attend that mail and would definitely have been aware that meeting, so I do not know what was actually said at hacking had gone wider, I asked him what the the meeting, but clearly confidentiality was a very consequences were at that meeting, he being the legal important point for Mr Taylor, too, albeit for very director of the company. His testimony is that different reasons. Yes, confidentiality was very widespread wrongdoing had been happening at the important for News Group, you cannot marry it up News of the World. I asked him what the consequences perfectly with the amount of money that was paid or were, and he pretty much said “Nothing”. There was any particular parts of it. In a sense, the best you could a 15-minute meeting, and nothing happened. He, as do is say that some of the difference between legal director, did nothing. £350,000 and the amount paid, which was £425,000, You, as the representative of a very senior firm of would relate to confidentiality. solicitors with an impeccable reputation, were aware that phone hacking had gone wider than one rogue Q1110 Louise Mensch: That is a fairly big reporter, and that Parliament was being lied to, and difference. yet again there were absolutely no consequences. No Julian Pike: Well, in the scale of things it is not a legal advice was given to News International that it huge amount. should make a clean breast of it or that it should stop giving false testimony to Parliament. How do you Q1111 Louise Mensch: In all your previous answers, explain that to people watching, who will not you have tended to discuss the discrete costs of the understand why lawyers—both internally and case to News Group—your liability for costs under externally—for News Group appeared to condone the part 36 offer. Therefore, you have been discussing very serious breaking of the law? the settlement in terms of how much it would cost Julian Pike: You are asking me to go outside the overall were you to go to court, lose, and pay the other Taylor case and, as I already wrote to you yesterday, side’s costs. A cap was placed of £500,000. Who told I cannot help you in answering that question. you that the cap was £500,000? Julian Pike: No, you are confusing a couple of things Q1115 Louise Mensch: I do not wish to trample on there. The £500,000 was, as I said, what I was told your legal professional privilege at all, but given that the News Group was prepared to go up to in terms of you have been exempted from privilege by your paying damages. clients in discussing the Taylor case, and it is the Taylor case that opened up the issue that phone Q1112 Louise Mensch: Who told you that? hacking went wider in the News of the World,it Julian Pike: Tom Crone. distinctly relates to the Taylor case, which blew open the fact that there was ongoing wrongdoing. I want to Q1113 Louise Mensch: Tom Crone said that the cap know why, as external counsel to News Corp, you did was £500,000; fine. So far, your evidence has tended not recommend some serious review of practices. towards the cost of the case itself, rather than any Julian Pike: In summary, the advice given in 2008 further liability to News Group from other litigants was that three journalists other than Goodman were should the Gordon Taylor case and the “for Neville” involved in phone hacking. Secondly, News Group e-mail become public and other people join in and sue was going to have to admit liability in relation to the News International. In other words, you are looking Taylor case and, thirdly, it was advised by counsel and only at the costs of the Gordon Taylor settlement ourselves that there was a powerful case to support a itself. Given that you said that you recognised the culture of illegally accessing information in order to cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 101

19 October 2011 Julian Pike get stories. That is what we advised in the context of information in particular being reported back to me the Taylor case. Your question originally asked me to after meetings. go outside the Taylor case and give answers in relation to other information, which I cannot do at the Q1121 Philip Davies: I am just a bit puzzled about moment; it is privileged. the process. At the start you said that this case was going to go beyond the limit at which Tom Crone was Q1116 Louise Mensch: There are references to the authorised to settle things. What limit would he have legal counsel; who was the legal counsel who advised been authorised to settle at? you that the cost would be £250,000? Julian Pike: To be perfectly honest, I do not think I Julian Pike: Michael Silverleaf QC. have ever known that. Philip Davies: Roughly? Q1117 Louise Mensch: Thank you. One last thing, Julian Pike: I would not want to put a figure on it, Mr Chairman; I am sorry to trample on your time. on the basis that it would be guesswork on my part. You said earlier in answer to Mr Watson that the fact of Neville Thurlbeck knowing about this would have Q1122 Philip Davies: Would it be £25,000? been discussed with James Murdoch, but the Julian Pike: It would be more than that. It would be testimony of Mr Myler and Mr Crone to the a low six-figure sum, I imagine. Committee was that they could not remember whether they had shown him the e-mail in the meeting in question, or whether they had used the name Q1123 Philip Davies: That is fine. I am struggling “Neville.” In his written evidence to the Committee, with the fact that you said you were authorised to Mr Murdoch states that Neville Thurlbeck’s name was settle the case for up to £500,000, and that you were never mentioned to him. Do you merely assume that told that by Tom Crone. they would have discussed the matter with Mr Julian Pike: That is correct. Murdoch? Do you have any evidence or attendance notes, or anything to suggest that they discussed Q1124 Philip Davies: That is beyond Tom Crone’s Neville Thurlbeck with Mr Murdoch, which would authorisation level, so it cannot have been him who contradict Mr Murdoch’s testimony? authorised it. Who said that you could go up to Julian Pike: On 27 May 2008, Colin Myler had a £500,000? meeting with James Murdoch, which I know took Julian Pike: It would have been James Murdoch place for two reasons. First, three days earlier, on 24 giving an instruction to Tom Crone and Colin Myler. May, I was copied in on a briefing that Tom Crone had given to Colin Myler about that meeting. Q1125 Philip Davies: So that authorisation of Secondly, after the meeting, I was telephoned by £500,000 came from James Murdoch? Colin Myler, who told me that it had taken place, and Julian Pike: I assume so. that they wanted to wait until they had counsel’s advice. Q1126 Philip Davies: There is another bit that I do not understand. I am interested in the process. I would Q1118 Louise Mensch: Did any of those notes or have thought that it would have worked the other way briefings indicate that Neville Thurlbeck had been round, and that you would have been left to negotiate specifically discussed with Mr Murdoch? the best possible deal for News International. You Julian Pike: The briefing notes referred to the fact would then have reported back to News International that the e-mail had been found and disclosed to us, to say that the best possible price you could get was x. but they did not identify Neville Thurlbeck by name. Julian Pike: It does not really work like that. Q1119 Louise Mensch: So Mr Murdoch might justifiably say to the Committee that the e-mail in Q1127 Philip Davies: No? question told him that he had to settle the case, but Julian Pike: No. In this instance, we made an opening that he was not told about an e-mail addressed to offer of £50,000. That was rejected. We then increased Neville Thurlbeck? Could he legitimately say that he it to £150,000, and when that was rejected, we put in, did not know that it had spread beyond Goodman and on the basis of counsel’s advice, a Part 36 for Mulcaire, but merely knew that he was going to lose £350,000. As we are doing this, we are obviously the case and had to settle? having discussion with Tom Crone, saying, “We think Julian Pike: No. Had he read the e-mail and notes as we should go up to this figure for these reasons. Do being a reference to Goodman, I think he would have you agree?” He would have his own input in that, so expected to see Goodman’s name in those notes. In it is not just a question of me negotiating and coming fact, the e-mail refers to a News of the World reporter, back at the end, saying, “This is the best deal you can which indicates that it is not Goodman. do. Okay?” It is a much more involved process.

Q1120 Louise Mensch: Yes, true. So you are saying Q1128 Philip Davies: On what date were you told that he would have been told that it had spread beyond that you could go up to £500,000? Goodman or Mulcaire. Julian Pike: It would have been, I think, around about Julian Pike: I think he would have been told, but I 10 June, which is the date of the Colin Myler and Tom was not at the meeting. I do not recall that piece of Crone meeting with James Murdoch. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 102 Culture, Media and Sport Committee: Evidence

19 October 2011 Julian Pike

Q1129 Philip Davies: So it was as a result of that Q1143 Paul Farrelly: Do you consider that you have meeting that you were given authorisation to go up behaved with integrity in this affair? to £500,000? Julian Pike: Yes. Julian Pike: I think so, yes. Q1144 Damian Collins: Mr Pike, I want to go back Q1130 Paul Farrelly: Can I just ask you, Mr Pike, briefly to something you referred to earlier. You said what would happen at Farrer’s if you or any other you had notes of a meeting that had taken place solicitors, under your professional code or Farrer’s between Colin Myler and James Murdoch on 24 May. own code, became aware that a client had told a Julian Pike: 27 May. blatant lie to a court? Julian Pike: I am not sure we have had that Q1145 Damian Collins: Sorry, 27 May 2008. Your situation before. understanding of that meeting was that it was a discussion to update James Murdoch on the Taylor Q1131 Paul Farrelly: But what would happen case, and a prelude to the meeting with Tom Crone, professionally? where they then discussed whether they should settle Julian Pike: Obviously, we would discuss it among the case and the terms of reference for that. ourselves and come to a view. Julian Pike: That is broadly right; 27 May was probably the first time James Murdoch had been given Q1132 Paul Farrelly: And what would that view be? a briefing about the case. Julian Pike: Well, it is a hypothetical question you are asking me, but, clearly, we would take a pretty Q1146 Damian Collins: The reason I ask that is that dim view of what was happening. we sent a series of questions to James Murdoch after his appearance before the Committee. That included Q1133 Paul Farrelly: You would? Might you resign this question: “Before authorising the Gordon Taylor from representing that client? settlement, what did you know about the interception Julian Pike: That is certainly a possibility. and other facts surrounding it”. In his answer to that, he says, “Prior to the meeting of 10 June 2008, I do Q1134 Paul Farrelly: Might you ask the client to not recall being given any briefing nor do I recall Mr correct the record? Crone or Mr Myler referring to, or showing me… Julian Pike: That is certainly a possibility. documents during the meeting”—the meeting on 10 June. However, from what you have said, your view Q1135 Paul Farrelly: Who is Farrer’s most high- would be that that is not accurate and that James profile client? Murdoch was given a briefing before 10 June by Julian Pike: I do not think you need to ask that Colin Myler. question; you know who that is. Julian Pike: That is correct. I am aware that there was a number of meetings and the 27 May meeting Q1136 Paul Farrelly: Well, tell us. and the 10 June meeting were two of those meetings. Julian Pike: The Queen. Q1147 Damian Collins: So from your point of view Q1137 Paul Farrelly: The Queen, who has a palace of the terms of the case and possibly the need to settle just up the road. the case because of the existence of documentary Julian Pike: I believe so. evidence that potentially proved that the transcript had passed through the News of the World and that the Q1138 Paul Farrelly: From Parliament. News of the World was directly implicated, your view Julian Pike: I believe so. is that James Murdoch would have been briefed on those points before 10 June? Q1139 Paul Farrelly: Yet you have told us that you Julian Pike: Yes. were aware from the moment that News International came in front of Parliament that it was not telling the Q1148 Damian Collins: And the meeting on 10 June truth and did nothing. Does that make you was simply to discuss with legal advice what they uncomfortable? should do about that? Julian Pike: Not especially, no. Julian Pike: Well, the first meeting was only with Colin Myler. The second meeting was with Colin Q1140 Paul Farrelly: So the Queen should continue Myler and Tom Crone, so broadly I think you are to employ a firm whose solicitors do nothing with a probably right. client who they know comes and lies to Parliament? Julian Pike: I think you are looking at this with the Q1149 Damian Collins: So James Murdoch has mis- benefit of hindsight. recalled the sequence of events in that regard? Julian Pike: I think so, yes. Q1141 Paul Farrelly: Do you have any scruples? Julian Pike: Yes, I do. Q1150 Damian Collins: Can you tell us in the remit you have to give evidence to us, if Farrer prepare a Q1142 Paul Farrelly: What are they? note for Colin Myler on that meeting on 27 May, or a Julian Pike: I do behave with integrity. background briefing for him? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 103

19 October 2011 Julian Pike

Julian Pike: No. As I said earlier, Tom Crone Q1158 Damian Collins: How did they describe the prepared a note for that meeting and it was sent to me, document they had? by way of copying me in, on 24 May. Julian Pike: They very broadly just described it as an e-mail that implicated News Group. They did not give Q1151 Damian Collins: Would it be possible for the it to us at that stage; they simply described it very Committee to receive a copy of that document? briefly. So we were aware that there was an e-mail Julian Pike: I can take instructions on that. that suggested News Group’s involvement in this.

Q1152 Mr Watson: On the document—the 24 May Q1159 Damian Collins: And that was a letter that document—can you tell me who else was copied in? was sent to Farrer? Julian Pike: No one else was copied in, as far as I Julian Pike: That is correct. It was also sent to am aware. I cannot say if there were any blind copies. George Davies.

Q1153 Mr Watson: So it was Crone to Myler, cc Q1160 Damian Collins: Did you discuss that with you? Tom Crone? Julian Pike: Yes. Julian Pike: Yes.

Q1154 Mr Watson: And there is no legal privilege Q1161 Damian Collins: So Tom Crone was aware, issue for you disclosing the document, given that you certainly in November 2007, that the Metropolitan have had legal privilege waived. Is that correct? police was asserting that it had documentary proof Julian Pike: That is correct, yes. that linked News of the World to the Gordon Taylor case? Q1155 Mr Watson: And the note of the telephone Julian Pike: Correct. call you had with Myler about it on the 26th—is that right? Q1162 Damian Collins: Again, Mr Crone is Julian Pike: The 27th. certainly a man who chooses his words carefully. In Mr Watson: Presumably, you bill clients by the hour, his written evidence to the Committee, which was so you record electronically the conversations you submitted on 21 July, he says: “Mr Taylor’s case was have and the case you are on? circumstantial and NGN itself had neither found nor Julian Pike: That is correct. seen direct evidence to support it” until April 2008. That was the case? Q1156 Mr Watson: So would you be able to give us Julian Pike: That is right. the record of contacts for that period on this particular case? Julian Pike: I can do that. Q1163 Damian Collins: I suppose that means that he Mr Watson: You can do that? had not actually physically seen the documents. Julian Pike: I can. Julian Pike: No, the process after November was that Mr Watson: Thank you very much. George Davies then applied to court in December for the documents from the police and from the Q1157 Damian Collins: I want to move on to the Information Commissioner’s office. Then those letter the Committee received on 2 September from documents were disclosed to them during the early Farrer, which my colleague Mr Watson referred to part of 2008. Then we did not get the documents until before. In terms of understanding the background and April 2008, so the first time we saw the “for Neville” the process, I just want to ask some questions relating document was in April 2008. to the paragraphs at the bottom of page 2, where it says: “The Firm’s attention was first drawn to the Q1164 Damian Collins: So you saw it then, but the existence of what was known as the ‘for Neville’ impression Mr Crone is giving was that this was—not email on 1 November 2007, when it was referred to a bolt from the blue, but that until April 2008, there by the Metropolitan Police in response to an inquiry was no real knowledge that this document existed and made by the Firm on 28 September”. Could you tell therefore what the implications were for the us a little more about what the Metropolitan police settlement. Really, though, from what you are saying, said in their response to you? from November the previous year, Tom Crone and Julian Pike: I will give you a bit of background on News International were aware of the potential that. Over the summer of 2007, the view we had of existence of this document; you had not physically got the case was that it was so weak that it ought to be it, so you probably could not decide exactly what struck out—it should be dismissed. In order to allow course of action to take, but nevertheless you had a us to do that, we obviously needed to make sure that pretty good idea of what was coming? the Metropolitan police did not have any evidence to Julian Pike: You are sort of on the right lines. suggest that News Group was involved in Glenn Broadly you are right, but what we did not know was Mulcaire’s activities, so we wrote to the Metropolitan what was actually in the document, so it may be that police to get that confirmation. Obviously, what they once you saw the document there was an obvious came back with was, “Actually, we have got this explanation for it—it might be a forgery, for document”, and therefore that is how the Neville e- argument’s sake. Not until you actually see the mail materialised. document can you form a view on it. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 104 Culture, Media and Sport Committee: Evidence

19 October 2011 Julian Pike

Q1165 Damian Collins: But the significance of the the existence of this evidence that the police said document was not so much what it contained, but the they had? fact that it was evidence that linked News Julian Pike: As I say, I am obviously aware that he International and News of the World to this case and had spoken to James Murdoch about it and Colin that previously had not been established. Myler, because those three had been discussing Julian Pike: That is right. resolving the case and James Murdoch’s authority was required to settle— Q1166 Damian Collins: At that point, even though you had not actually seen the document, it was known Q1172 Damian Collins: Sorry, you are talking about by Tom Crone in November 2007 and was known by the June 2008 meeting. I was talking about in News International at that time. Did you discuss with November 2007. them in the intervening period before you saw the Julian Pike: I am not aware of any discussion at that document itself in April 2008, the impact this might stage, no. have on the case and how the company might need to think differently about how it might settle the case? Q1173 Paul Farrelly: I just want to be precise on the Julian Pike: No, we did not. We were obviously point Damian was asking about. At any time during waiting to see the documents. these negotiations to settle for this large amount of money about a story that had not been published, were Q1167 Damian Collins: So no further action was you made aware by Mr Crone or anybody else with taken until that was the case? whom you were dealing, that James Murdoch had Julian Pike: No. been shown and had digested the “for Neville” e- mail? Julian Pike: Q1168 Damian Collins: Did Tom Crone ask your No, I was not aware that he had actually been shown it. opinion on what the implications might be for the company if the document were produced and proved to be genuine? Q1174 Paul Farrelly: You never asked? Julian Pike: I don’t think he did, but that is because Julian Pike: No, I did not ask. I gave the advice to Tom Crone. He is the in-house lawyer and it is his job he had a pretty clear view himself as to the importance to take instructions internally. of the documents. Q1175 Chair: Can I ask you about one other aspect? Q1169 Damian Collins: I want to ask a final You have said that the final settlement terms were question on the settlement amount—I appreciate that influenced by the confidentiality requirement, as has colleagues have already covered this in some detail. I now been confirmed by James Murdoch, so clearly understand that, from your point of view, if Gordon that was quite important. The publication on 8 July Taylor had asked for £250,000 initially and that had 2009 by The Guardian represented a very serious been declined, he was always going to want more than breach of the confidentiality agreement did it not? that. Presumably, though, there is a question of Julian Pike: It did. whether his initial offer was reasonable in the first place. If he had asked for £1 million in 2007, would Q1176 Chair: In publishing details of the Gordon you then have assumed that it would be perfectly Taylor settlement, The Guardian knew not only the reasonable to settle above £1 million after April 2008? sum that the settlement comprised, but the existence Julian Pike: No. Certainly if you get to those sorts of of the “for Neville” e-mail and the Information figures then you are off the scale, I agree. Commissioner documents. How could The Guardian have got hold of those? Q1170 Damian Collins: But already an opening Julian Pike: There were not many people who would offer of £250,000 would be seen as off the scale by have known about all of those things for sure. On our most people, given the previous cases. side, Tom Crone and I would have known about it, Julian Pike: I know, but again you have to put it back and Mr Lewis and Mr Taylor would have known into the context of two things. Obviously News Group about it. wanted to keep this confidential if it could. Secondly, £250,000, when it comes to the costs of fighting a Q1177 Chair: So, there are four possible sources— case, is very quickly eaten up, particularly, for Farrer, News Corp, Gordon Taylor and Gordon example—although I don’t think it applied in this Taylor’s lawyers. For The Guardian to have those case—if you have a CFA case then you would be documents, one of those four must have given The talking about double your money each time, so a £1 Guardian the documents. million case costs-wise for claimants suddenly Julian Pike: That is probably right, yes. becomes a £2 million case. In that context, £250,000 is a lot of money, yes, but you have to see it in the Q1178 Chair: When this serious breach of context of the overall costs of the litigation. confidentiality occurred, what was your advice to News Corp? Did you say, “Ignore it, there’s nothing Q1171 Damian Collins: Okay. One further question much that we can do about it”? on something we have previously discussed. Did you Julian Pike: Well, there’s not an awful lot you can do have any indication from Tom Crone of whether he about it, unless you can prove where the breach of had discussed with other people at News International confidence has come from. You can have your own cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 105

19 October 2011 Julian Pike opinion, but whether you can prove it is another Q1187 Mr Watson: “Powerful use of illegal matter. accessing of information”. Let me just take you through point one. Were you aware of which three Q1179 Chair: Can I ask you and your firm whether journalists—I am not going to ask you to name or not you gave The Guardian those documents? them—were involved in phone hacking? Julian Pike: Absolutely not. Julian Pike: I had three names, yes.

Q1180 Paul Farrelly: It would not be just four Q1188 Mr Watson: Did you tell Tom Crone? parties, would it? Were there many people in the Julian Pike: He did know that. court, including the judge? Julian Pike: No, because I don’t think that this case Q1189 Mr Watson: So he was aware at that point ever went in front of a judge and the court did not that the external lawyers had raised their view that have the documents that were disclosed to The others were involved in phone hacking? Guardian. Julian Pike: Correct. Q1190 Mr Watson: Were you surprised that the Q1181 Paul Farrelly: In your experience, have you company did not tell the police that criminal ever been involved in a case where a court has been wrongdoing had taken place in the newsroom? asked and has complied with a request to seal all the Julian Pike: Probably not. I wasn’t surprised. files? Julian Pike: Yes. Q1191 Mr Watson: Why was that? Was it because you thought that they got up to that all the time Q1182 Paul Farrelly: How many? anyway and it was commonplace? Julian Pike: I cannot put a figure on it, but it is not Julian Pike: No, not at all. I think at that stage I was uncommon in a privacy case. Quite often in privacy being instructed that they wanted to settle this case on cases, the claimant goes off and that is the first thing confidential terms, and, having done so, it would be they do having issued the proceedings. It is pretty quite surprising therefore if they were to go and do common in privacy cases. something which was going to open the can, as it Chair: Tom, last question? were.

Q1183 Mr Watson: Well, following up on questions Q1192 Mr Watson: In your understanding of any revealing new information, Chair. norms of corporate governance, though, do you find Mr Pike, there is a brutal honesty to your testimony that unusual—that a company of that size that takes a this morning that is revealing and gives a level of zero tolerance approach to wrongdoing would not detail that we were not aware of before. I should just report a crime by its employees? like to pull you up on a few points. I hope that I have Julian Pike: I think it is quite commonplace for there written these down quickly enough to be accurate. to be confidentiality agreements around litigation, and You said that a number of issues led you to believe there is no obligation on me as a lawyer to go and that other journalists were involved in phone hacking. report something that I see within a case where there One of them was the contract in 2005. might have been some criminal activity. Your Julian Pike: No, you are talking about the contract application of zero tolerance, although correct, is between News of the World and Glenn Mulcaire— obviously using something that they have said since then, as opposed to something they said at the time, I think you’ll find. Q1184 Mr Watson: I am not; you mentioned 2005. Which contract was that? That was a separate contract Q1193 Mr Watson: So they weren’t applying zero for £12,000. tolerance to wrongdoing back then? Julian Pike: No, it was the pre-publication contract, Julian Pike: I don’t know. It was outside my dated 4 February 2005. It was for the Gordon Taylor knowledge. story. You remember this? Q1194 Mr Watson: Going back to the detail, Crone Q1185 Mr Watson: I’m aware of that, but we have told you that he would discuss the transcript with not seen the contract. Could you provide us with that? Neville Thurlbeck. Julian Pike: I think you have seen it. Julian Pike: No. He told me that he had gone to see Neville about the e-mail. Q1186 Mr Watson: If we have not, you can reveal it? Okay. Then you said that there were three things Q1195 Mr Watson: He needed to find out. that you took from the disclosure. The first was that Julian Pike: Yes. three journalists were involved in phone hacking; the second was that News Group should accept liability Q1196 Mr Watson: So it is perfectly reasonable to for Taylor; and the third was that there was a powerful assume that in his 15 minutes with James Murdoch, case to support the fact that there was a much wider he would inform him that he had talked to Neville use of phone hacking in the company. Thurlbeck and asked him what his view was. Julian Pike: No, I said the powerful use of illegal Julian Pike: I do not know the answer to that accessing of information. question. That is a reasonable conclusion one might cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 106 Culture, Media and Sport Committee: Evidence

19 October 2011 Julian Pike draw; I understand that—but I do not know the answer e-mail specifically, but rather that he was made aware as a matter of fact. that an additional News of the World reporter had been made aware of phone hacking, and in that sense he Q1197 Mr Watson: Could you just explain the was indeed made aware that hacking had gone beyond powerful case—what did you say? Goodman and Mulcaire: is that accurate? Julian Pike: I said there was a powerful case that Julian Pike: I was not at the meeting, so I can’t there was evidence to support illegal accessing of actually say what was said. information in order to obtain stories. Q1206 Louise Mensch: But you have a briefing note. Q1198 Mr Watson: And you told Crone that at the Julian Pike: But I have a briefing note that does refer time? to the fact that there had been an e-mail sent by a Julian Pike: That was given in the advice, yes. News of the World reporter.

Q1199 Mr Watson: In written advice? Q1207 Louise Mensch: Yet Mr Crone, in his Julian Pike: Yes. recollection, and Mr Myler, in testimony to us of that meeting with Mr Murdoch, both said that—briefing Q1200 Mr Watson: And you can provide that to us? note set aside—testified that they could not remember Julian Pike: As I said, I will take instructions on it, if they had either shown him the email or used the yes. word “Neville” at all. Is it not conceivable that whatever was raised—was the briefing note previous Q1201 Mr Watson: But you have been—client to the meeting, or post the meeting? privilege has been lifted? Julian Pike: Shall I give you a time line? A briefing Julian Pike: I do not have a problem with you note is sent by Tom Crone to Colin Myler on 24 May seeing it. 2008. The first meeting or conversation is on 27 May 2008, between James Murdoch and Colin Myler. Q1202 Mr Watson: So there is no problem whatsoever from a privilege point of view? Q1208 Louise Mensch: Not Tom Crone. Julian Pike: I agree. Julian Pike: Not Tom Crone. The counsel opinion arrives on 3 June 2008, and on 10 June, there is the Q1203 Paul Farrelly: Just two final questions: in meeting between Colin Myler, Tom Crone and James terms of the phrase “accessing information”, at any Murdoch. stage when you were employed by News International and the News of the World, did you ever become Q1209 Louise Mensch: Therefore—excuse me, but aware that any of that accessing of information this is an extremely important point of fact. What you extended beyond phone hacking? have referred to is that the briefing note is evidence Julian Pike: No, the reference to that in the opinion that they would have discussed the “for Neville” was very much based around the Information thing, that there was an additional reporter, yet their Commissioner’s evidence, which was disclosed, testimony to us of the meeting on 10 June stated that which you will be familiar with in terms of two they could not remember whether they had either reports, “What price privacy?” and “What price shown Mr Murdoch the e-mail or brought up the privacy now?” That is where that information has words “for Neville”. Therefore, it is plausible, is it come from. Generally speaking I am not aware that not, that Mr Murdoch is in fact correct when, there was lots of illegal accessing of information. whatever the briefing note said—it might have said, Journalists aren’t saints, I know that, but that does not “We should raise this with Mr Murdoch”—it was not mean that everything they do is criminal, either. in fact raised with him? Julian Pike: Both are possible. I do not know. I Q1204 Paul Farrelly: Finally, in making no attempt wasn’t at the meeting. to get your client to correct the record, when you Louise Mensch: Thank you. knew that they had come here and not told the truth, to what extent do you feel that you and Farrer’s were Q1210 Dr Coffey: Can I clarify a couple of things? part and parcel of a cover-up? Just after the meeting on 27 May, after Mr Myler met Julian Pike: Not party to any cover-up. James Murdoch, can you clarify what I thought you said earlier? Did Colin Myler telephone you Q1205 Louise Mensch: Briefly, because I know my personally to discuss the meeting? colleague Dr Coffey wants to come in, Mr Watson just Julian Pike: That is right. Not so much to discuss the said that it was a normal inference that they would meeting as to report back that he had had the meeting. have discussed Neville Thurlbeck’s position on this at As I said to you, what he told me was that they wanted the meeting. Yet it was Mr Crone’s testimony that he to wait until they had counsel’s opinion. did not use the name “Neville”, and he could not remember if he had shown the “for Neville” email. Q1211 Dr Coffey: So that is when the external Just to be absolutely clear, because you will appreciate opinion was sought, and then it was given on 3 June? that it is important for this Committee to determine if Julian Pike: It was on its way by then, anyway. Mr James Murdoch has lied to the Committee, it is not your testimony that he was made aware of Neville Q1212 Dr Coffey: Earlier, you made a strong Thurlbeck’s name specifically, or of the “for Neville” assertion that News International executives had cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 107

19 October 2011 Julian Pike misled Parliament, on the basis of your knowledge. Julian Pike: No, it wasn’t irrelevant, in the sense that Can you confirm who exactly you think misled us? we knew that that set the level of Gordon Taylor’s Did they knowingly mislead, in your view? Not in expectation. your view; in the evidence that you have as legal advice, did they knowingly mislead, or was it a Q1218 Mr Watson: But that’s immaterial to you, question of briefings done incorrectly? isn’t it? You’ve got a value on— Julian Pike: It’s very difficult to answer that question, Julian Pike: No, it’s not immaterial, because you because I can sit here today, having had the ability to know you can’t settle the case afterwards, once he go back and look my file and my notes. If I had not gets the evidence, for less than that sum. It’s simply been able to do that, I would not have been able to not do-able. recollect with accuracy dates, times and so on. I suspect that none of those who have been in front of you have had the ability that I have had to go back Q1219 Mr Watson: But if the evidence didn’t exist, and look at contemporaneous records, so I think it you would have laughed at a request for £250,000. would be very unfair of me to say whether someone Julian Pike: Yes. deliberately or only inadvertently misled you. Frankly, it’s not a fair question of me—I cannot give you a Q1220 Mr Watson: Finally, the net effect of this proper answer to that—but there is a difference, in the settlement and the confidentiality clause was that a sense that I have the ability to look at crime was not made public. Do you think that there contemporaneous records, and they probably do not. was a cover-up? Julian Pike: No. Bear in mind where the document Q1213 Dr Coffey: Can I also clarify the advice you came from. It came from the police, so the police had gave in 2008 about the three journalists involved in the document. There is no question of a cover-up the “powerful case to support a culture of illegal whatsoever. accessing of information”? What stopped you as a solicitor reporting crime to the police? Q1221 Paul Farrelly: I am just imagining headline Julian Pike: There is no obligation on me to do so. that says, “Queen’s solicitors knew News of the World You’ve had a paper from Harbottle on this point was lying to Parliament and did nothing about it”. Do already. I would simply adopt what they have said to you. you think that that reflects well or badly on Farrer’s Dr Coffey: Thank you. as a firm? Chair: We need to move on quite rapidly. Paul, Julian Pike: I have dealt with this already. We have you’ve had five final questions already. Damian first. obligations to the client we are acting for. I am not—

Q1214 Damian Collins: I want to clarify something Q1222 Paul Farrelly: Do you think it reflects well that we discussed earlier and that Louise asked about or badly? as well. We didn’t know about the meeting on 27 May Julian Pike: That sort of headline is obviously not until today, and in fact James Murdoch said to us in ideal. his evidence that he wasn’t briefed before 10 June, Chair: And the last question. which, based on your testimony, simply isn’t true. It is possible, therefore, that they may have discussed Q1223 Philip Davies: Just on the timeline, I have the Thurlbeck issue on 27 May, but previously, all our been reading Farrer’s letter to the Committee again. questions were directed to the meeting on 10 June, There is just one thing. There seems to be a subtle where it may not have been discussed because they shift in the letter from when you were advising News had already covered it. That could be the case, from Group Newspapers what to do to when they started your point of view? telling you what to do. The letter starts off saying that Julian Pike: It’s possible. you advised News Group Newspapers to increase the offer to £150,000 plus costs. Then you got the advice Q1215 Damian Collins: Do you think you should be that said that it would be a maximum of £250,000 and able to supply us with that document, the brief that that the counsel had suggested £250,000. The next Tom Crone prepared for Colin Myler for the meeting part of the letter says: “The Firm was instructed to on 27 May? Do you think that should be released to the Committee? There’s no reason why it couldn’t be. increase the…offer to £350,000.” At what point did Julian Pike: No. you stop advising News Group newspapers what to offer and it started to tell you what to offer? Q1216 Mr Watson: Regardless of what George Julian Pike: It doesn’t quite work like that. They were Davies asked you for—£250,000—had the “for given advice that £250,000 was the likely top amount Neville” transcript not existed, what would you advise that might be awarded. As I said earlier, it is quite them to settle for? common that what you do is you add more on top of Julian Pike: Had it not existed, we might well have what you think you might— been applying to strike them out, so we wouldn’t have been paying them anything. Q1224 Philip Davies: But did you advise them to offer £350,000? Q1217 Mr Watson: So in that sense, the 250K asked Julian Pike: No. As the letter says, we were was irrelevant. instructed. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 108 Culture, Media and Sport Committee: Evidence

19 October 2011 Julian Pike

Q1225 Philip Davies: So at what point were they not Julian Pike: It was 3 June 2008. seeking your advice? At what point did they start Philip Davies: So it was 3 June when you were telling you, “This is what you should offer”? instructed to offer £350,000. Julian Pike: Having given the advice that the case Julian Pike: Yes. might be worth up to £250,000, we were instructed to Chair: Right. I think we have no more questions. offer £350,000. Thank you very much.

Q1226 Philip Davies: Do you know what date that was—the date that you were instructed to increase the offer to £350,000?

Witness: Mark Lewis, Partner, Taylor Hampton Solicitors, gave evidence.

Chair: For the second part of this morning’s session, Q1229 Louise Mensch: They all relate to the same may I welcome Mark Lewis? Louise Mensch is going things, though. Have you just breached professional to start. privilege by saying that you were told you were negotiating with Murdoch if, as you said in your Q1227 Louise Mensch: Mr Lewis, I think you were previous answer, you do not have Gordon Taylor’s sitting in the public gallery in the previous evidence permission to reveal the attendance notes? session, so you won’t be surprised if I open by asking Mark Lewis: I do not think, if you check the record, you what evidence you have for your assertion to this I said that I did not have permission to reveal the Committee that you were told by Mr Pike that you attendance notes; I said that I did not have the were negotiating with Murdoch. You have heard him attendance notes. I do not consider that I breached very flatly deny that. Do you have an attendance note professional privilege at all. of your meeting in which you recorded that you were negotiating with Murdoch? What is your evidence for Q1230 Louise Mensch: You did just say that you do making that claim? not have Gordon Taylor’s permission. Do you have Mark Lewis: My evidence is that I remember him Gordon Taylor’s permission to discuss what was said saying it. I don’t have any attendance notes because I to you in those negotiations or don’t you? am no longer at George Davies. I lost my job in 2009, Mark Lewis: I have not got his permission to hand and so I have neither the file nor the permission of over an attendance note, but I think I am entitled to Gordon Taylor. But if someone says to you, when you say that I had a conversation and that this is what was are talking to them, “You are negotiating with discussed. You asked me if I had breached Murdoch”, you remember them saying it. He didn’t professional privilege, and I do not consider that I did say, “You’re negotiating with Rupert Murdoch”, nor breach professional privilege. did he say, “You’re negotiating with James Murdoch”, but it is a memorable statement. When I heard Julian Q1231 Louise Mensch: Why did you say, “I don’t Pike give evidence now, it was entirely consistent with have Gordon Taylor’s permission”? what was happening and what I was being told. Mark Lewis: Because you asked me a question, and I Putting it in context, the two of us were on very have not got his permission to hand a document to amicable terms—albeit opponents in litigation—and you. we were having a conversation where he made a throwaway remark. When we had gone past the £250,000 barrier, we had the conversation where he Q1232 Louise Mensch: You are talking about the said, “You’re negotiating with Murdoch.” It was an content of what would have been in an attendance achievement for me to know that I had gone to a level note. You do not have the physical attendance note, that, he seemed to suggest, was not just being dealt but you can tell us what you would have put in the with by the lawyers. He has confirmed to you that the attendance note. instructions had to have come from a board member, Mark Lewis: Sorry? and that board member happened to be James Louise Mensch: Do you not need your client’s Murdoch in those times. permission to reveal what was said at that meeting? Mark Lewis: It was not a meeting; it was a telephone Q1228 Louise Mensch: He has been very clear to us conversation. I do not think I need specific permission in his written and oral evidence that he never used to talk about a conversation that I had. that phrase at all, and would never have used it. You have just said that you do not have the permission of Q1233 Louise Mensch: Right, so you do not feel that Gordon Taylor to reveal your attendance notes. Have you need your client’s permission to discuss you not just breached legal professional privilege if negotiations that were held in the context of settling you do not have the permission of Gordon Taylor to his case. You have said that the statement was assert that you were told that you were negotiating memorable, that it stuck in your mind and that it was with Murdoch? Does your lawyer-client privilege important. You do not have the attendance notes, expire because you were fired by the firm in question? because they are held by the firm you were with, Mark Lewis: I am sorry. I think that was three which fired you. Did you write this phrase down in questions. the attendance notes if it was so memorable? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 109

19 October 2011 Mark Lewis

Mark Lewis: Two things. They did not fire me; they if you are speaking to a solicitor obviously you don’t gave me an ultimatum as to whether or not I would speak to their client directly— act for other people in regards to phone hacking, so it is slightly different from being fired. I do not recall Q1237 Louise Mensch: But Mr Crone is a lawyer, whether I wrote the phrase down. I think it is very so I can see why News International would be unlikely, because I do not actually have a right hand perfectly happy for him to enter into discussions with that writes things down. I am right-handed. I you. Apart from— remember things, and I occasionally type things with Mark Lewis: Sorry, I was just explaining to you. He my left hand, but I do not actually write. was content for that to happen. Tom Crone came to see me in Manchester. That was the giveaway—that Q1234 Louise Mensch: Whether you physically there was something more to it—and that is what led write them, sir, or type them is surely entirely to the £250,000 offer. By way of explanation, I had at irrelevant. If this was such a memorable thing to be that stage been doing the job for 17 years. I had had said, did you record it in an attendance note of the numerous negotiations with Tom Crone over that conversation for purposes of billing or to keep your period, and he had never once left Wapping. All of a records of the case? sudden he was getting on a train to come and see me Mark Lewis: I would have made a very short note as in Manchester. I knew that there was something more to the amount of time I had spent on something. to it. When Julian Pike was talking about part 36 Whether or not it went further than that, I certainly offers, there is a significant— recall that statement being made to me. I am adamant that that statement was made to me, and I am telling Q1238 Louise Mensch: Can I stop you for a second, you that that statement was made to me. Mr Lewis? You are digressing from my question massively. My question is: who did you speak to at Q1235 Louise Mensch: In your letter to the Farrer’s or at News International? Did you speak to Committee, you allege, “In that context it becomes anyone other than Tom Crone or Farrer’s? Did you relevant that during the negotiations Julian Pike said ever negotiate yourself, or have any discussions, with to me ‘you are negotiating with Murdoch’. I did not James Murdoch? I am asking you, in the context of know whether he meant Rupert Murdoch or James your settlement negotiation—we can get on to that; it Murdoch…but it seems likely that the reference was is very interesting and we will get onto it—who to James.” You suggest that News Group should “give precisely you dealt with. permission to Farrer & Co to provide copies of their Mark Lewis: I answered that question. I dealt with ‘file/attendance notes’ showing who they got Julian Pike and I had a meeting with Tom Crone. instructions from”. You are saying that Farrer should provide the Committee with a copy of its attendance Q1239 Louise Mensch: And no one else? That is the notes of the meeting in question, but you have no missing part—no one else at News International? recollection of whether you recorded this key piece of Mark Lewis: My letter does not say that I dealt with information in your own attendance notes. anyone else. Why would Julian Pike have said, Mark Lewis: That is a peculiarity of me. I do not “You’re negotiating with Murdoch,” if I had been make attendance notes as thoroughly as other lawyers sitting face to face with James Murdoch, or if I had do, because I have one hand that does not work. That met or spoken to James Murdoch? is how it works; I work with my brain and remember things, because I have to cope with a certain disability. Q1240 Louise Mensch: He might not have discussed the terms of the negotiation. Just to clarify, you spoke Q1236 Louise Mensch: Mr Pike has said very only to Farrer’s, and at News International the only clearly that he did not say this and just would not say person you spoke to was Tom Crone. Is that right? it; it was not part of the negotiations, and he totally Mark Lewis: Even more specific: only Julian Pike and contradicts your account, so you are basing it on an Tom Crone. assertion and nothing else. Apart from Julian Pike, at the firm, who else did you personally speak to with Q1241 Louise Mensch: Only Julian Pike and Tom regards to the Gordon Taylor settlement? Did you Crone. Thank you very much. You infer that it is very speak directly to executives at News International? important that Mr Crone came to see you to negotiate Were your negotiations totally with Farrer’s? personally this part of the settlement. Did you ever Mark Lewis: No, no. I will take that twofold. say to him, or to anyone else, that you were Internally in George Davies, the person who was negotiating with Murdoch, or that you had been told assisting me on the case was Charlotte Harris. I by Farrer’s that you were negotiating with Murdoch? discussed that aspect with Charlotte Harris. We were Did you say to Mr Crone, “Listen, you might as well working as a team at that stage. In terms of my give it up because I’ve been told at this stage that I’m physical conversation, it was only with Julian Pike. negotiating with Murdoch. So, give my client what he But if we go back to the very beginning—this might wants”? Did you say anything of that sort? set it in context for you—when I sent the initial letter Mark Lewis: You are now jumping ahead— of claim for Gordon Taylor I got a phone call from Louise Mensch: I am asking you a question, sir. I do Julian Pike asking whether it would be in order for not mind about the sequence of events. I would like Tom Crone to come and see me. Although Tom Crone to know whether you ever made reference to the was his client, it was his decision that I could speak statement that you were negotiating with Murdoch to to his client directly. Professional etiquette is such that anyone. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 110 Culture, Media and Sport Committee: Evidence

19 October 2011 Mark Lewis

Mark Lewis: Please let me answer. The Tom Crone went to a restaurant on Fetter Lane. At the end of that, visit to Manchester was much earlier. It was in 2007. after he paid the bill, I took great pleasure in watching 2008 was the date of the conversation: “You’re him go pale when I told him that I had two other negotiating with Murdoch.” As I indicated to you phone hacking cases, because the confidentiality in before—as I answered the question—that respect of the Gordon Taylor settlement did not affect conversation was relayed by me to Charlotte Harris. my doing other cases. I asked whether I should write to him or to Julian Pike at Farrer’s, and he said, “Write Q1242 Louise Mensch: Yes, but Charlotte Harris is to Julian Pike at Farrer’s.” someone at your own firm. There is some significance to that, because it Mark Lewis: No. completely undermines the explanation that Julian Pike has given you on the £350,000 or £425,000 being Q1243 Louise Mensch: Didn’t you say that she was before the Mosley judgment. The second case was the a partner who helped you or something? Joanne Armstrong case, which settled for £100.000 Mark Lewis: She was an associate at the time. for an unpublished story. That settlement was after Mosley, so there is no doubt that they knew that Q1244 Louise Mensch: At your firm. I am interested somebody could get £60,000 for a privacy action in whether you ever used it in your negotiations, or in involving lots of publication, lots of videos, internet anything subsequent to that, with the other side rather access, et cetera, and they still paid a lot more. than with your own firm. Louise Mensch: Thank you for your very full answer. Mark Lewis: It wasn’t that type of conversation. I am sure that colleagues want to get in, so my next When I had made the offer to settle the case, as has question will be brief. You heard the Chairman’s been reported, of £1 million at that time, and they had previous question— made the offers that Julian Pike had gone through in Chair: I want to come on to that later. sequences—£50,000 and going up in stages—at some point in one of those conversations he said, “You can Q1245 Paul Farrelly: I have three opening questions have the £250,000 that you asked for initially,” and I before, hopefully, I come in later following my said, “That was before the case had started.” When colleagues’ questioning. When you last came before we got beyond that, there were telephonic the Committee, Mr Lewis, you related to us another negotiations. There was a part 36 offer of £350,000. chance remark allegedly made by Detective Sergeant Oddly enough, £500,000, which apparently is the Maberly outside the court. I think the phrase was, limit, was rejected as an offer. So, notwithstanding “This could run to thousands,” or, “There could be Julian Pike telling the Committee that he could have thousands of people or messages involved.” At the settled for £500,000, he didn’t settle for £500,000. I time, the News of the World was saying that there was was instructed to settle at the level I settled at, but only one rogue reporter, which we know now was a during the course of those negotiations on the part 36 lie—it knew it was a lie—and, at the time, the police offer of £350,000 I was told by Julian Pike that I was were saying there was just a handful of victims. In the negotiating with Murdoch. meantime, you have had an apology and damages Before you stopped me, the answer I was giving in from the chair of the Press Complaints Commission, respect of part 36 is very important, because part 36 and Operation Weeting is employing vast police has significant consequences for court cases. In part resources and is contacting all the victims and 36—if you fail to beat, as lawyers would call it, a part potential victims. You have been vindicated, haven’t 36 offer—your client would end up paying the costs. you? If there had been a part 36 offer of £25,000 in that Mark Lewis: Well, my action is still going on. Look, case, it would have had to have been accepted. The it is quite clear that most people would understand risk of fighting on would have been too high for that when I came before the Committee in 2009, I Gordon Taylor, because he could well have won the relayed this conversation that I had had with DS case while receiving only £25,000 or less, and, Maberly, as he then was, about him telling me that therefore, he would have had to settle. A part 36 offer there were 6,000 victims but “You don’t need all the of £350,000 would have been impossible to beat. The information; we will give you enough to hang them.” negotiations at that point were nothing to do with part Baroness Buscombe, who was then, and probably still 36, because part 36 would have trounced us at is, chairperson or chairman of the Press Complaints £350,000. The negotiations at that point were, “How Commission made a speech to the Society of Editors much money can we get so that the Gordon Taylor that suggested that I had misled this Committee—had settlement isn’t disclosed?” There was a difficulty for lied to this Committee. That was on the basis of Farrer, Julian Pike, et cetera, because they had information that was wrongly given to her, or wrong wrongly assumed that the settlement of the Gordon information that was given to her by the Metropolitan Taylor case ended everything and that a lid had been police, who are part of the lie and cover-up. I am sorry put on it. That is, I think, quite important for you. for talking in terms of conspiracy theories, or like a After the case ended, Julian Pike telephoned me and conspiracy theory, but sometimes there are said, “Tom Crone would like to meet you for lunch— conspiracies, and there appears to have been a with me. Next time you are in London, phone us up conspiracy there. and we’ll arrange the lunch.” I said that I was in I still have an action against the Metropolitan police. London on whatever day it was, and Julian Pike said The Metropolitan police are still justifying the that he could not make it. I went out for lunch with position that, they say, the conversation as regards the Tom Crone. We met at El Vino wine bar and then number of victims—6,000 victims—did not happen, cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 111

19 October 2011 Mark Lewis although I understand that the police’s barrister the scandal; it was a cover-up by all the newspapers confirmed in court last week, in respect of the judicial about what was happening—came out. review, that there were 6,500 names. I hope to be vindicated, but I have not been yet. Q1248 Chair: On your lunch with Tom Crone, you waited until he paid the bill before telling him that Q1246 Paul Farrelly: I have two more quick there were other cases coming along. You said there opening questions. Do you feel that had you not were two other cases. One was that of Joanne advised Gordon Taylor and picked up the case, this Armstrong, but who was the other one? whole affair might not have been exposed? Mark Lewis: The other one I have never, ever Mark Lewis: The best words on that were Tom disclosed, and I cannot do so because of client Crone’s when he came to Manchester. He started the confidentiality. Last time I gave evidence, I made it meeting with me with the phrase, “We thought this clear that there were three constraints: I could not had all gone away.” It obviously had not gone away. I, discuss anything that was not in the public domain for whatever reason, worked out what had happened, because of client confidentiality; I could not discuss because I had had a claim from Gordon Taylor’s any court documents that were not in the public assistant, Joanne Armstrong, a year earlier. After there domain; and I know of other documents— had been a wrong story—it was completely wrong— they said that there had been proper journalistic Q1249 Chair: Is the case of the third individual inquiries. When I saw about Mulcaire and Goodman, ongoing? I realised that the “proper journalistic inquiries” was Mark Lewis: No. In the third case, I was under threat not true and that, in fact, there had been phone of an injunction— hacking. Chair: No, the third case that you referred to. That is how all the phone hacking cases started. Look, Mark Lewis: No, it is settled. the confidentiality agreement between Gordon Taylor and News Group was misunderstood, I think, by Q1250 Chair: And the name has never been Farrer’s and Julian Pike. That was confidential, but mentioned? the confidentiality did not extend to before there was Mark Lewis: The name has never come out. Another a confidentiality agreement and the court file was aspect of when I gave evidence last time is that I was sealed. The court file was open; it was open for any under threat of an injunction from News of the World, journalist to go in and see that News of the World and Farrer & Co. and Julian Pike. News Group newspapers were being sued. I am sure that the confidentiality agreement was effectively locking the stable door after the horse had bolted; that Q1251 Chair: Which was never actually is what happened. implemented. I suspect that The Guardian and Nick Davies already Mark Lewis: I never heard anything more after I had knew about this before there had been any settlement. given evidence to the Committee. I am sure that is how it came out. Yes, I would like to take some credit, but I do not really think it is my Q1252 Chair: Jo Armstrong was at the other end of credit for uncovering the scandal. It is their own fault the telephone from Gordon Taylor, so the transcript for creating the scandal in the first place by trying to that they had recorded the conversation between do something that could not be done. Gordon Taylor and Jo Armstrong. It should not have taken a genius to work out that if Gordon Taylor had Q1247 Paul Farrelly: This is my final question of a case, Jo Armstrong also did. Had that not occurred my initial three. This all goes to the issue of your to Tom Crone? credibility as a witness. Do you feel that if you had Mark Lewis: I could not comment as to whether or not been so relentless in your pursuit of this, or had not Tom Crone or Julian Pike are geniuses, but I not got a reputation for pursuing this when advising understand why such an observation might be made, Milly Dowler’s family, that the News of the World and that it would not take a genius to work that out. might still be carrying on now and employing some When I mentioned to Tom Crone that there were other of the people who have since been arrested? cases, Julian Pike phoned me up and said, “You can’t Mark Lewis: I have no doubt—we know; we have act. This is not something you can do,” and he heard from Julian Pike—that information, threatened that I was not able to act. My answer to instructions, and a report was given that there were at that was, “Yes, I am able to act, but if you think I least three journalists, and yet they came before this can’t, then I will pass it to another firm of solicitors, Committee and said that there is this “rogue reporter” because the case will not disappear and the clients will defence. The stance taken by News of the World on be represented. If you want another solicitor to know all these cases has moved from there being one rogue about this, fine.” At that point he said, “You know reporter—Clive Goodman, the royal correspondent— what, you can act.” And I did act. and Glenn Mulcaire, who was not really anything to do with it, to an attempt to present it as being about Q1253 Chair: Basically, you responded to the threat people who have no right to any sympathy, such as of an injunction by saying, “Okay, I’ll go and tell politicians, celebrities or sportspeople. It was only somebody else about it.” after the Milly Dowler case, which exposed Mark Lewis: Yes. I said I would tell the client that I everything, that the lie that we were being told by the could not act, and that they should go and get News of the World and other newspapers—that was another solicitor. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 112 Culture, Media and Sport Committee: Evidence

19 October 2011 Mark Lewis

Q1254 Mr Watson: We now understand from the Q1259 Damian Collins: I want to go over some of disclosure that took place after you last gave evidence the ground on the “for Neville” e-mail that I asked that the Mulcaire file lists a target individual and the Mr Pike about. You referred to Tom Crone coming to people in their social circle below that—essentially, Manchester to see you. When did that meeting take we believe, where they attempted to paint a picture of place? the individual they were trying to get a story about. Mark Lewis: That was at the very beginning of the In the disclosure, that means that Gordon Taylor was case, when a letter had been passed to Farrer. Farrer given a list of people who were also potential hacking thought that I had gone away, and then proceedings victims. Did you advise him at the time that he should were issued. Julian Pike telephoned me and asked contact them, so that people might know that a crime whether Tom Crone could come up. It was Tom Crone had taken place and that their privacy had been travelling that was the big clue that there was invaded without their knowledge? something more to this. The most obvious thing to do Mark Lewis: Client confidentiality would stop me would have been to pay £12,000 or so to settle without from saying what advice I gave to a client. It might any admission of liability, to say that the phone was be inferred that, obviously, a solicitor would tell a not hacked. The fact that Tom Crone came up led to client all about their case and how to deal with it on that meeting where that request was put forward. I think that that was early 2007—maybe March or the existing evidence. Joanne Armstrong lost her job April. at the PFA. She is pursuing a claim because the PFA, or Gordon Taylor, is alleging that she is using PFA information that she obtained as an in-house lawyer. Q1260 Damian Collins: So you interpreted him coming up as evidence that they were taking it very She has got to deal with that, because Gordon Taylor seriously. had Joanne Armstrong in a meeting and she would Mark Lewis: He started that meeting by saying, “We have seen something. You would have to ask Gordon thought it had all gone away”, because there had been Taylor what he did or did not instruct in respect of the prosecution of Clive Goodman on the royals. No notifying other victims. one had linked the News of the World to any of the non-royal victims. It would have just been Glenn Q1255 Mr Watson: Do you know whether the Mulcaire, the investigator whom they had nothing to people on the disclosure file from Taylor were do with. members of the PFA? Mark Lewis: I actually do not know who is and who Q1261 Damian Collins: Farrer said, as you will have is not a member of the PFA. I suspect, looking back heard, that it was aware of the potential existence of at it, that some of them would be players or former this documentary evidence, which we now know as players who probably would be entitled to be the “for Neville” e-mail, on 1 November, from a letter members of the PFA, while others, who were not that it had from the Metropolitan police. When were footballers, would not be members of the PFA. you first aware of it? Mark Lewis: Well, they did not tell me. I would not Q1256 Mr Watson: Okay. It has been reported that expect them to have necessarily told me. I know that you are representing hacking victims in the United there were discussions with Julian Pike on States. You are taking legal action in the United professional duties. The professional duties of States. Can you explain what that is about? solicitors are such that we do not have a duty to notify Mark Lewis: There are two aspects. There are those the police. In respect of Julian Pike, we do not tell the people who are or were in America at the time they police about our clients, except for money laundering, were hacked and, because of the differences in the which we have an obligation to report. legal systems, private claims are being considered in respect of those individuals. There is also a separate Q1262 Damian Collins: Sure. It must have come side as to whether actions can be taken as a group to from the police to Farrer. seek compulsion of various individuals to give Mark Lewis: They did not tell me. At the same time, depositions, as they call them in America, about the what they had not been aware of at Farrer was that I knowledge of News Corporation or News Corporation was making this application for non-party disclosure, executives on the level of the cover-up of the actual which we did not have to notify Farrer of, so it was activities. us against the Metropolitan police to get disclosure of the documents to show what had happened. Operation Weeting, as you are familiar with, is employing Q1257 Mr Watson: Let me just make this clear: you innumerable officers to go through documents, are aware of clients where the evidence suggests that whereas, at that time, there were a handful of they were hacked while in the United States? people—5 or 6 or 8—who had been affected by phone Mark Lewis: Those are my instructions. hacking. As Julian Pike said, because we did not have any evidence, we were presenting the case on an Q1258 Mr Watson: Would you say that that is the inferential basis, and we wanted to show all the sort of thing that the directors of the company should illegality. Naively, we were saying that we wanted raise at the News Corp AGM on Friday morning? everything from the Metropolitan police. Mark Lewis: Well, it is not for me to advise the directors of News Corp on what they should raise. Q1263 Damian Collins: Sure. When did you make Mr Watson: Thank you. that application? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 113

19 October 2011 Mark Lewis

Mark Lewis: Probably towards the end of 2007. I the “for Neville” e-mail as a relevant document; there think we got the order in December 2007, and the were numerous other documents, some more documents were provided at the end of 2007 or the important than others. One was a CD of a recording of beginning of 2008. Glenn Mulcaire telling another reporter how to hack a phone. That reporter has been put forward as being Q1264 Damian Collins: I suppose the timing might Raoul Simons, but Glenn Mulcaire had a strong be interesting, because if Farrer wrote to the cockney or south-east accent, and it sounded like Metropolitan police on 20 September and did not get “Rile” on the recording: “Oh hello Rile, this is how a reply until 1 November, did the Metropolitan police you hack a phone”, blah, blah, blah, and then reply to the letter after you had made your application something about Tottenham Hotspur football club. for the documents, thereby alerting them to the “Rile” turns out to have been Raoul Simons. He now existence of this document? works for The Times, but at that point in time he was Mark Lewis: I honestly do not know. Until this working for the Evening Standard, which was then evidence session, I had no idea that Farrer had also owned by Associated. applied for the documentation. Now, rather than the News of the World or Farrer saying, “You’re suing the wrong person. Look, you’ve Q1265 Damian Collins: When you made your got the recording and it’s actually the wrong company. application, you did not know what the Metropolitan You’re suing News of the World and News Group police had; you just wanted to see what they had in Newspapers, but you should be suing the Standard or case there was anything that would be helpful to your Associated”—we went back to court to get an order client’s case. to ask who “Rile” was, and that order was never Mark Lewis: We wanted as much as possible to back complied with; it was a condition of negotiations that up this inference, for a civil case, that News the order would never be complied with, but an order International was responsible for some unlawful was made by a Master to provide that information— conduct. negotiations started. All of a sudden, a fax was passed to me that said that Q1266 Damian Collins: Finally, what sort of contact there was an offer of £50,000, which was alluded to was there between you and Tom Crone from towards by Julian Pike before. Then there was this offer of the end of 2007 up to April 2008, when they had seen £150,000. Then there was a telephone conversation, the transcript? which Julian Pike did not refer to, in which they said, Mark Lewis: None. There was the first meeting, when “All right then, you can have the £250,000 that you he got the train. It was not a very long meeting. I asked for.” I said, “That was before we started the asked for £250,000, and he grabbed his hat and coat case.” They carried on negotiating. They should not and went back to London. I do not think that he was have negotiated like that. There was no reason to; it in my office for more than 20 minutes. The meeting is illogical. One of the members of the Committee— went something like this: Tom Crone said, “I’ve asked it might have been you—said, “If the first offer had all the journalists at the News of the World—except been £1 million, would they have carried on for one or two who have left—and they all tell me negotiating?” The idea that the parameters for that they didn’t do it. They have not phone-hacked,” negotiations were set by what I had asked for in the and I said, “I believe you, Tom. I absolutely believe first place is just nonsense. It is quite conceivable that you. I don’t believe them, but I believe you.” That I could have been wrong. Of course I was wrong, in was my sense of humour. I drew him in and saw that terms of the measure of damages for a privacy action he was feeling quite good when he thought that he for something that had not been published. There was had sold me a dummy until I told him that I did not no way that that case was worth that amount, but I believe them. was negotiating, and if the other side wanted to pay What he should have done is said, “What are you that amount of money— talking about—£250,000?” I had asked for £250,000. Damian Collins: You are going to help them out. He should have said, “£15,000 is all you’re having,” Mark Lewis: Of course. That is my job as a lawyer: or “£12,000 is all you’re having.” I would then have to negotiate as best I can. Where they made the had to advise my client, but he did not do that; he mistake is that they thought that that negotiation for just, as I said, grabbed his coat and hat and went and Gordon Taylor would be the end of everything. That got the train back to London. We carried on with the is why they took me for lunch. They thought that it case. The defence was served without prejudice to a was all over—done and dusted—and that “You did a strike-out application, because it was going to put good job and nobody else needs to sue.” When forward that there was no evidence, and then we Gordon Taylor was named, four other people were sought non-party disclosure from the Metropolitan named as non-royal victims. Max Clifford did not police, which is what uncovered this. know about it. His lawyers had not told him about it at that time. Sky Andrew had not been told. Elle Q1267 Damian Collins: There was no other Macpherson has never brought a claim, nor has Simon discussion about settlement at all until after the “for Hughes. They did not know about the case. That is Neville” e-mail came to light? why I thought that they wanted to hush it up. There Mark Lewis: No, none at all. They were so confident were at least four other people who they didn’t want about their defence in the case that they did not think to bring claims and do the same. That is why they of making a part 36 offer. We then got the disclosure paid over the odds. It is just incredible that you would from the Metropolitan police. It did not just include pay. You heard the answer—£30,000 or £40,000 for a cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 114 Culture, Media and Sport Committee: Evidence

19 October 2011 Mark Lewis published story, for a breach of privacy, but with this Apparently it has hacked my phone. I was told that my unpublished story, we carried on negotiating to more phone had been hacked. It shouldn’t have happened. It than £400,000. It wasn’t just over £400,000; it was was before the Dowler situation, around December also payment of my costs. 2010 and January 2011, that my phone apparently was hacked and I was followed. There has been a report— Q1268 Damian Collins: Sorry to interrupt. Thank I am waiting to see a copy of that—the police you for what is an illuminating and very full answer. investigation and my civil claim. What they were paying for was confidentiality, so that other people would not come forward and seek Q1272 Paul Farrelly: You’ve filed a claim, have similar amounts. you? Mark Lewis: Absolutely. They did not want it to get Mark Lewis: No. I’ve sent a letter off to News out. They had paid my costs in full. They didn’t knock International. I am waiting for its response to answer, a penny off. That is unheard of in litigation. They did “What have you got and why?” not knock a penny off my costs. I asked for a figure and they paid it in full, every single penny. Q1273 Paul Farrelly: Presumably, if you file a claim, the statement of claim will be a public Q1269 Paul Farrelly: Mr Lewis, what you said document. about your former client, Gordon Taylor in the PFA, Mark Lewis: Unless a court orders otherwise. There strikes me as absolutely disgraceful. He took all the is no aspect of privacy that I am concerned about. The money and ran, as it were. He possibly let his report that I had seen, which might or might not be members down by agreeing to such confidentiality and the right one, suggests that the reason that I am doing then sacked Jo Armstrong for suing. I hope the PFA this is because I am dying. Whoever it was who members will take note of that in the way that that followed me and saw me limp and not have a right- organisation conducts itself. hand side that works has wrongly assumed that I have I want to come on to our difficulty. Yet again we are some sort of fatal illness. Well, I have a fatal illness— going to produce a report—hopefully shortly, and it’s called life, and I hope that I am around for another hopefully our final one—and we are in a situation 60 or 70 years. What I have is multiple sclerosis, and where we do not know as much as you. We certainly that is not a secret. I do my job as well as I can. do not know as much as Judge Vos and all the other Unfortunately I am not able to take notes, as I’d like lawyers. There are caches of documents that have to be able to, but I work around that. been produced under disclosure in the cases that are Paul Farrelly: Are you aware of any other people going before the courts. Lots of them are confidential who may have made their life difficult, apart from at the moment. Without breaching confidentiality, yourself, who have been targeted in a similar way? could you just describe to us the extent of the documents that have been disclosed, so that we are Q1274 Chair: Are these matters subject to police less in the dark? investigation at the moment? Mark Lewis: I am not sure how far I can go. Mark Lewis: I’ve made a complaint to the police. Chair: I don’t think we should proceed with this Q1270 Paul Farrelly: Be as general as you like, but matter. give us an idea. Paul Farrelly: Feel free to answer. Mark Lewis: All I can say is that there are claimant Chair: No, don’t feel free to answer. If these matters lawyers who have given undertakings to the court in are subject to police investigation, we will not respect of disclosure of documents and we must abide pursue it. by those undertakings. Whether or not there was one document, or even 100,000 documents, we would not Q1275 Paul Farrelly: Regarding all the documents be allowed to deal with that. There is a separate that have been disclosed, from your experience, are inquiry taking place under Lord Justice Leveson, and you aware of any other accessing of information that I suspect that he will report on the volume, or may have been illegal apart from phone hacking? Is otherwise, of the documentary evidence and who phone hacking the tip of an iceberg? knew what at that particular time. Mark Lewis: I am acting for other people who have complaints. What has happened is that information Q1271 Paul Farrelly: As part of all the documents has been obtained. Yes, it was the tip of the iceberg, that have been produced under disclosure, are there but it was sort of known about that there were other any documents that are reports by—however you call activities, in the Information Commissioner’s report, them—private investigators, inquiry agents and “What price privacy?”. We now know about obtaining freelance journalists doing a job for News of the World private information such as phone bills and medical or from Mr Crone, who referred to this? Are there any records. documents where people who might have been making News International’s life difficult have been Q1276 Paul Farrelly: That’s blagging. What about targeted? computer hacking or reading people’s e-mails? Mark Lewis: I am aware that there has been some sort Mark Lewis: It seems that voice mail interception or of investigation and following of me. That is in the phone hacking is old hat and that the thing to do now hands of the police. I have pursued that with the police with the inquiry agents is to obtain information by and also pursued a civil claim against News way of e-mails. As I understand the technology, one International to say that it has infringed my privacy. plants a Trojan in someone’s computer by sending cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 115

19 October 2011 Mark Lewis them an e-mail that looks innocuous, which then happen, the solicitor got struck off. That is the pinches all the e-mails sent out or received and sends position. them to someone else. I am pursuing a claim. Mr As regards Parliament, it is a slightly different aspect, Justice Vos has ruled that it is not going to be part of but I would expect that if you have a client who lies the voice mail interception claims for a former to Parliament and you know that they have lied to member of military intelligence, who was subject to, Parliament, you have to be absolutely 100% saying to shall we say, a Trojan plant. We know that. That is that client, “You have just lied to Parliament.” Oddly also subject to a police investigation, so I suppose we enough—you talked about Baroness Buscombe have to be very careful, but there is a civil claim for before—her libel against me was saying that I had lied that. to Parliament last time. I had not lied to Parliament. I think everybody knows that I did not lie to Parliament Q1277 Paul Farrelly: But, in general, by persons but, between them, the Metropolitan police and the acting on behalf of the News of the World and News Press Complaints Commission like to give the view International or— that I lied to Parliament. Mark Lewis: I think the police have gone beyond It is the same with James Murdoch. I think James scoping an investigation into another inquiry agent in Murdoch would like to give you the impression that relation to work for not just News International he is mildly incompetent rather than thoroughly newspapers but titles that belong to other newspapers. dishonest, but he has been dishonest to you if he says Paul Farrelly: I just wanted, if I may— he did not know about the settlement and did not Chair: I do not want to pursue this line any further. know the information, because— Dr Coffey: Mr Farrelly, the Chair does not want you Chair: Okay, you have given a fairly full answer. to, so I can ask a question. Chair: Hold on a sec. Paul, you have a final question Q1280 Dr Coffey: May I go back to when you in relation to the subject you are pursuing, but I do became aware of the “for Neville” e-mail? The story not wish to go into the area of police investigations. in my head is that you applied for the disclosure order. What triggered you to apply for that disclosure order? Q1278 Paul Farrelly: I have two questions, Chair, Mark Lewis: We had to do it, because the case that we and then I will finish. had brought for Gordon Taylor against News Group With respect to Glenn Mulcaire, we had an admission Newspapers was based on inference; we did not have from James and Rupert Murdoch that they were, any documentary evidence. indeed, paying his legal fees and that has stopped, and they insist that that is still the case. In your experience, Q1281 Dr Coffey: What triggered you to think that from the claims that you are pursuing, who will pay the police had evidence? any damages awarded against Glenn Mulcaire? Mark Lewis: No, we knew the police— Mark Lewis: Certainly in the past, in the experience that I have of cases, News Group Newspapers—the Q12821283 Dr Coffey: You knew the police did? News of the World—has paid the damages and paid Mark Lewis: We knew the police had, because the the costs rather than Glenn Mulcaire. I think the police had prosecuted Glenn Mulcaire and Clive position regarding Glenn Mulcaire is as follows: his Goodman, and we were pursuing this inferential case. funding of his legal costs by News Group has ended, For a civil case you have to show things on the although he is taking legal action against News Group balance of probabilities—in other words, that it is Newspapers. His case is that there is an indemnity in more likely than not, so we wanted to show that News respect of the payment of his legal costs, and News of the World had done things that were improper and Group is saying that that indemnity does not apply. therefore we could present to the court, “Look, in assessing whether it is more likely than not that they Q1279 Paul Farrelly: Finally—again, down to your had broken the law, look at all these other things that credibility as a witness—if you became aware that a they have done”. client had lied to a court or to Parliament, what would you feel obliged to do professionally? Q1284 Dr Coffey: I heard what you said earlier that Mark Lewis: It is a different matter. I was listening to the Tom Crone visit was instrumental in your mind, the answer that was given. The answer is actually in and led to you thinking, “This is serious, we are on to The Guide to the Professional Conduct of Solicitors. something”, because they would never otherwise If you have a client who lies to a court, and you are leave Wapping and just say, “Here is a cheque for aware of his lying to a court, you have to stop acting. £10,000, go away”. So, your application for disclosure It is not “We might stop acting”, as Mr Pike said; you was after that meeting. have to stop acting. You either have to say to the client Mark Lewis: It was after that. to tell the court the truth, or you have to stop acting. The case on that is that, in order to avoid being Q1285 Dr Coffey: So you met Tom Crone in March sentenced on the basis of previous convictions, or April. You applied in December. somebody who went into a magistrates court gave a Mark Lewis: Because the case had started. The false name. The solicitor knew it was a false name, defence was put in and then we made the application. because he had acted for that person before. Because They thought we had gone away. the solicitor carried on acting in those circumstances, Dr Coffey: I am just trying to clarify the position. after he had given a false name, and allowed that to Mark Lewis: Just to go through the sequence of— cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Ev 116 Culture, Media and Sport Committee: Evidence

19 October 2011 Mark Lewis

Q1286 Dr Coffey: One final question, because I am recognised that it paid him that money to cover afraid I have to go a meeting that I have organised. something up. Would you have applied for the third party disclosure if Tom Crone had not visited you? Q1291 Chair: So, you did not tell The Guardian any Mark Lewis: Yes. details of the settlement. Dr Coffey: You would have done. Mark Lewis: No, not at all. Mark Lewis: It was the tactic of the case. Dr Coffey: That is all I need to know for my story. Q1292 Chair: You and your firm did not leak the “for Neville” e-mail, or the Information Q1287 Chair: I want to move on to the other area, Commissioner documents. because time is running out. Did you agree with Julian Mark Lewis: No, and in fact the settlement figure only Pike that The Guardian’s publication of the terms of came out in The Guardian a few weeks ago, because the settlement represented a serious breach of the Farrer’s—for whatever reason, presumably on confidentiality agreement? instructions—in breach of its duty to Gordon Taylor Mark Lewis: I think you have to look at it two ways. from the agreement, talked about the settlement of I am not sure that one can ever have confidence in £425,000. Never before had I ever said the figure. I something that is unlawful, so technically it probably had always said, “It is reported as a £700,000 isn’t a breach of confidentiality. I think there are two figure”—or whatever—“including costs”, but I had aspects of confidentiality. In terms of the Gordon never, ever talked about it. Taylor confidentiality to Gordon Taylor, that would be a breach of confidentiality if I, for example, had Q1293 Chair: Did you have any conversation with provided information. That is client confidentiality. Nick Davies, or anybody else at The Guardian prior The confidence in the criminal activity, or covering up to the publication of the story? the criminal activity— Mark Lewis: No, I had not spoken to Nick Davies. Obviously, I know who he is now, and I have spoken Q1288 Chair: What The Guardian published was the to him since then, but no I hadn’t. fact that a settlement had been reached of £700,000. That was the revelation of the settlement. Q1294 Chair: You did not speak to him before 8 Mark Lewis: That side is not a breach of July, when the story appeared. confidentiality by The Guardian, but if the only duty Mark Lewis: Is it 8 or 9 July? of confidence is from George Davies to Gordon Chair: 8 July 2009. Taylor. So, if George Davies had leaked the Mark Lewis: No, I hadn’t had a conversation. information, whether me or somebody else at George Davies had leaked the information of that settlement, Q1295 Chair: Nor did Charlotte Harris then that would be a breach of confidence. Mark Lewis: I couldn’t speak for Charlotte Harris, but I would be very surprised if she had had a Q1289 Chair: Do you agree that the knowledge of conversation. the existence of the key documents—the “for Neville” e-mail and the Information Commissioner’s report— Q1296 Chair: Your position is that nobody at your was only in the possession of Farrer, News Corp, firm was responsible for The Guardian having that George Davies and Gordon Taylor? information. Mark Lewis: No. Mark Lewis: No, but one also has to remember—it goes without saying—that before the confidentiality Q1290 Chair: Who else? agreement, the court file was open for anybody to go Mark Lewis: The police have that information. There in and inspect and look at. In a sense, if people are were lots of people and lots of information within that asking how Nick Davies got the story, it is probably article. It is almost like a jigsaw. You can say, well, because he and The Guardian went into the courts and certain people had that information and certain people saw that News Group was being sued by Gordon did not have that information. Gordon Taylor made a Taylor. complaint. He has new solicitors, Brabners. They made a complaint about me to the Law Society about Q1297 Chair: He wouldn’t have got a copy of the the disclosure of that, not based on any evidence. I “for Neville” e-mail from that. dealt with that in response to the Law Society, Mark Lewis: No. I got the copy of the “for Neville” pointing out that there were parts of that information e-mail from the police. that I could not have possibly have known in The Guardian article. When it came down to it, it was Q1298 Chair: He wouldn’t have done. thrown out by the Law Society. It was rejected as a Mark Lewis: Got it from the police? complaint and so on. One understands why Gordon Taylor might have been Q1299 Chair: Unless you are suggesting that the concerned, because potentially News of the World police leaked it to The Guardian. could have asked Gordon Taylor—I am sure this is Mark Lewis: The police leaking information to The why he has not spoken about it. News of the World Guardian has been quite topical recently. could have said to Gordon Taylor, “Right, we want the money back because you breached the confidence”. I Q1300 Chair: Your guess is that the police leaked it do not think that News of the World has ever to the Guardian. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

Culture, Media and Sport Committee: Evidence Ev 117

19 October 2011 Mark Lewis

Mark Lewis: It could be from anybody. Mark Lewis: I do not know, because they chose to settle. I know he now works for News International; Q1301 Chair: It couldn’t be from anybody, because he is now at The Times. A lot of people are, including very few people had it. the first investigating police officer, Andrew Hayman, Mark Lewis: Anybody from those five groups. who is now a Times journalist.

Q1302 Chair: One assumes it wasn’t News Corp or Q1310 Louise Mensch: Indeed. You did say that as Farrer’s. You are saying that it wasn’t your firm. a result of your investigations as perhaps the “lead Mark Lewis: I wouldn’t go so far as to make guy”—the most known lawyer who deals with phone assumptions about anybody. You do not know who hacking—that people will come to you, presumably speaks or who provides information. as your clients in America. You said that it is happening at other newspaper groups as well. Have Q1303 Chair: I think you did just suggest a couple of you seen evidence to that effect? seconds ago that it seems likely that it was the police. Mark Lewis: Sorry? Mark Lewis: The reason for mentioning the police, is that you talked about four, and I said there is a fifth Q1311 Louise Mensch: Did you not say earlier that possibility, because that was where the information hacking was happening at other groups, too? Have came out. you seen evidence to that effect? Mark Lewis: No, I said— Louise Mensch: Q1304 Chair: And you went on to say that it is not You were just referring to this particular guy. unknown for the police to leak information to The Mark Lewis: Guardian. In respect of the information that the police are obtaining about another inquiry agent in Mark Lewis: It appears that way. respect of computer hacking, his clients were from other newspapers. Q1305 Chair: So your guess is that it was police. Mark Lewis: I try not to guess how things happen. Q1312 Louise Mensch: Okay, that is a separate issue. You said you were bringing cases from Q1306 Louise Mensch: Briefly, Mr Lewis, I want to American victims of phone hacking against News go back to the CD you talked about, where Glen International. Were you referring in the latter to what Mulcaire was discussing with a reporter how to hack they term in America “a class action” lawsuit of a phone, and that reporter was from Associated hacking victims against News International? Is that Newspapers. It was not directly relevant to your case what you are bringing forward? against News International. I am interested why that Mark Lewis: No, I think that that is generally used to CD was disclosed to you. Why was it sent to you as describe the fact that I am acting for a number of part of the package, if it was not relevant to your case people. Whether or not a class action is pursued or against News International, but was against another whether it is an action ancillary to the English newspaper group? proceedings, it is pursued for disclosure and Mark Lewis: First, you would have to ask the police depositions, as the American lawyers call it. why they disclosed it to me. The police thought it was relevant to my case. Q1313 Louise Mensch: Can you give us a rough number of how many victims you represent in the Q1307 Louise Mensch: They may have been under United States, without disclosing who they are? Can the impression that he was not working for Associated you give us an example of the number of American but was a News International journalist, because he victims of News International phone hacking? was a contact of Mulcaire. Mark Lewis: We are on two stages. One, they are not Mark Lewis: It might have been a simple mistake by necessarily Americans, but they were in America at the police. What is more interesting is why News the time they were hacked; that is what I said. International—News Group Newspapers—chose to settle. We had made the application to court to find Q1314 Louise Mensch: That is what I mean: people out who “Rile” was. You would have thought they who were hacked on American soil to your would have said he is not one of ours. knowledge. Mark Lewis: I have two cases and potentially that Q1308 Louise Mensch: Do you infer then, that includes four people. “Rile”—this journalist—was working double-hatted, Louise Mensch: Thank you. the he was also working for News International? Why Mark Lewis: The “class action”, as you describe it— would they be so concerned about the disclosure that as the ancillary action, or whatever—is something Glen Mulcaire had discussed phone hacking with a different, which would effectively cover everybody. journalist at Associated? That’s great; it gets them off the hook. It says, “Look, everybody’s doing it.” Q1315 Louise Mensch: It would cover everybody. Mark Lewis: You would have thought that they would Are you pursuing a class action lawsuit? have said, “You have sued the wrong person.” It might Mark Lewis: We are investigating the possibility. be that the journalist was writing for them as well. Q1316 Paul Farrelly: I want to return to the central Q1309 Louise Mensch: Both groups. point of our inquiry, which is who may or who did cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG04 Source: /MILES/PKU/INPUT/012695/012695_o004_db_Corrected Transcript TSO 19 Oct 11.xml

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19 October 2011 Mark Lewis mislead Parliament. I am not sure that the question Q1318 Louise Mensch: Very short. I do apologise. about who did or did not leak stories to The Guardian This is a terrible pattern, coming back for a final bite is terribly relevant to that inquiry. at the cherry. My final question regards the testimony of Rebekah To follow on from Mr Farrelly’s question, in our Brooks, which, after James and Rupert Murdoch session with Messrs Myler and Crone, I referred to appeared in front of us, was seen almost as a changed editions of the News of the World on the sideshow. Rebekah Brooks told us that, in terms of Milly Dowler case. I do not know if you are aware of the targeting of Milly Dowler’s phone, she was the the story that was pulled from additional editions in editor and the buck stopped with her, but, on the other England and Scotland ascribed to two separate hand, News International was very quick to say that reporters. It literally quoted from her voicemail she was on holiday at the time that story appeared, transcripts. It was then removed and replaced for the and also at the time of the alleged targeting of the main edition, and was discovered by The Wall Street young girls involved in the Soham case. Having read, Journal. Were you aware of the original story? as you must have done, Rebekah Brooks’ testimony Mark Lewis: From The Wall Street Journal article. I to us, is there anything in her testimony that either had not seen the earlier editions. strikes you as odd or potentially misleading as far as Parliament is concerned? Q1319 Louise Mensch: I wondered if you have had Mark Lewis: I have to say that I have not actually any discussions with News International about who read it. I was not here at the time she gave evidence. gave the authority to pull that story and replace it. I was next door in the Home Affairs Committee. Mark Lewis: No, I have not had those discussions. Louise Mensch: Thank you. One final thing. Q1317 Paul Farrelly: Will you read it to see if [Interruption.] It is a comment: may I urge you to anything strikes you? keep attendance notes on a Dictaphone perhaps, Mark Lewis: If there is something within in it that because they might be very useful in future? strikes me, I will let you know, but I am not going to Chair: Thank you very much. try to make up what it might be. Paul Farrelly: Thank you. Chair: A very short question from Mrs Mensch. cobber Pack: U PL: COE1 [SO] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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Monday 24 October 2011

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Paul Farrelly Damian Collins Mr Tom Watson Philip Davies ______

Examination of Witness

Witness: Les Hinton, Former Executive Chairman, News International, gave evidence.

[This evidence was taken by video conference] Q1325 Chair: Right. The appeal letter you were copied into suggested, as I am sure you will recall, Q1320 Chair: Good morning everyone. This is a that Clive Goodman claimed that he was by no means further session of the Select Committee’s inquiry into the only person who had knowledge of illegal activity. the evidence we were previously given relating to the Indeed, the knowledge was widespread and frequently inquiry we undertook into phone hacking. I would like discussed at editorial conference. Was this complete to welcome to give evidence to the Committee the news to you when the letter arrived? former Executive Chairman of News International, Les Hinton: Yes, it was. Les Hinton. Mr Hinton, this is the third occasion you have appeared before the Committee on this matter, Q1326 Chair: Right. You subsequently agreed that and I would like to thank you particularly for agreeing there should be an investigation into the claims made to appear today, because I realise it is quite early in by Mr Goodman. the morning where you are. Les Hinton: Yes. The letter, of course, was addressed Les Hinton: Good morning, Chairman. Thank you. principally to Mr Daniel Cloke, the Human Resources Director, and its arrival began the process you have Q1321 Chair: Can I start off by asking you about the heard about in detail from Daniel, Jon Chapman and letter which you sent to Clive Goodman in February Colin Myler. 2007, in which you said that he was being dismissed, but that, in the light of his frequently distinguished Q1327 Chair: Right. So following the investigation, years of service to the News of the World and in which you told us last time produced no evidence to recognition of the pressures on his family, it was support Mr Goodman’s claims, it was nevertheless decided that, on his termination, he would receive one agreed to give Mr Goodman a further payment of year’s salary? Can I ask whether you came to that £153,000. Why was that? decision? Did you seek advice on it? Was it agreed Les Hinton: The process of the complaint by with others? Can you tell us a bit about the Goodman led to a series of things, including—I won’t background to that? go over the detail you have already received—the Les Hinton: That was quite a while ago, Chairman. pretty thorough investigation of what had been Of course, I would have had discussions with others, claimed by him, and, as you know, there was no basis but I don’t recall with whom I had them. But it was found for it. Subsequently, he threatened to go to a my decision to do that. tribunal, and there were internal discussions I had with Jon Chapman and Daniel Cloke. There was a view— Q1322 Chair: You decided that he should receive I think that Daniel said to you when he testified last one year’s salary payment of £90,000, and you month—that we would probably lose. There was an authorised that payment. issue of a long process, which I thought was going to Les Hinton: I did. hamper the company’s, or the newspaper’s, opportunity to get back on track, and I decided at the Q1323 Chair: Right. That was a decision for you; time that the right thing to do was to settle this and you did not have to refer it to anybody else. get it behind us. Les Hinton: No, I made that decision myself. Q1328 Chair: You said in your letter to Mr Q1324 Chair: Right. Following your letter, Mr Goodman in February, “In all the circumstances, we Goodman wrote to Mr Cloke saying that he wished to would of course be entitled to make no payment formally launch an appeal against the termination of whatsoever”, but you ended up making a payment his employment. That letter was sent at the beginning approaching £250,000. Were you angry about that? of March, but the payment that you had already Les Hinton: In my mind, and it is probably worth offered him in your original letter went ahead. Why while bearing that in mind, there were two issues here. was that? I made the decision, on dismissing Mr Goodman, that Les Hinton: I can’t recall exactly what the process he would receive a year’s salary. As to the process was of those payments, Chairman, but what I can say that kicked off after that, of course it surprised me, is that, in my mind and, I think, in others’ minds, the and I guess was annoyed. But in the end, I acted on matter of my having given Goodman a year’s salary the view that we would most likely or probably lose, and the subsequent appeal were treated separately. in Daniel’s words, and that rather than go through that cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton process, it was best for the company to get ahead and around the Gordon Taylor settlement, all of which get it behind us. That is why I agreed to that happened after I had left. settlement. Q1335 Paul Farrelly: I’m aware of that. I want to Q1329 Chair: The settlement you agreed was come back to what happened in your tenure before £153,000. We were told by Jon Chapman, I think, that you left in December 2007. Can you not pin down at that was broken down approximately into £40,000 in any point when you became aware that we were not compensation, £13,000 in legal expenses and £90,000 being told the whole truth or even the truth at all? in notice, but you had already paid £90,000 in notice, Les Hinton: I think it became very clear in the last so it appears you ended up paying it twice. Can you couple of years, I guess, that there was much more explain that? to this affair than seemed apparent when I left, but Les Hinton: All I can tell you, Chairman, is that we pinpointing anything beyond that, Mr Farrelly, is looked at the settlement proposal—that was a difficult for me to do. settlement proposal which I was advised was the best we could achieve, and I decided to go ahead with the Q1336 Paul Farrelly: Okay. That takes us pretty £150,000. much back to when you last appeared two years ago. Again, the same question as to Mr Pike: when you Q1330 Chair: But it was a settlement proposal a became aware of this, and having appeared in front of component of which was a year’s notice. Surely, you us twice, what did you do about it? could have said, “Well, we’ve paid the year’s notice Les Hinton: Mr Farrelly, I was, as you know, and already.” have been since December ’07 working in another Les Hinton: That’s a fair question, Chairman, but at country with another company. I was aware, I think, the time that’s not what we did. a year after it happened of the Gordon Taylor settlement. My involvement beyond testifying to you Q1331 Chair: So you paid him, in essence, two at some period soon after that about my experience years’ notice, or one year’s notice twice over? and what had happened when I was there was limited to that. So it wasn’t clear. Les Hinton: We paid him a year’s salary, and we paid him the £90,000 of notice in relation to his appeal, yes. Q1337 Paul Farrelly: Do you think that you were complicit in any way in letting untruths, misleading statements and the lack of the whole truth lie on the Q1332 Paul Farrelly: Good afternoon, Les. It’s been record without correction? four and a half years since we first started discussing Les Hinton: I don’t think I was complicit in the way this with you. Can I start with the same question as I in which you’re suggesting. What I am telling you is asked Julian Pike of Farrer’s at our last meeting here? that events have evolved quite significantly in the time When did you first become aware that answers given since I departed. My involvement in what happened to this Committee by people from the News of the has been pretty well limited to my testimony last time. World or News International had not been truthful? Les Hinton: Mr Farrelly, you said, “four and a half Q1338 Paul Farrelly: Can I just come back to when years”. A lot has happened since then, and still the you first appeared on 6 March 2007? You told the full story is unclear. Therefore, for me to have a Chairman that there was a full and rigorous inquiry. clearer view of who may or may not have been You admitted that it was continuing. Clearly, since untruthful to you and when is really hard for me in then we have established that that was not the case. It this context to say with certainty. was made clear not only in our report but by the fact that as recently as July this year, Linklaters, acting Q1333 Paul Farrelly: This is a pretty big affair for for the Standards and Privileges Committee, disowned the media here and for you because you’ve now statements made about Burton Copeland’s inquiry. So resigned after 52 years. I’m just asking, when did you that was not the whole truth. When did you know first become aware that the answers that this about the letter of 2 March 2007, which was copied Committee had been given were either not truthful or to you by Clive Goodman and which made allegations not the whole truth? that other people knew? When did you receive it? In Les Hinton: I think it is clear, based on events, in particular, did you receive that letter before you came particular, I suppose, over the last 12 months or so, and talked to us? that some of the answers that you were given were not Les Hinton: That’s a good question. I am not 100% accurate. Whether they were—whether calling them certain, but I do not believe that I was aware of “untruthful” is the appropriate word, I don’t know. Goodman’s complaints when I appeared before you in 2007. Q1334 Paul Farrelly: Well, Mr Pike’s answer was a lot more clear-cut, because referring to the evidence Q1339 Paul Farrelly: But you were certainly aware session first of all in July 2009, which preceded your of them when you appeared on 15 September 2009, second appearance, he told us that he was aware that having gone through the whole process. we were not being told the truth as soon as the Les Hinton: Yes. witnesses opened their mouths. Les Hinton: I heard a little of Mr Pike’s evidence. I Q1340 Paul Farrelly: Can I read out an answer that think he was referring, in what he said, to the events you gave to me in September 2009? I will quote you: cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

Culture, Media and Sport Committee: Evidence Ev 121

24 October 2011 Les Hinton

“There was never any firm evidence provided or”— prospect about losing that case in a tribunal and we two key words—“suspicion provided that I am aware went ahead and settled. of that implicated anybody else other than Clive within the staff of The News of the World. It just did Q1345 Paul Farrelly: My question was rather not happen, Paul. Had it happened we would have different. We know what Clive Goodman was acted.” Having been through Clive Goodman’s alleging, as part of his appeal and potential allegations and settled with him, that statement you proceedings. My question to you is: can you share gave to us in September 2009 was not anywhere near with us what Glenn Mulcaire was alleging? the truth, was it? Les Hinton: He, as I recall—this was specified, as I Les Hinton: I don’t think that I would regard Mr said, in a note to you two years ago, Mr Farrelly— Goodman’s letter as evidence of anything. There were had claimed employment-related claims on which he accusations and allegations by an employee who had based his appeal. The advice I was given was that been dismissed for gross misconduct. there was a significant chance that we would lose that at appeal, and so I decided to settle. Q1341 Paul Farrelly: We can quibble about what constitutes evidence, but you use the words, “or Q1346 Paul Farrelly: So he wasn’t, as far as you suspicion provided”. Clive Goodman provided you were aware, making similar sorts of claims to Clive with plenty of suspicion, didn’t he? Goodman—that he had been acting for other Les Hinton: We reacted very responsibly—and you journalists, that he was not just working on his own have heard more detail than you are going to get from with Clive Goodman and so on? me about it—to what Mr Goodman claimed. At the Les Hinton: Not that I’m aware, no, Mr Farrelly. end of it, we could discover no basis for what he was claiming. I think, therefore, my statement is valid. Q1347 Paul Farrelly: Can I ask you, Les, what do you think happened at the News of the World?Was Q1342 Paul Farrelly: Can I move quickly on to the there a small group of people who decided that if we pay-offs that John has referred to and other members keep the façade and stick together the truth won’t get might want to refer to? Getting the full extent of those out and the boss, Rupert Murdoch, won’t get to know pay-offs out of The News of the World and News about it, otherwise we’ll be for it? Is that what International has been like pulling teeth. Clearly, you happened? were aware of the full extent of them. Last time, in Les Hinton: Look, this whole affair is still unfolding, September 2009, you admittedly said that you could Mr Farrelly. I look forward, at some point when not discuss them or had been advised not to discuss everything is known, to being able to answer that them. question, but I cannot now. Les Hinton: Yes. Q1348 Paul Farrelly: I am going to wrap up now and pass on to colleagues, because we are not getting Q1343 Paul Farrelly: Have you been aware all along very far. Regarding the pay-offs, Rebekah Brooks that the evidence that we have been given, including wrote a letter to us, dated after your departure but a letter from Rebekah Brooks after she became Chief regarding events within your tenure. She wrote to us Executive, was only partial? in November 2009. Regarding the Goodman claim, Les Hinton: Having been in New York, I did not play she said she applied an analysis, looking at everything a part in the response to that information. When I in the round, and recommended to Les Hinton, the spoke to the Committee, I answered honestly on two Executive Chairman, that we explore settlements. counts. First, that it was subject to confidentiality and, Could you tell me what Rebekah Brooks’s role in that secondly, that I did not remember. I did not play a was, because she was only appointed Chief Executive part. I answered you honestly then, and I did not play of News International in September 2009? Why did a part in the response that you received from News she have a role at all? International. I do not particularly remember Les Hinton: Mr Farrelly, I think, with respect, you registering, either one way or the other, what it may have misread the letter. The line that you were contained. just quoting, I think, was part of that submission by Mrs Brooks that was written by John Chapman. Q1344 Paul Farrelly: We have pretty much got to the bottom of what happened with Clive Goodman, Q1349 Paul Farrelly: Right. Okay. So she didn’t including his letter to Daniel Cloke, copied to you. have a role in that at all? You said you could not talk much about that, or about Les Hinton: At the time that this happened, she was dealings with Glenn Mulcaire in September 2009, but Editor of The Sun. would you care to share with us what happened with Glenn Mulcaire and how far his proceedings went and Q1350 Paul Farrelly: Okay. That’s my misreading. what allegations he was making? Can I ask you finally, Les, because there are a lot of Les Hinton: You were advised of this in a letter. specifics that I clearly won’t get very far on with you [Interruption.] today. Regarding your resignation after 52 years, a Chair: Sorry, Les; we lost you for a second. pretty mortifying moment, could you just tell us—my Les Hinton: That he had made an employment claim. colleague Tom Watson wants to come on to this in As I recall in Mr Chapman’s note to you, he said, more detail—what conversations you had with Rupert having looked at it, that there was a significant Murdoch before taking that step? Did he ask you, cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton

“What went on here, Les? Why did you let it go so Q1358 Mr Watson: Is your severance paid as a far? How have we come to this?” Can you just give salary payment or a one-off payment? us a general description? Les Hinton: The separation agreement is obviously Les Hinton: The issue in my mind, and I’ve said this the subject of confidentiality and I am not permitted in my resignation letter, was that although unaware I to discuss the detail of it. was in charge of this company at the time the core wrongdoing took place, and things reached such a Q1359 Mr Watson: Can I ask why you are not scale that I felt, given the consequences, the victims permitted? of what appears to have happened—and I would like Les Hinton: It is a standard confidentiality agreement to now give my unreserved apologies to those who and it does not permit you to discuss its detail. have been victims—and the fact that the News of the World was closed and a lot of people who clearly had Q1360 Mr Watson: Is part of the detail within that nothing to do with this lost their jobs. This was a confidentiality agreement that you don’t talk about the terrible moment for everyone else but, in a small way hacking scandal? in the context of things, it was for me as well, and I Les Hinton: I can’t discuss the details of this told Mr Murdoch that I wanted to go. agreement. I am sorry, Mr Watson, but, by my declining to discuss any detail, you shouldn’t assume Q1351 Paul Farrelly: So, just very finally given that anything from that. statement, can you tell us now: what part do you think you played by either act or omission in ensuring that Q1361 Mr Watson: Have you talked to the police the full truth about this affair did not come out early about the hacking scandal? enough? Les Hinton: No. Les Hinton: Until I am clear on what it is that happened, it is a perfectly proper question but it really Q1362 Mr Watson: So you’ve not been interviewed isn’t at this moment one I can properly answer. I really in anyway by the Metropolitan police? look forward to the day I can. Les Hinton: No.

Q1352 Mr Watson: Good morning, Mr Hinton. You Q1363 Mr Watson: Have you been interviewed by resigned as boss of Dow Jones on 15 July, is that Viet Dinh, the board member responsible for the right? corporate governance of News Corp, with Les Hinton: Yes, I think you are right. responsibility for the hacking scandal? Les Hinton: No. Q1353 Mr Watson: And you’ve just told my colleague Paul Farrelly you resigned because you felt Q1364 Mr Watson: Are you surprised that he has you needed to take responsibility for what went on on not taken an interest in what you knew and what you your watch. Is that right? didn’t know, given that he has taken a personal lead Les Hinton: I thought that having been responsible on it? for the company and seeing what had unfolded that it Les Hinton: I can only tell you that I haven’t spoken was proper for me to go, yes. to him about it.

Q1354 Mr Watson: Are you still being paid by Q1365 Mr Watson: In your previous answer to Paul News Corp or any other company associated with Farrelly you said that evidence has been emerging in News Corp? the last couple of years that hacking was wider at Les Hinton: I am no longer an employee of News News of the World. Is that right? Corporation. I have not worked there since the day Les Hinton: That’s what seems to have been I left. happening, yes.

Q1355 Mr Watson: Are you still being paid by Q1366 Mr Watson: So does it surprise you that, at News Corp in any capacity? the last annual general meeting—not the one this Les Hinton: I have a settlement agreement with them, weekend, but the year before—Rupert Murdoch told yes. But I am no longer associated with the company shareholders that hacking was the work of a single in anyway. rogue reporter? Les Hinton: I don’t recall him saying that, so I can’t Q1356 Mr Watson: Did you keep the car? really comment. Les Hinton: I beg your pardon? Mr Watson: Have you kept the car? Q1367 Mr Watson: Well, he did say that. If he did Les Hinton: Have I kept calm? say that, was he misleading shareholders? Mr Watson: The car, the motor car, the vehicle. Les Hinton: I don’t recall what he said and I am not Les Hinton: I have not kept a motor vehicle, no. sure even what my chronology is. I know that the company in the last, I guess, seven or eight months— Q1357 Mr Watson: Have you kept any office space or maybe longer—has acknowledged the issue. I am in News Corp premises? saying that, as things were emerging—particularly in Les Hinton: I have no office space in News Corp relation to the police files being sought by civil premises, no. claimants—there was a point where there seemed to cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton be more than that, but I can’t comment on Mr Pike that there was a powerful case that three others Murdoch’s statement. were involved in phone hacking, they were not immediately sacked for gross misconduct? Q1368 Mr Watson: Given that you have said that in Les Hinton: I was not aware he had, and I don’t know the last two years the evidence now emerges that there what the terms or the evidence were so I can’t really was wider involvement in phone hacking at News of answer that. the World, if you were addressing last year’s AGM would you have used the single rogue reporter Q1376 Mr Watson: Given that you had sacked defence? someone for gross misconduct, would you have Les Hinton: In answering Mr Farrelly I said two sacked them if you were still in charge? years, and I am not sitting here with a calendar in Les Hinton: I don’t know the circumstances; I don’t front of me, but the truth is that over a period of time know their identities; so it is too hypothetical for me, there were indications emerging that there might be Mr Watson. more involved; but the certainty you can attach to what was being said or claimed by various people is Q1377 Mr Watson: Does it surprise you that there another matter. wasn’t even a company investigation? Les Hinton: I don’t know what happened. Q1369 Mr Watson: When you gave us evidence in 2009 you told us that Rupert Murdoch was very Q1378 Mr Watson: But what would you have done concerned about the Goodman case. Did you make on your watch, if a lawyer had given you a briefing him aware of the Julian Pike submission that said that said there was a powerful case that three of your there was a powerful case that three others were employees were involved in criminality? involved in phone hacking? Les Hinton: I would have looked at it, and reacted, Les Hinton: Mr Watson, I think Mr Pike told you that but this is such a hypothesis: I don’t know what was that memo was written in relation to the Gordon said when I was not there; I don’t know what the Taylor event which was after I left. company did. I really think it is a little much to expect me to be putting some other hypothesis on what they Q1370 Mr Watson: So if he was very concerned, but may not have done. it was your decision to sack Goodman, why did you tell him you had sacked him? Q1379 Mr Watson: But the very least you would Les Hinton: Sorry, Mr Watson, I did not quite follow have done was mount an internal investigation? the question. Les Hinton: I don’t know what it was that was alleged. I don’t know what the circumstances were. I Q1371 Mr Watson: You said he was very concerned. can’t—I’m sorry—put myself in their position. You told him that you had taken the decision to sack Goodman. On what grounds did you sack him? Q1380 Mr Watson: I’ll tell you what was alleged. Les Hinton: For gross misconduct. What was alleged was there were three other journalists involved in phone hacking. Given that you Q1372 Mr Watson: And you told Rupert Murdoch were in charge of the last investigation—if that that? evidence was given to you, you have just said you Les Hinton: I don’t remember the detail of any would have mounted an investigation; there is nothing conversation with Mr Murdoch. I think it was an hypothetical about that—does it surprise you that automatic matter that Goodman was going to be there was not one? dismissed. I do not recall a particular discussion with Les Hinton: If I clearly had substantive evidence of him. wrongdoing, then you are going to consider a reaction Mr Watson: He was going to be dismissed because to it, but I really don’t know what happened in the he had been found guilty in a court of law or because case of Mr Pike’s letter. the company was aware that he was involved in phone hacking? Q1381 Mr Watson: Okay. The payment to Gordon Les Hinton: He was dismissed after his conviction Taylor of £425,000 happened after you had left. What and sentencing. was the highest payment you ever authorised, for an out-of-court settlement? Q1373 Mr Watson: Is that the test that is applied to Les Hinton: I don’t know, I can’t remember. all employees? Les Hinton: The test being what? Q1382 Mr Watson: You’re not doing badly, Mr Hinton, you have only said that you can’t remember Q1374 Mr Watson: That you have to be found guilty seven times so far. In 2009, you used that phrase 32 in a court of law before you are guilty of gross times. misconduct. Les Hinton: Thank you, but we’ve got a long way to Les Hinton: Of course not. Gross misconduct can go, Mr Watson. cover many things. He was fired for gross misconduct Mr Watson: I’m glad you have kept your sense of because of what happened. humour at least. Les Hinton: Seriously, you are talking about events Q1375 Mr Watson: So does it surprise you that that happened five years or so ago, and I am not—nor when company executives were told in 2008 by Julian did I two years ago—going to do anything if I don’t cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

Ev 124 Culture, Media and Sport Committee: Evidence

24 October 2011 Les Hinton remember except say so. So forgive me, but I am Les Hinton: Because he was an employee of the being straightforward. company. It is not at all unusual, when an employee of the company is arrested in relation to their Q1383 Mr Watson: So just to conclude, the employment, that they get representation costs and £425,000 payment to Gordon Taylor effectively support. bought his silence as a victim of crime. You took responsibility for what went on on your watch by Q1389 Philip Davies: Who told you that that is not resigning. Should James Murdoch resign, and take unusual? responsibility for what happened on his watch? Les Hinton: I don’t think that, whether you are a Les Hinton: I see no reason why James Murdoch contractor or an employee and are working on behalf should resign. of a company, being indemnified in the event that you Mr Watson: Thank you. are subject to a legal action is at all uncommon. That is my experience. Q1384 Philip Davies: Mr Hinton, you said that when you gave evidence to us in 2009 you answered Q1390 Philip Davies: When you said that you agreed honestly—that is what you said earlier on today. Back to settle the case with Clive Goodman, you seemed to in 2009, I asked you whether or not the legal fees for be saying that it was because you were told that that Clive Goodman and Glenn Mulcaire had been paid, was what you should do by the lawyers. Are you still and your answer was, “I absolutely do not know. I do sticking to that particular line? not know whether we did or not.” Then you say it Les Hinton: As I said to you two years ago and as I again, “I honestly do not know.” Was that absolutely am saying now, any settlement such as this which I honest? become involved in is one that I am going to Les Hinton: It was absolutely honest. Two things: authorise, and that is what I did. As you know, two first, I wasn’t sure and, secondly, I wasn’t expecting years ago, when Mr Chapman wrote to you, he said the question. Thirdly, I also said to you that it would that he had recommended to me that we seek a not be unusual in such a case for someone’s legal settlement, which advice I took. expenses to be met, and I know that in a written request that the Committee made subsequently that Q1391 Philip Davies: Mr Chapman did not actually question was answered. No, I was not—I was not say that when he came to give evidence to us. He said, being dishonest. “It was not me agreeing to that… It was Mr Hinton.” Philip Davies: But it’s true to say— He was saying that the decision was taken by you; he Les Hinton: Sorry, Mr Davies, but if I had been sure did not take the decision. Daniel Cloke, as the HR at the time, I would have told you. person, said, “I probably would have dealt with the process slightly differently”. So it is not really right that you were just following their advice, is it? This Q1385 Philip Davies: But in 2009, you did know was a decision that you were making, and making on that Clive Goodman and Glenn Mulcaire’s legal fees your— had been paid, didn’t you, because you authorised Les Hinton: Hang on. First, I do not see a conflict in them? what Mr Chapman wrote two years ago and what he Les Hinton: Yes, but what I told you was that I wasn’t said to you. He was, I think, drawing a distinction sure, that I did not expect the question and that I was between the advice that a lawyer gives and the not going to answer without being certain. decision that an executive makes. So far as I could tell in looking at his evidence, he did not demur from Q1386 Philip Davies: That really was not the having recommended to me to make a settlement, but impression that you were giving. You said, “If we paid I made the decision on the settlement. It was my their legal fees the company would know; but I do responsibility. And I do not see a fonflict. not.” Les Hinton: “I do not know” because I did not recall. Q1392 Philip Davies: When I asked Mr Chapman I really don’t think that this is reasonable, Mr Davies. what his advice to you had been, he said, “I was asked That question was answered later by people who had to try to reach a reasonable settlement”, so it was not a record of it. advice—it was not that he was advising you to reach a reasonable settlement; he was asked to reach a Q1387 Philip Davies: So can you explain to us, now reasonable settlement by you. that you do know that you authorised the payment of Les Hinton: Yes, as he was, and as his letter to you their legal fees, why you did that? two years ago said, he gave me advice and I asked Les Hinton: Since we spoke, a couple of things that I him to reach a settlement. His advice was that we didn’t mention at the time, or didn’t occur to me to should seek a reasonable settlement, but it was not his mention, were, first, that I was out of the country for decision; it was mine. a good two weeks from the moment of the Goodman arrest. I spoke to Mr Coulson who told me that he was Q1393 Philip Davies: It did not seem to be his organising a solicitor and legal representation for him, advice either. In the session— and I allowed him to do that. I did not subsequently Les Hinton: No. just a minute, Mr Davies. You have question it. a letter from him two years ago, saying that he advised me to reach a settlement. If you thought there was a Q1388 Philip Davies: Why? conflict in what he said two years ago and what he cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton said before you last month, I am surprised you did not employment from News International while you were raise it with him then, because I do not see the Chief Executive. conflict. Les Hinton: No. I dismissed him for gross misconduct, and so of course not. Q1394 Philip Davies: We did raise it with him then. We are beginning to learn not to take at face value Q1400 Dr Coffey: Could you clarify what anything that we were told two years ago, Mr Hinton. procedures were in place to report criminal activity at We are in this position today because people were not appropriate board levels? straightforwardly telling us everything two years ago. Les Hinton: Criminal activity covers a wide range of When we had Rupert and James Murdoch here, Jim things, whether it is embezzlement or a theft within Sheridan said to Rupert Murdoch, “do you accept that the office. All of these amount to criminal activity, but ultimately you are responsible for this whole fiasco?” all those kind of things were dealt with within the And Rupert Murdoch said, “No.” Jim Sheridan said, company and by the law. “You are not responsible. Who is responsible?” And Rupert Murdoch replied, “The people that I trusted to Q1401 Dr Coffey: To give you an analogy, I used to run it, and then maybe the people they trusted. I work for a family company, and News Corp has very worked with Mr Hinton for 52 years and I would trust much the feel of a family company with its special him with my life.” Should we take it from that that structure. Although you would not want the family to Rupert Murdoch holds you responsible for the whole know about certain activities, there were certainly fiasco? clear procedures in place for any kind of—as you Les Hinton: I would not take that from it, but I did suggested—embezzlement, fraud or criminal activity resign because I was responsible for the company at undertaken in the course of the operations of the the time this happened so I think the consequence for business. Is it fair to say that that did not exist within me of what happened is fairly clear, and I wanted that News International? to be the case. Les Hinton: No, I am not saying that. I do not want to assume too much, but if there were a case involving Q1395 Philip Davies: In terms of agreeing to come some sort of criminal activity of any kind, I am sure to give evidence today, was that your decision alone it would be recorded by HR and by the legal or did News Corporation speak to you and encourage department for that purpose. you to come to give evidence? Les Hinton: It was entirely my decision. I did not Q1402 Damian Collins: Mr Hinton, I want briefly to have any discussion with News Corp about whether go back to your evidence in March 2007. Towards the or not I should come. end of that session, the Chairman said, “You carried out a full, rigorous internal inquiry, and you are Q1396 Dr Coffey: We have not met before, Mr absolutely convinced that Clive Goodman was the Hinton, but during this investigation we have had only person who knew what was going on?” Your assertions from Clive Goodman—in his letter, I think, answer was, “Yes, we have and I believe he was the that was sent to you—that he had been given an only person, but that investigation, under the new expectation that he would be able to work for News Editor, continues.” First, there never was a rigorous International again in some capacity, and that seemed internal inquiry into this matter, was there? to be supported by assertions made by Tom Crone Les Hinton: When I spoke to the Chairman in 2007, last month. So did Andy Coulson or Tom Crone ever a long time ago, we had an exchange, and by the way I suggest to you that you re-employ Clive Goodman was one of four panellists. It was a very broad-ranging after he had served his sentence? discussion about all matters involving the press, and Les Hinton: I do not recall them ever asking me to this came up a couple of times. The issue was about give him his job back, no. knowledge within the company and within the newspaper of Clive Goodman’s activities. And it was Q1397 Dr Coffey: Did anybody else ever suggest it my understanding then that there had been an inquiry to you? internally into whether or not others knew. Les Hinton: I do not remember anyone suggesting it, no. Q1403 Damian Collins: What inquiry did you think there had been? Q1398 Dr Coffey: In terms of re-employing people Les Hinton: I understand that more recently there has who have been convicted for crimes, why would that been some conflicting evidence, but you have heard be in any way considered, whether as a contractor or that solicitors were brought in with two functions: to as an employee? I am trying to understand the cultural liaise with the police to make certain that they could norms at News International in employing known get all the assistance they needed and to look at what criminals, in the case of their work, as opposed to had happened internally in relation to Clive. hitting somebody or drink-driving or something that is not connected to their work. Q1404 Damian Collins: That is not what Burton Les Hinton: I dismissed him. Copeland said. It was very clear in written evidence to the Committee that it did not conduct an Q1399 Dr Coffey: So you never had in mind that he investigation; it had a very narrow remit to liaise with would ever receive another penny in remuneration for the police. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton

Les Hinton: I understand that, Mr Collins, but what I particular e-mails, but I do not remember more than am telling you is that there was other evidence given that. and my information at the time—this is very recent— was that they had been involved in looking at the Q1410 Damian Collins: So it was Daniel Cloke’s activities of Clive in relation to other people. recommendation to you on how the e-mail review should be conducted. Did he basically say that he Q1405 Damian Collins: You seem to have a wanted to investigate the claims that Clive Goodman confused understanding of what its role was, given had made in his letter? that it is your company and given that you felt Les Hinton: The entire premise of this investigation— confident to agree with the Chairman that there had the foundation of this investigation—was a response been a rigorous internal investigation, which clearly to what Goodman had claimed. there never was. Can you confirm that there never was a rigorous internal investigation? Q1411 Damian Collins: So the review was Les Hinton: What I have told you is what my conducted, and then he sought your permission to understanding was when I answered the Chairman’s bring in Harbottle & Lewis to review that work. Is question about what Burton Copeland’s functions that correct? included, so I was answering his question honestly as Les Hinton: I am foggy on this detail. He may well I knew it at the time. have recommended that we do it, and then gone ahead and done it, but I know that the review took place. Q1406 Damian Collins: So you did not understand how limited the remit was? Is that what you are Q1412 Damian Collins: Then he came back to you saying? and told you the outcome of the work that Harbottle & Les Hinton: All I can tell you is what I have read— Lewis had done? you have read it too—and that is that Burton Copeland Les Hinton: He told me that the entire process of has written a qualifying letter, but I know what I was investigating Goodman’s claims led to nothing. told at the time. When I spoke to the Chairman, that was my understanding. Q1413 Damian Collins: Is that what he told you? Les Hinton: Yes. Q1407 Damian Collins: You had the police investigation going on, which revealed the case Q1414 Damian Collins: Did he show you the against Clive Goodman, and a law firm had been hired letter—the opinion of Harbottle & Lewis that to liaise with News International staff about that, but concluded their work? you were not aware of what their role was. Is that Les Hinton: I have seen the letter, but I do not what you are saying? actually remember Daniel showing it to me. He may Les Hinton: What I am telling you is what I was well have done, though. aware of and what I was told their role was. I did not speak personally to Burton Copeland, no. Q1415 Damian Collins: Did you ask him any questions about the review—about the work that had Q1408 Damian Collins: You did not feel that it was been done? maybe your responsibility to ask questions, given that Les Hinton: No. I relied on Daniel and Chapman— they were working on the police investigation in your two very experienced guys who had of course nothing own company? to with any of the events that may or may not have Les Hinton: The police were involved, lawyers were happened at News of the World. I relied on them as involved. I was not personally involved. professionals to conduct this; I did not scrutinise the detailed processes, no. Q1409 Damian Collins: We will come back to that in a second. Something you were personally involved Q1416 Damian Collins: Did you discuss the review with was the e-mail review that Daniel Cloke and with Colin Myler? Jonathan Chapman conducted, following the letter Les Hinton: No, I did not, except that Colin, too, I you received on 2 March 2007, which then led to the recall, told me that nothing had come up from the separate review by Harbottle & Lewis. Daniel Cloke investigation that could lead to anything. said that he agreed the terms of reference for the initial internal inquiry with you, and then discussed the Q1417 Damian Collins: When you gave evidence in outcome. Could you tell us a little about those 2009, you said that, when you brought Colin Myler conversations? On what terms did you discuss that into the News of the World in 2007, you wanted him to with Daniel Cloke? What was your reason for setting get to the bottom of what had gone wrong, to conduct the remit for the investigation that you did? seminars, to talk to people about ethics and the Les Hinton: I was not involved in specifying the company’s code of practice, and to look for any particular remit. What Daniel was overseeing was a evidence of wrongdoing. Did you discuss that remit response to the claims that Goodman had made, and with him during his time as Editor, or did you just that included the review of e-mails. On the extent to leave him to get on with it? which they were limited, I cannot recall the Les Hinton: To put Colin’s role in perspective, he discussion, but I know that it related specifically to came over at my request from New York to the News the claims that Goodman had made. I recall Goodman of the World for a series of reasons. He came over or his lawyers making particular requests for with nothing at all to do with this, and I hope that one cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton day he will forgive me. He had two functions. One Les Hinton: Well, I will leave that to your judgement. was to make sure that processes were right, and to Just to give you some context, this is a very important make sure that any measures that needed to be taken matter, which has taken on a greater scale than any of to be certain that people were well aware of the proper us could have imagined. I was, at the same time as rules of conduct would happen. I told him too that he dealing with this, relying on others, because we had a should keep talking to people, and that if he had any company with 4,000 people, numerous newspapers, cause for concern about others’ activity, he should act digital businesses and offices all over Europe and in upon it. I feel sure that he would have done and he Britain; I did have a lot of other things to do. You never raised any issues with me. can, in retrospect, challenge whether I was sufficiently inquiring, and it is a fair point, but I did not think I Q1418 Damian Collins: If I could refresh your was less inquiring than I needed to be at the time. memory, in an answer that you gave to a question from the Chairman in 2009, you said that the Editor Q1423 Damian Collins: You left the company in had “a clear remit to do two things: make sure that July this year, and before your departure, the work of any previous misconduct was identified and acted Mr Lewis to review the Harbottle & Lewis file had upon and that the prospect of any future misconduct been conducted. Rupert Murdoch talked about that would be ruled out.” Was that a brief you were giving when he gave evidence to the Committee. Did you him—to have a full review, a rigorous internal discuss that review with the Murdochs at that time— investigation, into whether there was anyone else who earlier this year? Did they ask you what had gone on had been involved in phone hacking? during that review, given that you had been in charge Les Hinton: No. He, I knew, would be speaking to of the company at the time? lots of people, which he did. He was sending out e- Les Hinton: No, I was aware that there had been a mails; he was writing and speaking to various people. subsequent review and that questions had been raised, but I was not personally involved in discussing it or I had told him as well—I attached great importance explaining that. I just became aware of what may have to the turmoil that all this had caused for the News of emerged, and I am not quite sure what has. the World—that he would just settle down the company and get people back on track. It was a great Q1424 Damian Collins: newspaper and deserved to recover from this. I wanted So did anyone in the company ask you about the Harbottle & Lewis review him to be alert and to speak to people, and if he of this year? discovered anything that he was worried about, he Les Hinton: I don’t know. I don’t think so. should pursue it. That was the extent of what I asked him to do, yes. Q1425 Damian Collins: No or maybe? Les Hinton: I am sorry, I just cannot remember. There Q1419 Damian Collins: Do you accept, Mr Hinton, were a lot of issues, and there was a discussion about based on your evidence to this Committee both in this matter, especially as it blew up. There was 2007 and in 2009, that this Committee was misled by publicity about the review, and the review of the News International about the nature of these internal review, and that was a topic, but I do not recall being investigations, how rigorous they were and whether particularly inquired of about it, no. they had led to anything? Les Hinton: It is very easy now to look back at all Q1426 Damian Collins: Did you have any this in the much more difficult environment that we conversations with the Murdochs, or the team briefing are in now. I felt at the time that what had been done the Murdochs, before they gave evidence to the was thorough, and I thought myself that it was Committee about the Harbottle & Lewis review and sufficient, and I think others did too. the internal investigations of the company? Les Hinton: Not about the Harbottle & Lewis Q1420 Damian Collins: How do you know? review, no. Les Hinton: Looking back on it now, I really look forward to understanding exactly what did unfold and Q1427 Damian Collins: But about other aspects of what we might have done that we did not. the inquiry? Les Hinton: I had conversations, going back—a Q1421 Damian Collins: But if we take what you conversation, a few months ago, in which I basically have said at face value today, you simply did not gave a narrative of my experience and what I knew know. You just left it to other people to get on with it. and what had happened. That predated by a significant You did not know if there had been a rigorous internal time the testimony of the Murdochs. investigation, because you have never been shown any evidence of it. Q1428 Damian Collins: By two or three months? Les Hinton: But I was never provided with any Les Hinton: I would guess it was early summer, yes. evidence of suspicion against people, either, so that May, maybe; I am not sure. was the important issue for me. Q1429 Damian Collins: So two months before? Q1422 Damian Collins: If you will forgive me, Mr Les Hinton: Possibly. Hinton, I must say that for somebody who has worked for a news company for 50 years, you do not seem to Q1430 Damian Collins: I ask because Rupert have a very inquiring mind. Murdoch was clearly very badly briefed when he gave cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton evidence to the Committee. He referred to the was fairly damning, pointing the finger at Jon Harbottle & Lewis review and the work of Burton Chapman for having sat on that file for years, he said. Copeland as being internal investigations to get to the Following the conclusion of that review, did Jon heart of, and find out, what was going on, and he was Chapman mention anything to you about other subsequently shocked when it turned out that things evidence that he found that may have indicated that perhaps should have been acted on at the time payments to police or potential further criminality were not. Were you party to that briefing of Rupert beyond phone hacking? Murdoch? Les Hinton: He definitely did not, Mr Farrelly. Les Hinton: I did not have a conversation with Mr Murdoch about those subjects, no. Q1434 Paul Farrelly: He said nothing at all about anything else that they had found? Q1431 Damian Collins: Not at all? Les Hinton: Nothing—nothing. Les Hinton: No. Q1435 Paul Farrelly: We have learned recently that Q1432 Damian Collins: I have one final question to the first time that Farrer’s, your former solicitors, and ask—I have got as far as I can with these questions— Gordon Taylor’s lawyers became aware of the now which touches on something else that you said in the infamous “for Neville” e-mail was at the beginning of evidence session in March 2007 on the nature of November 2007, which was still on your watch as phone hacking. I was interested in this, in terms of the Executive Chairman. We learned from their evidence culture within the company for which you worked. If that Tom Crone was made aware of the existence of you do not mind, I will read out your answer. It is that e-mail. Did anyone see fit to mention it to you? several lines, but it is helpful to set the context. You Les Hinton: I don’t remember it ever being were asked about phone hacking and journalists mentioned. I am pretty certain that it wasn’t. I think pursuing stories, and you said: “If Andy Coulson, also, in that letter, Farrer’s themselves said that they when he was Editor of the News of the World, had did not actually see the memo that led to all the called up the Metropolitan Police Commissioner and activities that you have been concentrating so much— said, ‘I have to tell you, Mr Blair, that one of my reporters was accessing a phone message, a voicemail, Q1436 Paul Farrelly: But they learned about it. and we have reason to believe that, two days from Les Hinton: Yes, but I did not learn about it, no. now, bombs will go off on the London Underground’, I doubt that Mr Blair’s first words would have been, Q1437 Paul Farrelly: It just seems that the old joke ‘Mr Coulson, you’re under arrest’. We operate in this about the mushroom seems to come to mind. You area all the time. It is not to say that we do not make seem to have been kept in the dark by quite a number mistakes or that we will continue to, but placing too of people. great an inhibition on people who are setting out to Les Hinton: Thank you. I do not actually think that explore what they consider to be genuine issues of is fair. I have seen that letter and I knew there was a public concern is a dangerous thing to do.” complaint by Taylor, as I told you more than two years When you said, “We operate in this area all the time,” ago, but I do not recall anything. In fact, I am certain you were deliberately referencing phone hacking. I am that I was not told anything about a “for Neville” e- not saying that you knew of widespread incidents of mail. I did not become aware of the “for Neville” e- phone hacking, but does that not suggest that there mail until—gosh—a year after the Taylor settlement was a culture within the company whereby almost appears to have been made. anything was permissible to find stories? Les Hinton: No, it does not suggest that at all. That Q1438 Paul Farrelly: Given all that has happened, exchange goes back to the much more enjoyable and do you consider that anybody at the News of the World freewheeling days when I would appear before this or some of your people at News International ever, at Committee and we would often have a proper, robust any stage, kept you in the dark? discourse on such things. That was a completely Les Hinton: I cannot answer that question, because I random example, and I accept ill-chosen, to do not know what happened. At some point, I want to demonstrate that journalists could find out the most know even more than you, Mr Farrelly. important things—the things that other people do not want them to know—and that, sometimes, it is Q1439 Paul Farrelly: So you would not point the legitimate to employ techniques that would ordinarily finger at Andy Coulson, Tom Crone, Colin Myler, not be used, but I did not mean to imply that phone Stuart Kuttner, Daniel Cloke or Jon Chapman? They hacking was an everyday thing; on the contrary. It was all did their best. in a day when the climate between people such as Les Hinton: I do not think it is reasonable—especially myself and this Committee was rather different from in the situation we are in now—for me to be pointing how it is now. the finger at anyone, Mr Farrelly. Damian Collins: Thank you very much, Mr Hinton. Chair: We have a few more follow-up questions. Q1440 Paul Farrelly: I have got just one final question, Mr Hinton. There are a lot of big things Q1433 Paul Farrelly: Following the Harbottle & about which you are hazy and you do not remember, Lewis inquiry, it transpired that a cache of e-mails, a but you certainly remembered that I appeared to be file of documents, was left in the safe at Harbottle & misreading from a letter in November 2009, which Lewis. When I pressed Rupert Murdoch on that, he was written by somebody else. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

Culture, Media and Sport Committee: Evidence Ev 129

24 October 2011 Les Hinton

Les Hinton: Yes. million e-mails to the police, so we can try and track it down. I think you have just said that you were aware Q1441 Paul Farrelly: Which is a remarkable of the “for Neville” e-mail in 2009. Can I just confirm contrast. Can I ask you whether there is anything else that that is the case? that you are aware of that happened in this affair— Les Hinton: I was aware of the “for Neville” e-mail about phone hacking or other potential criminality— after the Gordon Taylor settlement became public. while you were Executive Chairman at News International that is not already in the public domain Q1447 Mr Watson: Okay. You said that you believe and that you would like to share with us? that sometimes journalists needed to use techniques to Les Hinton: No, I am not aware of anything, and get information. Does that include tracker devices on since you are raising the issue of my memory, I would people’s cars? like to—in my ability to answer your question on the Les Hinton: I am not familiar with that ever being last time I read that letter, Mr Farrelly—I can only used as a device, no. thank the wonders of the parliamentary website, because I have been able to go over documented Q1448 Mr Watson: What about hacking computers? accounts. Les Hinton: I would have thought that was highly Paul Farrelly: Thank you very much. illegal, and I am not aware of that being done, no.

Q1442 Chair: I want to follow up on the “for Q1449 Mr Watson: Do you have a suspicion that Neville” e-mail. You are correct that the actual copy people might have been commissioning hacking was not made available to News International until computers now you know what you know? after you left; but nevertheless, it was then regarded Les Hinton: I have read newspaper reports and I have as significant enough to completely alter the terms of heard your own comments, Mr Watson, but I never the Gordon Taylor settlement, as you know. When you have had the suspicion of it being done in the gave evidence to us in 2009, did you not talk to your company that I had been working in, no. former colleagues just to say, “Can you bring me up to speed? Has anything happened?”? Q1450 Mr Watson: Would it surprise you if it were Les Hinton: No, I did not. In fact, I have not spoken revealed that computers were hacked now—at some about this matter to Crone, Chapman or Cloke for point in the future? years, so I did not do that, no. Les Hinton: It would surprise me, yes.

Q1443 Chair: So essentially, from the day you left Q1451 Mr Watson: Just on the point—I think my London to go to New York, you put phone hacking colleague, Damian, might have got this, but I just out of your mind until it was only recently resurrected. want to get it right. You said that you were told that Les Hinton: No. I would have loved to have been there was a vigorous investigation. Just let me know, able to do that, but I did not think much about it until who told you that? the Taylor settlement and your last invitation to appear Les Hinton: At the time that the initial arrests before you. I thought it right, in testifying before you, happened, Andy Coulson was the Editor there and he that I relied upon on my recollection, so I did not was overseeing the entire reaction to it, and my communicate with anyone else, no. conversations and the conversations which led me to tell you what I did—and I think Mr Coulson, in his Q1444 Chair: You did say that, before you appeared own evidence, reiterated it—that was the basis on before us in 2009, you had a prep session—a briefing. which I believed there had been an internal inquiry Did you not, as part of that, think to talk to anybody into who was aware of Clive’s activity. in London about whether or not any new information might be relevant? Q1452 Mr Watson: So it was your belief that the Les Hinton: No. I was sent—I think I remember— vigorous investigation was taking place as a result of several of those Q-and-A things that are hardly ever the things that Andy Coulson told you. right. There were some exchanges at the time, but Les Hinton: Andy was the man in charge of the what I did not do, because I thought it was the proper newspaper when all this happened, yes. thing to do, was start having conversations with anyone or refreshing and comparing memories, Q1453 Mr Watson: So he gave you the impression because I did not think that would be helpful to you there had been a vigorous investigation—yes or no? or right for me. Les Hinton: Come on, it’s not a courtroom, Mr Watson. I think I can answer the question the way I Q1445 Mr Watson: Just to pick up on some of the choose. He appeared to me to be very conscientious things that you have said, Mr Hinton, you said that in reacting to it. you received a Q-and-A thing. Can we have a copy of that? Q1454 Mr Watson: Have you ever met the private Les Hinton: I doubt that I have got it. I do not work investigator, Jonathan Rees? there any longer. I would be very surprised if it still Les Hinton: No. exists. Q1455 Mr Watson: Have you ever met the private Q1446 Mr Watson: I am sure that a digital copy investigator, Philip Campbell Smith? exists. The company has recently given a number of Les Hinton: No. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG05 Source: /MILES/PKU/INPUT/012695/012695_o005_db_Corrected transcript 24 10 11.xml

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24 October 2011 Les Hinton

Q1456 Mr Watson: Are you aware of any other Q1459 Mr Watson: Are you aware of payments that private investigators that were contracted to work for were made to any other public officials? News of the World? Chair: Tom, we are getting into areas which are Les Hinton: No. subject to the police investigation. Les Hinton: No. Q1457 Mr Watson: Or any other News Mr Watson: Okay. Thank you. International newspaper? Chair: I do not think the Committee has any more Les Hinton: No. questions. Can I thank you very much for making yourself available? Q1458 Mr Watson: Are you aware of payments that Les Hinton: Thank you very much, Chairman. Good were made to the police? morning. Les Hinton: No. Chair: Good morning to you. cobber Pack: U PL: COE1 [SO] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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Thursday 10 November 2011

Members present: Mr John Whittingdale (Chair)

Dr Thérèse Coffey Steve Rotheram Damian Collins Mr Adrian Sanders Philip Davies Jim Sheridan Paul Farrelly Mr Tom Watson Louise Mensch ______

Examination of Witness

Witness: James Murdoch, Deputy Chief Operating Officer and Chairman and Chief Executive Officer (International), News Corporation.

Q1460 Chair: Good morning. This is a further by them and received by them earlier. It was only special session of the Culture, Media and Sport sufficient information to authorise them to increase the Committee’s inquiry. We are examining the previous settlement offers that they had already made. evidence given to us when we were investigating phone hacking and whether or not the Committee was Q1461 Chair: Even if it was not described as the misled at that time. This morning, I would like to “for Neville” e-mail, were you made aware of the welcome back to the Committee James Murdoch, the existence of an e-mail that contained the transcript of Deputy Chief Operating Officer and Chief Executive voice intercepts, which, in Tom Crone’s word, was Officer (International) of News Corporation. “fatal” to your case? Mr Murdoch, I would like to ask you one or two fairly James Murdoch: Yes, and I think this is an important broad questions in the main area that we are point just to be very, very clear on, if I may. The e- concerned about, and then I will invite my colleagues mail that is now known as the “for Neville” e-mail to pursue more detailed aspects. First of all, you will was important for two reasons. On the one hand, it recall that when you appeared with your father before was important because it was a transcript of voicemail this Committee we spoke at some length about the interceptions that were made on behalf of the News of decision that you made to agree that Gordon Taylor the World, and that was seen as evidence, and as should receive a substantial settlement. We understood sufficient to conclude that the company would lose the at that time that the decision was taken by you, case. There was another part of that e-mail that was following a meeting with Tom Crone and Colin Myler, important, which was that it was so-called “for but that you were not made aware at that meeting of Neville”, and that it named another journalist in that the detail of why a settlement should be reached, and e-mail. That second part—that importance—was not in particular the existence of the “for Neville” e-mail. described to me in any detail, or at all. It was not As you know, we subsequently heard from Tom Crone described as the “for Neville” e-mail, and I want to and Colin Myler, who say they did make you aware be very clear: no documents were shown to me at that of the existence of that e-mail. Would you like to say meeting or given to me at that meeting, or prior. whether or not you still assert that you had no knowledge of the e-mail? Q1462 Chair: So it is now your position that you James Murdoch: Yes, and thank you very much, Mr were made aware of the existence of an e-mail that Chairman, and to all the Committee members. The was extremely damaging to your defence, which was substantive meeting that occurred on 10 June 2008 that nobody else was involved? was for the purpose of gaining the authorisation for James Murdoch: Yes, and I think as I testified in the Mr Crone and Mr Myler to increase the offer of summer to this Committee, I was made aware that settlement that they had already made on a number of there was evidence, that the transcript existed and that occasions to Mr Taylor and his lawyers. The meeting, it was on behalf of the News of the World. Its dual which I remember quite well, was a short meeting, importance, if you will—that it was the “for Neville” and I was given at that meeting sufficient information e-mail, and that it also was perhaps the beginning of to authorise the increase of the settlement offer that suspicion that other individuals were involved at the had been made, or the offers that had been made, and News of the World—was not described to me, and the to authorise them, or Mr Crone, to go and negotiate e-mail was not shown to me either. that settlement, but I was given no more than that. Certainly evidence was described to me that indicated Q1463 Chair: Right. So you did not see a copy of that the company would lose the case if it litigated, the e-mail? but the nature of the “for Neville” e-mail—the so- James Murdoch: No, I did not. called “for Neville” e-mail, in so far as it was described as “for Neville”, which it was not—and any Q1464 Chair: And were you aware of the legal wider spread, or evidence, or suspicion of a wider counsel’s opinion that had since been obtained? spread of wrongdoing, none of these things were James Murdoch: I was aware that leading counsel’s mentioned to me, including the detail and substance opinion had been obtained, but the leading counsel’s of the leading counsel’s opinion that had been sought opinion was described to me as to do with damages cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch and the estimate of damages, were the case to be that. There was no reason at the time to believe that litigated and lost. It—the leading counsel’s opinion— it was anything other than a settled matter that was in was not shown to me, nor did I have described to me the past. the other things in the leading counsel’s opinion, which I know has been provided to you, that were not Q1469 Jim Sheridan: Given the fact that it is a to do with damages. significant amount of money that could have serious consequences for the company for future Q1465 Chair: Finally, we have since learned from discrepancies, do you not think it is proper that you Farrer’s that it is suggested that there was a previous should ask, to make sure that this does not happen meeting that you had with Colin Myler, for which again? Tom Crone supplied a brief, at the end of May. Do James Murdoch: At the time, I received, and the you remember that meeting? company relied on, assertions that the police had James Murdoch: I think you are referring to a note closed their case, that internal investigations had that Mr Pike of Farrer’s wrote, describing a occurred, that two people had been successfully conversation that he had with Mr Crone. Just to be prosecuted and gone to jail, and so on and so forth. I clear, I have now seen this note—I had not seen it think it was seen as a matter that was in the past, before—and in it, Mr Myler suggests, or says, to Mr where accountability had been delivered, and that the Pike that he spoke to James Murdoch. He does not police had successfully prosecuted their case and say there was a meeting. He refers to a conversation closed it and the investigation, so there was no prompt that he allegedly had with me. Neither Mr Myler nor or reason to revisit a particular settlement matter that I recall that meeting, conversation, telephone call or it was well within Mr Hinton’s authority, as chief whatever it might have been. As I testified, the first executive earlier, to make a judgment on. and only substantive meeting and conversation that I recall about the matter was the 10 June meeting with Q1470 Jim Sheridan: Les Hinton also told us that Mr Crone and Mr Myler, although I cannot rule our your father was very concerned about the Goodman whether or not he called me, or got me in a hallway case. Why was he concerned? or something like that, for a brief conversation. James Murdoch: Very concerned about the Goodman Chair: My colleagues will return to some of these settlement, or the Goodman case? questions in more detail, but before they do, I think Jim Sheridan: The Goodman case and settlement. that Jim Sheridan wants to concentrate on events a James Murdoch: This is, again, before my time in the little beforehand. business, but I think that when a journalist was arrested at one of the newspapers in the group, it Q1466 Jim Sheridan: Good morning, James. When should have been a matter of concern for the chief you took over from Les Hinton in 2007, what did he executive. tell you about the Goodman case and the settlement? James Murdoch: First of all, in December 2007, I Q1471 Jim Sheridan: You never said to your father, returned to News Corporation as regional chairman “Father, why are you concerned about the Goodman for all of our European and Asian operations, which case?” included News International, along with—just for James Murdoch: I was not at News International or clarity—five other large entities in the area. In the News Corporation at the time. absence of a full-time CEO after Les Hinton moved to the United States to run Dow Jones, I had more Q1472 Jim Sheridan: But you are family. You do direct responsibility, for a period of time, for News speak to your father now and again, I suppose. International. At the time, Mr Hinton did not discuss James Murdoch: Yes. I don’t think we discussed the with me any of the matters around Mr Goodman. The News of the World matter prior to— entire employment of Mr Goodman, his subsequent Jim Sheridan: No, the Goodman case. arrest and conviction, and the settlement matters—this James Murdoch: Neither the Goodman case nor the Committee is aware that we have provided News of the World matter. documents—all predated my presence in the company and I had no discussion with him about it. He did not Q1473 Jim Sheridan: So you would not think to say raise it with me or brief me on it. to your father, as any normal son would do, “Father, why are you concerned?” Q1467 Jim Sheridan: Did you ask? James Murdoch: Well, he didn’t raise it with me and James Murdoch: Did I ask him about the Goodman it wasn’t anything to do with my work at the time. It settlement in particular? simply did not come up between us. Jim Sheridan: Yes. James Murdoch: No, I did not. Q1474 Jim Sheridan: The last time you were here, along with your father, your father expressed his view Q1468 Jim Sheridan: So this significant settlement that he was extremely humbled by the whole event. has been paid out, and you have not asked anyone in Do you feel the same way about your position? the company about the background to it. James Murdoch: I have had some time to reflect on James Murdoch: It was some time before I had all of these events, and it is certainly appropriate to joined. The matters affecting Mr Goodman and Mr reflect. I think the whole company is humbled by this, Mulcaire—those convictions and arrests—were well and what we are trying to do—and what I am trying over a year or year and a half before—something like to do—is learn from events from over the past number cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch of years, and trying to understand why the company Q1479 Mr Sanders: Who should have told you could not get to grips with some of the issues in front about it? of it in as fast a way as I, or the company, would have James Murdoch: It is important to remember that liked. We must learn from that. Yes, I think we are all after the resignation of Mr Coulson in 2007, Mr humbled by it, and we are trying to improve the Hinton brought Mr Myler in as an outside person who business, and improve the structures and leadership had a responsibility and remit to both clean up and across all the operating companies, to make sure that investigate the issue, and move the company and the these things do not happen again. They are something newspaper forward in a way that made sure that these that I am very sorry about. things could not happen again. If he had known— which is an if—that there was wider-spread Q1475 Jim Sheridan: On the question of things not criminality, or that there was evidence or sufficient happening again, finally, have you or News suspicion of that, I think he should have told me Corporation sought or received any technical advice those things. that would stop phone hacking in the future? James Murdoch: How do you mean, technical Q1480 Mr Sanders: When The Guardian first advice? reported in July 2009 that thousands of mobile phones had been targeted, News International responded with Q1476 Jim Sheridan: Have you, for instance, an aggressive denial of the allegations. Why did you spoken to telephone companies to say, “How can we allow that statement to be issued? stop this as a company? Is there any technical advice James Murdoch: It was the summer of 2009—a year that we can get to make sure this doesn’t happen after the Taylor matter. As I said to you when I again?” testified to this Committee, I think the company did James Murdoch: I don’t know the technical details of push back too hard. Within 24 hours of those what a telephone company might do. We have not allegations emerging—please recall that the relevant sought to advise telephone companies on the matter document, the so-called “for Neville” e-mail, was a of voicemail interceptions, no. document that the police had possession of—the chief of police issued a statement saying that that same Q1477 Mr Sanders: Good morning. Last time I issue had been a matter of careful and extensive asked you if you were familiar with the phrase, investigation by experienced detectives, and that there “wilful blindness”. You stalled for so long that your was no new evidence to warrant further investigation. father had to interrupt and answer for you. Have you As I testified to you in July, we relied on the repeated had time to consider the phrase and tell the Committee assertions from inside the company around the quality, what you think it means? scope and breadth of the internal investigations that James Murdoch: I think you described to me at the had been done in 2006 and 2007 and the repeated time, Mr Sanders, what it meant. What I have assertions and reassurances by the police, publicly, reflected on is really where in this process there were that there was no new evidence in the matter, as well places where the company could have heard the alarm as the third-party endorsement of the company’s bells, if you will, or seen them more clearly, and reflected on that dispassionately. If there was a actions in the aftermath by the PCC. Did the company mistake or a shift that we need to focus on, it was the rely on those things for too long? I think it’s clear that tendency for a period of time to react to criticism or the company did, and if I knew then what I know allegations as being hostile, or motivated today with respect to the relevant leading counsel’s commercially or politically. What we did not opinion and the details and import of the “for Neville” necessarily do was reflect as dispassionately as we documents, the company would have acted differently, might have, among all the din and clamour that and probably in a way similar to that in which we surrounds a large business such as this around the have acted in the last year to really move as world, and to try to pick out those things we could aggressively and determinedly as we can to sort this react to differently. At no point do I think the company out and make sure we put it right. suffered from wilful blindness on my part or that of others. Q1481 Mr Sanders: But, clearly, there are people in the company who knew what was going on and were Q1478 Mr Sanders: Throughout the inquiry you not reporting it to you. So who should have reported have claimed that you did not know the detail of what these things to you? was going on in your company. Do you think that James Murdoch: As I answered the question earlier, internally the evidence about phone hacking, for I believe that where evidence or sufficient suspicion example, was kept from you? of widespread criminality or allegations of it were James Murdoch: It is clear to me that in 2008, for there, it was the job of the new editor, who had come example, the information that I received about the in to, for lack of a better word, clean this up, to make Taylor case was incomplete. It is also clear to me that me aware of those things. But, on the contrary, I was in 2009, on allegations arising in a newspaper about not shown those things in 2008, and in 2009, I the Taylor case, the full extent of the knowledge or received the same assertions around the quality of evidence within the business, as well as with the those investigations and the lack of evidence that this Metropolitan police, was not made clear to me. That Committee received, and that’s something that is a is something that I am very sorry for. matter of regret. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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Q1482 Mr Sanders: The problem is that, were I a Q1485 Mr Watson: Good morning, James. After the shareholder—I am not a shareholder in your company, arrest of Rebekah Brooks, we were given legal advice but were I—I would actually expect you to know what and prohibited from going down a certain route with was going on. That begs the question: which do you our questions. Can you confirm that you have not been think is worse—knowing what was going on, but arrested and are not currently on bail, and are being wilfully blind to it, or not knowing what was therefore free to answer all the questions that I am going on, when you should have known what was going to put to you? going on? James Murdoch: I have not been arrested, and I am James Murdoch: I think it’s important to put the not currently on bail. I am free to answer questions, News of the World in the context of the scale of the and I would like to. I should say, though, that to the overall business and what the company deals with, extent that questions relate to matters of criminal and I deal with, on a daily basis. The News of the investigation or individuals who are currently World was the smallest newspaper financially of four arrested, on bail or under criminal investigation, some in an operating company—News International— of those things would be inappropriate, as you know, which was the smallest, by some measures, of all of for me to answer. the companies within the European and Asian business. This is a company of over 50,000 employees Q1486 Mr Watson: I understand that. You just said globally, and—appropriately so—senior management that you have now read the Committee submissions in the company, myself included, rely on executives from Julian Pike of Farrer and Co., as well as Tom at various levels in the business to behave in a certain Crone. That’s right, isn’t it? way. We have to rely on those people and we have to James Murdoch: The recent submissions that came trust them to be able to get the job done that they need through, yes. to do, because it is otherwise impossible to manage every single detail of a company of this scale. Q1487 Mr Watson: I would like to ask you a series of questions about those documents, for which I would be grateful for just yes or no answers. Do you Q1483 Chair: Just following on from Mr Sanders’ accept that Mr Crone prepared a detailed question, this Committee—a Committee of memorandum concerning the Gordon Taylor case, Parliament—produced a report in 2009, in which we which he sent to Colin Myler and Mr Pike on 24 said that we found it inconceivable that only one May 2008? person was involved, and we said the company was James Murdoch: Mr Crone prepared a memorandum, guilty of collective amnesia. It was published in 2010 but it was substantially narrower and did not raise and the evidence was from 2009. The result of that certain things that the leading counsel’s opinion was that your papers described this Committee and, in raised. That is a critical point to note. particular, members of this Committee as a disgrace to Parliament. Wouldn’t it have been more appropriate Q1488 Mr Watson: So that’s a yes? He sent it to when a parliamentary Committee reached that Crone and Myler— conclusion for you to have another internal James Murdoch: I would question your investigation, rather than rubbishing the Committee? characterisation of its detail. James Murdoch: I think, as I said before, at various times through this process, the company, and I am Q1489 Mr Watson: Okay. But he did send a sorry for this, moved into an aggressive defence too memorandum? You accept that? quickly, and it was too easy for the company to do James Murdoch: Yes, he did send a memorandum. I that, with all of the noise and clamour around the think it was on 24 May. business. I think that, particularly with respect to the early 2010 report, a more forensic look at the specific Q1490 Mr Watson: And do you accept that that evidence that had been given to this Committee in memorandum was prepared by Crone for Mr Myler in 2009 would have been something that we could have advance of his meeting or discussion with you? done, and I could have directed the management of James Murdoch: I don’t know that. I would assume the company to do differently, but, at that time, I had that that was the case. Certainly some of the things stepped away from day-to-day management of News in that memorandum were discussed with me in the International. But I think in hindsight, today, I look conversation with Crone and Mr Myler on 10 June. back at the reaction to the Committee’s report and think that would be one turning point, if you will, that Q1491 Mr Watson: So that’s a yes. Do you accept the company could have taken. that this memorandum acknowledges that documents recently disclosed in the Taylor case evidence Q1484 Chair: So you admit it was a mistake not to widespread criminality at the News of the World and have taken that report seriously and done something were, in Crone’s words, “fatal to your case”, and that about it? your position was very perilous? James Murdoch: Well, I think what I would say is James Murdoch: Mr Crone did use those words that the company, at the highest levels, should have around the evidence being “fatal to our case”, but had a good look at the evidence given to you in again, at no point in that memorandum did it mention retrospect, in 2009, had a proper look at that in 2010 Mr Thurlbeck, for example, wider-spread criminality and followed that trail wherever it led. with respect to phone hacking or those crucial details cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch from the leading counsel’s opinion that were left out powerful case that there is…a culture of illegal in that memorandum of the 24th. information access used at NGN in order to produce stories for publication.” Q1492 Mr Watson: So that’s a yes. James Murdoch: I don’t have that exact quotation in James Murdoch: Mr Watson, I’m sorry, I don’t think front of me. Mr Silverleaf did provide an opinion. It it is. I think you’re trying to put words in my mouth. was not shown to me at the time, nor was it discussed I think the memorandum was prepared. It did not with me in those terms in any way. I have since seen discuss those crucial elements of widespread it and yes, it concludes that there is sufficient evidence criminality, and it certainly didn’t mention those to suggest that there is wider-spread activity in illegal individuals involved. voicemail intercepts.

Q1493 Mr Watson: Do you accept that you met Q1499 Mr Watson: So you accept that, following Colin Myler on 27 May to discuss the Taylor case? the receipt of this opinion, you again met with Mr You’ve said that you weren’t sure if it was a meeting, Myler, this time with Mr Crone, on 10 June, to discuss but you accept that there was a conversation. the Gordon Taylor case, and following that meeting James Murdoch: As I answered the Chairman’s Mr Crone called Mr Pike to report on your question earlier on, I am aware of the note of a discussions? conversation with Mr Myler. Neither Mr Myler nor I James Murdoch: As I have testified to this recall that conversation. A conversation or a telephone Committee in the past, and I have written to this call could have happened, but I neither accept nor Committee in some detail on this matter, the only deny that it occurred. I have no recollection of it. substantive meeting that I recall occurred on 10 June. That is the case. It was with Mr Crone and Mr Myler Q1494 Mr Watson: But you accepted— and it was to discuss the case, but it was in order for James Murdoch: The only substantive meeting that them to receive authority to increase the settlement occurred on this subject was on 10 June with Mr offers that they had already made. Myler and Mr Crone. Q1500 Mr Watson: And after that meeting, Crone Q1495 Mr Watson: But you accepted Mr Pike’s note called Pike. You accept that. of the conversation with Myler that Myler believes James Murdoch: That seems to be what is in the was a conversation, and that he relayed the message documents provided to you. that you wanted to take the view of an external QC before deciding what action to take? You accept that Q1501 Mr Watson: Do you accept that Mr Pike’s that document exists? notes of his conversation with Crone on 10 June 2008 James Murdoch: I accept that the document exists, states that, “JM”—presumably you—“said he wanted but I don’t think it says what you are characterising it to think through the options”? as saying. Mr Myler and Mr Crone had already James Murdoch: Yes, I’ve seen that note and I don’t instructed leading counsel at that point. This is an recall—I recall leaving that meeting with a clear important point: it was not me who told them to understanding that they would increase their offer. instruct leading counsel. They had already done that. Whether or not there was some time to rest on it for Neither Mr Myler nor I recall that conversation or a minute, I don’t recall that part of the conversation. what our conversation was about at that point. Q1502 Mr Watson: Do you accept that Crone and Q1496 Mr Watson: But Pike’s note is very clear. He Myler have not had access to their office files since is under the impression that you asked Myler to get they left the company’s employment? him to instruct him. James Murdoch: It is my understanding that they James Murdoch: Mr Pike’s note says that Colin have not had access to those files. Myler said, “Spoke to James Murdoch. No options. Wait for QC’s opinion,” or something of the like. It Q1503 Mr Watson: Do you accept that Crone states, doesn’t at all say that I instructed Mr Myler to seek in his letter to us of 5 November 2011, that he believes QC’s opinion. that you had knowledge of the widespread criminality identified in his memorandum—that is my view—of Q1497 Mr Watson: But you accept that Michael 24 May 2008, and subsequently confirmed in Mr Silverleaf QC prepared a detailed opinion on the Silverleaf’s opinion of 3 June 2008, and that you had merits of the Taylor case, dated 3 June 2008? this from at least 27 May 2008 when you met Myler James Murdoch: Yes, he did, and I have now seen to discuss Mr Crone’s memorandum of 24 May? that opinion. James Murdoch: No, I don’t accept that at all, Mr Watson. I was given, at the 10 June meeting, sufficient Q1498 Mr Watson: And do you accept that Mr information to authorise the increase of settlement Silverleaf’s opinion stated that there is “overwhelming offers that Mr Crone and Mr Myler had already made. evidence of the involvement of a number of NGN Neither Mr Myler nor I remember a conversation on journalists in the illegal enquiries into [redacted]. In 27 May. Mr Silverleaf’s opinion was not shown to me addition, there is substantial surrounding material or discussed in that context, nor was any evidence of about the extent of NGN journalists’ attempts to wider-spread phone hacking, nor any reason to carry obtain access to information illegally in relation to out any further investigations, shown to me or other individuals. In light of these facts there is a discussed with me at that time. And that is what I cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch have testified to consistently to this Committee in James Murdoch: It follows that I do, yes. person and in writing over the last number of months. Mr Watson: And so do you think Mr Myler misled us as well? Q1504 Mr Watson: You failed to inform this James Murdoch: I believe their testimony was Committee of the 27 May meeting or discussion. Mr misleading, and I dispute it. Myler might not have recollection of it, but the lawyer Mr Watson: Do you think Mr Pike, a partner at does—the external lawyer. Isn’t it inconceivable that Farrer’s, the solicitors to the Queen, misled us in his throughout this two-week period you didn’t at any recollection of events? stage discuss either Crone’s memorandum, James Murdoch: I do not have a reason to believe Silverleaf’s opinion or the “for Neville” e-mail, given that, but nor do I have direct evidence otherwise. that these were the three documents that were forcing you to settle the claim, a claim that you were Q1510 Mr Watson: The last time you appeared previously defending, and to make an unprecedented before us you said, at question 155, that “the critical payment to Taylor in order to buy his silence? new facts…as the company saw them” only emerged James Murdoch: As I have testified to you, and I from “the civil trials at the end of 2010”? Is that right? think Mr Crone and Mr Myler have testified to you as James Murdoch: To my attention that is correct, yes. well, none of those documents were given to me or shown to me at the 10 June meeting or previously. Q1511 Mr Watson: But we now know that this Neither Mr Myler or I recall at the 27 May alleged statement was completely untrue. We know that conversation—we might have had a telephone call; it critical new facts were seen by the company as early was not substantive, because otherwise one of us as 2008, so who told you that it was only in 2010 that might have remembered it—and I have testified to you the company became aware? very consistently about my knowledge of evidence or James Murdoch: Well, certainly I became aware of suspicion of wider-spread phone hacking, and that is those critical facts in 2010, after the due process of what happened. The period between those days was the civil trial had uncovered some of the police one where I wasn’t in London, actually. The week evidence, in discovery by those civil claimants. before the 10 June meeting, I was in India at our television business there, and then at Hong Kong after Q1512 Mr Watson: And who was it who told you that. I only returned, late in the afternoon on the 10th, that? Was it previously— from other business in the UK not related to News James Murdoch: Previously I had received assertions International. from Mr Myler, from Mr Crone, that there was no new evidence, and that—as you had received those Q1505 Mr Watson: Mr Murdoch, let me just ask you assertions as well, in 2009 and later. again: did you mislead this Committee in your original testimony? Q1513 Mr Watson: So you also said that you James Murdoch: No, I did not. sympathised with the frustration of the Committee, and you said it was “a matter of real regret that the Q1506 Mr Watson: So if you did not, who did? facts could not emerge and could not be gotten to my James Murdoch: As I have written to you and have understanding faster.” You now know that that was said publicly, I believe this Committee was given untrue. You could have had— evidence by individuals either without full possession James Murdoch: No, it is a matter of concern, and I of the facts, or, now, it appears—in the process of my think what I have tried to describe earlier, with respect own discovery in trying to understand as best I can to how I think about what we could do differently and what actually happened here—it was economical. I how we can improve on what happened here, I think think my own testimony has been consistent. I have the amount of transparency between what was known testified to this Committee with as much clarity and by certain individuals, or at least what was seen by transparency as I possibly can, and where I have not them—the leading counsel’s opinion, etc—if that had had direct knowledge in the past, since I testified to been more transparent to me I think that would have you last time, I have gone and tried to seek answers been very important and very helpful; but it was not, and find out what happened, and where the evidence and that is a matter of great regret. is and what is there; and that is what I am here to do. Q1514 Mr Watson: So the correct position is that the Q1507 Mr Watson: So was it Mr Crone, a respected facts emerged in 2008 and this Committee was misled. lawyer and in-house legal adviser for many years? James Murdoch: The facts did not emerge in 2008. James Murdoch: Who did what? Certain individuals were aware. The leading counsel’s opinion was there. The “for Neville” e-mail, so-called, Q1508 Mr Watson: Who misled this Committee. was there. None of those things were made available James Murdoch: As I said to you, as I wrote to you, or discussed with me and I was not aware of those and I issued a public statement, certainly, in the things. Even in 2009, when a newspaper made evidence that they gave to you in 2011, with respect allegations about those things, the company relied— to my knowledge, I thought it was inconsistent and and I have testified to this fact and written to you, and not right, and I dispute it, vigorously. I will say it again—for too long on repeated assertions and assurances as to the quality and rigour and scope Q1509 Mr Watson: So you think Mr Crone misled of the internal investigations that had been carried out us? previously. And I think it relied also on the assertions cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch and reassurances made publicly by the police, who James Murdoch: Certainly not between myself and had all the relevant information, that no new evidence Mr Myler. What you are referring to is a transcript of was found, within 24 hours of the 2009 allegations, Mr Pike’s discussion with Mr Myler, as I understand for example. it.

Q1515 Mr Watson: You previously informed us that Q1521 Paul Farrelly: You probably remember this Myler did not show you the “for Neville” e-mail when note very well, Mr Murdoch, but when you said that you met him on 10 June. Did he mention it, or could you have read it as Colin Myler didn’t believe that he have discussed it with you, when you had that there was a problem in the newsroom, I read him as conversation on 27 May? saying, “I don’t believe the culture in the newsroom!” James Murdoch: No, I do not—again, neither Mr That is a completely different interpretation. Myler nor I have any recollection of a substantive James Murdoch: Okay. That is a different conversation on 27 May. interpretation. It depends where you put the—I suppose it wouldn’t be a punctuation issue, but in a Q1516 Mr Watson: Your company solicitor’s transcript, it is hard to come across. It doesn’t really contemporaneous note of his discussion with Myler matter. The point is that none of it was discussed following that meeting was that you agreed with with me. Myler to “wait for silks view” in relation to damages. The silk was your QC Mr Silverleaf, presumably. Q1522 Mr Watson: So you are seriously suggesting James Murdoch: Presumably. I would guess that is that there was no mention of the “for Neville” e-mail, what he is talking about in that. despite this being central to your discussions with Myler and Crone and, in Crone’s opinion, fatal to Q1517 Mr Watson: This opinion was being prepared your case. so you could decide what to do about Gordon James Murdoch: I want to be very, very clear, and let Taylor’s claim. me say this again. The so-called “for Neville” e- mail—now referred to as the “for Neville” e-mail, but James Murdoch: With respect to damages, is my not then referred to as the “for Neville” e-mail—was understanding. mentioned to me as evidence that was important, with respect to it being a transcript of a voicemail Q1518 Mr Watson: And it contained the words I just interception that came through and that proved it was read to you. Mr Pike’s note also states: “one result on behalf of News of the World. It was not shown to of Goodman—CG sprayed around allegations, horrid me, nor was it discussed with me, its other feature, process,—IE, NW + SK. Ross Hall, IE Associate Ed, that it was “for Neville” and that it might indicate GM, Mulcaire. wider-spread knowledge or wider-spread activities of Didn’t believe culture in the newsroom…Les no phone hacking. It was important for two reasons. It longer here—James wld say get rid of them—cut out was the evidence that was “fatal to our case”, but it cancer”. Do you accept that note? was also evidence that might have—in conjunction James Murdoch: I think actually it’s a good thing to with leading counsel’s opinion and with the focus on for a minute— appropriate transparency that I would have liked, in retrospect, to have had—led to further investigations Q1519 Mr Watson: Let me just ask you this. What and moving forward on a different footing. cancer do you think Mr Pike was referring to? James Murdoch: First of all, this is the part of the Q1523 Mr Watson: You are seriously asking me to note where Mr Pike is writing down what Mr Myler accept that there was no mention that News Group was telling him. What I can see in that note was Newspapers had actively made use of a large number actually a conversation between Mr Pike and Mr of extremely private voicemails from Taylor’s Myler, where Mr Myler referred to the “horrid telephone, as evidenced in Colin’s memo. process” of investigations and, assuming these are James Murdoch: It was only told to me that there with respect to the Goodman allegations and his were transcripts of voicemails there. Those documents dismissal claim, that he does not believe that there is that you are referring to weren’t shown to me, nor a problem in the newsroom. Then, I think crucially, it were they discussed—[Interruption.]—in those terms. really shows that perhaps he was worried about raising these issues with me, because I would have Q1524 Mr Watson: There was no mention of a said, “Get rid of them all”, and I would have said, number of News Group journalists identified by Mr “Cut out the cancer”—i.e. people who are suspected Crone at News of the World and The Sun who were of wrongdoing, we would pursue and hold obtaining access to information illegally. accountable. That was the way that I would approach James Murdoch: No. it. I think that that speaks volumes. And I think it is also why perhaps I was given a narrower set of facts Q1525 Mr Watson: After receiving Mr Silverleaf’s than I might have liked in the 10 June meeting of that opinion, you met Myler again, on 10 June, this time year—the following week and a half later. with Crone, did you not? James Murdoch: As I have testified extensively, I did Q1520 Mr Watson: It does suggest that there was a meet in the late afternoon with Mr Crone and Mr discussion at least about a culture of hacking at the Myler. I did not receive Mr Silverleaf’s opinion. Mr newspaper. Crone and Mr Pike had received Mr Silverleaf’s cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Ev 138 Culture, Media and Sport Committee: Evidence

10 November 2011 James Murdoch opinion and I don’t know what they discussed about to that, an estimate was made—I think I testified to it with Mr Myler. you of this in July—of somewhere between £500,000 and £1 million. This was what would be required to Q1526 Mr Watson: So there was no mention of a settle this case. Relative to litigating the case, losing culture of illegal information discussed at that and spending that money, it was a reasonable decision meeting. to go with the very strong legal advice that had been James Murdoch: Certainly not. received.

Q1527 Mr Watson: Do you still maintain that Q1533 Mr Watson: Why do you think Mr Crone and neither Crone nor Myler mentioned this, even in Mr Myler immediately questioned your previous passing, given the strength of words used by testimony to this Committee? Silverleaf? James Murdoch: I cannot speculate as to why they James Murdoch: Yes, that is exactly right. They did did that. not mention it. Q1534 Mr Watson: When you appeared here last Q1528 Mr Watson: Despite this information going time, you said that “outside legal advice had been to the very heart of the problem that you and they taken on the expected quantum of damages.” You were meeting to discuss, namely that Taylor have just mentioned that. “Their advice was that the settlement, they didn’t raise anything within the case would be lost and that, in the absence of any new Silverleaf opinion other than those two issues. evidence—I was certainly not made aware of any new James Murdoch: They gave me sufficient information evidence—”, as you have said again this morning, “it to authorise the increase of the settlement offers that was simply a matter related to events that came to they had already made, that they had commenced light in 2007 and in the criminal trials before I was making some weeks before, without my knowledge. there. It was a matter in the past.” Having now seen They left that meeting with the authority to continue Mr Silverleaf’s advice, do you accept that this is not to negotiate. They did not give me any of the relevant an accurate assessment of the advice received from documents that you referred to. They did not discuss external counsel, and that the Committee was misled them with me in the terms that you describe. They did by Crone and Myler on that particular point? not discuss wider-spread phone hacking, allegations James Murdoch: Can I clarify that? I think you are of wider-spread criminality or the like. Nor did they referring to my testimony with respect to that, and I discuss with me the wider findings, or wider views, stand by my testimony. That was my understanding at contained in the leading counsel’s opinion. the time, and that was precisely how I understood it at the time and why it was reasonable to make the Q1529 Mr Watson: So having waited for decision that was made. With respect to having now Silverleaf’s opinion, you did not bother to ask about seen the leading counsel’s opinion, as I said earlier its contents. this morning, it would have been better if the whole James Murdoch: As I testified earlier, Mr Silverleaf’s nature of that opinion and all of the issues contained opinion was discussed with me in the context of in it were made clear to me, but none of those things damages and estimates of potential damages that could be made, which was again the relevant were discussed with me at the 10 June meeting or information for Mr Myler and Mr Crone to leave the other meetings or conversations at all. The only meeting with authority, or implied authority, to substantive meeting was the 10 June meeting between increase their settlement offers. Mr Crone and Mr Myler. The only things that were discussed were the things that Mr Crone and Mr Q1530 Mr Watson: You talked to Crone and Myler Myler deemed sufficient for me to authorise them to for up to 15 minutes without any detail emerging increase the settlement offers that they were already about what the opinion said, other than those two engaged in making to a much larger sum. points. James Murdoch: I think if all of those other details Q1535 Mr Watson: Mr Murdoch, it is clear you are had been discussed, it would have been a lot longer not going to answer any of my detailed questions. I meeting. was not going to do this, but I feel that, given that it is in the papers this morning, I need to tell you that I Q1531 Mr Watson: Or why the opinion made it have met Neville Thurlbeck. Although the meeting necessary to offer Mr Taylor a very large payment. was supposed to be in confidence, I think there is a James Murdoch: I am sorry, could you repeat that, public interest in revealing what he said to me. I know Mr Watson? you have not seen this yet. I will make it available to you. He said to me, “No one asked of Crone, ‘Before Q1532 Mr Watson: You did not ask why the large you went in to see James Murdoch, did you discuss payment was necessary. what your strategy with him would be with anyone James Murdoch: It was made very clear to me that else?’ He discussed the strategy with me at one point. the case would be lost, that there was evidence in the What he did was this: just before he went to see case that linked the voicemail interceptions to the Murdoch and to clear the funds and to say we’ve got News of the World, and that if litigated the company to settle, he had to speak to me about what the would lose. There was an estimate of damages. transcript for Neville was all about. ‘Neville, we’ve Adding plaintiff’s costs and the company’s own costs got a problem because of this. What’s this all about?’” cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch

Q1536 Paul Farrelly: Who is this, Tom? the transcript for Neville.” Then there are large blocks Mr Watson: This is Neville Thurlbeck. of redacted text of the actual things. That is all I have seen, which is what you have seen. I saw it recently; Q1537 Paul Farrelly: Is it Colin Myler he is it was not shown to me before. I am answering your talking to? questions in as clear and consistent a way as I can.

Q1538 Mr Watson: This is Neville Thurlbeck Q1540 Chair: We published it in our report in 2010. talking to Tom Crone. “I looked at it. ‘I don’t know, You didn’t look at it then? Tom. I never received it. I don’t know.’ I’m looking James Murdoch: Yes, I think I saw the words at that at it and saying: ‘Clearly, it’s hacked. Who is it? You’d point. better speak to x. Somebody must have asked x to do Chair: We published the e-mail. this. I mean, x was asked to do so many of these by James Murdoch: With the redactions, yes. people on the newsdesk at the time. He would know. He would have to be pretty dumb [not to know]. So, Q1541 Chair: I would have hoped that you might Tom comes to me and I give him a full explanation. have looked at our report. ‘Tom, this had nothing to do with me. We discussed James Murdoch: As I testified earlier, I did look at things.’ ‘Right, fine,’ he said. ‘However, this shows the report. Mr Watson, I really can’t say what Mr that this had gone through the office. It’s gone through Crone and Mr Thurlbeck may have discussed. We are the office; it’s gone through x, through his computer happy to see that and deal with that, but my in the office, so clearly News International are recollection is very clear. All I can testify to you about culpable and we’re going to have to settle. And I’m is what I knew at the time, what I was told at the time going to have to show this to James Murdoch.’ The and what I was not told at the time. reason I can remember him saying that was because I said to him, ‘Please, do you have to show him this? Q1542 Mr Watson: Are you familiar with the word Because he’s going to assume the worst of me and mafia? he’s going to think it’s all to do with me. Is there any James Murdoch: Yes, Mr Watson. way we can get round this?’ And he said to me, ‘Nev, I’m sorry but I’m going to have to show him this Q1543 Mr Watson: Have you ever heard the term because it is the only reason why we’re having to omertà? It is the mafia term for the code of silence. settle. I’ve got to show him this.’ I said, ‘Tom, I’m James Murdoch: I am not an aficionado of such going to lose my job.’ He said, ‘Not necessarily. Not things. necessarily.’” Could that be a true and accurate account of Neville Thurlbeck’s recollection? Q1544 Mr Watson: Would you agree that it means a James Murdoch: I have no idea of the conversation group of people who are bound together by secrecy, that Mr Thurlbeck allegedly had with Mr Crone who together pursue their group’s business objectives around that. I would be very happy to see that if you with no regard for the law, using intimidation, can provide it to us at another time. But I can tell you corruption and general criminality? that at no point did Mr Crone or Mr Myler discuss James Murdoch: I am not familiar with the term evidence or suspicion of wider-spread phone-hacking particularly. I have heard it vaguely. during the meeting of 10 June or otherwise in relation to increasing the offer of settlement with Mr Taylor’s Q1545 Mr Watson: Would you agree with me that attorneys. this is an accurate description of News International in the UK? Q1539 Mr Watson: I pressed him on this, Mr James Murdoch: Absolutely not. Frankly, I think that Murdoch. He said, “This is not some vague memory. that is offensive and it is not true. I was absolutely on a knife edge. He was going to show this to James Murdoch. There’s only going to Q1546 Mr Watson: There are allegations of phone- be one conclusion he is going to jump to, which is get hacking, computer-hacking, conspiring to pervert the rid of Thurlbeck. Tom took it to him. The following course of justice and perjury facing this company and week, I said to him, ‘Did you show him the e-mail?’ all this happened without your knowledge. and he said, ‘Yes, I did.’ Now Tom can’t remember if James Murdoch: As I have said to you, Mr Watson, he showed it him now or spoke to him about it, but and to this Committee on a number of occasions, it is he said, ‘Yes, I did.’ I then said to Thurlbeck, ‘So, he a matter of great regret that things went wrong at the did show it to him?’ He said, “He said ‘Yeah’”. This News of the World in 2006. The company didn’t come is Thurlbeck saying to me what Crone said to him. to grips with those issues fast enough. We all “He said, ‘Yeah, yes. It’s all right. It’s fine. We’re recognise that. I have also acknowledged that settling.’” evidence to this Committee was given without full James Murdoch: Mr Crone, I think, testified to you possession of the facts in the past and that is that he did not show me the e-mail. My understanding something that I am very sorry for. What I can tell is now that the e-mail was subject to some particularly you, though, is that when evidence came to light and stringent confidentiality agreement with Mr Taylor’s when we finally achieved the transparency that is attorneys and the police or something like that. Mr appropriate, we have acted, and the company has Myler was part of that confidentiality ring, I believe, acted, with great zeal and diligence, to get to the but it was not shown to me at all. I have only recently bottom of issues, to improve the processes to make seen the e-mail itself, which is as described. “Here is sure they don’t happen again, and to make sure that cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Ev 140 Culture, Media and Sport Committee: Evidence

10 November 2011 James Murdoch our co-operation with the police, with this Committee Q1551 Damian Collins: It was clearly new and the like is such that we can bring any wrongdoers, information; it wasn’t information that had come out if they are proven to be so, to account. of the trials, because this wasn’t known. James Murdoch: Yes, but I think, to be clear, it was Q1547 Mr Watson: Mr Murdoch, you must be the an instance of voicemail interception that had already first mafia boss in history who didn’t know he was been part of the trials beforehand, i.e. that it was Mr running a criminal enterprise. Taylor—his voicemail being intercepted. I think that was one of the counts that Mr Mulcaire was tried on. James Murdoch: Mr Watson, please. I think that’s inappropriate. Mr Chairman. Q1552 Damian Collins: Did you challenge them Chair: Have you finished, Tom? All right. Damian when you were having this conversation? Because the Collins. Taylor case was one that—I mean, Farrer’s noted that they thought it was so weak the case ought to be Q1548 Damian Collins: Thank you, Mr Chairman. I struck out when it was filed in 2007, and yet less than would like to ask you some questions, Mr Murdoch, a year later you are authorising it to be settled for about the decision to settle the Taylor case, because up to £500,000. Did you question why this massive you have rightly said that the meeting you had on 10 turnaround had taken place? June 2008 was really about understanding what level James Murdoch: Well, the whole history of the case of settlement should be paid. And, in fact, Mr and the pleadings and whatever Farrer’s or our own Silverleaf is quite clear in his note: the brief he’d had counsel had said about it was something that predated from your company was not really, “Should we settle my involvement in the company. It was brought to me or not?”, but “How much should we be prepared to as case simply that would be lost. It was described pay and what are the tactics for concluding that briefly to me that there was evidence of the voicemail settlement?” When was the decision taken? When did interception transcript—the transcript of the voicemail you take the decision that this case had to be settled? interception—that proved that it was for or on behalf James Murdoch: I did not take the decision that it had of the News of the World, that it was open and shut to be settled. Mr Crone and Mr Myler had, previous to that the company would lose it, and that it was the meetings with me, already started to pursue that important to settle the case, because litigating the case path, and I think that has become clear in the would be costly, and it was seen as a matter of the documents that have been provided to you by Mr past. It was seen more as the end of something that Pike, after News International waived privilege on had been going on before, as opposed to the beginning those things. My understanding is that it was Mr of something new. Crone who started the settlement discussions some weeks beforehand, and it didn’t come to my attention Q1553 Damian Collins: Were you told how much until after it was necessary—they felt it necessary— Michael Silverleaf had recommended the company because the number had gotten large enough that it settle at? was going to draw my attention to it. They had already James Murdoch: I was given—I was certainly told sought to settle, or Mr Crone had sought to settle, at the number. And the number that sticks out in my a variety of levels before. mind, I think, was—I want to say four hundred and something thousand pounds plus expenses and whatnot, and I believe that was ultimately— Q1549 Damian Collins: When you gave evidence to Damian Collins: That was the ultimate— us in July, you said with regards to the settlement that James Murdoch:—the number that was settled on, you were, “certainly not made aware of any new and it may have been that that was discussed— evidence—it was simply a matter related to events that came to light in 2007 and in the criminal trials”. Q1554 Damian Collins: But were you told what the Do you still stand by that statement? number was in Silverleaf’s opinion? He gives a clear James Murdoch: That is what I understood at the view as to what he thinks the next step should be. time, and I was not made aware of new things in James Murdoch: Yes, I think in his opinion, which I 2008. Yes. did not see at the time, it was described as £250,000— possibly more—plus costs of both sides. Q1550 Damian Collins: Although you are saying now that you were aware of the transcripts, but were Q1555 Damian Collins: He was recommending an you aware the transcripts were new evidence? increase from 150, which had been offered, to 250. Certainly all the internal discussion of them that James Murdoch: Yes. we’ve seen suggests that it was regarded as new evidence. Q1556 Damian Collins: By the time you met on 10 James Murdoch: I think it was a new disclosure. I June, that had already been increased to 350. don’t remember how exactly it was described—as James Murdoch: Yes. “new” or not. It was certainly presented as, “There is evidence; here it is”. They didn’t show it to me, but Q1557 Damian Collins: So was this described to you they said, “It’s a transcript of voicemail interceptions at all—the fact that these increases were being made that have proved that it was on behalf of the News of and that you were being asked to sign off on a the World”, and that’s what I was told. payment that was potentially double what the QC had cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch recommended in his recommendation to the to increase the level of settlement. None of those other company? things were discussed with me. James Murdoch: No. The escalation of those offers, and the back and forth, is something that has come to Q1562 Damian Collins: So you made your decision light to me only recently, and it was described to me to give them consent to negotiate a settlement of up that an offer had been made. I can’t remember the to £500,000 with Gordon Taylor simply on the basis exact number of the offers that they talked about at that you were told the case would be lost, and you the time, but it had been rejected and they—Mr were told the reason it would be lost was because of Croner and Mr Myler—thought it would cost the existence of this transcript, and those are the something in the range of between £500,000 and £1 only reasons. million, but that when you added up the costs of both James Murdoch: And that there was advice, when sides of litigating, plus the damages recommended, you added in costs of both sides, that made it they thought that that was reasonable and they gave reasonable to settle at a higher level. I followed their me very strong advice that it was commercially advice to settle; I didn’t decide to settle. They had reasonable to settle. strong advice to settle and I consented to that advice of the senior legal manager for many, many years and Q1558 Damian Collins: So when you had this the editor of the News of the World, who I had no meeting on 10 June, that was the first you heard of all reason at the time to believe had anything other than this? There was no pre-briefing? You had no idea what the best interests of the company at heart in saying, they were coming to talk to you about? “This is the advice to settle.” James Murdoch: The first I’ve heard of—what did you say, sorry? Q1563 Damian Collins: Had you asked what the silk’s recommendation was—the silk’s advice you Q1559 Damian Collins: Of the fact that you were were waiting for—you would know that they were going to have to settle the case, the fact that it was asking to settle at a very high level, a level at which it might be unreasonable to accept that any court this amount of money. I mean, were you even aware would ever award that amount of damages. of the Gordon Taylor case before this meeting? James Murdoch: Well, I am not sure that’s the case. James Murdoch: Yes, it was certainly the only I think— substantive discussion that happened, as we discussed at some length earlier, this question of— Q1564 Damian Collins: That’s certainly what Mr Silverleaf seemed to suggest in his note. Q1560 Damian Collins: What does that mean, James Murdoch: But Mr Collins, if you take the though—“substantive”? What is “non-substantive”? £250,000 or more and you add in the costs, both of James Murdoch: It’s the only conversation that I Mr Taylor as well as those of News International, recall. It went into some details about authorisation to were they to pursue that, you can get to higher settle this thing and the evidence that was there. As numbers. So you have to add in both sides of those we discussed just a few minutes ago, there is this costs, which can be well over £100,000 on each side, question of whether or not there was a conversation depending on the complexity and so on. So, from the or a telephone call, or something like that, on 27 May. standpoint of the amount that was agreed, they Neither Mr Myler nor I recall it, but neither of us rule described to me that they had received counsel’s out the possibility that a brief heads-up or a discussion opinion that this amount would be appropriate. They in a hallway or a telephone call had happened. thought it was the right thing to settle, as they testified to you. They gave strong advice that it was the right Q1561 Damian Collins: In the note that Tom Crone thing to settle and I followed that advice. prepared for Colin Myler, which we have discussed earlier, the “for Neville” e-mail is only one of three Q1565 Damian Collins: Just a final thing on that, in issues that he cites with the case. The other two were terms of the advice you get. Did you ever say to them, the existence of the contract between the News of the “This has already been part of a trial”? That is what World and Glenn Mulcaire for him to obtain you understood—that is what you told us. “Why don’t information about Gordon Taylor, and also we just go to court? What is the risk? This case is information that had come to the company from the already known about. There’s only this small amount police—information relating to the Information of new evidence. The Mulcaire link to Gordon Taylor Commissioner’s work, which suggested that there is already known. One of our journalists has already were examples of other journalists at both the News gone to prison for this. There is no one else involved, of the World and The Sun who were involved in illegal there is nothing new. What are the risks of going to activities. That was given equal, if not more court?” prominence, by Tom Crone in his note. Was any James Murdoch: It was described to me that there mention of that made to you at all? was clear evidence that the company would lose the James Murdoch: No, and I think it is important just case. There didn’t seem any point in taking it all the to reiterate that the memorandum that Mr Crone way to court and taking it on if the company was prepared was not shown to me or shared with me at convinced that it would lose the case and there was any time during this period. I have since read it and an amount of damages that were possible. Rather than those things were not discussed. What was discussed go through that, it was reasonable to avoid that was simply sufficient information to get authorisation expense and distraction. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch

Q1566 Damian Collins: But did you discuss the ask anyone about it. You just agreed with Tom Crone reputational risk to the company that might come out and let them get on with it. of a case like this? James Murdoch: I was given a range where this James Murdoch: I don’t recall a particular discussion, litigation was likely to settle. I was told that, in the although I think that it was seen as dragging up damages estimated by leading counsel, they had matters of the past and as desirable not to have all sought leading counsel’s opinion that the estimates these things dragged up again. As I testified to you in plus costs for both sides would land within this range, July, I wasn’t aware at the time that there was any and I was given strong advice to settle the case. I went confidentiality, or anything out of the ordinary in along with that advice. terms of the confidentiality, but I think that I wrote to you in August, saying that confidentiality was, in fact, Q1571 Damian Collins: Honestly, it may not be the discussed between the different lawyers. That was mafia, but that is not management today. It does not something that became clear to me after the fact. sound like a textbook example of how you might settle something like this. Q1567 Damian Collins: We have been discussing James Murdoch: Again, just to put this in context, reputational risks, which are often seen as a normal while it is a large amount of money, and looking at it part of companies deciding whether to settle or not, in retrospect, we can say that more transparency because you might pay an awful lot more settling than around things like the leading counsel’s opinion and you would going to court. When Jon Chapman gave to have been able to have actually seen that, or for evidence to us, he said that many companies, other senior executives outside the newsroom to have particularly big companies, pay out because they do seen that—I don’t have any knowledge that anyone not want stuff to be raked up. Is that something that did; I certainly didn’t—would certainly have been you discussed with Tom Crone and Colin Myler? desirable, but in the context of the overall European Were you worried that other things would be raked up business, the News International business and if this went to court? businesses that I was running, this was something that James Murdoch: There was no discussion necessarily was within the responsibility of the editor and the of other things, because no other things were legal manager of News Group Newspapers. They had mentioned, but it seemed pointless to take it to court, come to me with strong advice. They described given the fact that it would probably be high profile. sufficient information to get the authorisation that they The company was certain at the time that it would were seeking, and it was left to them to manage the lose the case. It was just a question of assessing what issue. the cost of going through the process is and whether there is a way to remove that or take that cost, or Q1572 Damian Collins: This is my final question. something like it, earlier and avoid all that. You never considered any other option, other than settling the case at the level that Tom Crone Q1568 Damian Collins: Is this the way things are recommended ultimately when you had that meeting? normally settled in your business—people come to James Murdoch: I think the only options available you and say, “We have to pay out this money,” and, were to go forward litigating the case, or to settle the rather than asking why, you just say, “Okay”? case and think that through. Whether there were other James Murdoch: No. Mr Collins, reasons were given questions, I do not recall. I recall leaving that meeting to me around the relevant evidence in the case, not in with a clear sense that they would do that, and I think relation to wider phone hacking, but in relation to this that is what they left that meeting with as well, as they case, and it was very strong advice that the company testified to you. would lose the case. Q1573 Philip Davies: Just to clarify some of the Q1569 Damian Collins: But you did not challenge points that I am still a bit unsure about from the why such a large amount was being recommended. answers you have given to Tom Watson and Damian You did not ask what the QC’s opinion was on the Collins, you are not aware that the meeting took place appropriate amount to settle. You took Tom Crone’s on 27 May, and neither was Colin Myler—I get that— and Colin Myler’s word for it that that was the but do you recall at some point saying to Colin Myler, appropriate amount and that that was what you were “Let’s wait for the silk’s view,” which is what was in going to have to pay. the note to Julian Pike? Julian Pike said that Colin James Murdoch: And that they had sought leading Myler had rung him up and that you had said to him, counsel’s opinion and this is where they had come out. “Let’s wait for the silk’s view.” Do you recall saying that to Colin Myler? Q1570 Damian Collins: If you had asked, you would James Murdoch: I don’t recall that. I do want to be have got a slightly different picture. You would have clear: there is no record or assertion of a meeting; understood why. It is almost impossible now to look there is a reference to, potentially, a conversation that at the Silverleaf document and ignore why he neither Mr Myler nor I recall. It may have happened, recommends the level of settlement that he does, but I don’t have a recollection of a conversation about because of the overwhelming evidence against the waiting for the silk’s view. company that he finds. But in this case, you did. You knew none of that. You didn’t know that he had Q1574 Philip Davies: Okay. But you wanted the actually recommended a substantially lower amount opinion of the silk before you agreed to authorise? than you were now being told to sign off. You didn’t You wanted that. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch

James Murdoch: I think if they hadn’t had a silk’s thing—was discussed in any level of detail. As I have view when they came to me on 10 June, I probably said to you, exactly what was presented to me at that would have asked what leading counsel thought of it time was sufficient to give them the authority to go etc., but they did, and they came to me with a and increase the offer, but no more. recommendation that leading counsel had provided information about. Q1579 Philip Davies: And the sufficient information that you referred to, am I right in thinking that it was, Q1575 Philip Davies: Okay. The bit I am struggling first, “We’re going to lose the case” and, secondly, “If with now is that you seemed to be indicating to we lose the case, the cost is going to be £250,000 plus Damian that you were not aware of the figure that whatever the costs might be of going to court”? Michael Silverleaf had quoted for what the amount James Murdoch: Yes. could be. You understood that there were costs on top, but you just said, if I remember rightly, that you were Q1580 Philip Davies: Is that you are saying is the not actually aware of the exact numbers that Michael sufficient information that you were given to settle? Silverleaf gave. Am I right? James Murdoch: And also the existence of evidence James Murdoch: I was not provided with the that linked the particular voicemail intercept in document itself at all. It was described to me that there question to the News of the World—that is was a range, that leading counsel’s opinion had been important—as well as that leading counsel’s opinion sought and that this was a reasonable range. was that, yes, the company would lose the case and that a certain amount was arranged that was agreed Q1576 Philip Davies: It’s just that when you came upon. before us last time you seemed to be very precise about what the silk’s opinion was. When Adrian Q1581 Philip Davies: What was the basis on which Sanders asked you about this last time, your answer you arrived at the figure in terms of authorising to him was that the “advice was that the damages Farrer’s to go up to £500,000? What was your could be £250,000”, which is absolutely spot on—that rationale for authorising a level up to £500,000? is exactly what he said. James Murdoch: I don’t remember the £500,000 James Murdoch: Which, Mr Davies, is exactly what limit, but I think the advice that was given to me by I just said in answer to Mr Watson’s question. Mr Crone and Mr Myler, as I have testified to you, was that the range would be between £500,000 and Q1577 Philip Davies: But when you answered £1 million, with damages plus costs, and they made a Damian, you seemed to be saying you were not really strong recommendation that that should be pursued. entirely sure what the number was that Michael Silverleaf was saying; you just knew the number plus Q1582 Philip Davies: But Julian Pike said, when I the cost, or whatever. Usually, people come the second asked him whether they were prepared to settle this time round and they are more on the ball than they case at any price, or whether there was a cap they were the first time round; you seem to be more vague were prepared to go up to, in which case, after they this time round than you were the first time round, had reached it, they would say, “Well, that’s it. We’ve and I just wonder why that might be. been generous enough. We’ll see you in court”, he James Murdoch: Well, that’s certainly not my intent. said to me that the £425,000 was getting close to the There were a lot of numbers, I guess, going around: cap. When I pressed him, he said that the cap was we had the £425,000 that, ultimately, it settled for in £500,000. Now, that was beyond Tom Crone’s damages, plus the costs and so on. As I testified authorisation, so presumably, it must have been you earlier, I am aware that Mr Silverleaf said it could be who authorised it that they could go up to £500,000, £250,000—possibly more—in damages, and then, in because Julian Pike was very clear that that was the these considerations, you add on those costs. I am amount that he was authorised to go up to, to settle trying to be as specific and transparent as I can with the case. you. James Murdoch: Certainly, £500,000 was beyond Mr Crone’s authorisation. I believe that his authorisation Q1578 Philip Davies: The other thing is that when was much, much lower, with respect to legal you came last time round, you sort of described this settlements, which is some £10,000. To try to be clear, brief meeting on 10 June with Colin Myler and Tom Mr Crone and Mr Myler had already attempted to Crone—15 minutes maximum, I think, is how you settle this case at a number of levels before they ever described it. Today, you have twice described it as a came to me—at a variety of levels, some of which substantive meeting, which, again, seems to be a appear to be above their authority, because it was slightly different emphasis from last time round. How £10,000 for Mr Crone. do you explain the discrepancy between a short, 15- minute meeting and, now, a substantive meeting? Q1583 Philip Davies: Who had given them the James Murdoch: First of all, I think I said that it was authority to try to settle at a lesser amount than you 15 or 30 minutes; in the diary records, it is, I think, were agreeing to, but at higher amounts than they recorded as about 30 minutes—it was scheduled for were authorised to give? Who had given that that; I don’t know how long it actually took. I think authorisation? Mr Crone said to you it was 15 minutes, but I can’t James Murdoch: Certainly, in the documents that I’ve recall. I referred to it as substantive because it was the seen recently and that you’ve seen as well, it appears only meeting where this material—the question of this that Mr Crone took it upon himself to authorise a cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch settlement of £50,000, and then £150,000. I certainly of pay off an employee who has been to prison—you did not authorise that, nor the increase to £350,000 give them a quarter of a million pounds without a that came later. That was not at my authorisation, nor blink of an eye to pay them off, even though they had do I have any records. We’ve looked quite hard at been to prison and brought the company into this to find any records of other executives at News disrepute. You agree to settle cases with no real cap International who could have done so—the chief in place, just some sort of a ballpark figure that people financial officer, for example—and there is no record are left to go along with. You think that the company of any of that. should have counsel’s opinion, but you don’t ask even to see the opinion when it comes, even when it is a Q1584 Philip Davies: So Tom Crone had the substantial amount of money. authority to settle for up to £10,000, and yet, The bit I have a problem with is that you seem to completely unilaterally, he was instructing your characterise this—your sort of defence for this— lawyers to settle a case for £150,000, £250,000 cavalier approach as, “Well, this is the News of the without any authority from anyone else even though World. It’s a tiny part of our business. I really can’t his authority level was £10,000? be bothered trifling about with these sorts of things.” James Murdoch: Presumably, he, Mr Myler and Mr I used to work for Asda. I don’t know how big Asda Pike had discussed those things, but they did not come is compared to News Corporation. to me until 10 June, as I have said. James Murdoch: I think it’s owned by Wal-Mart, so it’s big. Q1585 Philip Davies: I still come back to the same Philip Davies: Exactly. Asda is owned by Wal-Mart. question: who gave the £500,000 cap to Julian Pike I am pretty safe in saying that Wal-Mart is bigger than then? News Corporation. James Murdoch: Certainly, at the 10 June meeting, a James Murdoch: I think you are very safe. range was discussed, and if that was the cap that Mr Crone wanted to give Mr Pike, that was there. I had Q1590 Philip Davies: Absolutely. I guarantee that if agreed certainly with them that, within a range, as someone had said to the chief operating officer of we discussed—something above £500,000 when you ASDA—a small but not inconsiderable part of Wal- include costs—they had the authority to go out to try Mart—“We have a problem. A legal case is going to to settle it, which is the advice that they had given me. cost us in the region of £500,000,” any chief operating officer of ASDA that I have ever dealt with in my Q1586 Philip Davies: Had you given them a cap? entire life would have said, “For God’s sake, let me You say, “Something above £500,000”, but that have a look at that.” I find it absolutely incredible that sounds like a minimum. I’m on about what the cap you did not say, “How much? £250,000? Let me have was. a look at that.” I cannot even begin to believe that James Murdoch: The point here is the damages that is a course of action that any self-respecting chief number, plus the costs to both sides to litigate it. I executive or chief operating officer could possibly don’t recall the discussion of a cap on damages, take, with so much of the company’s money and although it would have been quite normal to say, “Go reputation at stake. and have a go at this number”, but I don’t recall that. James Murdoch: Mr Davies, I think that it is important to note—I have testified to this effect, and Q1587 Philip Davies: Did you give a cap or not? I have tried to describe this to you in some detail— James Murdoch: Certainly, I didn’t imply that they that the situation we had was that a description was could settle at any number—I want to be absolutely given very clearly by senior legal counsel that the case clear about that. They gave me a range, and within would be lost, and a description of why it would be that range, I said that they could go and pursue the lost, with respect to the linkage of the voicemail settlement. intercepts. It was very clear that there was a losing case on the cards. There was an amount of money that Q1588 Philip Davies: Did they come back to seek was substantial; you are absolutely right. I was your authorisation when they had a figure that had assured that, within a range, leading counsel had been agreed? Did they have to come back for you to concurred that that was where it would, or could, say, “Okay. Let’s go with that”? settle. Within that range, I authorised Mr Crone and James Murdoch: They had authority to go to settle Mr Myler to go and negotiate that. the case within the range that they had presented to The way that the company has always operated is to me. Whether or not they came back and there was a rely on executives directly responsible for a unit of confirmation of what had happened or how it had gone the business—a paper, etc.—to go and do the things at some point in the future, there were no subsequent that they needed to do, under the assumption that they meetings with the two of them on the subject, but they would be appropriate and lawful, and that they would may have called me or had a confirmatory discussion be questioned from time to time, and come to senior that way. management with issues. I was given sufficient information to authorise that settlement. I was not Q1589 Philip Davies: You see, the problem I have is given no information; I was given sufficient that it all seems very cavalier to me—very cavalier information, and I asked the question, “Is there a with money. Given that your organisation is so leading counsel’s opinion? What do they say?” “They successful, I can’t believe that you’ve been so say that within this range is reasonable.” It was a successful by being so cavalier with money. You sort reasonable decision to settle that case—to agree with cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch their advice and take no further action—because no you in August to clarify that point. I hope that is other evidence, and none of these other issues that helpful. we have discussed today, came to light during that conversation or at that meeting. Q1593 Philip Davies: Can I just ask a final question about all this? As a result of this, do you now run Q1591 Philip Davies: At what sort of level would things differently? Do you deal with things the settlement or the advice of counsel have needed differently? Do you have a more hands-on approach to be for you to have wanted to say, “Let me have a to the way you deal with things in your company as a look at that”? How much money were you prepared result of this? Can you not see that, actually, this really to give away on the say-so of somebody who was is pretty lax for somebody in your position? authorised to give up to £10,000? The bit that I cannot James Murdoch: It is a huge focus for the business, understand is that there was a culture, apparently, of and has been for the past year, to get to the bottom of trusting executives to make the decisions, and going this issue, definitely, and to co-operate with the police with the flow and all the rest of it, with maybe a few with respect to their criminal investigations, and with challenging questions here and there. If that was the this Committee, as well as with the judicial inquiry case, why did Tom Crone have only a £10,000 limit? into the press, politicians and police that is under way. If you are happy to take his advice to settle for nearly Crucially, we should learn the lessons from these £500,000, that does not strike me as the kind of episodes and ask, “First of all, how can we improve company that said to Tom Crone, “We are only giving the on-the-ground governance of operating companies you the authority to settle for £10,000.” That does not around the world, including News International? How make sense. There is a mismatch between the culture can we improve transparency with senior management that you are trying to portray and the strict £10,000 on a global or regional basis, and operating companies authorisation limit that Tom Crone has. in various territories?” We have taken a number of James Murdoch: Mr Davies, there is a contrast here measures to do that. between controls—financial controls to make sure that You ask how. For example, at News International and things are, hopefully, recorded and authorised all of the operating companies that I have authority properly and so on, and that if they are not, they are for, we have instituted a more formal board review dealt with in the right way—and following the process. At News International, we have actually put recommendation of experienced counsel. This is the an internal board in place and appointed a chief strong recommendation of very experienced counsel, compliance officer, full time, around those things. I who had some 20-plus years as counsel of News meet outside executives—from within News Group Newspapers. A new editor had come in and Corporation, but outside News International. I meet had a fresh look at all of these issues, I had assumed. with that board; we have had one meeting already They made a strong recommendation, and I followed with a substantive compliance agenda around these it. things. The goal is to go through, in great detail, legal There are two pieces here, if I can try to be helpful. matters that are facing the company, ongoing One is the decision whether to settle, or to increase reputation risks, governance risks, compliance and so the authority, within a range of, as I recall, £500,000 on. For example, just in the last week, out of one of to £1 million, which does imply a cap—all in: costs these processes, in India we have retrained over 1,000 and so on. Then there is the decision—or rather the staff with respect to compliance and risk. These are lack of a decision—to say, “Are there other things things that I take very seriously, as I have throughout here that we should be looking at?” Again, sufficient my entire career. Clearly, the transparency that was information was given to authorise them reasonably achieved around this set of issues was not good to negotiate, within a range, the increase of the enough, and it is something that I am determined to settlement offers that they had already made, but sort out. It is something that we believe in very nothing more, and nothing to indicate any other strongly. action. There are two sets of things to consider there. Q1594 Paul Farrelly: I have one question regarding Q1592 Mr Sanders: How much of that was to do Mr Davies’s line of questioning. The 10 June meeting with confidentiality? What part of that sum was the was the first substantive meeting that you had over confidentiality element? this. They came to you to ask for authorisation to James Murdoch: As I testified to you in July, at the increase what they were offering. Do you remember meeting of 10 June 2008, confidentiality as a cost what they were offering before they came into the item, if you will, was not discussed. It was not my meeting? understanding at the time that confidentiality was a James Murdoch: I now know that the previous offer line item, if you will, that would increase the cost and they had made was £350,000, but I do not recall the so on. It is entirely customary for certain settlement exact amount that they discussed with me at that time. agreements, and settlement agreements of this nature, to be confidential. That is normal practice in many Q1595 Paul Farrelly: This is your first substantive businesses, if not all, when faced with certain legal meeting with people you have just described as having claims. As I wrote to you in August, it later became a very low authorisation limit. Did you even ask them clear to me, after my testimony to you, that in who gave them the authority to offer that £350,000, documents that had I not been privy to, or or whatever, beforehand? conversations that I was not part of, confidentiality James Murdoch: Again, I do not recall them was discussed as a cost in that settlement. I wrote to mentioning the £350,000 offer. I now know that that cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Ev 146 Culture, Media and Sport Committee: Evidence

10 November 2011 James Murdoch offer was made the week before while I was abroad, James Murdoch: I couldn’t possibly speculate about and I did not have a discussion with them about that all the conversations they might have had with each at the time. I think I would have been more focused— other. I just don’t know. I was more focused—on what the total amount would be for this to settle, given the strong advice that the Q1603 Paul Farrelly: One of the great words that case would be lost. That was what was focused on. has come out of this inquiry is that people have occasionally “refreshed” their memories. Colin Myler Q1596 Paul Farrelly: You did not ask, “Who the hell has told us that he is unable to verify details about the gave you authority to offer that in the first place?” meeting or the discussion that may or may not have James Murdoch: Their authority levels were not top taken place on 27 May 2008, because News of mind during that conversation. International has refused him access to the relevant documents—presuming some relevant documents Q1597 Paul Farrelly: To your knowledge, were any exist. Will you undertake now—so that Mr Myler can other people involved in that chain of authorisation— refresh his memory, to use that term—to give him Stuart Kuttner, for example, or Jon Chapman? access to any documents he needs surrounding that James Murdoch: To my knowledge, the authorisation meeting or otherwise? process was that I think Mr Crone was authorised James Murdoch: I can tell you that if there is an independently to make a £10,000 legal settlement. Mr occasion to review a policy around former employees’ Myler, the editor, would have been £50,000, and other access to systems, we can review that and I can come members of the executive committee—the chief back to you on that. I can tell you that I have gone operating officer, the chief financial officer—would and looked for records around my own diary with have been authorised, I believe, up to £500,000. respect to conversations during that period. I am happy to provide my calendar to you. There is no Q1598 Paul Farrelly: Did they go through any of record of a conversation or a meeting on 27 May, with Mr Myler or with anyone else, on this matter. I can those? provide you with those calendar events all the way James Murdoch: I can find no record of those through. authorisations being sought or given. We have looked, and tried to find out exactly how that escalation Q1604 Paul Farrelly: But if he has made a note of occurred during that period. it, or documents exist on his computer in there that might be helpful to us, he should surely have access. Q1599 Paul Farrelly: So as far as you are aware, it Wouldn’t you agree with that? really was the Tom Crone and Colin Myler show? James Murdoch: I think we, the company and, James Murdoch: I think Mr Crone and Mr Myler—I around all these issues, the management standards think it is in the documents given to you—were very committee—the independent management standards much driving the agenda around the Gordon Taylor committee, for that matter—have looked at all those litigation. I believe that is what Mr Chapman testified things, and if there is an occasion to revisit those, to you as well. certainly I will raise it with them.

Q1600 Paul Farrelly: I want to come to Mr Crone Q1605 Paul Farrelly: In the spirit of being open and Mr Myler a little bit later, but the memo that Tom and transparent. Crone wrote for Colin Myler was produced on a James Murdoch: Very much so, and I am happy to Saturday—a very busy day for the News of the provide you with my own calendar and notes around World—for the following Tuesday. He is clearly the entire period. expecting Colin Myler to have a meeting with you, which he says he cannot be at because he is preparing Q1606 Paul Farrelly: It is a peculiar meeting, or for a holiday. When did you first see that memo? non-meeting. James Murdoch: I did not see that memo at the time; James Murdoch: Well, I don’t think anyone is I first saw that memo recently—since I gave evidence suggesting that it is a meeting, Mr Farrelly. Mr Pike to you in July. records a note that Mr Myler told him of a conversation—so, a second-hand note of a Q1601 Paul Farrelly: So effectively that was a conversation that neither Mr Myler nor I recall. private note from Tom Crone to Colin Myler, and was Neither of us rules out the possibility of a brief not copied to you. conversation on that day—a telephone call or what James Murdoch: It was not copied to me. It was not have you—but it certainly would not have been a shared with me. substantive meeting, because otherwise one of us would have recalled it. Q1602 Paul Farrelly: Would you agree that the fact that you cannot recall having a meeting or a Q1607 Paul Farrelly: Just in terms of the way discussion—certainly Colin Myler cannot recall people are dealing with each other, you are very clear having a meeting that Tom Crone expects to happen, that you told them to go and settle, whereas the notes hence his writing a pretty serious memo—adds the made by Julian Pike of his conversation with Tom question of how these two characters are dealing with Crone are quite clear that “JM said he wanted to think each other, and whether they are being full and frank through options”. You said that that is not the case. with what they are up to? That again raises questions about what these people cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Culture, Media and Sport Committee: Evidence Ev 147

10 November 2011 James Murdoch are telling each other, and whether they are being the World. When you had this meeting, did you know honest with each other—if you are telling us the truth. who Gordon Taylor was? James Murdoch: I think Mr Crone and Mr Myler James Murdoch: I don’t recall if I knew who he was have both testified to this Committee—well, certainly beforehand, but Mr Myler would have told me, I Mr Crone did—that they left that meeting with the assume. understanding that they had the authority to go and settle; the authority that they were seeking to increase Q1616 Paul Farrelly: Did you ask in the meeting, their offer was something they left that meeting with. “Who the hell is this Gordon Taylor?”? I don’t know what that note from Mr Pike is referring James Murdoch: I don’t recall if I asked. I recall to, whether or not there was a loose end that Mr Crone being aware of it at the time. Whether it was prior to or Mr Pike or somebody had to be—I just don’t know. the meeting, or I was made aware in the meeting who Mr Taylor was, I don’t recall. Q1608 Paul Farrelly: Can I just step back on your position and responsibilities? You took over when Les Q1617 Paul Farrelly: Did you know what he did for Hinton moved over to The Wall Street Journal, and a living? you were running the international, or the Europe and James Murdoch: Well, I was told. As I just said to Asia, operations of News Corp. When Les moved, you—just to be clear, Mr Farrelly—I don’t know if I were you effectively executive chairman of News had a lot of knowledge about Mr Taylor’s role International? beforehand. James Murdoch: I was chairman of News International when Les—Mr Hinton—moved to New Q1618 Paul Farrelly: The one thing that, right from York, to Dow Jones, and did spend time, obviously, the outset of this, really showed us—and, I think, any on the business, and relied on the senior manager of 10-year-old—that the News of the World’s line did not the business, who had been in place for some time. It stack up was the fact that Gordon Taylor was not a was always the case that we, the company, would member of the royal family or the royal household. appoint a full-time CEO to replace Mr Hinton, and it Did you not say, “But he’s not royal”? took about 18 months to get to that point. James Murdoch: I think the point here is not so much whether or not I was told who Gordon Taylor was but, Q1609 Paul Farrelly: That was Rebekah Brooks? really, when I came to News Corporation in 2007, I James Murdoch: Yes, that’s Mrs Brooks. did not receive a briefing on all the matters of 2006. It was December 2007. I was aware that the editor Q1610 Paul Farrelly: In September 2009? had resigned over these things; two people had gone James Murdoch: Yes, although I think effectively it to jail and one of them was a reporter. The details of was announced in the summer of 2009, and she started the specific voicemail interception involving the royal to play a much bigger role. family, and the fact that Mr Goodman was the royal reporter—those things were not top of mind for me. Q1611 Paul Farrelly: So you are the chairman— formally or effectively? Q1619 Paul Farrelly: Okay, but you are authorising James Murdoch: I think formally I was the chairman a settlement that turns out to be substantially above, of News International. in terms of damages, what the QC is talking about, and you are not even curious enough to say, “Hold on. How come Glenn Mulcaire has hacked this man’s Q1612 Paul Farrelly: The executive chairman or— phone when he’s not royal?” when at that particular James Murdoch: I don’t recall. I may have been the time, as far as you are concerned, it is only the royal executive chairman. reporter who’s involved. James Murdoch: As I said, the details of the original Q1613 Paul Farrelly: Who was the de facto chief Goodman prosecution, in terms of his being the royal executive of News International, running the show, reporter and that it was a voicemail interception before Rebekah was appointed? involving the royal family, were not top of mind for James Murdoch: We had an executive group of a me at the time. I was given a set of information that chief operating officer, myself as executive chairman, this was a case; it was an old matter; there was no and a chief financial officer, and I instituted involving question but that it was the same Glenn Mulcaire who the editors more transparently in the business was convicted before and so on, who had been operation. working with the News of the World with Mr Goodman—but Mr Goodman I don’t believe was Q1614 Paul Farrelly: So you were executive discussed at the meeting—and there was a piece of chairman? evidence that would ensure that the company would James Murdoch: Yes. As I say, I might have been lose the case, because indeed the interception in named executive chairman, but I was effectively question was on behalf of the company. That was the executive chairman. information I was given.

Q1615 Paul Farrelly: In this meeting on 10 June— Q1620 Paul Farrelly: Did you ask, “And who the you could not have been clearer on this—the “for hell else has this Glenn Mulcaire been hacking”? Neville” e-mail, in its wider significance, was not James Murdoch: I do not believe so. I think it was mentioned; just the fact that it involved the News of known at the time that this was a voicemail cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Ev 148 Culture, Media and Sport Committee: Evidence

10 November 2011 James Murdoch interception that had already been prosecuted by the James Murdoch: It was described to me that the police. The police had said, “There isn’t anything opinion was made with respect to damages, and there more here”, and they had shut their investigation and weren’t other things there. It did not seem necessary successfully prosecuted the individuals concerned. for me to ask for a copy of it, nor was it forthcoming.

Q1621 Paul Farrelly: I have got this growly Q1627 Paul Farrelly: Do you know how widely the Australian accent rattling around in my head at the QC’s opinion was circulated? moment, who would then go on to say, “And how James Murdoch: I do not know. much more is this Glenn Mulcaire going to cost me?” Do you think your Dad might have asked more Q1628 Paul Farrelly: Do you know whether it was questions than you? circulated or asked for by Rebekah Brooks when she James Murdoch: I couldn’t begin to speculate. took over? James Murdoch: I do not know. Q1622 Paul Farrelly: And it did not occur to you to ask whether Glenn Mulcaire was doing this off his Q1629 Paul Farrelly: The “for Neville” e-mail was own bat, and who else was authorising it. published far, far earlier than our report in February James Murdoch: No, it was definitely specifically 2010. It was actually published shortly after 14 July said to me that he was doing this on behalf of the 2009, when it was disclosed to us. News of the World, with respect to this, and that was James Murdoch: It was in the newspaper allegation the relevance of the evidence that was described to in 2009. me. Chair: It was distributed to this Committee by Nick Davies, the journalist, and we then published it. Q1623 Paul Farrelly: It is remarkably incurious. Are you always so incurious with all the other businesses Q1630 Paul Farrelly: Do you remember where you that you run in News Corp? were when The Guardian produced that story and James Murdoch: I think it is important, Mr Farrelly, then, a week later, they came and these documents to be clear here that the questions were asked with were published following our session? respect to, is there evidence, what is the evidence James Murdoch: When the newspaper allegation was about, and is the case going to be lost? I was told a made, I was in the United States. I believe I was in leading counsel had provided opinion within a range Idaho at a business conference. that a settlement recommendation was made. It was not as if there wasn’t a conversation—it was not a Q1631 Paul Farrelly: At the time, were you based terribly long conversation. In my view, it was a settled in London generally? matter. I was given a very, very strong James Murdoch: Yes, I returned to the UK the recommendation by senior and experienced legal following week. counsel and the editor of the News of the World, who had been with the business for some time and in the Q1632 Paul Farrelly: Okay. Do you remember what industry for some time. I had no reason to believe, nor your reaction was? Did you ask for anything? was I provided with any reason to believe, that James Murdoch: My reaction was to understand anything further was afoot. whether or not it was true that there were further allegations, and I asked—I received a telephone call Q1624 Paul Farrelly: In terms of the QC’s opinion, from the UK. I received a copy of the article and the allegations made—was asked, “Is this true?” and it it either did not occur or clearly did not seem relevant went back to the News of the World, because Mr to you to even ask for a copy. Crone and Mr Myler had handled the settlement. The James Murdoch: I understood at the time—and it was answer came back very strongly that investigations described to me at the time—that the leading and inquiries have been made, that previous counsel’s opinion was with respect to damages. I was investigations have been made and had uncovered no given an answer about the range of damages and what new evidence at all—the same assertions and it would take to settle, with respect to what Mr assurances that you received at this Committee in Taylor’s requirements were, in terms of what he might 2009. Indeed, it was well before I returned to London. want to settle for and how to do that. That was the It was only 24 hours after the allegations in the discussion that was had and it was deemed sufficient. summer of 2009 emerged that the Metropolitan Police issued a statement saying that there was no new Q1625 Paul Farrelly: Were you not at all curious to evidence and that this had been a matter of a very ask whether the QC had said anything else? serious investigation by experienced detectives and James Murdoch: Seeing as I was told that the QC there was nothing new to investigate, which was not had been asked to opine on damages, and it was equivocal. described to me what the range of damages were, it did not occur to me to probe further. Q1633 Paul Farrelly: So when the story was published and the e-mail was published, you did not Q1626 Paul Farrelly: So you didn’t even ask how even think at that stage, “Well, I’d better have a look long this QC’s opinion is, in case you thought “If it is at these transcripts that were mentioned to me a year just a few pages long”—which it is—“I might just previously and while I’m at it I’d like to have a look have the chance to read it in the car to the airport.” at the QC’s opinion.” You didn’t ask? cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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James Murdoch: The transcripts themselves? or other third parties to access voicemails of any individual.” You will accept now that Colin Myler, the Q1634 Paul Farrelly: The e-mail. editor at the time producing that editorial and the legal James Murdoch: Yes, but as you said, there was not manager, Tom Crone, in position at the time, knew much in it. I think it was in the facsimile of it or that statement in the paper to be false. something like that. I remember the blocks of redacted James Murdoch: What I do know now is that in 2008 text and one piece there. they had access to the leading counsel’s opinion and other things. What conclusions they drew from that Q1635 Paul Farrelly: So even at that stage in the and the other things is a matter that would be middle of 2009 as the Executive Chairman of News speculation if I got into that. I think you have spent a International, you are possibly the only person in lot of time with Mr Myler and Mr Crone. I think it is London who still thinks that there is one rogue also a matter for this Committee. reporter and one private detective? James Murdoch: As you are aware, Mr Farelly, Q1639 Paul Farrelly: Similar statements were made, within 24 hours the police issued a statement, and which we referred to, about our Committee report in recall that the “for Neville” e-mail actually came from 2010. Can I just very quickly deal with Mr Crone and the police in the civil trial disclosure process. So they Mr Myler who have taken issue with you? Mr Pike issued a statement saying that there was no new has already told us that he knew that people from evidence. News International were not telling the truth, principally Mr Myler and Mr Crone, as soon as they Q1636 Paul Farrelly: You had it for a year. opened their mouths in evidence in July 2009. Can I James Murdoch: Yes, but they said that there was no add something else into the mix, as far as what Mr new evidence—the police had had it for longer than Crone and Mr Myler have told us? Originally, Mr that because it had come from them—that there was Crone told us: “I questioned Neville Thurlbeck then no new evidence, that there was nothing new to and I have spoken to him about the same subject since investigate. Secondly, the executives responsible were then. His position is that he has never seen that email, very clear that thorough investigations had been done nor had any knowledge of it.” Yet now we have an e- and that, as I said earlier on in today’s testimony, the mail that Crone sent on 24 May 2008 to Mr Pike, in company relied for too long on assurances about the which he says, “I went through the new Taylor docs thoroughness and scope and completeness of those with X today”. He said that X now remembered the investigations as well as the assurances of the police. transcript—and X can only be Neville Thurlbeck, despite the redactions, because of the context, the Q1637 Paul Farrelly: Can I just now move back to door-knock and the showdown that the e-mail refers News International and News of the World’s reaction to. Those two statements—Crone’s e-mail and what to some of these events? In July 2009 you said that he said to us—are totally at odds with each other. How they had been too quick and too aggressive in their does that reflect on Mr Crone’s reliability as a defence. When they talk about a thorough witness? investigation clearly that did not happen because a James Murdoch: With respect, Mr Farrelly, it is a thorough investigation did not even unearth the QC’s question for this Committee to judge the evidence opinion, which was pretty damning. Clearly, now you given to it. I have been very clear that I believe that will take responsibility as Executive Chairman for this Committee was given evidence by executives that failing. either without full possession of the facts, or that was James Murdoch: I think, as I said, the company— not as complete as it should have been. I am sorry for and I do share a responsibility as a senior executive that, and the company is. It is not good, and it is in the company—relied for too long on very strong something that I am determined to make sure does not assurances, both internally, inside the company, happen again. The only thing I can speak to, with around the quality, scope and thoroughness of the respect to the evidence given to you—and I have investigations that had been made on an ongoing made a statement to this effect—is that assertions that basis, as well as in 2006 and 2007, and also on the Mr Crone and Mr Myler made about my knowledge assurances from outside the company from the police were wrong. who, it is presumed, had more information and were the last word, if you will, on the investigations that Q1640 Paul Farrelly: Yes. Mr Crone also said, when they carried out and which led to two successful he came back, “For the first time he”—that’s you— prosecutions in 2006. I have said that the company “realised that the News of the World was involved relied on those things too long and I have said that I and that involvement involved people beyond Clive am sorry for that. It is something that—you know— Goodman. On that basis, he authorised a settlement.” we are determined, in how we operate the business He could not have been more categoric. Your denial going forward, that we make sure these things don’t could not have been more categoric. Again, how does happen again. that reflect on Mr Crone’s reliability? James Murdoch: I am sorry, can you repeat that piece Q1638 Paul Farrelly: The News of the World of transcript? editorial on 12 July 2009 pretty much repeated News International’s statement. It said, amongst other Q1641 Paul Farrelly: Yes. Mr Crone came back to things, that there was no evidence that News of the the Committee to say, of the settlement authorisation, World journalists had “instructed private investigators “For the first time he”—that’s you—“realised that the cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Ev 150 Culture, Media and Sport Committee: Evidence

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News of the World was involved and that involvement things do not happen again and making sure of the involved people beyond Clive Goodman. On that quality of the business that we see and that I see with basis, he authorised a settlement.” colleagues everywhere round the world, from my James Murdoch: There is a lot of supposition— colleagues in Hong Kong to Milan to Munich and would have known, might have known, should have New York and California, just to name a few—a huge known and this and that. What never happened was and great organisation that clearly, in this instance, has Mr Crone and Mr Myler showing me the relevant failed to come to grips with something important, and evidence, explaining that evidence and its relevance, part of taking responsibility is making sure to sort or talking about wider-spread criminality, the Queen’s that out. counsel’s opinion—all these things. That simply did not happen. People can suppose that I might have Q1644 Paul Farrelly: Yes or no—do you think this understood, but, at the end of the day, those things whole saga and your evident lack of curiosity about were not provided to me. asking questions that were screaming to be asked As I said earlier, I was given sufficient information— shows you to be competent or incompetent? Yes or and only sufficient information—to authorise the no? increase of the settlement offers that Mr Crone and James Murdoch: No, I do not think it shows me to Mr Myler had already eagerly been increasing in order be incompetent and I do not think, for the record, that to achieve a settlement, even before it had to come I would characterise it the same way you just did. across my desk. That is what I received; I received nothing more. Q1645 Louise Mensch: Mr Murdoch, I apologise in advance, but I am going to have to leave the Q1642 Paul Farrelly: I am just drawing to a Committee immediately after asking you my last conclusion, Chair. To be absolutely clear, if Mr Crone question. We have children the same age, I think, and and Mr Myler are telling the truth, you are not telling I have to go back home and pick them up from school. the truth; if you are telling the truth, they are not James Murdoch: Oh, good. Good luck. telling the truth. James Murdoch: Mr Farrelly, I have looked at some Q1646 Louise Mensch: When your father appeared of their testimony and it is quite interesting. There is before us in July, he promised to undertake a review a lot of supposition in it, such as, I would have known, of News Corporation’s properties all around the world they understood me to know—those sorts of things. in order to ensure that this scandal could never happen What they never did was clearly tell you that they showed me those e-mails. They never clearly told you again. To your knowledge, how is that review that they showed me and discussed with me the real coming? significance of the Queen’s counsel opinion. They James Murdoch: A number of activities are under never went that far. It was a very confusing and way. Some of them are discrete to different regions, muddled session, to be honest—I agree with that. But so the newspaper businesses in Australia, for example, it is for this Committee to decide the quality of the have undergone a review of editorial practices and so evidence and the testimony that it is receiving; it is on and so forth. As you know and as we have not for me to pre-judge that. informed this Committee, in the UK the company has set up an independent management and standards Q1643 Paul Farrelly: My final question is this: committee, reporting to the independent directors of given all the evidence that was clearly there within the board, and that review of editorial practices— News of the World, given the cost of all this, the proactively, into all of the titles; not just the News of closure of the News of the World and the loss of the the World—is well under way and is a matter of great merger with BSkyB, do you think you have handled activity and a lot of detail. I hope that that is this competently? concluded early in the new year, although that is being James Murdoch: I have spent quite a bit of time managed separately to the business. reflecting on my decisions and behaviour, and the As I mentioned earlier, from a corporate perspective company’s behaviour more generally, in this matter. and from a governance and compliance perspective, For that time in 2008 and leading up to the middle of we are making the changes that we think will 2009, I had direct responsibility as Executive hopefully ensure greater transparency around things if Chairman, as you put it. It might have been Executive they do go wrong, but also ensure the disciplines and Chairman in title—we don’t focus that much on titles. the prioritisation of matters around transparency up With respect to the settlement, for example, I think I and down the chain of the business. I actually feel behaved reasonably, given the information that I had. they are coming along well. I do not have perfect I do think—and I share in the responsibility for this knowledge of the management and standards and I am sorry for it—the company took too long to committee independent review—nor should I, as an come to grips with these issues, with understanding executive involved in this part of the business. what had been done and what had not been done in I think one of the real lessons learned here is to avoid 2006 and 2007 with respect to its own investigations, allowing—not to be too pat—the newsroom to and with understanding how to dispassionately look at investigate itself. I think having independent eyes and what were perceived as attacks as opposed to having a stronger and more proactive corporate legitimate criticism from the outside. presence when things are raised or when an alarm I think part of sharing that responsibility and part of goes off is one of the key lessons that we have taking responsibility is also making sure that those learned. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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Q1647 Louise Mensch: In advance of the Australian Q1652 Louise Mensch: So far, you are coming up Government’s inquiry into media standards over there, empty. to your knowledge, is the resignation of John Hartigan It would seem that, at best, Mr Tom Crone misled this yesterday as the head of your Australian arm related Committee in his most recent evidence. In answering either to phone hacking or to any unethical practices questions from my colleague Tom Watson, the in the Australian arm of the company? exchange went as follows: “Mr Watson: Did you James Murdoch: I am not involved in the Australian arrange for the lawyers of phone hacking victims to part of the business, but I would think certainly not. be monitored by private detectives?” “Tom Crone: No” “Mr Watson: Did you arrange for a dossier to be Q1648 Louise Mensch: Okay. To your knowledge, kept on them and follow up on their private lives?” how many other News International papers have been “Tom Crone: No.” “Mr Watson: Have you ever hacking either phones or e-mails, other than the News received or commissioned reports on the civil case of the World? lawyers that involved private investigators?” “Tom James Murdoch: The management and standards Crone: Let me just think about that last question. I committee—the investigation is under way. I really do may have in litigation—certainly not in the last few not want to prejudge the outcome of that investigation. years, but a long time ago maybe—I might well have It is an important investigation. If there is evidence used, I probably did in fact use private investigators”. that is found, there will be matters of criminal Is it not in fact the case that, as recently as May 2010, investigations as well. As you know, a journalist at Mr Crone instructed Farrers, News International’s The Sun was arrested recently, which is a matter of solicitors, to look into the personal relationship that great concern, but I also think it shows how seriously may or may not have existed between Mr Lewis and we are taking these issues. The company is moving the lawyer Charlotte Harris, also representing the determinedly to provide whatever information there is victims of phone hacking? to the police in those instances. But that matter is a matter of a criminal investigation, and I should not James Murdoch: Mr Crone and another News of the talk too much more about it. World employee at the time did engage certain private investigators—I am not sure of the details around that Q1649 Louise Mensch: I might ask the counsel as you describe it—to surveil plaintiffs’ lawyers. I whether it would be in order for you to say not which want to say for the record that it is appalling. It is journalists but which papers—that is all I ask—in something I would never condone and the company News International have, to your knowledge, been should never condone. It was shocking when I found involved in the hacking of phones, because that would out, and it is just unacceptable. not prejudice any individual police investigation. James Murdoch: At this point I have no knowledge Q1653 Louise Mensch: When did you discover that of any of the other papers being involved in the the lawyers of plaintiffs had been put under hacking of phones, but I do not want to prejudge the surveillance by News International? management and standards committee work, and nor James Murdoch: Very recently—the last few weeks. have I seen all the work that it is doing. It is important to say that that was absolutely not a corporate activity that was condoned, and it is Q1650 Louise Mensch: When last you came before absolutely not appropriate. Mr Crone and the other us, I asked if you were aware of the allegations that person did not do that with any authority or any victims of phone hacking had been hacked on knowledge by me. I would never condone that American soil, and you said that you were not aware behaviour. of any such allegations. Since that time, Mr Mark Lewis, the lawyer for the victims, has told us that he Q1654 Louise Mensch: Does your internal review of is representing victims who were hacked by News the evidence suggest—you are stating for the record— International journalists on American soil. What do that Mr Crone authorised that surveillance of you know of that matter today? victims’ lawyers? James Murdoch: I know that it is a matter of activity James Murdoch: There was surveillance that was for the management and standards committee. It is done by Mr Crone and another executive at the News looking into that and co-operating with the police here and the ongoing investigations, as well as with any of the World. Which private investigator and what bits matters in any other jurisdiction with respect to between them, I do not know, but they were involved activities of the UK newspapers. I have no knowledge in that. of the veracity or substantiveness of those allegations. Q1655 Louise Mensch: Are you aware that Mr Q1651 Louise Mensch: So you have no knowledge Lewis’s family, including his 14-year-old daughter, of those international claims. Do you still have no was trailed by private investigators? Would you agree knowledge—you stand by your earlier testimony— with me that that is completely despicable and has that 9/11 victims or their families were hacked by absolutely no place in the practices of a modern agents of News Corporation? media corporation? James Murdoch: That is correct. A lot of James Murdoch: I totally agree with you. I was not investigation and a lot of work has been done on that aware of that allegation, but if it is the case, as I have subject, and, so far, there is nothing to confirm it, as I just said, the whole affair is just not acceptable and understand it. not on. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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Q1656 Louise Mensch: Are you aware that private in as timely a way as possible about any behaviour investigators investigated my colleague Tom Watson, that is unacceptable or illegal, we are seeking to deal and other members of this Committee and the with it. We are dealing with it with full co-operation predecessor Select Committee—in fact all members of with the police investigations that are ongoing and by the predecessor Committee—during the time of their being as transparent as we can, given that criminal investigations into your company? investigations and a judicial inquiry are ongoing, with James Murdoch: I am aware of the case of the any other inquiries that come through. surveillance of Mr Watson; again, under the circumstances, I apologise unreservedly for that. It is Q1658 Louise Mensch: So just to be completely not something that I would condone, it is not clear—obviously you will need to clear all this with something that I had knowledge of and it is not the police so that you don’t prejudice ongoing something that has a place in the way we operate. I criminal investigations—for those matters that the think it is important to note that certain surveillance police allow you to release, as a leader of the of prominent figures in investigative journalism and company, Mr Murdoch, will you guarantee to this things like that is acceptable but, in this case, that is Committee now that you will publicise every absolutely not acceptable. You have my unequivocal nefarious practice that has happened in your company statement to that effect and my apology on behalf of to do with the scandal and allow it to be known before the company—even though I did not condone it, The Guardian or others expose it on Newsnight or in would not condone it and don’t agree with it. other media outlets? Will you come forward and admit wrongdoing where you have evidence of it and where Q1657 Louise Mensch: I’m sure that Mr Watson will such admission will not prejudice a police have some follow-up questions on that later. investigation? May I put it to you, Mr Murdoch, that it seems that James Murdoch: First of all, I just want to be very every month, if one is following the hacking scandal clear about the corporate governance structure that we here in the United Kingdom, there is another set of set up recently around these matters. The disclosure revelations about unethical behaviour by News of information—alongside with and to the police—is International executives? The latest is the scandalous a matter of utmost importance to the management and revelation of surveillance of the lawyers of victims standards committee, and the independent and those lawyers’ families, and of members of the management and standards committee is responsible Select Committee investigating the company. You for information and disclosure around judicial have spoken repeatedly here today about the review inquiries, new press practices, and so on and so forth. of practice in your newsroom and referred to the need It is absolutely in my interest to be as transparent as to clean up your act, and to how proactive the possible and to avoid these things, which was why in company is trying to be in cleaning up its act. Do you April this year, when the company admitted liability not agree that it would be better for News Corporation to wider-spread phone hacking, we set up to make a clean breast of things and get out in the compensation schemes, asked victims to come open every unethical practice that has yet to come to forward and apologised unreservedly to victims of light, thereby avoiding the drip, drip, drip of those voicemail interceptions. We have asked incredibly damaging revelations that seem to come out repeatedly for information to come forward that can week after week, month after month, in relation to help us get to the bottom of this, underscore the issue this scandal? and move forward in a way that is as transparent and James Murdoch: I think it’s important to note that appropriate as possible. much of the disclosure around these activities around police payments and phone hacking really started to Q1659 Louise Mensch: When Mr Crone and Mr come to light as we came to grips with this. Much of Myler last appeared before our Committee, I put it to the disclosure has actually been by News Corporation Mr Crone that his credibility had been damaged by and News International: first of all in respect of the the contradictions in his testimony versus his initial disclosure around a journalist who was since testimony before the Committee in 2009. It will arrested in January this year, which led to the obviously be further damaged by the revelation that restarting of the police investigation into the News of he said he did not authorise surveillance on victims’ the World and the phone hacking pieces, with the families and lawyers, when clearly he did—and not a disclosure of sufficient evidence that we thought that long time ago but as recently as May 2010. Since your the police should open an investigation into police answer to me shows that News International did know payments as well. That was something that was there that Tom Crone had authorised this surveillance, why that we didn’t know about previously. When it came did you not write to the Committee to alert us that the to light, we acted very quickly. evidence that we were given by Mr Crone in Since the end of 2010, as the company has found September was not true? things out and discovered the extent of what has been James Murdoch: My understanding is that this suspected of happening—again, a lot of it is a matter information came to News International’s attention for police investigation—we have sought to be as very, very recently—in the last few days or weeks— transparent as the company can be. That is certainly and it is something that was not known to us and the posture of the business, of the chief executive of confirmed. the business, of the management and standards committee and at the board level of News Q1660 Louise Mensch: So you would have done had Corporation. To the extent that we can be transparent you had more time to look at it. If you knew that we cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch had been misled by Mr Crone, you would have James Murdoch: If you would like, Mr Watson, supplied that evidence to the Committee. perhaps you could write to us and we could go James Murdoch: I do not know exactly when others through all of that and be as fulsome as possible. in the company became aware of it, or our legal counsel and so on, but, again, on the matters to Q1667 Mr Watson: Given that we are talking about disclose before this Committee, I have tried to be as private investigators, I would like to ask you now. complete as I can in sending you documents and Could you also examine the activities of the private things that we have understood and found out since investigator Barry Beardall? my last testimony. James Murdoch: I am not aware of the individual Louise Mensch: I am sure that you would agree that identities of private investigators that were used, but only News Corporation can clear up this mess, so I perhaps it would be helpful, Mr Watson, just to clarify wish you luck in pursuing your ethical review of the one of the things that the company is doing around company. Thank you. this. The use of private investigators clearly has been, Chair: Given the line of questioning that Louise in the industry and by the News of the World, too pursued, it is only fair to allow Tom to come in. widespread, and I have just apologised to you and to the other members of the previous Committee, as it Q1661 Mr Watson: James, you will be aware that was described to me, for what was inappropriate the convicted private investigator Glenn Mulcaire surveillance. One of the things—one of the key targeted Prince William. That came out in the original changes—that we have put in place over the last year inquiry. This week we have found out that the private is that the use of private investigators, in particular, is investigator Derek Webb also targeted Prince William. severely restricted by the journalists at News You will probably know, but it has not been publicly International. In fact, no private investigator, under confirmed, that the private investigator Jonathan Rees our new guidelines and new rules around this, can be targeted at least one friend of Prince William in 2006. hired or contracted by a newspaper without the editor Is that right? going to the chief executive of the company for James Murdoch: I was not aware of that particular approval, so that the use of these private investigators piece, but I may have been—I do not recall. does not get out of hand and is only in extremis done for appropriate public interest purposes. Q1662 Mr Watson: I know that because I have an invoice from News International Supply Company Ltd Q1668 Mr Watson: Under the circumstances, Mr from Jonathan Rees regarding that, so can I ask that Murdoch, I would like to say that that is a great relief you check out your company e-mails and let us know to me. when Jonathan Rees was contracted to work for the James Murdoch: I am glad. It is something that we company when he came out of prison in 2005, how look forward to having in place. long he worked for the company, what he did, and who appointed him? Q1669 Mr Watson: We do agree. At last. James Murdoch: I do not see that there is any reason Are you aware of the Serious Organised Crime why we could not show that. I think it has been known Agency investigation codenamed Operation that he worked for a number of news organisations, Millipede? including News International. James Murdoch: Operation—No, I am not aware of that. Q1663 Mr Watson: He worked for a number of news organisations in the late ‘90s and then he went Q1670 Mr Watson: I won’t go there, don’t worry. I to prison for a serious crime. He got a seven-year am just asking if he was aware. Can you let me know sentence. When he left prison, he was then contracted whether the company admitted liability to e-mail to work for what we now know is News International hacks during any of the settled civil cases? I am Supply Company Ltd and did a number of pieces of thinking of Taylor, Miller or Clifford. work for the company. Could you check the invoices James Murdoch: I do not believe so. I am not aware and let us know what that is about? of any of that. James Murdoch: Absolutely. If you provide those with us, we can check those and come back to you. Q1671 Mr Watson: If it is subsequently found, could you go back and let us know if that’s the case and Q1664 Mr Watson: Are you aware of any other write to us if you did accept liability? You’ve got private investigators that targeted Prince William? some lawyers with you. James Murdoch: I am not aware of any other James Murdoch: I will consult with counsel about private investigators. that to hopefully clarify those things, but I am not aware of any of the computer hacking that you have Q1665 Mr Watson: Could you let us know what the talked about in the past. activities were for the private investigator John Ross? Mr Watson: Your lawyers behind you might be able James Murdoch: It is the first time I have heard that, to let you know whether that’s a yes or a no. so if you want— James Murdoch: Would you like me to talk to them now, or can I write to you at some point in the future? Q1666 Mr Watson: He worked for you. And Alex Mr Watson: Yes, if you just ask them now. We’ve Leighton? got a bit of time. Yes or no. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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James Murdoch: They would like to get back to us. of any other discussions with him about this or other They are not aware. matters. Mr Watson: Okay, thank you. Q1672 Mr Watson: Okay. At the News Corp AGM a few weeks ago, board director Viet Dinh told me Q1679 Steve Rotheram: Mr Murdoch, did the lack that he would investigate allegations of computer of appropriate corporate governance give a false sense hacking. Has he discussed that with you? of security that News International was untouchable? James Murdoch: No. Mr Dinh has oversight authority James Murdoch: Mr Rotheram, I don’t quite at a board level for the work that the management and understand your question. I wouldn’t say that there is standards committee is doing, and I would understand a lack of appropriate corporate governance. I think we that it’s on the agenda for the management and had an instance here, as I have testified— standards committee and is being pursued with vigour. Q1680 Steve Rotheram: You’ve changed the Q1673 Mr Watson: Are you aware that former Army corporate governance. intelligence officer Ian Hurst has now had it confirmed James Murdoch: We have tried to strengthen a that he is a victim of computer hacking? number of procedures, but from a governance James Murdoch: No, I am not aware of that. perspective I would not call this a failure of governance. I think there was a failure in Q1674 Mr Watson: And that 16 others associated transparency. We had individuals who were not with him have had their e-mails illicitly read? making transparent information that was relevant and James Murdoch: No. could have been more consequential to a higher level, Chair: Tom, I am advised that you are straying into and what I have tried to do is strengthen some areas that could relate to the police investigations. procedures around that to make sure that there’s more transparency there. Q1675 Mr Watson: Okay. This is about me, Steve Rotheram: I did not mention “failure”; I said Chairman. You may be aware or may not be aware, “lack of appropriate corporate governance”. given the line of questioning, that Operation Tuleta James Murdoch: Okay, lack. Sorry. My apologies. contacted me last week to say that my name appears on seized electronic devices and they need more Q1681 Steve Rotheram: You said earlier that you information to rule me out as a victim. Are you aware wanted to strengthen it, so obviously there must have of that? been some flaws in the corporate governance, but is it James Murdoch: I have no knowledge of that. not the case that you failed to show the urgency or the will to deal with unethical practices at News Q1676 Mr Watson: Okay. I thank you for your International because, quite frankly, successive chief apology, on behalf of the company, for the executives since 1989 have believed that they could surveillance undertaken by private investigator Derek do whatever they wanted and get away with it? Webb. Can I bring to your attention a conversation that I had with another former senior employee of James Murdoch: I cannot possibly speak to what News International on this matter, who has asked to chief executives in the past had believed they could remain anonymous because they are frightened about do and what they couldn’t. I can say that as soon as the consequences? He said to me in relation to the evidence came to light to me—unequivocal original inquiry and members of this Committee: “The evidence—around wrongdoing this company has diktat went out, you know, ‘Dig up as much moved with determination and with vigour to sort this information as you can on the members of the out. I think it is very, very important that the company Committee’.” Do you know who might have sent out takes responsibility for what happened, both with that diktat? respect to liability with victims of illegal voicemail James Murdoch: No, I have no knowledge of that. intercepts, which the company did and which I fully support, as well as move to make whatever changes Q1677 Mr Watson: He said to me about Rebekah are necessary, and pursue with vigour whatever Brooks—you might find this amusing, you might not: allegations arise to make sure that (a) people who are “She didn’t like you at all”—that’s me—“she took an involved in wrongdoing are held to account and we absolute pathological dislike to you. She saw you as aid the police to do that, and (b) that we make sure, the person that was threatening.” Did Rebekah Brooks to the extent at all possible, that these things don’t discuss my line of inquiry on the investigation with occur again. I don’t think that there’s been—certainly you? not in my experience in the company—a sense that James Murdoch: Not that I recall, no. anyone is untouchable, actually. What we want as a business—what we want to be—is a business that Q1678 Mr Watson: He went on to say to me: “She aspires to be where we are, doing the good work of tried to smear you as being mad. She was saying to serious journalism, of serious creative endeavour Blair, ‘You’ve got to call this man off. He’s mad. outside in our other businesses, and that these things Don’t you realise he’s mad?’” Did you discuss the don’t happen in the future. inquiry, or do you know whether Rebekah Brooks discussed the inquiry, with Tony Blair? Q1682 Steve Rotheram: Do you understand the James Murdoch: I certainly had very little to do with significance of the date I gave—1989? the former Prime Minister, and I have no knowledge James Murdoch: Pardon me. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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Q1683 Steve Rotheram: Do you understand? It’s is it, I think, appropriate to prejudge what actions the me scouse accent. company might take to deal with those. James Murdoch: No, it wasn’t that; it was just something—I’m sorry. Q1692 Steve Rotheram: You don’t rule it out? James Murdoch: I don’t think we can rule, and I Q1684 Steve Rotheram: Do you understand the shouldn’t rule, any corporate reaction to behaviour of significance of the date I gave, which was 1989? wrongdoing out. That will be a decision taken at the James Murdoch: I think I know where you’re going. time, given whatever is out there. I don’t think it would be right to rule out any behaviour, but Q1685 Steve Rotheram: Okay. Do you want me— it is important not to prejudge any outcomes James Murdoch: Are you referring to the from the investigations. There are important police Hillsborough coverage in The Sun? investigations, and there are important internal investigations that we are actively pursuing to make Q1686 Steve Rotheram: I am, of course I am. sure that our papers are as good as they can be, and Absolutely. It is the case that the reference to 1989 is that they can keep the trust of their readership and because that was when The Sun newspaper published continue to perform the important role that they lies about the Hillsborough disaster under the banner have—that I believe that they have—in their headline, “The Truth”. The question that I would like communities. you to answer is, did the fact that The Sun got away with telling outrageous lies in 1989 lead News Q1693 Dr Coffey: Mr Murdoch, you’ve now seen International into believing they could do whatever the opinion of leading counsel, Michael Silverleaf. If they wanted without reproach? any employee had seen it, according to your James Murdoch: All I can say about that, and I would governance and your code of conduct within News like to say it clearly, is that I would like to add my Corporation, should that have been reported, and to full apology for the wrong coverage of that affair. I whom? would like to add that voice to successive editors of James Murdoch: I think—I am not aware of the The Sun and chief executives of News International requirements in the code of conduct with respect to who, since that incident, have apologised. I would like legal counsel being received and who it must be to add my voice to that as well. It was wrong to do shown to and not shown to. I would say that, given so. It was 22 years ago, and I was far away and a the findings and content of that opinion, it certainly much younger person. Obviously I had no would have been appropriate for it to be shown to involvement, or really proximity to it, but I have since more senior legal counsel in the company, away from looked at it. I am aware of the concerns and the hurt the News of the World, as well as in full to me, for that it caused, and it’s something that we are very example, and others. sorry for, and I am as well. Q1694 Dr Coffey: Okay. So far, you have asserted Q1687 Steve Rotheram: Is it in the public interest that you did not see the opinion and certainly were to tell lies? not briefed on the full contents of it. James Murdoch: James Murdoch: Certainly not. That is correct.

Q1688 Steve Rotheram: Okay. You mentioned that Q1695 Dr Coffey: I cannot find at the moment any a journalist at The Sun had been arrested earlier. Did evidence that definitively says that Mr Myler saw the employees working at The Sun newspaper opinion or was briefed on the full extent of it, but commission phone hacks? something’s happened between 2008, when it is clear, James Murdoch: It would be inappropriate for me to certainly, Mr Pike had it, because he was amending it, comment on any of the circumstances around what and also it’s a strong suggestion that Mr Crone was provided by— certainly saw it. Nobody else seems to have been made aware specifically of certain allegations. Q1689 Steve Rotheram: No individuals, just— However, 18 months later, there is so much evidence James Murdoch: I shouldn’t probably comment on that it is brought to your attention, so who brought it the charges or anything like that either, Mr Rotheram. to your attention at the end of 2010—this whole I hope you understand. business with Sienna Miller and all the other civil litigation? Was it Tom Crone who came forward? Q1690 Steve Rotheram: Are you aware that the James Murdoch: It was a matter—No, first of all, words “The Sun” appeared in the evidence file of there were a number of civil actions that were convicted private investigator, Glenn Mulcaire? following their process as it went through. It was James Murdoch: I was not aware of that. certainly in the second half of 2010 that the company—I was not at this point involved in the day- Q1691 Steve Rotheram: Okay. If this particular to-day management of the company—started to publication is implicated in phone hacking, and if it’s grapple with this. The company went and proactively revealed that The Sun does appear in the Mulcaire file, requested both the police and the newspapers that will you close this paper, like you did with the News were reporting this—I think it was referred to as a of the World? drip, drip of allegations out there—for the evidence James Murdoch: I think, Mr Rotheram, it’s important that they had. Up until the end of 2010, the police still not to prejudge the outcome of any investigations, nor asserted that there was nothing new that they saw as cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

Ev 156 Culture, Media and Sport Committee: Evidence

10 November 2011 James Murdoch worthy of opening up a new investigation, but, requirements to the extent that, for a time, they were certainly, the company decided, and the management banned in the company. As the new chief executive company decided, that if evidence emerged in the civil and the management and standards committee work cases, that was sufficient to warrant further through that with the editors in terms of what sort of investigations—that the company would act on that petty cash arrangements should be made, those things very quickly, and the company did. I don’t recall who have been adjusted a little bit. But the cash payment came to me precisely to discuss that, but it was a terms are dramatically tightened up, and I think are matter of discussion among a number of senior rare at this point, if at all. I would be very happy to executives at the end of 2010. send you the policies and guidelines that have changed. When the management and standards Q1696 Dr Coffey: So you said no to Tom Crone committee’s recommendations are finalised after their earlier. Could it have been Colin Myler? Could it have investigations are complete, we intend to be very been Rebekah Brooks? transparent with respect to both practices and a code James Murdoch: Mrs Brooks, as the chief executive of conduct on journalistic practices, but also things at the time, was certainly involved in those activities. like cash payments. She was running the company until the summer of 2011. Q1700 Dr Coffey: Building on that, it sounds like Q1697 Dr Coffey: Just going back to the transcript you have made some changes, so would it now be of Julian Pike’s notes of his call with Colin Myler on fair to suggest that there are controls perhaps on the 27 May; it has already been read out largely by Mr maximum amounts that can be paid out by a single Watson. It talks here about “didn’t believe culture in person to another person within a certain time frame? the newsroom”—we have already had that discussion; James Murdoch: Very much so. editors and below did not know a lot—and “here investigation into IE, NW, SK”. Were you ever made Q1701 Dr Coffey: When you provided evidence aware of the outcome of that investigation into those back in July, you suggested there were no aggregate three individuals? limits. James Murdoch: I received, throughout the period James Murdoch: I think right now there are very from 2009 onwards, after the allegations came out in strict limits. I do not have at my fingertips the exact the newspaper, repeated assurances that internal numbers of those limits. Not only are there limits, but investigations had been conducted, that they were the number of people who can make cash payments thorough, that they had concluded that there was no and authorise them has been restricted dramatically. evidence whatsoever of wider-spread phone hacking. That was something that was repeated I know to you—to this Committee—in 2009, and those were the Q1702 Paul Farrelly: I want to ask a final question same assurances that I was being given as well, also on Mr Mulcaire and his legal costs and damages, by the public statements of the police at the time. which I raised when we last met. Just before I do that, this whole inquiry is really about this Committee Q1698 Dr Coffey: Further in the note, there is a being misled, and therefore essentially what News reference to “have e-mail from member of staff”. International knew, who knew it and when they knew Nothing is written about it. Is it possible for you to it. As part of what you call an aggressive defence, on give us some assurance—or at least go away and 28 February, in reaction to our report, two members of make sure that this happens—that such evidence has the Committee were named in the News of the World been presented to the police as part of their editorial. Tom Watson was not called “mad”; he was investigation? called “Top toadie”, and I was a former journalist on James Murdoch: Certainly so. First of all, co- The Observer mainly pursing an agenda from my pals operation with the police and providing them with at the left-wing rag. It went on to say, “Sadly, the everything that the company can and that they require victims here are you, the public.” Well, how true was is paramount. That is a very important point to make. that? With respect to the particular document that he is Very quickly after that appeared, the next big referring to, I can’t speculate what it is. I suspect it is settlement was with Max Clifford in March 2010. This the evidence we have been discussing in this is about what News International knew, who knew it Committee. and when. You were the executive chairman then, but Rebekah Brooks was the chief executive. Were you in Q1699 Dr Coffey: Yes, although, unfortunately, any way involved in the rumoured £1 million Julian Pike does not make that specifically clear. settlement with Max Clifford? Turning to financial governance—I think I discussed James Murdoch: I was not involved with the this with you in July—with the evidence that you sent arrangements with Mr Clifford. I was informed of back to us, you talked about how the editor had a them, but in very general terms. I was not involved in £50,000 limit and the managing editor was involved, but any cash payments required the permission of the that. At that point, I was not running the business day editor specifically or the deputy editor. Is that still the to day. case, or are there alternative arrangements? James Murdoch: Actually, one of the changes we Q1703 Paul Farrelly: But you were the chairman. have made is to significantly tighten up cash payment James Murdoch: Yes. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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Q1704 Paul Farrelly: Were you consulted at all? Did Q1711 Paul Farrelly: Do you know whether you anyone come to you for the benefit of your experience went through the same process as with the Gordon in having settled the previous case? Taylor settlement, of seeking outside QC’s opinion, James Murdoch: Mrs Brooks did discuss the perhaps Michael Silverleaf again? settlement, or the arrangement, with Mr Clifford, James Murdoch: I am not aware and, again, I was which was a commercial arrangement I think for not involved directly in the Max Clifford settlement. services in the future, but not in any great detail. Q1712 Paul Farrelly: Could the company confirm Q1705 Paul Farrelly: She did not seek your whether that process was followed and whether there authorisation? Did she seek your views? is a QC’s opinion? James Murdoch: No, it was discussed with me in James Murdoch: We can certainly write to the general terms, but not from an authorisation Committee with what details are appropriate around perspective. As the chief executive of the business arrangements with Mr Clifford. I am happy to do that. with full day-to-day responsibility, she could make those judgments. Q1713 Paul Farrelly: Just again on the basis of what the company knew—having given a strident defence Q1706 Paul Farrelly: Did you know who Max just days beforehand—who knew it and when they Clifford was? knew it, would you consider a request from the James Murdoch: Yes, I was aware of who Max Committee that, if there is a QC’s opinion, suitably Clifford was. redacted, and no doubt after checking with Mr Clifford, to preserve any personal details, it might be Q1707 Paul Farrelly: Did you say, “Well, he’s not a released to us, as the Silverleaf opinion has already member of the royal family, either”? been released to us? James Murdoch: As I recall—I will tell you exactly James Murdoch: In general, Mr Farrelly, it is what I knew—there had been a previous commercial probably wise not to go down the path of routinely arrangement some years earlier with Mr Clifford, I waiving privilege on legal advice around matters of litigation, matters involving individuals and matters was told, which was around publicity for clients or the involving the company. As I have said, I am happy to like, and it was seen that it was desirable to enter into go back to counsel and to the company and say, “What an agreement like that for the future and that that can we provide with respect to details around the Mr would be a good thing to do with Mr Clifford. With Clifford arrangements?” I am happy to write to you respect to any specifics about the litigation, it was just on that basis, but I do not want to make any particular seen as taking a commercial arrangement with Mr commitment about waiving privilege. Clifford going forward, which was in both parties’ interests, rather than having an acrimonious litigation. Q1714 Paul Farrelly: I hope we will follow up in a On the litigation specifically, I was not particularly letter as well. briefed on the ins and outs. Finally, following our last session, Mr Murdoch, your senior, said effectively that it was wrong to pay Glenn Q1708 Paul Farrelly: I have an Australian voice Mulcaire’s legal costs, particularly as you had issued rattling around in the back, asking, “Hell, how much an apology to the Dowler family whose phone he had is this Glenn Mulcaire going to cost me now and in so cruelly hacked, in the circumstances. You then the future?” Those questions were not asked by you came out and said that those legal costs were being at that stage? stopped, but subsequently confirmed to us in a letter James Murdoch: I think it is important to remember, that any damages that are awarded against Glenn and I believe this is the case, that Mr Clifford was Mulcaire, the company will stand him good for. again one of the original counts of voicemail James Murdoch: I am not a lawyer—forgive me, Mr interceptions that Mr Mulcaire had been convicted of, Farrelly—but I think there are questions here, with so it was not at that point a new piece of wrongdoing respect to Mr Mulcaire being a co-defendant, of were or anything like that. In fact, I am not aware of the there to be a case or damage award against him, that details and ins and outs of that case one way or he was conducting work on the company’s behalf, and another. I simply wasn’t involved in the legal strategy then really the company is liable for those things. That of that. is my understanding. Again, I can provide more detail on that, if you like, but I think there is a legal point Q1709 Paul Farrelly: Do you remember whether he there—I am not a lawyer, but there is legal point there served full particulars of claim on the News of the that is worth noting, if he was an agent doing it on World, News International? behalf of the business. James Murdoch: I wasn’t involved in that level of Dr Coffey: It is vicarious liability. detail. James Murdoch: That’s the word, yes, thank you, Dr Coffey. Q1710 Paul Farrelly: I know that the settlement is confidential, but could you confirm whether he served Q1715 Paul Farrelly: If he is now in a position a claim or whether it was just a threat? where he cannot pay his legal costs and therefore James Murdoch: I can discuss with counsel and come cannot mount a defence, if he is sued, the court would back to the Committee, whether or not that is just make an award against him, but that is an award appropriate or confidential. that the court makes against him and not you, because cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:38] Job: 012695 Unit: PG06 Source: /MILES/PKU/INPUT/012695/012695_o006_th_Corrected transcript CMSC 10 November 11.xml

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10 November 2011 James Murdoch you will also be in the dock with a claim, and a Glenn Mulcaire? Will it just be his word that separate award may be made—certainly no doubt will somebody authorised it, or will he have to satisfy a be made—against you. So if you are backing him on test—leap a hurdle—to prove that there was any awards against him, we are back to where we authorisation from the company for that particular were before the July Committee: you effectively are hacking he did or whether it was just off his own bat? making good an indemnity to Glenn Mulcaire still. Is Will there be a test? Will you discriminate between that right or wrong? different cases in terms of standing behind Mr James Murdoch: With respect, Mr Farrelly, I don’t Mulcaire? think that is the right characterisation. The word that James Murdoch: The company has set up an I didn’t know—Dr Coffey is right—this notion of independent process, as I think you are aware, Mr vicarious liability, is important, and this is a matter of Farrelly, to deal with civil cases coming through. Sir law and the courts. The question of paying for the Charles Gray, as an independent person—a former defence is one thing, and the question of the court High Court judge as I understand it—is setting up a awarding damages and the company being vicariously process to deal with claimants coming through. liable for those things is another. It seems like we are engaging in legal speculation. Q1718 Paul Farrelly: I am talking about the courts, not Charles Gray’s process. Q1716 Paul Farrelly: I am sure you are engaged in James Murdoch: Yes. There are a number of test legal speculations. I don’t see your lawyers behind cases coming through over the next number of you all nodding in unison with you. But we are back months, which will give the judge dealing with this a in the position where you will be effectively sense of what the damages number will be in these supporting the man who hacked Milly Dowler’s cases and what the ranges are. As the company has phone. Is that right or wrong? admitted liability where legitimate claims are made, James Murdoch: I am happy to come back on this. I this is a question for the independent management of don’t think your characterisation of our supporting Mr the cases and the company to judge which claims are Mulcaire is accurate or right. The management of the legitimate and which are not, with respect to company and the management and standards voicemail interceptions. The settlement procedure will committee have taken a view on reviewing the legal then take its course. On the specific test, to be clear, I expenses of various people around these matters, and am not aware of the specifics of that. to cease paying the legal expenses for Mr Mulcaire, as my father, when he testified to you in July, Q1719 Paul Farrelly: Should a case come to court indicated. The question of what legal issues there are and not be settled out of court, is it your position that, in the event of future litigations is something that I in all circumstances, no further questions asked, you could not possibly comment on. will pay any award made against Glenn Mulcaire? Or will you be more discriminate? Q1717 Paul Farrelly: My final question on this is James Murdoch: I think every case has to be seen on that more than 5,000 names are now being looked at its merits. That is the appropriate way for the courts that appear in Mr Mulcaire’s notebooks, any amount and the company to proceed. of whom might sue News International and Glenn Chair: I think we have finished our questions. I thank Mulcaire. What will be the test for News International you for your attendance. as to whether they pay any award that is made to James Murdoch: Thank you, Mr Chairman. cobber Pack: U PL: COE1 [SO] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Written evidence

Written evidence submitted by John Yates QPM, Acting Deputy Commissioner, Metropolitan Police

I know you will have read the recent reporting in the media in relation to phone hacking following the debate last Thursday involving Chris Bryant, MP.

Mr Bryant has made some very serious allegations about my integrity in relation to evidence I provided to your Committee. You will no doubt have noted the responses that I have sent to both the Guardian and Independent newspapers who reported the matters at some length.

The purpose of this letter is to invite you, should you so wish or thought it appropriate, to ask me to reappear before your Committee so that I can provide the evidence necessary to rebut the allegations that Mr Bryant has made.

I am most concerned that the reputation of the Metropolitan Police as well as my own is being damaged by these unfounded allegations. You may therefore think it sensible that that I be provided with the opportunity to allay Mr Bryant’s, and perhaps your, concerns.

Out of courtesy, I am copying this letter to the Chairs of all the Parliamentary Committees that have an interest in this matter. 14 March 2011

Written evidence submitted by John Yates QPM, Acting Deputy Commissioner, Metropolitan Police

I write further to my letter of 14 March 2011 in relation to my response to the allegations made by Chris Bryant, MP in the Adjournment Debate on “Mobile Communications (Interception)” on 10 March 2011.

Mr Bryant made a number of statements about the manner in which this investigation has been undertaken by the Metropolitan Police. Is particular, he has suggested that I may have misled your Committee. This is a very serious allegation and it is for this reason that I felt it necessary to write and provide further detailed background material as well as to offer to appear before you to discuss any points you feel need further clarification.

During the Debate Mr Bryant made several assertions that are not correct. The most stark and immediate of these is the aspect that relates to my evidence provided to the Home Affairs Select Committee on 7 September 2010. Mr Bryant stated that I misled the Committee in relation to legal advice. He stated that “I misled the Committee....and used an argument that had never been relied on by the CPS or by his own officers so as to suggest that the number of victims was miniscule.”

During this evidence, I set out what I termed the “very prescriptive” definition under Section 1, Regulation of Investigatory Powers Act (S.1 RIPA) of what has become known as mobile phone voicemail “hacking”. Principally, I explained to the Committee that in 2006, to prove the offence of Interception of a Communication under Section 1 of this Act, the Prosecution had to show that a voicemail had been intercepted prior to it being listened to by its intended recipient. On this basis, I advised that there may in fact only be perhaps ten to twelve victims against whom we could actually prove the above mentioned offence of Interception of a Communication had occurred in relation to the evidence at that time.

Mr Bryant stated that “never at any stage during the prosecution of Goodman and Mulcaire did anybody from the Crown Prosecution Service advise the Metropolitan Police that the law should be interpreted in such a way”. This is not correct.

The investigation began on 21 December 2005. Legal advice—including as to what constituted an offence of Interception of a Communication under S.1 RIPA—was generally given “orally in conference” as explained by the Director of Public Prosecutions (DPP) in his letter to you, as the Chair of the Culture Media and Sport (CMS) Committee on 3 November 2009. In this same letter, the DPP also explains that the following advice was given to the original investigation team: “section 1(1) of RIPA…requires the communication to be intercepted ‘in the course of its transmission’.” This is a direct rebuttal of what Mr Bryant claimed.

The latter clause is also qualified in the same letter: “section 2(7)...has the effect of extending the time of communication until the intended recipient has collected it. The CPS view was that the observations of Lord Woolf were correct, and accorded with the rationale of prohibition in Section 1(1). Moreover, it was also our view that in this case there was nothing to be gained from seeking to contend for a wider interpretation of Section 2(7) than that contemplated by Lord Woolf.” cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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This advice itself followed a previous letter from the DPP to you, as the CMS Chair, on 30 July 2009 in which he states: “The Law: To prove the criminal offence of interception the prosecution must prove that the actual message was intercepted prior to it being accessed by the intended recipient.” A further reference to this point is mentioned in the same letter again as being “an essential element of the offence.” The same legal advice was given to the Senior Investigating Officer (SIO) during the Mulcaire/Goodman case throughout the investigation in 2006. It permeated every aspect of his investigative strategy and his submissions to the CPS and required the employment of tactics, and indeed experts, to evidence the difference between a voicemail being opened or unopened at the point of its alleged interception. There are several references to legal advice throughout the Goodman/Mulcaire investigation. On 9 March 2006, the SIO recorded: “Guidance to be sought from the Head of CT CPS to establish range of possible offences.” On 4 April 2006, in his review of the case to date, the SIO reflected the oral advice given thus far and sought further guidance from the CPS, specifically: “In terms of points to prove, the key aspect would be that any interception took place prior to the intended recipient receiving the message.” On 20 April 2006, the SIO met with the senior CPS lawyer and provided relevant briefing material to which the CPS lawyer replied by email on the 25 April 2006 that: “The offences under Section 1 RIPA would, as far as I can see, only relate to such messages that had not been previously accessed by the recipient.” The CPS lawyer does however go on to say that the law in this area was not clear as, at the material time, it remained untested. The law, therefore, was untested, but the legal advice to the police was unequivocal. On 30 June 2006, an Advice File was submitted by the SIO to the CPS which included opinion from an expert who specialises in telecommunication forensics. This included details of the technical challenges of proving that a voicemail had been intercepted prior to it being accessed by its intended recipient thus reinforcing the view that this was an essential element of the offence. (Note: on 13 July 2006, the CPS lawyer met with the same expert to discuss this point.) On 18 July 2006, the CPS lawyer wrote to the SIO: “It is also apparent that on four occasions....messages left on the voicemail of (Subject A) have been accessed by those numbers prior to (Subject A) retrieving those messages.” In the same letter, the CPS lawyer goes on to refer these as “the RIPA offences” and “the four alleged instances of offences under RIPA”. In relation to the SIO’s tactic of asking the victims not to access their voicemails for a period to see what happens, the CPS lawyer refers to the lack of any apparent interception of these unopened voicemails during this time as a “weakness” in the case, again reinforcing that proof of this point was indeed an essential element of the offence. This letter formed part of a further Advice File which included the same telecommunication forensics expert’s testimony. This again reiterated the SIO’s tactic based on the advice given—with respect to leaving voicemails unopened in an effort to obtain best evidence if someone were trying to intercept them. In a further email of 2 August 2006 to the police team, the CPS lawyer refers to “the four main clear RIPA offences” and on 9 August, the Deputy SIO explains in his log that: “It should be noted that the advice from CPS at present is that we will require not only evidence of access but also evidence that (1st) a message existed and (2nd) that message was intercepted prior to being listened to by a victim. Only when both parts are complete would an offence be committed.” On 7 August 2006, a third Advice File was submitted to the CPS which included additional evidence from one of the Service Providers which detailed the fact that the voicemails (of Subject A) were unopened by the intended recipient at the point of interception. As is evidenced above, the SIO and his Deputy were very clear in what was required to provide the CPS and Counsel, and ultimately the Court, with the best evidence to secure a conviction. In light of the CPS and Counsel advice given at the time (as restated by the DPP himself in 2009) they based their investigative strategy on the need to prove that voicemails were unopened when “intercepted” and therefore still “in the course of their transmission” under Section 1 RIPA 2000. In the Adjournment Debate of 10 March 2011, Mr Bryant also went on to say that the CPS “formally warned” a team from the Metropolitan Police on 1 October last year that “it was wrong to claim such an interpretation” of this offence. Further, he states that this misinterpretation of the law was “the very reason— and the only reason—why the Metropolitan Police refused point blank to re-open the case until January of this year.” cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Mr Bryant is mistaken on both matters.

On the first point, there was no such “warning” in relation to any previous cases. The claim may however refer to the provision of some newly commissioned legal advice—in late 2010—as to what might constitute an offence of Interception of a Communication for the purposes of any future investigations. The CPS, as is perfectly proper, have signalled an intention hereon to adopt a wider interpretation of what might constitute an offence of this nature—possibly to include the interception of voicemails that have already been opened by the intended recipient. This may of course impact on the current investigation being led by my colleague, DAC Akers.

On the second matter, concerning the opening of a new investigation, it is clear that the sole reason for doing so was due to the fact that News International provided new material to the police in January of this year.

Whatever the outcome of future investigations of this nature, the fact remains that during the Mulcaire and Goodman case, and throughout the ensuing period until October 2010, the legal advice on this matter was unequivocal and, as I said on 7 September 2010, “very prescriptive”.

The significance of this point is clear. While the suspects may have had many possible targets of interest, we could only prove the offence of voicemail interception in relation to a very small number of cases.

If a wider interpretation of what constitutes an “interception” is now applied, then this position will of course need to be reviewed and may change significantly. This will be a matter for the new investigation team to address and clearly it would be wrong for me to comment further at this time.

I feel it important that your Committee be aware in greater detail of the very real legal challenges that this investigation posed. I also thought it important that I demonstrate the detailed and determined efforts undertaken by both the police and the CPS to overcome these challenges. I trust that this letter will allay any concerns that you may have had about the integrity of the evidence that I provided to your Committee. I did not mislead you or any other Committee in relation to this case.

This letter has been copied to the other Parliamentary Committees who have an interest in these matters, as well as the Director of Public Prosecutions. 24 March 2011

Written evidence submitted by Keir Starmer QC, Director of Public Prosecutions

Thank you for your invitation to provide further written evidence to the Committee. As I understand it, the Committee would like me to give a fuller account of the advice on the law that was given to the Metropolitan Police by prosecution lawyers (whether Crown Prosecution Service or counsel) in the investigation and prosecution of Messrs. Goodman and Mulcaire in 2006–07.

Before I set out my understanding of the position, I need to make the following plain. I was not the Director of Public Prosecutions during the period of the investigation and prosecution of this case in 2006–07. Moreover, the CPS lawyer who had the day to day conduct of the case at the time no longer works for the CPS. I am therefore at a considerable disadvantage in giving evidence to the Committee.

Therefore the approach I have taken is as follows. I have asked my Principal Legal Advisor to look at all the documents currently in the possession of the CPS. In addition, I have spoken myself to the DPP at the time of investigation and prosecution of Messrs Goodman and Mulcaire, Lord Macdonald of River Glavern QC, and to the CPS lawyer then responsible for the case (the then Head of CPS Special Crime Division). That discussion was in 2009 and it is fair to say that, at that remove, their recollection of the detail was understandably limited and the question of the interpretation of RIPA was not central. I have also spoken at some length to both leading and junior counsel. Those discussions took place in 2009, 2010 and, given the importance of the issues now before the Committee, again yesterday when I spoke to leading counsel for over an hour on the telephone and junior counsel face-to-face. In the last week, I have attempted to contact again the then Head of SCD, but without success.

Nonetheless, I am acutely conscious of the difficulties and risks inherent in piecing together a history of the legal advice given by the CPS to the Metropolitan Police nearly five years ago based on documents created by, and recollections of, others. I am also acutely conscious of the fact that I may not have seen all of the documents created by the Metropolitan Police and, inevitably, I was not privy to any of their internal discussions during the course of the investigation.

It is important to bear in mind that, on 14 January 2011, I asked my Principal Legal Advisor, Alison Levitt QC, to conduct a review of all the material in the possession of the police. This exercise involves an examination of all material considered as part of the original investigation into Messrs Goodman and Mulcaire and any material that has subsequently come to light. The purpose of this assessment is to ascertain first, whether there was evidence which would have justified the consideration of other suspects at the time or since. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Secondly, whether there is any material which could now form evidence in any future criminal prosecution relating to phone hacking. Subsequently, on 26 January 2011, the Metropolitan Police announced that they were launching a new investigation into this matter as a result of new evidence that had been passed to them. This evidence and any other which the police obtain as a result of their new investigation will be subject to the same assessment by Ms Levitt. Two points emerge from this. First, Ms Levitt’s review is far from complete. It is possible that there are further documents which she has not considered in the time available to her which may have a bearing on the issues before the Committee. If any relevant matters subsequently come to light, I will, of course, inform the Committee of them. Second, there is now a “live” investigation into phone hacking and I have therefore deliberately limited my evidence to the specific and discrete issues which now arise before the Committee and have deliberately not attempted to address any of the wider issues. I do not propose to comment further on the live investigation. That all having been said, I am reasonably satisfied from the documents currently available and from my discussions with leading and junior counsel that a sufficiently clear picture has emerged for me to assist the Committee on the issues that have arisen. I will therefore set out my understanding of the advice on the law given by the CPS to the Metropolitan Police during the investigation and prosecution of Messrs Goodman and Mulcaire in 2006–07 and any advice given subsequently. The first occasion when the Metropolitan Police contacted the CPS about their investigation into phone hacking was in March 2006 when a telephone call was made to the Head of the CPS Counter Terrorism Division (CTD). The Head of CTD informed the Metropolitan Police that the case would not be handled by CTD but by the CPS Special Crime Division (SCD). Accordingly she advised that the Metropolitan Police should speak to the Head of SCD. Ms Levitt has spoken to the Head of CTD about this telephone call. The Head of CTD does not recall giving any specific advice and believes that she would not have done so without knowledge of the facts. But she accepts that if the Metropolitan Police had asked her which offences may have been appropriate for them to look at on such brief facts as may have been mentioned in a phone call, she probably would have done so. Any views which she may have expressed were necessarily provisional, not least because she was at the same time indicating that she would not be dealing with the case herself and that the Metropolitan Police should be seeking the advice of SCD. It appears from internal Metropolitan Police documents that, on 4 April 2006, the SIO reviewed the case. It seems that, at that early stage, the Metropolitan Police had understood the CPS to have advised that potential offences, both under the Regulation of Investigatory Powers Act 2000 (RIPA) and under the Computer Misuse Act 1990, may be relevant. It also appears that the Metropolitan Police were proceeding on the basis that the Computer Misuse Act offences may potentially have been the easier offences to prove. The Head of the CTD does not recollect giving a prescriptive view of the RIPA offences in the course of the telephone call described above, but even if she had been understood as suggesting a narrow view, the significance of the reference to the Computer Misuse Act is that, from the outset, the Metropolitan Police were advised that alternative offences might also be available, which did not require proof that a message had been listened to before it was accessed by the intended recipient. (At the relevant time, offences under the Computer Misuse Act were summary offences and thus subject to a six month time limit, which ran from the date upon which evidence to warrant proceedings came to the knowledge of the prosecutor. It is now an either way offence). It appears that on 20 April 2006, the Metropolitan Police did then ask the Head of SCD for advice on possible offences. And, on 25 April 2006, the Head of SCD gave advice by email. The following advice was given: “It is my view that the scenario gives rise to the consideration of (a) offences under s I of RIPA and (b) s I of the Computer Misuse Act 1990.” There then followed an analysis of each offence, making it plain that the Computer Misuse Act offence could apply whether or not the messages had already been listened to. The Head of SCD suggested that expert evidence should be obtained in relation to proving the offences under both RIPA and the Computer Misuse Act (to deal with different and separate expert issues). Since the advice given by the CPS to the Metropolitan Police on RIPA is specifically an issue, it may assist if I quote in full the advice given on that issue at that stage: “... the offences under section 1 of RIPA would, as far as I can see, only relate to such messages that had not been previously accessed by the recipient. However, this area is very much untested and further consideration will need to be given to this”. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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It is worth pointing out in this context that in the Metropolitan Police decision log entry of the following day (26 April 2006), the SIO refers to the reviewing lawyer’s email as containing “initial” advice and notes that the behaviour gives rise to offences under RIPA and the Computer Misuse Act. He concluded that he would get further technical data before deciding how the investigation should progress. It seems to me clear that the investigation was thus progressing on the basis that both offences were relevant. This is confirmed when, on 30 June 2006, the Metropolitan Police sent a file to the CPS seeking further advice. That file indicated that the investigation was indeed proceeding into offences under RIPA and the Computer Misuse Act. Advice was then given by the CPS to the Metropolitan Police in a letter from the Head of SCD dated 18 July 2006. The advice in that letter was that: “... whilst there are many aspects of the evidence I would require to be clarified, it is my initial assessment that offences under the CMA and RIPA 2000 may be provable. However in addition I would also be looking at considering an offence of conspiracy to commit those offences on the basis of the other evidence being available...”. The significance of the reference to conspiracy is that, as with the Computer Misuse Act offence, a charge of conspiracy would not necessarily require proof that every interception had taken place before it had been accessed by the intended recipient. On 28 July 2006, instructions were prepared by the CPS for, and sent to, leading and junior counsel. Then, on the 2 August 2006, a conference took place between Head of SCD and counsel. After that conference, and on the same day, an email was sent by the Head of SCD to the Metropolitan Police. The relevant part of that email, so far as the issues before the Committee are concerned, is as follows: “ ... we concluded that in essence the alleged criminal activity alleged against the suspects does give rise to the offences I have outlined in my previous correspondence. We have briefly discussed before the possibility of arguing that what we have termed our Computer Misuse Act offences might fall to be considered as RIPA offences—that the issue had not definitively been argued. I was reticent about arguing the point in this case. However, having considered the matter with counsel we have concluded that we could properly argue the point—and in any event nothing would be lost as we already have the four main clear RIPA offences ... we would therefore propose sample substantive offences to reflect the period of offending plus the four main offences under RIPA. “We have concluded that the Computer Misuse Act offences might in actual fact detract from what is the main thrust of our case. We would therefore not propose to pursue them. Let’s face it, if offered pleas to those offences we would not accept them. We still consider that conspiracy to commit RIPA offences would be applicable—Counsel does agree with me that the data provided does present a strong case thus far”. It appears to me that the decision at that stage not to pursue the Computer Misuse Act offence any further was tactical and not based on any interpretation of the law. Messrs Goodman and Mulcaire were arrested on 8 August 2006 and charged the next day. Pausing at this stage, from the documents in the possession of the CPS, it appears that this email of 2 August 2006, the letter of 18 July 2006 and the email of the 25 April 2006 referred to above are the only advice given by the CPS to the Metropolitan Police which was reduced to writing. I have in the last two weeks asked the Metropolitan Police on several occasions if there is, to their knowledge, any other advice which was reduced to writing. Nothing additional has been provided to me. Moving forward, I have discussed with leading and junior counsel the approach they took from the point at which they were instructed, ie from 28 July 2006, until the conclusion of the prosecution of Messrs Goodman and Mulcaire. They have indicated to me in the clearest of terms that: (a) they regarded the question of whether or not the unauthorised accessing of a voicemail message after the recipient collected the message is a RIPA offence was a difficult legal issue which had not been tested or authoritatively determined; (b) that there were tenable arguments either way, but the observations of Lord Woolf in NTL v Ipswich Crown Court (2002) pointed to a narrow view; (c) that they approached the prosecution on the basis that, if the issue of interpretation arose, it may be preferable to proceed on a narrow interpretation thereby avoiding the necessity of having a contested trial. I have pressed leading counsel on the third of these issues and he is clear that he did not at any stage give a definitive view that the narrow interpretation was the only possible interpretation and that, if he had been expected or required to give such a definitive view, he would have produced a full written advice. Leading counsel has assured me that the prosecution's pragmatic approach to the interpretation of the RIPA offence did not affect the course of the proceedings or the charges against the defendants. Thus, the position in the prosecution of Messrs Goodman and Mulcaire was as set out in my letter of 29 October 2010 to the Home Affairs Committee (and copied to this Committee), namely that: cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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“... it was not necessary to resolve in the proceedings whether section 1(1) of RIPA required proof that the interceptions had taken place before the intended recipients had listened to the messages. There were two reasons for this. First, the prosecution did not in its charges or presentation of the facts attach any legal significance to the distinction between messages which had been listened to and messages which had not. Secondly, the prosecution not having made the distinction, the defence did not raise any legal arguments in respect of the issue, and pleaded guilty. It is evident, therefore, that the prosecution’s approach to section 1(1) of RIPA had no bearing on the charges brought against the defendants or the legal proceedings generally. Indeed the prosecution was not even required to articulate any approach. The issue simply did not arise for determination in that case.” Before I sent that letter to the two Committees in October 2010, I asked that it be checked for accuracy with counsel instructed in the prosecution of Messrs Goodman and Mulcaire. Junior counsel confirmed the accuracy of the letter before it was sent. Yesterday I took the added precaution of going through the extract set out above, line by line, with junior counsel and he again confirmed that it accurately described the position at the time. I should add this, in analysing the charges on the indictment against Messrs Goodman and Mulcaire in detail, Ms Levitt has observed that in relation to a number of the counts on the indictment there was no evidence that the message had been intercepted before it had been listened to by the intended recipient. Put another way, if the prosecution had taken the narrow view of the RIPA offences, the indictment could not have been drafted in the way that it was. Yesterday, I discussed this specifically with junior counsel (who drafted the indictment) and he confirmed that included in the indictment were counts relating to calls in respect of which there was no evidence one way or other whether the interception had taken place before collection by the intended recipient. I also discussed this with leading counsel yesterday. His view was that this provided powerful support for the contention that the prosecution could not have taken a definitive narrow view of the RIPA offences at the time. Messrs Goodman and Mulcaire pleaded guilty on the 29 November 2006 and were sentenced on the 26 January 2007. As far as I am aware, the Metropolitan Police did not ask the CPS for any further advice on RIPA or any other offences until September 2010 when they embarked on an investigation into matters published by the New York Times on 10 September 2010. By this time, I was DPP and I was concerned that clearer and more robust legal advice should be provided to the Metropolitan Police. I therefore asked for new leading counsel to provide comprehensive advice on the proper interpretation of the offence in question under RIPA. That advice accorded with my own view that a court might adopt a wide interpretation of the offences under RIPA and accordingly I asked the then Head of SCD to advise the Metropolitan Police at the first opportunity of my view and that I considered that investigations into phone hacking should not be inhibited by a narrow approach to RIPA offences. That advice was given to the police orally in October 2010 and in writing in December 2010. Between the conclusion of the prosecution of Messrs Goodman and Mulcaire in January 2007 and the advice given to the Metropolitan Police Service in October 2010, I provided written evidence to this Committee on 30 July 2009, 3 November 2009 and, on 29 October 2010, I copied a letter to this Committee that I had written to the Home Affairs Committee. In the 30 July 2009 written evidence I referred to an examination of the material supplied to the CPS that I had asked to be carried out. I then dealt with a very specific issue, namely an email which contained a transcript of various messages. In that context, I summarised for the purposes of dealing with the email, the charges, the law and the investigation in 2006–07. In summarising the law I said “... to prove the criminal offence of interception, the prosecution must prove that the actual message was intercepted prior to it being accessed by the intended recipient”. This summary was based on what I understood to be leading counsel’s recollection (in 2009) of the approach he had taken in 2006–07. Leading counsel did not at that stage have all of the relevant documentation before him. In retrospect, now having gone through the documents in some considerable detail, leading counsel and I accept that it would have been better to have indicated that the summary of the law set out in my letter reflected the pragmatic basis upon which counsel thought it preferable to proceed at the time, rather than a definitive statement of the law. Bringing all this together and bearing in mind the considerable caveats I set out at the beginning of this letter, my own conclusions about the advice given by the CPS to the Metropolitan Police in relation to the prosecution of Messrs Goodman and Mulcaire are as follows: (a) advice was given by the CPS to the Metropolitan Police at an early stage of the investigation indicating, in provisional terms, that it seemed that the offences under RIPA might require the prosecution to prove that a message had been listened to before it was accessed by the intended recipient. But no concluded or definitive view was ever reached and, from the outset, the Head of SCD indicated that the interpretation was “very much untested” and that further consideration would need to be given to the interpretation; (b) as matters turned out, the prosecution was never required to, nor did it, articulate a definitive view of the law; (c) the indictment in the case of Messrs Goodman and Mulcaire included counts where there was no evidence one way or the other as to when the message in question had been listened to and once the cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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defendants had pleaded guilty, “the prosecution was not ... required to articulate any approach. The issue simply did not arise for determination in that case”; (d) from the outset, the CPS also gave the Metropolitan Police advice about the Computer Misuse Act offence in respect of which the issue of when a message was listened did not present a difficulty. Furthermore, from a relatively early stage of the investigation, the Head of SCD also gave advice that conspiracy to commit offences both under RIPA and Computer Misuse Act might be a possibility. Again that would not necessarily require the prosecution to prove that a message had been listened to before it was accessed by the intended recipient; (e) in my view, the legal advice given by the CPS to the Metropolitan Police on the interpretation of the relevant offences did not limit the scope and extent of the criminal investigation.

I wish to make it abundantly clear that I can only give evidence about my understanding of the advice the CPS actually gave to the Metropolitan Police and the understanding of the CPS team as to the effect of that advice. It is not for me to give evidence about the understanding that the Metropolitan Police may have taken from the advice that was being provided to them, nor the basis upon which they approached the nature and extent of the investigation. Those matters can only be dealt with by the Metropolitan Police.

I have shared this letter with Acting Deputy Commissioner Yates and invited him to identify to me any factual inaccuracies. He did not identify any factual inaccuracies, but did make a number of observations and where I have felt able to do so, I have reflected them in my letter.

I am sending a copy of this letter to the Home Affairs Committee and will ask that it be treated as part of my evidence when I appear before that Committee next week. 1 April 2011

Written evidence submitted by John Yates QPM, Assistant Deputy Commissioner, Metropolitan Police

Further to my appearance before your Committee on 24 March and your subsequent letter dated 28 March, I am writing to provide answers to the questions raised. Where I am constrained from providing a full response I will of course explain why, but I hope that the following is helpful to your Committee. — In relation to Q26 and Q119 I can confirm that following the media reporting in autumn last year four men were interviewed under caution and by appointment. Interviews (not under caution) were sought with a number of other people who we intended to treat as potential witnesses. It is contrary to MPS policy to release an overall figure as to do so may lead to unhelpful speculation as to their identities. — In response to Q50, it was approximately December 2009 when the list of 91 was generated in response to a Freedom of Information Act request. — In Q70, the venue of my dinner with the Editor of the News of the World is requested. As the head of Counter Terrorism policing in the UK, and in common with other people who are subject to specific threat assessments in their own right, it would not be our normal practice to disclose the locations of appointments in my diary. However, on this occasion and in the interests of transparency I am able to tell the Committee that the location was The Ivy. — I have now considered the request at Q88. I would refer you here to our recent response to the Metropolitan Police Authority when asked for details of meetings between senior MPS officers and senior executives of News International between 2006 and 2011. I had dinner with the Editor of the Sunday Times in September of 2007 and again in September 2009, and in November that year I also had dinner with the Editor and Crime Editor of the News of the World. it may be helpful to know that in that same period I also met with representatives from other media outlets, including The Guardian, The Telegraph, the BBC, ITN and Channel 4. I do not keep a separate list of my social engagements. — I can confirm that in answer to Q108, 28 people were notified in 2006–07 that they may have been affected. In 2009 we revisited this issue resulting in an additional eight people being contacted and in a number of attempts being made to contact others. As I acknowledged in my evidence to your Committee. I have accepted that more could and should have been done in relation to those who may have been potential victims. This is now a matter for the new investigation. — In relation to Q130, I was not aware of this development before it came into the public domain. — With respect to Q146, I can confirm that Chris Bryant MP wrote to the Commissioner of the MPS on 9 July 2009. No trace has been found of any prior correspondence from Mr Bryant in relation to this issue. A meeting did take place between myself and Mr Bryant on a totally unrelated matter in 2004. This meeting was over seven years ago. To my recollection, no issue was raised in relation to the security of his mobile phone at that time. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 166 Culture, Media and Sport Committee: Evidence

— I attach a copy of the letter dated 7 September 2006 from the original investigation team to the solicitors representing News of the World in keeping with your request at Q43. You will recall that I referenced this letter in my evidence to your Committee in 2009.1 — In terms of our Hospitality Register (Q69 and 72), we are required to keep a record of the gifts and hospitality offered and to record whether the offer was accepted or declined. This is scrutinised regularly by the Metropolitan Police Authority (MPA). When I provided my evidence to you, my understanding was that this was published on the MPA website. I have since learned that whilst the expenses of Management Board members are indeed declared in this way, those relating to gifts and hospitality are only included in relation to the Commissioner and the Deputy. A redacted version is placed on the MPS Publication Scheme at http://www.met.police.uk/foi/c_lists_and_registers.htm. Details in relation to gifts and hospitality relating to myself have only recently been requested and mode public by the MPA and this was fresh in my mind when I provided my evidence. — In relation to Q90, since assuming responsibility in July 2009 for dealing with the legacy of this case, relevant senior officers have been made aware that Mr Wallis and I know each other. The meeting referred to during my evidence was a private engagement attended by a number of others. There would be no reason to declare this. — Q105 is a matter for AC Dick and it would be inappropriate for me to comment further.

I hope you find this useful. 13 April 2011

Written evidence submitted by John Yates QPM, Assistant Commissioner, Metropolitan Police

I am writing in response to your letter dated 28 April in which you raised two further questions with respect to my answer to Q90 during my evidence to your Committee on 24 March this year.

In my letter to you dated 13 April, I stated that “since assuming responsibility in July 2009 for dealing with the legacy of this case, relevant senior officers have been made aware that Mr Wallis and I know each other”. I can confirm that this includes the Commissioner Sir Paul Stephenson, Detective Chief Superintendent Philip Williams, Detective Superintendent Dean Haydon and, more recently, Assistant Commissioner Cressida Dick and Deputy Assistant Commissioner Sue Akers.

My rationale for alerting colleagues at relevant times was out of a desire to ensure transparency on this issue. I would not, however, have deemed this action to be of such significance to merit a record being made and I am therefore unable to provide details of when any of the above were informed.

I hope you find this useful. 11 May 2011

Written evidence submitted by Rebekah Brooks, CEO, News International

Thank you for your letter of the 4 May regarding oral evidence given to the CMS Committee by News International executives on 21 July 2009. We apologise for the slight delay in replying but wished to consult with the Metropolitan Police before we did so.

As you will be aware, the Metropolitan Police investigation into illegal voicemail interception continues and we are fully co-operating with that. Aspects of the work to which you refer specifically in your letter are likely to be relevant to that investigation. Indeed the Police have already asked us specifically to provide information about them.

I understand that various Select Committees have approached the Police over time in relation to this and other cases. The Police’s position has been to co-operate where this did not directly impact on the investigation in question. In those cases where it did potentially impact, the Police have historically declined to comment at that stage. Our understanding is that this approach has not been challenged. Given that we are in the midst of an investigation, and we do not want to prejudice it, I hope you will understand why we feel It would not be appropriate to respond to your question at present in order to be consistent with the Police's approach. 1 Not printed. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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In the meantime, be assured we remain committed to co-operating to the fullest extent possible with the Committee and its inquiries. We understand that when the criminal process is finally completed you may decide to revisit previous oral evidence and News International executives will be able to discuss these in detail then. 31 May 2011

Written evidence submitted by Rebekah Brooks, CEO, News International

Thank you for your letter of 12 July, on behalf of the Committee, inviting me to give evidence to you on 19 July.

I am writing to confirm that I am available to appear before the Committee on that date and welcome the opportunity to do so.

As you will be aware, the Metropolitan Police investigation into illegal voicemail interception continues and we are fully cooperating with that. Aspects of the work to which your Committee may wish to refer are likely to be relevant to that investigation. Indeed, the Police have already asked us specifically to provide information about those matters.

I understand that various Select Committees have approached the Police over time in relation to this and other cases. The Police’s position has been to co-operate where this did not directly impact on the investigation in question. In those cases where it did potentially impact, the Police have historically declined to comment at that stage. Our understanding is that this approach has not been challenged. Given that we are in the midst of an investigation, and we do not want to prejudice it, I hope you will understand why we feel it would not be appropriate to respond to such questions at present in order to be consistent with Police’s approach, and that as a result this may prevent me from discussing these matters in detail.

I hope this is of help, and look forward to hearing from you to discuss exact timings and other details. 14 July 2011

Letter from the Chair of the Culture, Media and Sport Committee to Rebekah Brooks, CEO, News International

The Committee met this morning to discuss recent developments regarding allegations of phone-hacking at the News of the World. As a result of that meeting, it was decided to ask you, Rupert Murdoch and James Murdoch to give evidence to the Committee on Tuesday 19 July at 2.30 pm in the Wilson Room, Portcullis House. The Committee wants to give you the opportunity to attend voluntarily but reserves the right to use its powers to require you to do so should that become necessary.

We are aware that there are ongoing police investigations into these allegations. As no charges have been brought at this time, the matter does not engage the House’s sub judice resolution.

In view of the tight timeframe, I would be grateful for a response from you by 5.00 pm on Wednesday 13 July. 12 July 2011

Written evidence from James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

Thank you for your letter of 12 July, on behalf of the Committee, inviting me to give evidence to you on 19 July.

Unfortunately I am not available to attend the session you have planned next Tuesday.

However, I would be pleased to give evidence to your Committee on either the 10 or 11 August. Naturally, if neither of these proves suitable I would be willing to consider any alternative dates you suggest.

I hope this is of help to the Committee. 14 July 2011 cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 168 Culture, Media and Sport Committee: Evidence

Letter from the Chair of the Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

The Committee met this morning to discuss recent developments regarding allegations of phone-hacking at the News of the World. As a result of that meeting, it was decided to ask you, Rupert Murdoch and Rebekah Brooks to give evidence to the Committee on Tuesday 19 July at 2.30pm in the Wilson Room, Portcullis House. The Committee wants to give you the opportunity to attend voluntarily but reserves the right to use its powers to require you to do so should that become necessary.

We are aware that there are ongoing police investigations into these allegations. As no charges have been brought at this time, the matter does not engage the House’s sub judice resolution.

In view of the tight timeframe, I would be grateful for a response from you by 5pm on Wednesday 13 July. 12 July 2011

Written evidence from Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation

Thank you for your letter of 12 July, on behalf of the Committee, inviting me to give evidence to you on 19 July.

Unfortunately I am not available to attend the session you have planned next Tuesday. However, I am fully prepared to give evidence to the forthcoming judge-led public inquiry and I will be taking steps to notify those conducting the inquiry of my willingness to do so. Having done this, I would be happy to discuss with you how best to give evidence to your Committee.

I hope this is of help. 14 July 2011

Letter from the Chair of the Culture, Media and Sport Committee to Rupert Murdoch, Chairman and Chief Executive Officer, News Corporation

The Committee met this morning to discuss recent developments regarding allegations of phone-hacking at the News of the World. As a result of that meeting, it was decided to ask you, James Murdoch and Rebekah Brooks to give evidence to the Committee on Tuesday 19 July at 2.30pm in the Wilson Room, Portcullis House. The Committee wants to give you the opportunity to attend voluntarily but reserves the right to use its powers to require you to do so should that become necessary.

We are aware that there are ongoing police investigations into these allegations. As no charges have been brought at this time, the matter does not engage the House’s sub judice resolution (see copy attached).2

In view of the tight timeframe, I would be grateful for a response from you by 5pm on Wednesday 13 July. 12 July 2011

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

I refer to the Culture, Media and Sport Select Committee's request that my father and I attend the oral session on Tuesday 19 July at 2.30pm.

I am writing to confirm our attendance. I would like however to draw your attention to a few issues.

I hope that it is clear that we are committed to ensuring that the issues that have affected the News of the World are fully investigated and dealt with appropriately and robustly.

To that end we have committed to full cooperation with the police inquiries that are underway and with the Public Inquiry to be led by Lord Justice Leveson that will begin its work shortly.

We of course also wish to cooperate fully with your Committee's consideration of these matters.

In the course of the investigations and inquiries now envisaged, all the relevant issues will undoubtedly be fully and effectively reviewed and, no doubt, many questions will be asked. 2 Not printed. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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I am, however, very much concerned that we are now being asked to answer yet further questions in a different forum.

We have been advised that, in light of the fact that there are to be multiple reviews of the issues, this does carry the risk of prejudicing other judicial proceedings and in particular the ongoing police investigation and any potential subsequent prosecutions.

I would therefore respectfully ask you to take the utmost care in ensuring that the Committee hearing does not run any risk of prejudicing that investigation and subsequent prosecutions.

I look forward to hearing from you as soon as possible. 14 July 2011

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

Allegations have been made as to the veracity of my testimony to your Committee on Tuesday.

As you know, I was questioned thoroughly and I answered truthfully. I stand by my testimony.

I am preparing a written response to the questions that I undertook to follow up on when I appeared before you on 19 July. 22 July 2011

Written evidence submitted by Sly Bailey, Chief Executive, Trinity Mirror Plc

I write with reference to the two sessions of your Committee held on Tuesday afternoon. I was unsure whether it was most appropriate to write to The Speaker or to you but have decided that, as my concern is over something that happened in your Committee, I should in the first instance address my concerns to you.

I set out below two passages drawn from the uncorrected transcripts of Tuesday’s hearings. They are both consistent with what I remember hearing as I watched the live broadcasts.

On two occasions Mrs Mensch made uncaveated statements purporting to be facts. On both occasions she made allegations that are wholly untrue. Absent proof to the contrary, we are of course prepared to accept that this was not out of malice but was a mistake due to poor briefing. Nevertheless, if her comments remain uncorrected, they could cause The Mirror serious reputational damage and are likely to be repeated elsewhere.

She said: In questioning James Murdoch, Q404 Louise Mensch: Thank you. Two final questions. The first is, you touched earlier, Mr James Murdoch, very briefly on the general culture of phone hacking, blagging and illegal practices that have in the past happened in the country. If I could put a couple of things to you. You do not appear to have asked Piers Morgan, who is now a celebrity anchor at CNN, any questions at all about phone hacking. As a former editor of the Daily Mirror, he said in his book The Insider recently that that “little trick” of entering a “Standard four digit code” will allow “anyone” to call a number and “hear all your messages”. In that book, he boasted that using that “little trick” enabled him to win scoop of the year on a story about Sven-Goran Eriksson. That is a former editor of the Daily Mirror being very open about his personal use of phone hacking. In questioning Rebekah Brooks, Q478 Louise Mensch: I would like to draw you out on the question that I put to Mr James Murdoch at the end of our last session. On the wider culture of hacking, blagging and private detectives in Fleet Street, to what extent did the News of the World feel justified, in its internal culture, in using those practices because everybody was doing it? I put to him that Piers Morgan—now a celebrity anchor on CNN—said openly in his book, which, clearly, was published before this controversy broke, that he had hacked phones. He said that he won scoop of the year for a story about Ulrika Jonsson and Sven-Goran Eriksson. He actually gave a tutorial in how one accesses voicemail by punching in a set default code. Clearly, from the account that he gives, he did it routinely as editor of the Daily Mirror. It was something that happened at the Daily Mirror, he was, of course, also an ex-employee of News International. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 170 Culture, Media and Sport Committee: Evidence

Whereas the actual passage in Mr Morgan’s book reads: Friday 26 January I’ve been called to another interview with the DTI next month. Rather worryingly, this development leads to a flurry of calls from journalists asking about it. Given that the DTI has not to my knowledge leaked anything about this case to anyone, I am mystified. But someone suggested today that people might be listening to my mobile phone messages. Apparently if you don’t change the standard security code that every phone comes with, then anyone can call your number and, if you don’t answer; tap in the standard four digit code to hear all your messages. I’ll change mine just in case, but it makes me wonder how many public figures and celebrities are aware of this little trick.

This, as you can see, puts a completely different light on the matter.

Furthermore, nowhere in the book does Mr Morgan boast “that using that little trick enabled him win Scoop of the Year”. Again that claim is simply wrong.

I understand that on Tuesday afternoon Mr Morgan himself, in his capacity as a presenter for CNN, attempted to get Mrs Mensch to explain her allegation but she refused to do so citing Parliamentary privilege.

We hold no brief for Mr Morgan and have had little contact with him since he left our employment but it is wholly wrong that a Member of Parliament can use their position to make statements of “fact” that are wholly wrong. If a witness before your Committee did the same you would at best subject them to severe criticism and at worst would seek to have them held in contempt of Parliament.

We are writing to you to ask that you ensure that Mrs Mensch immediately corrects her statements. 21 July 2011

Letter from Louise Mensch MP to the Chair of the Culture, Media and Sport Committee

I write in response to the letter sent to the Committee by Trinity Mirror, in order to correct an error in my questioning during the Committee's evidence session of Tuesday 19 July.

In my questions to Rupert and James Murdoch and Rebekah Brooks, I wrongly stated that Piers Morgan, formerly editor of the Daily Mirror, had been open about personally hacking phones in a book he wrote. This was based on my misreading of an article in the Daily Telegraph published on the 13 July, which covered Mr. Morgan's description in his book of how to hack a phone and how he won the Scoop of the Year on the story of Sven-Goran Eriksson and Ulrika Jonsson. The Telegraph report covers the claim of a blogger that this story was acquired by phone hacking, and I misread that as Mr. Morgan himself claiming this to be true.

Therefore, I must apologise to Mr. Morgan and the Committee for this error about his book. I would have done much better to stick to quoting the figures for the Daily Mirror (and for Associated Newspapers) in “Operation Motorman”, as identified in the report “What Price Privacy Now”. The question for me was always was illegality confined to the News of the World and News International titles, or whether those papers had an air of entitlement in a Fleet Street culture where hacking and blagging was in fact widespread. I welcome the review announced by Trinity Mirror into practises in its newsroom. 29 July 2011

Written evidence submitted by Harbottle & Lewis

As requested, we are writing to update the Committee on the current position so far as it relates to this firm.

We set out our understanding of the position as it was in our letter sent yesterday, of which we attach a copy (see below).

1. At 17:56 last night we received an email from Linklaters LLP, now acting for News Corp and News International, setting out a waiver of privilege, limited to answering questions put to us by the Police or any relevant Parliamentary Committee. We are currently reviewing the ambit and effect of this waiver and will contact the Committee again as appropriate.

2. We confirm that we are happy for this letter and its attachment to be treated as evidence. 21 July 2011

Letter from Harbottle & Lewis, Dated 20 July 2011:

Yesterday, Mr James Murdoch and Mr Rupert Murdoch appeared before the House of Commons Culture, Media and Sport Select Committee (“the Committee”). Lord MacDonald appeared before the House of cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Commons Home Affairs Committee. Their evidence and the evidence of others was broadcast live and has been widely reported globally by the press. There is a great deal of interest in the matters which the Committee is investigating and understandably so.

On occasion the questions to, and evidence of, James and Rupert Murdoch and Lord MacDonald referred to advice which a former partner in this firm, Mr Lawrence Abramson, gave to News International in 2007.

As the Committee might be aware, Mr Abramson left Harbottle & Lewis LLP on 31 May 2010. No solicitors presently at the firm have any contemporaneous knowledge of the instructions Mr Abramson was given by News International in 2007 or the advice he gave to News International in May 2007. When Mr Abramson completed this retainer for News International, he followed the normal solicitor's practice of closing his file and retaining it in archived storage. The file was retrieved from archive earlier this year. It principally consists of (1) retained emails from News International's servers which Mr Abramson had reviewed (“the News International Emails”) and (2) a copy of his correspondence with those instructing him at News International covering the period of the retainer (“the Correspondence File”).

We understand that in order not to compromise the ongoing investigations by the Metropolitan Police Service, the News International Emails are not presently in the public domain.

Mr Paul Farrelly MP yesterday asked James Murdoch “could you provide us with the instructions that were given to Harbottle & Lewis, as well as the extent of the information that was given to them out of the totality of information that was available”. Mr Murdoch replied by saying the following: “If additional detail is required around those legal instructions, we will consult and come back to the Chairman with a way to satisfy you with the information that you'd like to have”.

It is not clear from this what steps News International will take in practice. We have ourselves asked News International's solicitors at BCL Burton Copeland whether their client is prepared to waive the confidentiality and legal professional privilege which attaches to the Correspondence File. They have refused.

Notwithstanding News International's position to date, we are considering whether we can, consistently with our professional obligations and the constraints currently imposed on us by News International, assist the Committee by providing substantive comments on yesterday's evidence. If we take the view that we can properly assist the Committee, we will do so within whatever timeframe the Committee sets.

If, in the meantime, News International agrees to disclose the Correspondence File in full to the Committee, then we will be able to provide a fuller commentary on yesterday's evidence.

In the meantime, we are very grateful to you, Mr Chairman, and to the Committee for taking this letter into account. 20 July 2011

Written evidence submitted by Jonathan Chapman

My attention has been drawn to an article in today's Evening Standard headed “Lawyer set to challenge Murdoch's evidence”. I have no idea as to the provenance of this article, nor did I have anything whatsoever to do with it. Accordingly, I understand fully the frustration you refer to in your statement in the article.

My only public comment on these matters was in the form of a statement released through my lawyers last week to The Times and to the Wall Street Journal, in the following terms: “There were a number of serious inaccuracies in statements made to the Culture, Media and Sport Select Committee yesterday concerning Mr. Chapman and his involvement in the issues under investigation. There have also been inaccuracies in the subsequent reporting of those proceedings. For example, there has been inaccurate reporting in certain media linking Mr. Chapman to decisions made in relation to litigation involving the News of the World, such as on settlement payments and payment of the defence costs of third parties. For the record, Mr. Chapman was responsible solely for corporate and commercial legal matters at News International and had no responsibility for any such decisions, nor did any editorial lawyers ever report to him. Mr. Chapman is considering these issues with his lawyers and has no further comment to make at this stage, save to confirm that he is willing fully to cooperate with the Select Committee in its investigations in order to ensure that the truth is established”.

As the statement indicates, I am currently taking advice on these matters from my lawyers, including, in particular, on the question of the ongoing investigation by the police. Subject to that, I would be delighted to cooperate fully with your Committee in its investigations. 26 July 2011 cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 172 Culture, Media and Sport Committee: Evidence

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

Many thanks for your letter of 29 July, further to my oral evidence to your Committee on 19 July. I am grateful to have the opportunity to be of further assistance to you. I am committed to ensuring that News Corporation and its subsidiary, News International, will cooperate fully with you. In my responses below I have sought to provide further information in a number of areas, where this is available. It is worth highlighting at this point that a number of your specific questions concern matters which are not within my own personal knowledge. Where that is the case I have made it clear that my answers are based on information obtained from my colleagues. I do that by prefacing my answers with a statement such as “I am informed”. Specifically, this applies in relation to the answers to questions 3, 4, 5, 6, 8, 9, 13, 14, 15, 16, 17, 18 and 19.

I would like to remind the Committee that I rejoined News Corporation in December 2007 and that News International was one of the companies in Europe and Asia for which I was responsible and that many of the underlying facts to the answers below pre-date my joining.

1. You promised to explain why News International did not disclose internal e-mails that would have aided the appeal of Mr Tommy Sheridan? [Q236]

I am informed that this matter is being looked into by Scottish police. We are co-operating with the Scottish and Metropolitan Police on this matter.

2. Please supply the News Corporation code of conduct document and indicate whether you require your executives to make annual statements that they have abided by your codes of conduct and ethics. [Q20]

I enclose the News Corporation Standards of Business Conduct. This is a comprehensive Code of Conduct which I understand was introduced in February 1996. It covers matters such as integrity and transparency of conduct, corporate recordkeeping and accounting, compliance with applicable laws and the prevention of corruption and bribery. It is reviewed periodically and was updated in 2004, 2006 and 2011. In addition to these standards the company has adopted an additional code of ethics for chief executives and senior financial officers. A copy of that document is enclosed. News Corporation currently does not require annual employee certifications with respect to receipt or review of its Standards of Business Conduct. All new employees are given the Standards and each employee has received an email of the recently updated version. Rather than undertaking the massive task of tracking certifications from each individual employee, the Company has been considering obtaining a certification from the head human resources person at each business unit that he or she distributed the Standards to the employees in their business unit, an approach we believe strikes an appropriate middle-ground.

3. Were the settlements to Gordon Taylor and Max Clifford paid by News International, News Corporation or News Group Newspapers? [Q256]

I am informed that payments to Mr Taylor and Mr Clifford were made by News International Services Company Limited (“NISCO”), a subsidiary of News International Limited (“News International”). These payments were made on behalf of, and charged back to, News Group Newspapers Limited (“NGN”). NGN is the entity which published the News of the World.

4. Please supply details of the contract with Mr Max Clifford, which was cancelled by Mr Andy Coulson. [Q285 & Q286]

Searches have been made and my colleagues have not yet been able to find a copy of any contract with Mr Max Clifford or his company, although we will continue our searches. I am unable to confirm that there was a written contract with Mr Clifford. I am informed that the arrangement between Mr Clifford and News International was terminated by Andy Coulson. I am informed that Mr Clifford’s company was, thereafter, paid from time to time for exclusive news stories.

5. Please supply details of payments made to Clive Goodman and Glenn Mulcaire subsequent to their guilty plea, and tell us who signed them off. [Q294 & Q295 & Q321]

I am informed that Mr Goodman was paid £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 for News International. The second was approved by Mr Cloke and Mr Jon Chapman, Director of Legal Affairs for News International. These payments were in the context of an unfair dismissal claim brought by Mr Goodman. Legal fees incurred by Mr Mulcaire were paid after his guilty plea—further detail of this is set out in the answer to question 6 below. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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6. Please confirm what legal fees have been paid In respect of Glenn Mulcaire and the current situation regarding such payments. If his legal costs are still being paid, please provide details of the contract or other obligations assumed that oblige his legal costs to be paid. [Q320] I am informed that approximately £246,000 was paid to Mr Mulcaire’s lawyers. Mr Mulcaire’s legal fees are no longer being paid by News International. On 20 July 2011 News International announced that it would no longer pay Mr Mulcaire’s legal fees and subsequently confirmed that in writing to Mr Mulcaire’s lawyers on 28 July 2011.

7. Please Indicate when, precisely, you first came to know about the file of emails that was discovered, allegedly in the offices of Harbottle and Lewis. [Q326] I first heard about the existence of the Harbottle & Lewis emails on or about 20 April 2011.

8. Please provide the instructions given to Harbottle and Lewis. [Q340] I enclose copies of the documents which I am informed constitute the correspondence (both hard copy and email) between the company and Harbottle & Lewis in relation to the review conducted by Harbottle & Lewis in May 2007 which led to their letter dated 29 May 2007, Redactions have been made after discussion with the Metropolitan Police Service. I do not know what other oral instructions were given, if any.

9. Could you tell the Committee the extent of the information that was given to Harbottle and Lewis out of the totality of information that was available? [Q340] In addition to the documents referred to in answer to question 8 above, I am told that Harbottle & Lewis appear to have been given online access to emails from six email accounts, namely the email accounts of individuals whose names arose in the context of employment proceedings brought by Mr Goodman following his dismissal. I do not know what else, if anything, was given to them.

10. Please indicate whether you would like to reconsider the Harbottle and Lewis letter provided to the Committee during its 2009 inquiry, and, if so, why. [Q347] I was asked during my appearance before the Select Committee whether I would like to withdraw the Harbottle & Lewis letter from the record “as an accurate portrayal of what really went on at the News of the World” [Q345]. In my evidence I explained that it was a relevant document in terms of the reliance placed on it by News International at the time. I did not suggest, however, that it should still be relied upon. As we now know, the facts show that the wrongdoing at the News of the World did spread beyond Mr Goodman. The letter cannot, therefore, be relied upon any more.

Based on Qq 242, 243, 244 and 247 11. Before authorising the Gordon Taylor settlement, what did you know of the interception and other facts surrounding it including: by whom it was carried out; and on whose instruction or behalf? How, when and by whom were you told; and what evidence did you see or ask for regarding the interception? I was briefed by Mr Crone and Mr Myler on the status of the case on 10 June 2008 at a meeting in my offices in Wapping. My recollection is that the meeting was relatively short (certainly less than 30 minutes). I explained my understanding of the case after that briefing in my answer to Q242. Prior to the meeting of 10 June 2008, I do not recall being given any briefing nor do I recall either Mr Crone or Mr Myler referring to, or showing me, any documents during the meeting. I recall being told by them when we met that the civil litigation related to the interception of Mr Taylor’s voicemails to which Mulcaire had pleaded guilty the previous year and that there was evidence that Mulcaire had carried out this interception on behalf of the News of the World. It was for this reason that Mr Crone and Mr Myler recommended settlement. I was told that external counsel agreed with this. I was advised that there was no benefit in continuing to litigate the case and that we would lose. I did not ask for any evidence—I was content to rely upon Mr Myler and Mr Crone. Let me reiterate that I have no recollection of any mention of “Thurlbeck” or a “for Neville” email. Neither Mr Myler nor Mr Crone told me that wrongdoing extended beyond Mr Goodman or Mr Mulcaire. There was nothing discussed in the meeting that led me to believe that a further investigation was necessary. As far as I can recall, I authorised Messrs Crone and Myler at the meeting of 10 June to go ahead and negotiate a settlement. There were no further meetings and I do not recall any further discussion on the subject. However, it is possible, although I do not recall it, that someone may have given me a brief update subsequently as to the amount of the final settlement. I would like to clarify what I said to the Committee about how the amount of the Taylor settlement was reached. In my answers to Q264 and Q392 I explained that I had understood that the amount was based on a judgement of the likely damages that could be awarded, and the costs and expenses associated with litigation. However, I did not know at the time or when I gave my evidence that any part of the amount of the Taylor settlement specifically related to the confidentiality aspect of the settlement. Since I gave this response, I have cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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been informed that confidentiality was a factor in determining the amount of the settlement payment; however, I was not party to those discussions nor was it my motivation in agreeing to settle the case which, as described above, was to avoid continuing to litigate a case which I understood we were bound to lose.

12. What did you know of the interception and other ‘facts’ surrounding it, including by whom it was carried out and on whose What are the financial thresholds for payments that would have required the approval of the Editor or of any of the other editorial postholders? There is an incomplete sentence at the beginning of this question. I believe that my answer to question 11 deals with what appears to be the gist of that question. The second sentence of this question is repeated as question 13. I will deal with that question in my answer 13 below.

13. What are the financial thresholds for payments that would have required the approval of the Editor or of any of the other editorial postholders? I have been informed that the Editor of the News of the World had authority to approve payments of £50,000. The following maximum approval limits were in place for other editorial postholders at the News of the World:

Desk heads £2,000 Scottish and Irish Editors £5,000 Senior Associate Editor £5,000 Deputy Editor £10,000 Deputy Managing Editor £20,000 Managing Editor £50,000

14. What is the maximum amount that could have been paid out by a single journalist without requiring approval a) in one transaction; b) in one year; b) to one person? I am informed that some senior journalists on the News of the World (desk heads) were able to approve payments up to £2000. I am not aware of any aggregate limits whether over one year or to one individual person. For all other journalists, and for payments above that level, the approval of the Managing Editor was required (cash payments also required the approval of the Editor or Deputy Editor).

15. Please describe the accounting process for petty cash transactions, including an indication of how long these records are kept for. I am informed that until 2007 there was a cash desk which held cash for use across all of the titles published by NGN. Any member of staff requiring petty cash was required to submit a document countersigned by the relevant Editor or Managing Editor. That document was required to identify the purpose of the payment. The document would then be presented to the cash desk and the cash handed over. After 2007 this system changed. Now a sum of cash is retained by each of the Managing Editors. Any member of staff requiring petty cash is required to submit a document to the Managing Editor identifying the purpose of the payment. If the Managing Editor is satisfied the cash is handed over to the applicant. The petty cash records are kept for at least 7 years.

16. Please give an indication of whether any of the records have been examined to look for payments to people who are neither employed by News International nor by approved suppliers and, if they have, details of who these people are. I am informed that the company has examined likely relevant cash payments made in relation to the News of the World and has handed all relevant documentation to the Metropolitan Police Service. However, News International has not yet undertaken an examination as broad as that suggested by this question.

Based on Q249 17. How many people have been disciplined or dismissed for violation of News International’s Corporate Code of Conduct each year since 2000? I am informed that our human resources department has records of those dismissed for misconduct although I have been asked to point out that it is not clear that all of this misconduct was such that it would constitute a breach of the News Corporation Standards of Business Conduct. These may also have included cases where there were appeals against dismissal which were compromised. However, I do not currently have any figures for these cases. The numbers dismissed over the period in question are as follows: cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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2000 6 2001 5 2002 3 2003 6 2004 5 2005 6 2006 5 2007 7 2008 2 2009 5 2010 1 2011 3 Total 54

18. What mechanisms and processes does News Corporation have in place to ensure that It will find out about any criminal or fraudulent activity that has been committed within the company or any of its subsidiaries? News Corporation has an internal audit function which conducts audits of our business units and seeks to identify any improper conduct. News Corporation encourages employees to report violations and has a strict policy that no employee making a complaint will be the subject of any criticism. News Corporation maintains an Alertline, which allows employees to make anonymous reports. News Corporation also has a complaint handling committee which includes representatives from the audit, legal and compliance functions. This committee reviews and responds to all complaints made about conduct in the company. Finally, as the Committee is aware, training programmes are regularly run to seek to ensure that the Press Complaints Commission’s Code of Practice is understood and adhered to.

Based on Qq 539 and 540 (originally directed at Rebekah Books) 19. Please tell us which Editor, Night Editor, News Editor and lawyer were on duty reviewing the stories for the paper published on 14 April 2002, including the story that makes reference to a voicemail in the Milly Dowler case? I am informed that at the date you specify, the positions at the News of the World to which you refer were held by the following individuals:

Editor: Rebekah Brooks Night Editor: Peter Smith News Editor: Neville Thurlbeck Legal Manager: Tom Crone Of those, our records show that Ms Brooks was on paid holiday from Tuesday, 9 April 2002 until Saturday, 13 April 2002 inclusive. We no longer have records dating back to 2002 showing who deputised for Ms Brooks while she was on holiday; nor do we still hold records for who was the on-duty lawyer on this date. I trust this information is helpful to the Committee. 11 August 2011 Documents referred to in the answer to Question 8—(See below) ______EMAIL: From: Chapman, Jon Sent: 10 May 2007 15:43 To: Lawrence Abramson Cc: Cloke, Daniel Subject: Our conversation cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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PRIVILEGED AND CONFIDENTIAL Lawrence On 5 February 2007, we terminated the employment of Clive Goodman, the Royal Correspondent of the News of the World, following his imprisonment for conspiracy to intercept voicemail messages. This Interception was carried out through a private investigator, Glen Mulcaire, who was also imprisoned. I have faxed you the termination letter and letters of 2 March, 12 March and 14 March relating to an appeal against dismissal. The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his illegal actions were known about and supported by both or either of [REDACTED] and [REDACTED] and that [REDACTED] and others were carrying out similar illegal procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions. We will make available to you access to the emails in question as soon as possible. Please don’t hesitate to contact me for any further clarification. Thanks and best wishes. Jon Chapman Director of Legal Affairs News International Limited ______

News International Limited [Facsimile Message from Corporate Legal Affairs] To: Lawrence Abramson From: Jon Chapman Date: 10 May 2007 PRIVATE & CONFIDENTIAL BY COURIER Clive Goodman Esq 5 February 2007 Dear Clive I am sorry to have to be writing this letter, but am afraid that events of the last few days and months provide us no choice but to terminate your employment with News Group Newspapers Limited. This action, I know you understand, is the consequence of your plea of guilty, and subsequent imprisonment on 26 January, in relation to conspiracy to intercept voicemail messages. This obviously constitutes a very serious breach of your obligations as an employee, such as to warrant dismissal without any warnings. In the circumstances of your plea and the court’s sentence, it is reasonable for us to dismiss you without any further enquiries. I recognise this episode followed many unblemished, and frequently distinguished, years of service to the News of the World. In view of this, and in recognition of the pressures on your family, it has been decided that upon your termination you will receive one year’s salary. In all the circumstances, we would of course be entitled to make no payment whatever. To summarise, in formal language, the following arrangements apply with immediate effect (but may be varied or revoked in the event of a successful disciplinary appeal); (a) Your dismissal takes effect immediately and your final day of employment is therefore today. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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(b) You will be paid, through payroll, on 6 February 2007, 12 months’ base salary, subject to normal deductions of tax and national insurance. (c) You must arrange for the return of any property, such as any laptop computer or mobile phone, belonging to us, in good condition, by 28 February. (d) We shall forward your P45 to you in due course. Again, Clive, I am deeply sorry we have found it necessary to take this measure, but we have no other choice. Of course, you have the right to appeal against your dismissal. If you wish to appeal, you (or your legal representative) must do so in writing to Stuart Kuttner within two weeks of the date of this letter. You would then have the opportunity to present your case at an appeal hearing in accordance with our disciplinary procedure. You may be accompanied at the hearing by a fellow employee or a NISA representative. Lodging an appeal will not delay the dismissal taking effect. If you have any questions, please contact Stuart Kuttner. Yours sincerely, Les Hinton Executive Chairman News International Limited ______Daniel Cloke Esq Group Human Resources Director News International 2 March 2007 Dear Mr Cloke, Re: Notice of termination of employment I refer to Les Hinton’s letter of February 5, 2007 Informing me of my dismissal for alleged gross misconduct. The letter identifies the reason for the dismissal as “recent events”. I take this to mean my plea of guilty to conspiracy to intercept the voicemail messages of three employees of the royal family. I am appealing against this decision on the following grounds: (i) The decision is perverse in that the actions leading to this criminal charge were carried out with the full knowledge, and support of [REDACTED]. Payment for Glen Mulcaire’s services was arranged by the [REDACTED]. (ii) The decision is inconsistent, because the paper’s [redacted] and other members of staff were carrying out the same illegal procedures. The prosecution counsel, the counsel for Glen Mulcaire, and the Judge at the sentencing hearing agreed that other News of the World employees were the clients for Mulcaire’s five solo substantive charges. This practice was widely discussed in [redacted] , until explicit reference to it was banned by [redacted]. As far as I am aware, no other member of staff has faced disciplinary action, much less dismissal. (iii-iv) (REDACTED). (v) The dismissal is automatically unfair as the company failed to go through the minimum required statutory dismissal procedures. Yours sincerely, Clive Goodman cc Stuart Kuttner, Managing Editor, News of the World Les Hinton, Executive Chairman, News International Ltd ______

News International Newspapers Limited PRIVATE & CONFIDENTIAL 12 March 2007 Mr Clive Goodman Dear Mr Goodman, Thank you for your letter of 2nd March 2007. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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I would like to request your attendance at an appeal hearing on Tuesday, 20th March 2007 at 10.00 am at the offices of News Magazines Limited at 2 Chelsea Manor Gardens, London SW3 5PN (when you arrive there, please ask for me at Reception). The purpose of the hearing is to consider, under the News International disciplinary procedure, your appeal against your dismissal on 5th February, on the grounds raised in your letter of 2nd March. The appeal will be heard by Colin Myler, Editor of the News of the World, and I will also be in attendance. In addition, there will be a note taker present. You are entitled to be accompanied as specified in the Company’s Disciplinary procedure. Please let me know in advance if you decide to bring a companion and their name and contact details. If there are any documents you wish to be considered at the appeal hearing, please provide copies as soon as possible, If you do not have those documents, please provide details so that they can be obtained. I should point out that appeals against dismissal under our disciplinary procedure would generally be considered by the Dismissal Appeals Panel, which consists of employee and management representatives. However, News International has the right to disregard or disapply any part of this procedure on a case-by- case basis in exceptional circumstances and where there are reasonable grounds for doing so. Given that your notice of appeal makes extremely serious allegations against a number of employees, it is clearly inappropriate for your appeal to be considered by this Panel. I would be grateful if you could confirm that you have received this letter and that you will attend at the time stated above. If, for any unavoidable reason, you or your companion cannot attend at that time, please contact me by telephone. If you have any other questions, please contact me as soon as possible. Yours sincerely, Daniel Cloke Group Human Resources Director ______Daniel Cloke Esq Group Human Resources Director News International 14 March, 2007 Dear Mr Cloke, Thank you for your letter of March 12. Although I can confirm that I will be able to attend the planned appeal hearing on March 20, for the reasons set out below, I believe it would be sensible and reasonable to postpone the hearing. I note that you are proposing to alter substantially the normal procedure for such a hearing. I am not convinced that the proposed alterations are necessary. However, in light of the exceptional circumstances you identify in your letter, I think It would be sensible for me to be accompanied by my legal representative rather than a work colleague. Please confirm to me you ore happy to proceed on this basis. I will let you have copies of relevant documents in my possession as soon as possible. In the meantime, I would be grateful if you could provide the following documents: (i) A transcription of the sentencing hearing from the Old Bailey on January 26, 2007. (ii) Full details available by a print out of every story payment requested by me from October 2005 until my arrest to include details of which executive approved each credit for payment, which executive authorised each credit for final payment, and from which budget each credit came. Also, the same audit trail for story payment requests from me that were not authorised for payment. (iii) Emails and other documents relating to my transfer from the Editorial Management budget to the News budget and any further relevant documents. (iv) Copies of emails passing between [REDACTED] and me, [REDACTED] and me, [REDACTED] and me, [REDACTED] and me, and [REDACTED] and me for the period October 2005 until January 26 2007. (v) Copies of emails passing between [REDACTED] and [REDACTED] for the period October 2005 until the present day insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or ‘Alexander’ or any work carried out by him. (vi) Copies of emails passing between [REDACTED] and [REDACTED] for the period October 2005 until the present day insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or ‘Alexander’ or any work carried out by him. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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(vii) Copies of emails passing to and from [REDACTED] and [REDACTED] for the period October 2005 until the present day insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or ‘Alexander’ or any work carried out by him. (viii) Copies of emails passing between [REDACTED] and [REDACTED] during he period from August 2006 to the present day insofar as they relate to me or any work carried out by me ,or relate to Glen Mulcaire or ‘Alexander’ or any work carried out by him. Further, copies of any emails passing between [REDACTED] and [REDACTED] relating to my criminal case. (ix) Copies of [REDACTED] mobile phone records for 2005, 2006 and 2007 showing calls to and from Glen Mulcaire. (x) Copies of [redacted] appointments diary for the period from August 2006 to the present date. (xi) A full transcription of [REDACTED] testimony to the Department of Culture, Media and Sport’s select committee hearing into the self regulation of the Press, given on March 6 2007. In view of the additional documents that are essential in order for me to prepare properly for the appeal hearing, I think it sensible and reasonable to reschedule Tuesday’s meeting until I have been given reasonable time to consider these further documents. I look forward to your response as soon as possible. Yours sincerely, Clive Goodman ______EMAIL: From: Evette Duncan Sent: 14 May 2007 10:09 To: Ros Silver Subject: FW: Our conversation From: Evette Duncan On Behalf Of Lawrence Abramson Sent: 11 May 2007 14:42 To: Jon Chapman Cc: Daniel Cloke Subject: FW: Our conversation That is fine Jon. I have read your email and the letters you sent by fax and we can start pretty much whenever you want us to. Is the first step to put our respective IT departments In contact to see how we are best able to access the relevant email accounts? Kind regards, Yours sincerely Lawrence Abramson ______From: Lawrence Abramson Sent: 11 May 2007 11:47 To: Evette Duncan Subject: FW: Our conversation From: Jon Chapman Sent: 10 May 2007 15:43 To: Lawrence Abramson Cc: Daniel Cloke Subject: Our conversation PRIVILEGED AND CONFIDENTIAL Lawrence On 5 February 2007, we terminated the employment of Clive Goodman, the Royal Correspondent of the News of the World, following his imprisonment for conspiracy to intercept voicemail messages. This interception was carried out through a private investigator, Glen Mulcaire, who was also imprisoned. I have faxed you the termination letter and letters of 2 March, 12 March and 14 March relating to an appeal against dismissal. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his illegal actions were known about and supported by both or either of [REDACTED] and [REDACTED] and that [REDACTED] and others were carrying out similar illegal procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions. We will make available to you access to the emails in question as soon as possible. Please don’t hesitate to contact me for any further clarification. Thanks and best wishes. Jon Chapman Director of Legal Affairs News International Limited ______EMAIL: From: Lawrence Abramson Sent: 14 May 2007 10:42 To: Ros Silver Subject: FW: Our conversation ______From: Daniel Cloke Sent: 14 May 2007 07:34 To: Lawrence Abramson Subject: RE: Our conversation Hi Lawrence, Do you now have the emails? If not could you let me know please. My number is [REDACTED] or mobile is [REDACTED]. Thanks Daniel ______From: Lawrence Abramson Sent: 11 May 2007 14:42 To: Jon Chapman Cc: Daniel Cloke Subject: FW: Our conversation That is fine Jon. I have read your email and the letters you sent by fax and we can start pretty much whenever you want us to. Is the first step to put our respective IT departments in contact to see how we are best able to access the relevant email accounts? Kind regards. Yours sincerely Lawrence Abramson ______From: Lawrence Abramson Sent: 11 May 2007 11:47 cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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To: Evette Duncan Subject: FW: Our conversation ______From: Jon Chapman Sent: 10 May 2007 15:43 To: Lawrence Abramson Cc: Daniel Cloke Subject: Our conversation PRIVILEGED AND CONFIDENTIAL Lawrence On 5 February 2007, we terminated the employment of Clive Goodman, the Royal Correspondent of the News of the World, following his imprisonment for conspiracy to intercept voicemail messages. This interception was carried out through a private Investigator, Glen Mulcaire, who was also imprisoned. I have faxed you the termination letter and letters of 2 March, 12 March and 14 March relating to an appeal against dismissal. The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his illegal actions were known about and supported by both or either of [REDACTED] and [REDACTED] and that [REDACTED] and others were carrying out similar procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions. We will make available to you access to the emails in question as soon as possible. Please don’t hesitate to contact me for any further clarification. Thanks and best wishes. Jon Chapman Director of Legal Affairs News International Limited ______EMAIL: From: Simon Avery Sent: 14 May 2007 11:39 To: Lawrence Abramson Subject: FW: Webmail Access See below from News International. It’s quite straight forward, do you want me to pop down and go through it with you? —Original Message— From: Simon Lowndes Sent: 14 May 2007 11:27 To: Simon Avery Subject: Webmail Access Simon, As per our telephone conversation, instructions below to access the Public Folder within our MS Exchange e-mail system : 1. Use URL https://gateway.newsint.co.uk/exchange 2. Domain \ username = ni\lawyer cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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3. Password = mailreview 4. Click on Public Folders ( bottom left hand side ) 5. Click on + sign for Human Resources 6. Click on + sign for Daniel 7. All e-mail items to view are contained in the 5 sub folders at this level. Any issues, please give me a call. Simon Lowndes Head of Managed Services Information Technology ______EMAIL: From: Yun Chan on behalf of Lawrence Abramson Sent: 25 May 2007 13:13 To: Jon Chapman and Daniel Cloke Subject: News International Importance: High DRAFT FOR DISCUSSION THIS PM We have on your Instructions searched the emails that you were able to let us have access to from the accounts of:- [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] I can confirm that we did not find any evidence that proved that either [REDACTED], [REDACTED], or [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other journalists at the News of the World were engaged in illegal activities prior to their arrest. Please let me know If we can be of any further assistance. Kind regards. Yours sincerely Lawrence Abramson Harbottle & Lewis LLP ______EMAIL: From: Jon Chapman Sent: 29 May 2007 12:50 To: Lawrence Abramson; Daniel Cloke Subject: RE: News International Lawrence After discussing this further, Daniel and I would like to try to get slightly closer to the wording of my original instruction email which stated: “The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his illegal actions were known about and supported by both or either of [REDACTED] and that [REDACTED] and others were carrying out similar Illegal procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions.” I would suggest the following: We have on your instructions reviewed the emails to which you have provided access from the accounts of. [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] These emails cover the period from[]to[]. I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman’s illegal actions were known about and supported by both or either of [REDACTED] and/ or that [REDACTED] and others were carrying out similar illegal procedures. Please let me know if we can be of any further assistance. Thanks and best wishes. PS Did you have any further thoughts on getting the transcript of the Old Bailey proceedings? ______From: Lawrence Abramson Sent: 25 May 2007 17:53 To: Jon Chapman, Daniel Cloke Subject: Re: News International I can’t say the last sentence in the penultimate para, I’m afraid. Can we discuss next week? —Original Message— From: Jon Chapman To: Lawrence Abramson; Daniel Cloke Sent: Fri May 25 16:12:39 2007 Subject: RE: News International A few suggestions: We have on your instructions reviewed the emails to which you have provided access from the accounts of: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] These emails cover the period from[]to[]. I can confirm that we did not find anything which appeared to us to prove that either [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other person employed or engaged by the News of the World was involved in illegal activities prior to the arrest of Messrs. Goodman and Mulcaire. 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 appeal put forward by him. Please let me know if we can be of any further assistance. Kind regards. Yours sincerely Lawrence Abramson ______From: Lawrence Abramson Sent: 25 May 2007 13:13 To: Jon Chapman, Daniel Cloke Subject: News International Importance: High DRAFT FOR DISCUSSION THIS PM cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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We have on your instructions searched the emails that you were able to let us have access to from the accounts of:- [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] I can confirm that we did not find any evidence that proved that either [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other journalists at the News of the World were engaged in illegal activities prior to their arrest. Please let me know if we can be of any further assistance. Kind regards. Yours sincerely Lawrence Abramson Harbottle & Lewis LLP ______EMAIL: From: Lawrence Abramson Sent: 29 May 2007 13:03 To: Jon Chapman Subject: Re: News International I think I can say this. I’ll get it finalised. Would you prefer a letter or an email? You need permission from the judge to get a transcript from the crown court. We’ve asked but haven’t heard back yet. We should hear this week, I hope. —Original Message— From: Jon Chapman To: Lawrence Abramson; Daniel Cloke Sent: Tue May 29 12:49:38 2007 Subject: RE: News International Lawrence After discussing this further, Daniel and I would like to try to get slightly closer to the wording of my original instruction email which stated:- “The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his illegal actions were known about and supported by both or either of [REDACTED] and that [REDACTED] and others were carrying out similar illegal procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions.” I would suggest the following: We have on your instructions reviewed the emails to which you have provided access from the accounts of: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] These emails cover the period from[]to[]. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 185

I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman’s illegal actions were known about and supported by both or either of [REDACTED] and/ or that [REDACTED] and others were carrying out similar illegal procedures. Please let me know if we can be of any further assistance. Thanks and best wishes. PS Did you have any further thoughts on getting the transcript of the Old Bailey proceedings? ______From: Lawrence Abramson Sent: 25 May 2007 17:53 To: Jon Chapman; Daniel Cloke Subject: Re: News International I can’t say the last sentence in the penultimate pare, I’m afraid. Can we discuss next week? —Original Message—- From: Jon Chapman To: Lawrence Abramson; Daniel Cloke Sent: Fri May 25 16:12:39 2007 Subject: RE: News International A few suggestions: We have on your instructions reviewed the emails to which you have provided access from the accounts of: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] These emails cover the period from[]to[]. I can confirm that we did not find anything which appeared to us to prove that either [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other person employed or engaged by the News of the World was involved in illegal activities prior to the arrest of Messrs. Goodman and Mulcaire. 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 appeal put forward by him. Please let me know if we can be of any further assistance. Kind regards. Yours sincerely Lawrence Abramson ______From: Lawrence Abramson Sent: 25 May 2007 13:13 To: John Chapman; Daniel Cloke Subject: News International Importance: High DRAFT FOR DISCUSSION THIS PM We have on your instructions searched the emails that you were able to let us have access to from the accounts of:- [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] I can confirm that we did not find any evidence that proved that either [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other journalists at the News of the World wer engaged in illegal activities prior to their arrest. Please let me know if we can be of any further assistance. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 186 Culture, Media and Sport Committee: Evidence

Kind regards. Yours sincerely Lawrence Abramson Harbottle & Lewis LLP ______EMAIL: From: Jon Chapman Sent: 29 May 2007 13:54 To: Lawrence Abramson Subject: RE: News International Lawrence Great. Would be good to have it on letterhead. Can you please drop the sentence which reads These emails cover the period from[]to[]. Thanks and best wishes. Jon ______From: Lawrence Abramson Sent: 29 May 2007 13:03 To: Jon Chapman Subject: Re: News International I think I can say this. I’ll get it finalised. Would you prefer a letter or an email? You need permission from the judge to get a transcript from the crown court. We’ve asked but haven’t heard back yet. We should hear this week, I hope. —Original Message— From: Jon Chapman To: Lawrence Abramson; Daniel Cloke Sent: Tue May 29 12:49:38 2007 Subject: RE: News International Lawrence After discussing this further, Daniel and I would like to try to get slightly closer to the wording of my original instruction email which stated: “The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his illegal actions were known about and supported by both or either of [REDACTED], and that [REDACTED] and others were carrying out similar illegal procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions.” I would suggest the following:- We have on your instructions reviewed the emails to which you have provided access from the accounts of: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] These emails cover the period from[]to[]. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 187

I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman’s illegal actions were known about and supported by both or either of [REDACTED], and/or that [REDACTED] and others were carrying out similar illegal procedures. Please let me know if we can be of any further assistance. Thanks and best wishes. Jon PS Did you have any further thoughts on getting the transcript of the Old Bailey proceedings? ______From: Lawrence Abramson Sent: 25 May 2007 17:53 To: Jon Chapman; Daniel Cloke Subject: Re: News International I can’t say the last sentence in the penultimate para, I’m afraid. Can we discuss next week? —Original Message— From: Jon Chapman To: Lawrence Abramson; Daniel Cloke Sent: Fri May 25 16:12:39 2007 Subject: RE: News International A few suggestions: We have on your instructions reviewed the emails to which you have provided access from the accounts of: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] These emails cover the period from[]to[] I can confirm that we did not find anything which appeared to us to prove that either [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other person employed or engaged by the News of the World was involved in illegal activities prior to the arrest of Messrs. Goodman and Mulcaire. 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 appeal put forward by him. Please let me know if we can be of any further assistance. Kind regards. Yours sincerely Lawrence Abramson From: Lawrence Abramson Sent: 25 May 2007 13:13 To: Jon Chapman; Daniel Cloke Subject: News International Importance: High DRAFT FOR DISCUSSION THIS PM We have on your instructions searched the emails that you were able to let us have access to from the accounts of:- [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] I can confirm that we did not find any evidence that proved that either [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other journalists at the News of the World were engaged in illegal activities prior to their arrest. Please let me know if we can be of any further assistance. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 188 Culture, Media and Sport Committee: Evidence

Kind regards. Yours sincerely Lawrence Abramson Harbottle & Lewis LLP ______EMAIL: From: Lawrence Abramson Sent: 29 May 2007 17:44 To: Jon Chapman Subject Clive Goodman Attachments: 20070428173551675.pdf Please see attached sent by post and email. Kind regards Yours sincerely Lawrence Abramson Harbottle & Lewis LLP

Harbottle & Lewis LLP ______Jon Chapman News International Limited VIA POST AND EMAIL 29 May 2007 Dear Jon Re: Clive Goodman We have on your instructions reviewed the mails to which you have provided access from the accounts of: [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] [REDACTED] I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman’s illegal actions were known about and supported by both or either of [REDACTED] and [REDACTED] and/or that [REDACTED] and others were carrying out similar illegal procedures. Please let me know if we can be of any further assistance. Thanks and best wishes. Yours sincerely Lawrence Abramson

Letter from the Chair of the Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation During the Committee’s recent evidence session on 19 July 2011, you made a number of commitments to write to the Committee with further information. For your convenience, I have listed these questions below and attached the relevant pages of the transcript: (1) You promised to explain why News International did not disclose internal e-mails that would have aided the appeal of Mr Tommy Sheridan? [Q236] (2) Please supply the News Corporation code of conduct document and indicate whether you require your executives to mak e annual statements that they have abided by your codes of conduct and ethics. [Q250] (3) Were the settlements to Gordon Taylor and Max Clifford paid by News International, News Corporation or News Group Newspapers? [Q256] cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 189

(4) Please supply details of the contract with Mr Max Clifford, which was cancelled by Mr Andy Coulson. [Q285 & Q286] (5) Please supply details of payments made to Clive Goodman and Glenn Mulcaire subsequent to their guilty plea, and tell us who signed them off. [Q 294 & Q295 & Q321] (6) Please confirm what legal fees have been paid in respect of Glenn Mulcaire and the current situation regarding such payments. If his legal costs are still being paid, please provide details of the contract or other obligations assumed that oblige his legal costs to be paid. [Q320] (7) Please indicate when, precisely, you first came to know about the file of emails that was discovered, allegedly in the offices of Harbottle and Lewis. [Q326] (8) Please provide the instructions given to Harbottle and Lewis. [Q340] (9) Could you tell the Committee the extent of the information that was given to Harbottle and Lewis out of the totality of information that was available? [Q340] (10) Please indicate whether you would like to reconsider the Harbottle and Lewis letter provided to the Committee during its 2009 inquiry, and, if so, why.[Q347]

In addition to the above, we would like to ask you the following questions, which arise from points made during oral evidence:

Based on Qq 242, 243, 244 and 247: (11) Before authorising the Gordon Taylor settlement, what did you know of the interception and other facts surrounding it including: by whom it was carried out; and on whose instruction or behalf? How, when and by whom were you told; and what evidence did you see or ask for regarding the interception? (12) What did you know of the interception and other ‘facts’ surrounding it, including by whom it was carried out and on whose What are the financial thresholds for payments that would have required the approval of the Editor or of any of the other editorial postholders? (13) What are the financial thresholds for payments that would have required the approval of the Editor or of any of the other editorial postholders? (14) What is the maximum amount that could have been paid out by a single journalist without requiring approval a) in one transaction; b) in one year; b) to one person? (15) Please describe the accounting process for petty cash transactions, including an indication of how long these records are kept for. (16) Please give an indication of whether any of the records have been examined to look for payments to people who are neither employed by News International nor by approved suppliers and, if they have, details of who these people are.

Based on Q249 (17) How many people have been disciplined or dismissed for violation of News International’s Corporate Code of Conduct each year since 2000? (18) What mechanisms and processes does News Corporation have in place to ensure that it will find out about any criminal or fraudulent activity that has been committed within the company or any of its subsidiaries?

Based on Qq 539 and 540 (originally directed at Rebekah Brooks) (19) Please tell us which Editor, Night Editor, News Editor and lawyer were on duty reviewing the stories for the paper published on April 14th 2002, including the story that makes reference to a voicemail in the Milly Dowler case?

Please send the response to the Committee’s secretariat using the contact details above. I would appreciate your response no later than 11 August.

The Committee reserves the right to call you back to give further oral evidence. 29 July 2011 cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 190 Culture, Media and Sport Committee: Evidence

Written evidence submitted by Rebekah Brooks, former CEO, News International

Thank you for your letter of 29 July 2011.

I am currently abroad and unable to access the material I need to answer your first question. I would be very grateful if you could extend the time for me to provide this information to 16 September 2011 by which time I hope I will be able to assist.

Regarding your second question, I first became aware of the suggestion that the number of a phone belonging to Sara Payne had been found in a notebook belonging to Mr Mulcaire when my attention was drawn to a piece in The Guardian online on the afternoon of 28 July 2011. In relation to the allegation by DCI Underhill it was brought to my attention following press reporting the next day, the 29 July 2011.

I released a statement on 28 July 2011 in response to the inaccuracies in the Guardian piece and to correct the inference they were trying to draw as follows: “These allegations are abhorrent and particularly upsetting as Sara Payne is a dear friend. For the benefit of the campaign for Sarah's Law, the News of the World have provided Sara with a mobile telephone for the last eleven years. It was not a personal gift. The idea that anyone on the newspaper knew that Sara or the campaign team were targeted by Mr Mulcaire is unthinkable. The idea of her being targeted is beyond my comprehension. It is imperative for Sara and the other victims of crime that these allegations are investigated and those culpable brought to justice”.

I am therefore unable to provide any information on who was responsible for any phone hacking either actual, attempted or contemplated in relation to Sara or DCI Underhill.

Letter from the Chair of the Culture, Media and Sport Committee to Rebekah Brooks, former CEO, News International

During the Committee’s recent evidence session on 19 July 2011, you made a commitment to write to the Committee with further information as to how often you either spoke to or met the various Prime Ministers since you became Editor of News of the World,ofThe Sun, and Chief Executive of News International.

In your evidence, you stated that part of the main focus of your editorship of the News of the World was campaigning in support of “Sarah’s Law”. Given this, we would be grateful if you would state when you first became aware that the phone of Sara Payne and possibly that of DCI Martyn Underhill had been hacked, and state who was responsible.

For your convenience, I have attached the relevant page of the transcript.

Please send the response to the Committee’s secretariat using the contact details above. I would appreciate your response no later than 11 August. 29 July 2011

Written evidence submitted by Jonathan Chapman

My Career at News International

I joined News International as Director of Legal Affairs in July 2003. The role has overall responsibility for all corporate and commercial legal matters within News International and, both when I joined and when I left, reported to the Chief Financial Officer, who in turn reports to the Chief Executive.

Responsibility for editorial legal matters within News International is wholly separate from that for corporate and commercial legal matters. Throughout my time at News International, Mr. Tom Crone had overall responsibility for editorial legal matters in his role as Legal Manager, News International. This role reported at the same level in the organisation as myself, latterly to the Chief Financial Officer.

I was, thus, never “top legal officer” at News International (for example, as referred to in Mr. James Murdoch’s answer to question 189).

On 23 June this year, I notified News International that I wished to leave the company. This was entirely at my own instigation, had never been suggested to me or discussed with me previously by News International, and was for personal reasons unconnected with the News of the World voicemail interception issue. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 191

Evidence given to the Committee on 19 July 2011 I wish to make it clear at the outset that I do not in any way seek to suggest that any of those giving evidence on 19 July intended to mislead the Committee in evidence given by them relating to myself or the 2007 review of certain emails carried out in News International and then by Harbottle & Lewis (the “2007 Email Review”). None of them has any first-hand knowledge whatosever of the circumstances of the 2007 Email Review, so they must have been wholly reliant on what they were told about this by others. Regrettably, this has, in my opinion, led to serious inaccuracies in what the Committee has been told.

Investigations and Inquiries after the Goodman/Mulcaire Arrests in August 2006 I am surprised and extremely concerned that, in the evidence given to the Committee on 19 July, the 2007 Email Review was deliberately put on a similar footing to, and given the same importance in terms of News International’s supposed reliance upon it, as the original police investigation and the PCC inquiry. This is the first time, to my knowledge, this has occurred and I believe this to be very misleading. At this point, it is worth looking at the question from the Chairman (question 154) which triggered the first of many references in the evidence to the 2007 Email Review. The Chairman refers to evidence taken by the Committee in 2009 from Messrs. Kuttner, Crone, Myler, Coulson and Hinton and states “All of them told us that there had been a thorough investigation and no evidence had ever been found that anybody else was involved. That clearly was not correct. Were any of them lying to this Committee?” The answer given to this question by Mr James Murdoch (“The company relied on three things for a period of time up until the new evidence emerged...the company relied on the legal opinion of outside counsel that was brought in related to those matters, who, with respect to their review, had issued a clear opinion that there was no additional illegality other than the two individuals involved before”) introduces what seems to me to be the new approach by News International of linking the 2007 Email Review with the police investigation and the PCC inquiry, and this approach continues in a very clear pattern in the answers given by Mr. James Murdoch to questions 339 and 362, and is further reinforced in Mr. Rupert Murdoch’s closing statement (after question 418). I thought it might be instructive to look at all references made by the individuals named in question 154 in their 2009 evidence to “investigations” or similar processes following the Goodman/Mulcaire arrests and have set these out, for the convenience of members of the Committee, in the Appendix to this statement (I have put specific references to the 2007 Email Review in bold). It seems to me that none of these individuals gives most weight to the 2007 Email Review and that, in particular, none of them in any way seeks to put it on a similar footing to, or to give it the same importance in terms of News International’s supposed reliance upon it as, the original police investigation and the PCC inquiry. In fact, generally, considerable emphasis appears to be given to an investigative exercise carried out by a firm called Burton Copeland who were apparently brought in by the News of the World in 2006 (see, for example, the answers given to questions 1394, 1395 and 1396 by Mr. Crone and Mr. Myler). I should note that I was not told about this exercise at the time and have no information about it, other than what is in the 2009 evidence. In fact, there is an earlier reference to this exercise in Mr. Hinton’s evidence to the Committee on 6 March 2007 (ie before the 2007 Email Review took place) when he is asked by Mr. Whittingdale (question 95) “You carried out a full, rigorous internal inquiry, and you are absolutely convinced that Clive Goodman was the only person who knew what was going on?”, his reply being “Yes, we have and I believe he was the only person, but that investigation, under the new editor, continues”. Although the Chairman’s question 154 to Mr. James Murdoch on 19 July mentions the evidence of five individuals in 2009, two of these (Mr. Coulson (who had left by the time of the 2007 Email Review) and Mr. Kuttner) only mention the Burton Copeland investigative exercise and, of the others, I think it fair to say that they give more weight to that exercise than to the 2007 Email Review. Even Mr. Hinton’s evidence—and he gave instructions for the 2007 Email Review to be carried out—refers in more than a passing manner to the Burton Copeland investigative exercise. In response to Mr. Farrelly’s question 2168 (see the Appendix), for example, his reply includes a clear reference to the Burton Copeland exercise: “We brought in a firm of solicitors and there were many, many conversations with the police, and not involving me. There was never firm evidence provided or suspicion provided that I am aware of that implicated anybody else other than Clive within the staff of the News of the World”. At one point, Mr. Hinton seems even to confuse the Burton Copeland investigative exercise and the 2007 Email Review (see his answer to question 1206 in the Appendix). Question number 154 from the Chairman on 19 July seems to have triggered an almost automatic response from Mr. James Murdoch whereby he refers to the 2007 Email Review as something upon which News International placed a very great degree of reliance that Goodman was working alone. No reference is made anywhere in the 19 July evidence to the work apparently done by “probably the leading firm in this country for white collar fraud” (Tom Crone responding to question 1388—see the Appendix). I do not understand why the Burton Copeland investigative exercise is no longer referred to by News International. Nor do I understand why the 2007 Email Review (which, as I will discuss later, was relatively limited in its scope and terms of reference) has now apparently become so hugely significant in the story of the News of the World and News International’s response to the events of 2006. I also had a strong overall cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 192 Culture, Media and Sport Committee: Evidence

impression from the 19 July proceedings that the process of providing evidence to the Committee seemed to focus unduly on disparagement of the way in which the 2007 Email Review was carried out, and of those individuals who carried it out, and that, as a result, less was learned about what was done or not done in response to the Goodman and Mulcaire arrests and their aftermath than the Committee might perhaps have wished.

The Nature of the 2007 Email Review To my knowledge, the 2007 Email Review was never intended to be a general internal inquiry or investigation into the issue of voicemail interception at the News of the World. To characterise and hold it out as such now, and to refer to it on several occasions in the same context as a major police investigation and an inquiry by a regulatory body, seems to me to be very misleading. The 2007 Email Review only came about as a result of the very specific circumstances of the internal disciplinary process involving Clive Goodman, and its scope and terms of reference were determined by that process and not by any other factor (Mr. James Murdoch actually partially recognises this in his answer to question 344). Due to the ongoing police investigation, I will not comment further on these circumstances but, as a result of such circumstances, Mr. Hinton, the Chief Executive, asked Daniel Cloke, the then head of human resources, to carry out a review of emails between Mr. Goodman and five other individuals (whose names are known to the Committee and the public). I was asked to assist in that exercise. The fact that the 2007 Email Review was carried out by the head of human resources and myself (as the employment lawyer for News International) demonstrates the context in which the review was carried out. Had there not been an ongoing disciplinary process involving Mr. Goodman in April 2007, there would have been no 2007 Email Review, and thus no internal exercise that News International could now purport to put on a similar footing to, and give the same importance as, the original police investigation and the PCC inquiry. The 2007 Email Review started over eight months after the Goodman/Mulcaire arrests (unfortunately, Mr. Rupert Murdoch’s reply to question 169 is thus incorrect (unless he is referring to Burton Copeland)— “eventually, we appointed—very quickly appointed—a very leading firm of lawyers in the City to investigate it further”). This seems to me to be a very long delay if the review was intended as a general internal investigation into the issue of voicemail interception at the News of the World (nor would such an investigation normally require an internal disciplinary process as a trigger). I would also suggest, perhaps, that some of the more evident differences between the 2007 Email Review and such an investigation might also be that:—(i) the review did not examine email traffic between Mr. Goodman and several other key senior reporters and editorial executives, current and former, at the News of the World (Mr. Farrelly correctly notes this in, for example, question 342 and I note that, in his answer to question 341, Mr. James Murdoch appears not to know why the 2007 Email Review was limited to the specific individuals it looked at), (ii) the review did not examine emails from and to Mr. Mulcaire and (iii) to state the obvious, it was simply a review of emails (so did not include, for example, staff interviews and a review of cash payments).

The Manner in which the 2007 Email Review was Carried Out Disparagement of the 2007 Email Review and those individuals who carried it out is readily apparent in the evidence given on 19 July (it can also be seen, for example, in coverage in a News International newspaper, The Times, which has clearly carried material purposely briefed from News International sources both before and after the 19 July Committee session). There is even a suggestion of a “cover-up”, implying perhaps some kind of misfeasance (Mr. Rupert Murdoch, in his answer to question 365, erroneously suggests, for example, that I had had a “report” of some kind from Harbottle & Lewis for a number of years which I had told nobody about but was rightly corrected by Mr. James Murdoch on this allegation, though Mr. Farrelly repeats the suggestion in question 524). Mr. Cloke and I reviewed a large number of emails with the aim of determining whether there was any reasonable evidence in those emails that a limited and specified number of individuals knew about Mr. Goodman’s voicemail interception activities. In order to carry out the review, Mr. Cloke and I were, I recall, given, on our respective computers, access to all those emails through an electronic folder of emails assembled by News International’s IT department. We carried out our reviews separately but conferred on our findings and discussed a number of emails which potentially required further review. Incidentally, to my knowledge, Mr. Myler was not involved in this exercise in any way, despite indications to the contrary both by Mr. James Murdoch and Mr. Rupert Murdoch in their evidence. We carried out the review carefully and diligently and found no such evidence within those emails, and I recall Mr. Cloke reported this back to Mr. Hinton. Mr. Hinton then requested that external counsel—it was agreed this would be Harbottle & Lewis—carry out a review of the same emails for the same purpose. Harbottle & Lewis were given, I believe, access to exactly the same folder of emails which we had reviewed on their own IT system and so reviewed exactly the same emails. This answers part of Mr. Farrelly’s question (346) to Mr. James Murdoch as to “the extent of the information that was given to [Harbottle & Lewis] out of the totality of information that was available”. Neither Mr. Cloke nor myself, nor Harbottle & Lewis, were tasked with looking for evidence of any other potentially illegal activities in the 2007 Email Review. I believe there was no suggestion at that time that cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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anything other than voicemail interception was an issue. I note at this point the questions and answers at 184 -186 in the Committee’s proceedings on 19 July. Due to the ongoing police investigation, I will not comment on any specific emails included within the 2007 Email Review. However, had I, in carrying out the 2007 Email Review, come across what I considered, within my then knowledge of criminal law (and I am not trained or experienced in criminal law), to be material evidence of either voicemail interception or any other criminal activity, I would, of course, have reported upon it immediately to my employer. I am sure Mr. Cloke and Mr. Abramson would say exactly the same. Why would that ever not be the case, given that we were two senior executives of News International, with no affiliations to the News of the World or its staff, and that the Harbottle & Lewis part of the 2007 Email Review was carried out by the Mr. Lawrence Abramson, who was Managing Partner, and a very senior and well-respected lawyer.

The Harbottle & Lewis Review I now turn to the question of the various archived emails provided to News International by Harbottle & Lewis several months ago. I do not believe the evidence given to the Committee on 19 July demonstrates any understanding or knowledge of how these came into existence. As I have indicated earlier, Mr. Rupert Murdoch refers to them as a “report” in his answer to question 365, as does Mr. Farrelly in his question 324 and Mr. James Murdoch in his answer to question 363. These and other references in the evidence imply a structured file with some apparent overall purpose. A typical definition of “report” is “an account or statement describing in detail an event, situation, or the like, usually as the result of observation, inquiry, etc”. I am not simply relying on semantics here—the emails in the Harbottle & Lewis archive are not a “report” and were not intended to be so. I believe the existence of a number of emails printed off from all those constituting the original folder provided electronically to Harbottle & Lewis might probably be explained simply in the context of how that firm went about its review of all the emails, although the Committee may, of course, wish to seek a first- hand account of this from the lawyer who was instructed with carrying out of the 2007 Email Review at Harbottle & Lewis. The existence of a number of emails in isolation from all the others in the folder suggests to me that a colleague of Mr. Abramson was tasked with doing an initial sweep of the emails and printing off from the electronic folder anything whatsoever that he or she felt should be looked at more closely. I would surmise that these would then have been reviewed more closely by/with Mr. Abramson, with the benefit of the context provided by the emails around them on the electronic folder. I should make it absolutely clear that neither I, nor in my belief anyone else at News International, was aware of the existence of this retained collection of some of the emails until earlier this year when they were provided to News International. There was no reason why we would be. It was not a report or dossier which Harbottle & Lewis wished to bring to News International’s attention as part of the 2007 Email Review (after all, all the emails in question were ones which had been previously reviewed internally at News International). It was simply part of their own internal working process and something they were perfecly entitled to do as part of their task—I had never instructed them not to print off emails or retain any so printed off. This, of course, means that there was no cover-up of the existence of these emails. At this point, addressing Mr. Farrelly’s question 362, in the context of those emails printed and retained by Harbottle & Lewis, therefore, nobody kept Mr. James Murdoch or any other News International/News Corporation executive from being in “full possession of the facts”. There is, of course, one obvious consequence of the current existence of these emails (which, as I have said, I believe were probably selected for printing simply because they were thought to require further review) in complete isolation from the context provided by the many other emails around them in the original electronic folder. That is that it is very easy to presume, without the benefit of that context, that all or many of them point to something sinister. It would appear, however, that by looking at them in the context of lengthy email “conversations” in the original electronic folder, Harbottle & Lewis were able to satisfy themselves that the letter of 29 May 2007 could be given to News International (thereby, of course, drawing the same conclusion as Mr. Cloke and myself). I should conclude this section by noting that there is a suggestion in Mr. Farrelly’s questioning to Ms. Brooks (see question 530, for example) that I somehow told Harbottle & Lewis what to write in their letter. There have also been suggestions in certain elements of the media to this effect. Whilst an element of negotiation on the terms of a legal opinion is not unusual, there is simply no way that a very senior and well-respected lawyer would let anyone tell him how to write an opinion unless he was comfortable with it! Ms. Brooks very rightly picks this up in her answer to question 533. As I have stated earlier, Mr. Cloke and I believed that we had come across no reasonable evidence of knowledge by others of voicemail interception in the emails reviewed in the 2007 Email Review, so clearly we would have hoped that Harbottle & Lewis would share that view.

Conclusion The 2007 Email Review was relatively limited in its scope and terms of reference, occurring purely in an employment-related context. It simply cannot reasonably be held out or characterised as the type of wider internal investigation that evidence given to the Committee on 19 July suggests it was. For that evidence to cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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have focussed to such an extent on the review and the manner it which it was conducted (including, for example, such serious misconceptions as the existence of a Harbottle & Lewis “report” separate to the 29 May letter) could be said to be a diversion from the very important issue of what the News of the World and News International did or did not do in response to the events of August 2006 and their aftermath. In my view, this cannot be conducive to the Committee’s aim of establishing the truth. 11 August 2011

Appendix to J Chapman Statement RELEVANT EXTRACTS FROM EVIDENCE TO CMS SELECT COMMITTEE Colin Myler/Tom Crone—21 July 2009 Q1383 Paul Farrelly: Mr Myler, I do not want to take up too much time because lots of other people want to come in, but I wanted to explore the basis for the evidence you gave the PCC, I believe, in February 2007 just after you arrived at the News of the World. At that stage what stage had investigations reached at the News of the World to your knowledge, because you gave the evidence to the PCC? Mr Myler: What had happened internally? Q1384 Paul Farrelly: Yes. Mr Myler: I think the first thing to remember is that as soon as Mr Goodman and Mr Mulcaire were arrested News International had an outside firm of solicitors to absolutely oversee the investigation to cooperate with the police, to be a bridgehead, to give whatever facility the police required. It was completely hands-off, if you like, for transparency from the company’s point of view. It was a nine month investigation. At the end of that nine months two people were convicted, tried and went to jail. No other member of the News of the World staff was questioned. It is important, if you would allow me to say so, that John Yates’ statement on 9 July after the first Guardian story appeared says this: “This case has been the subject of the most careful investigation by very experienced detectives. It has also been scrutinised in detail by both the CPS and leading counsel. They have carefully examined all the evidence and prepared the indictments—” Q1385 Paul Farrelly: We have seen this; we have this in evidence. Mr Myler: With respect, can I just finish this one sentence: “No additional evidence has come to light since this case has concluded; I therefore consider that no further investigation is required”. Q1388 Paul Farrelly: Who were the solicitors who handled the investigation? Mr Crone: Burton Copeland. They are probably the leading firm in this country for white collar fraud. Q1389 Paul Farrelly: Did that investigation go wider than investigating the circumstances because the court case was coming up of the Mulcaire/Goodman connection? Did it go wider and ask people such as the deputy editor, the managing editor, the news editor, the chief reporter as to whether they had been involved in any way with Mr Mulcaire? Did it go wider? Mr Crone: Sorry, this is for me? Q1390 Paul Farrelly: No, this is to Mr Myler because Mr Myler gave evidence to the PCC. Mr Myler: I think Mr Crone is the best person to answer. Q1391 Paul Farrelly: This is the basis of the evidence you gave to the PCC. Mr Myler: Mr Crone was there. This arrest took place, I believe, in August 2006. I think you should allow Mr Crone— Q1392 Paul Farrelly: To your knowledge, did that investigation go wider? Mr Myler: Wider than what? Q1393 Paul Farrelly: Than simply the relationship between Goodman and Mulcaire. Did the people either interview them or ask them to come forward under the basis of an amnesty if they had done something wrong to reveal themselves? Did it go to the accounts department? Mr Myler: I do not know whether or not the police— Q1394 Paul Farrelly: No, it is not the police. It is the News International investigation when you arrived. I want to know what your knowledge was of how far the remit went? Mr Myler: My recollection was that a very thorough investigation took place where there was a review of everything from how cash payments were processed. You have to remember that the Mulcaire contract, which the judge in the Goodman/Mulcaire trial said was absolutely above board and legal, meant that the staff had access to him 24/7. He was conducting enquiries perfectly legally and lawfully that meant journalists could call him for checks on electoral rolls or whatever. As I understand it, the inquiry was thorough; and to the executives that were there at the time they were happy with that. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Q1395 Paul Farrelly: Mr Crone, how wide was the inquiry? You understand the questions I am asking? Mr Crone: Yes. I got back the Tuesday after the arrests. They were arrested on one Tuesday and I was there the week after. By the time I got back, which must have been August 15, Burton Copeland were in the office virtually every day or in contact with the office every day. My understanding of their remit was that they were brought in to go over everything and find out what had gone on, to liaise with the police— Q1396 Paul Farrelly: Everything to do with Mulcaire and Goodman? Mr Crone: Yes, but what you have got to realise is, at the time the only case being looked at was an access of a Royal household—voicemails. The other names did not become known to us or, as far as I know, anyone else apart from the prosecution and the police, and the defence lawyers probably knew slightly earlier; the other names did not come out until November 29, which is five months later. What I think was being enquired into was what had gone on leading to the arrests; what, in the relationship with Mulcaire, did we have to worry about. Burton Copeland came in; they were given absolutely free-range to ask whatever they wanted to ask. They did risk accounts and they have got four lever-arch files of payment records, everything to do with Mulcaire, and there is no evidence of anything going beyond in terms of knowledge into other activities. Q1397 Paul Farrelly: I want to wrap-up fairly shortly. When the other names came into the frame after November 29, did the remit of the investigation in News International broaden? Mr Crone: Yes, to some extent but the questions had already been asked. Was anyone involved with Mulcaire, or doing this, that or the other? Burton Copeland had looked at all of the financial records; and there was subsequently an email check done which went to 2,500 emails; and that produced no evidence either. Q1405 Philip Davies: Can I just explore a bit further the idea about how many people at News International were involved in what was going on because, coming back to the point that Paul made, the idea that it was one rogue maverick journalist appears now to be a somewhat discredited theory. Given that the people who have been the victims of this—people like Gordon Taylor, Elle Macpherson—have nothing to do with the Royal Family, as Paul mentioned, surely that in itself would indicate to people that this must be going beyond Clive Goodman who was the Royal Editor; because why on earth would Clive Goodman be interested in the taped conversations of Gordon Taylor and Elle Macpherson? Mr Myler: 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, is the case. Can I just make the point that Mr Farrelly touched upon. In the course of talking to executives when I arrived to go through obviously what had happened—as I said, I conducted this inquiry with Daniel Cloke our Director of Human Resources—over 2,500 emails were accessed because we were exploring whether or not there was any other evidence to suggest essentially what you are hinting at. No evidence was found; that is up to 2,500 emails. Q1476 Mr Hall: I am quite intrigued about the fact that you said that you did a thorough trace through 2,500 emails. It occurred to me that there is a very good saying: “Don’t put anything in an email that you don’t want to see on the front page of the News of the World!” Were you not surprised that you did not find anything? Mr Myler: The investigation, actually, was done by one of our internal lawyers and our IT department, and they are not affiliated to one title; they work across the company and they are just told to do the search. As I said, it was overseen by our Director of Human Resources, who I think is as impartial, if you like, as most people can be in that situation.

Andy Coulson/Stuart Kuttner—21 July 2009 Q1558 Mr Ainsworth: What would you like to have done? Mr Coulson: It is difficult to say. I cannot give you a specific set of measures. To give you an example, once we knew that Clive Goodman had been arrested, obviously, we wanted to find out pretty quickly what had happened. So we instigated an internal inquiry; I brought in an independent set of solicitors with the primary purpose, I have to say, of trying to find out what happened in relation to Clive, and we discovered that these cash payments had taken place. So, yes, could I have tightened up the cash payment process? Maybe yes, and maybe I should have done. Q1563 Alan Keen: Mr Kuttner, how did you see Mr Coulson fitting into the management control system? Do you feel guilty that you left him to sink, really? Do you feel he should have known more about the payments that were being made, or did you feel that was not really his job and he was a journalist first and not a manager? Mr Kuttner: First things first: I deeply regret the circumstances in which Andy Coulson left the News of the World. He was a very fine editor of that newspaper and it was a very unhappy, traumatic time for the management of what I will call “my newspaper”, although I do not edit it. Do I think that Andy Coulson should have been told more, could have been given more information, that I left him down? No, I do not. He has said that he and I were deceived. There are in life, I am afraid, people who engage in such activity. In the grand scheme of things, with thousands and thousands of payments for stories, pictures, features and articles and sports reports going through our systems, and, as you have heard from previous witnesses, the entirely valid, legitimate Mulcaire contract, a relatively small but regrettable number of false cash payments were created and were approved, on the whole—not always but generally—by me, unknowing, and in those cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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circumstances, as I said a few moments ago, I think the arrests and what followed, and the bringing in of the independent lawyers, right from the start, was, in my long experience, one of the most traumatic and unhappy events that I have known in newspapers. Q1663 Mr Farrelly: Can I just ask you about Clive Goodman. You say you were deceived. How was Clive Goodman able to pay £12,300 to Glenn Mulcaire? Was it actually in readies or did it go through the accounts department in a masked way? Mr Kuttner: I think the answer to the first part is it was in cash, it was a cash payment. The answer to the second part is that it was all accounted for in the documentation and that is the material that either directly on their own account to the investigating police team, or through Burton Copeland, the solicitor who was looking into these things at News International, was all disclosed. Q1719 Tom Watson: When you found out about the arrests. Presumably you commissioned an inquiry? Mr Coulson: Yes. Obviously we wanted to know internally very quickly what the hell had gone on. Then I brought in Burton Copeland, an independent firm of solicitors to carry out an investigation. We opened up the files as much as we could. There was nothing that they asked for that they were not given.

Hinton—15 September 2009 Q2106 Chairman: Can I this afternoon welcome Les Hinton who is giving evidence to the Committee from New York. Les is currently the Chief Executive Officer of Dow Jones but was the previous Executive Chairman of News International at a time when the Committee previously took evidence in its last inquiry into self- regulation of the press. Les, thank you for making yourself available this afternoon: May I start by referring back to the evidence which you gave to the Committee in March 2007 because at that time in relation to the Clive Goodman affair you said that there had been a full rigorous internal inquiry, that you were convinced that Clive Goodman was the only person that knew what was going on but that the investigation continued. Can you say what the final outcome of that investigation was and if it remains the case that you are convinced that only Clive Goodman knew about the tapping of phones by Glenn Mulcaire? Mr Hinton: Yes, Chairman. As you have already heard, when Colin Myler took over as Editor he continued studying the events there and had the assistance, as you know, of a firm of solicitors, and I know from recollection he went through thousands of emails. He never delivered any evidence that there had been anyone else involved. At the same time as that of course our biggest concern was that the News of the World, having gone through a pretty terrible time, that he was going to make absolutely certain that whatever lapses had happened in the past would not be repeated. I think he gave you some pretty detailed information about the measures that he took to be certain that everyone there was well aware of the rules and the boundaries, but, no, there was never any evidence delivered to me that suggested that the conduct of Clive Goodman spread beyond him. Q2138 Adam Price: Well, did Clive Goodman in those negotiations in relation to his dismissal threaten to make public information which would have been damaging to the News of the World? Mr Hinton: That was never suggested at the time. Q2161 Mr Hall: Repeated by you this afternoon and given in evidence previously by Mr Myler, we are told that he looked extensively through about two and a half thousand emails to see if he could find any other evidence that this was a more widespread practice within the News of the World. Mr Hinton: If that is what he told you, I do not know. Q2168 Paul Farrelly: I just wanted to respond to the point made about Mr Yates’ evidence. We have asked you back here because we want to establish how you responded in the affirmative to the Chairman’s question that you carried out a full rigorous internal inquiry and you said yes you had. Can I just ask you on what basis did you feel able to give that answer, that to your recollection Tom Crone said that various investigations had been undertaken internally as the facts established themselves as the charges and trial developed. Can you tell us on what basis you gave us that answer? Mr Hinton: Okay. You have had the benefit of hearing the testimony of people that were much more closely involved in it than I, but when it all happened my first detailed conversation was with Andy Coulson and I said, “Andy, we have got make certain the extent to which this has been going on.” He had numerous conversations, the charges were laid, he invoked the help of Tom Crone, who is a company lawyer with a lot of experience and who again was disassociated from this, and there was a decision to bring him in to meet people and to help the police with their enquiries to make sure that they were being properly informed and helped without people that might have an interest in what was being told. We brought in a firm of solicitors and there were many, many conversations with the police, and not involving me. There was never firm evidence provided or suspicion provided that I am aware of that implicated anybody else other than Clive within the staff of the News of the World. It just did not happen, Paul, and had it have happened then we would have acted. I cannot tell you the state of alarm that Andy was in when all this happened because he felt a massive burden of responsibility for it having happened on his watch, which is why in the end he decided to quit. That was leading up before Andy’s departure. When Colin came in things were still very live but at that point cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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everybody was pretty exhausted by it all. There were two things I wanted Colin to do: (a) keep speaking to people, keep looking around to see whether or not any of this had happened before and (b) to settle the staff down because most of them of course had had no involvement in this at all, this was just Clive, and to get people focused on doing their job and being proud of what they do. He had a two-fold issue, a leadership issue and the issue of cleaning up and making certain that we were doing everything we could. We co-operated a lot with the Press Complaints Commission and through our own commonsense to make certain that we had as thoroughly as possible made people aware of the need to behave very, very carefully in certain areas.

Written Evidence From NI 2009—PS 137 Are there any written reports, either internal or by the lawyers you appointed, of the investigations into the activities of Goodman and Mulcaire, or other inquiry agents? If so the Committee would be grateful for sight of these.

Answer Any initial reporting on these matters was communicated orally. In May 2007, as the Committee knows, all emails which were then on News International’s IT systems between Clive Goodman and Andy Coulson, Stuart Kuttner, Ian Edmondson, Neil Wallis and Jules Stenson were identified and copied from the systems and reviewed by Jon Chapman and Daniel Cloke, before being passed to Lawrence Abramson, Managing Partner of Harbottle & Lewis, an external law firm, for further review.

Letter from the Chair of the Culture, Media and Sport Committee to Jonathan Chapman Thank you for your letter dated 26 July. In it you draw my attention to a statement you released through your lawyers affirming a number of serious inaccuracies in statements made during the Committee’s oral evidence session on Tuesday 19 July. You also confirm your willingness fully to cooperate with the Select Committee in its investigations in order to ensure that the truth is established. The Committee takes any suggestion that it has been misled very seriously. The Committee invites you, therefore, to submit written evidence to the Committee commenting on all the inaccuracies you have identified in the evidence given to the Committee on Tuesday 19 July, and providing what you consider to be a true account. Please send your response to the Committee secretariat using the contact details above. I would appreciate your response no later than 11 August. The Committee reserves the right to call you to give oral evidence. 29 July 2011

Written evidence submitted by Colin Myler I refer to your letter of 29 July 2011. In your letter, you invite me to: (A) Reconsider the evidence I provided to the Culture, Media and Sport Committee (“the Committee”) on 21 July 2009 at Q1384 and Q1394; and (B) Submit written evidence, providing more details about the areas in which I dispute the evidence provided by James Murdoch to the Committee on 19 July 2011, in particular covering when and how I informed Mr Murdoch of the “for Neville” email and what significance I attached to this. I will address each of these points in turn below.

My Evidence of 21 July 2009 You have asked me to consider my comments “that the external investigation News International had commissioned had been “completely hands-off” (Q1384) and “very thorough” (Q1394)”. I would like to thank the Committee for allowing me the opportunity to review my comments. I confirm that my comments to the Committee remain an accurate reflection of my understanding. It may, however, be helpful to the Committee for me to provide some further explanation on these points.

Q1384 The context for the evidence provided by me at Q1384 relates to the following question put to me by Mr Farrelly at Q1383: “...I wanted to explore the basis for the evidence you gave the PCC, I believe, in February 2007 just after you arrived at the News of the World. At that stage what stage had investigations reached at the News of the World to your knowledge...?” cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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My use of the phrase “completely hands-off’ concerned the appointment by News International of a firm of solicitors, BCL Burton Copeland, and that firm’s role in cooperating with the police investigation.

My knowledge of the police investigation and BCL Burton Copeland’s role was based on discussions that I had following my arrival at the News of the World on 27 January 2007. My arrival post-dated the police investigation, and BCL Burton Copeland’s work. However, as I understand the position, the firm’s role was to facilitate News International’s cooperation with the police investigation, and to assist in providing the police with any evidence that they requested from the company.

Q1394

It may assist the Committee’s understanding if I set out the various investigations and reviews of which I am aware which took place prior to the evidence I gave on 21 July 2009. The first investigation was the police investigation, which resulted in the convictions of Glenn Mulcaire and Clive Goodman. As set out above, my understanding is that News International appointed BCL Burton Copeland to cooperate with the police and to respond to any requests for evidence from the police.

On joining the newspaper in January 2007, following the conclusion of the police investigation, I instigated a detailed review of the newspaper’s internal systems and controls. This included a review of the protocols on cash payments, the amendment of staff contracts, and the implementation of a programme of seminars by the Press Complaints Commission (“PCC”) on the PCC Code of Practice. Further details on this review and the changes made are set out in my opening statement to the Committee on 21 July 2009.

In the summer of 2007, after Mr Goodman had been released from prison, he appealed the disciplinary action taken against him by News International. During the course of that appeal, Mr Goodman made allegations that other employees were aware of phone hacking. While he provided no evidence to substantiate his assertions, the company commenced an internal investigation to determine whether there was any evidence to support those allegations. The investigation included the questioning of key executives (which I conducted, together with Daniel Cloke, the company’s Director of Human Resources) and the review of 2,500 emails (in relation to which the Legal Department instructed outside lawyers, Harbottle & Lewis). Once the email review was complete, I was informed that the emails did not suggest wider issues in relation to phone hacking as had been alleged by Mr Goodman. I believe the phrase used by Mr Cloke was that there was “good news; there is no smoking gun or silver bullet in the emails”.

When the “for Neville” email came to light in April 2008, Mr Crone conducted an investigation into the background to that email. This included questioning a number of reporters and tasking the company’s IT department to carry out checks on the email.

James Murdoch’s Evidence of 19 July 2011

I have had an opportunity to review Tom Crone’s letter to you in which he responds to the same points as those raised in your letter to me. I agree with Mr Crone’s explanation of the meeting we had with Mr Murdoch to discuss the Gordon Taylor settlement and the significance of the “for Neville” email, and cannot add any additional points to his explanation. 10 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Colin Myler

I write with regard to oral evidence that you and Colin Myler gave to the Culture, Media and Sport Committee on 21 July 2009 in the context of the oral evidence that James Murdoch gave to the Committee of the same name on 19 July 2011.

In the July 2009 evidence session, you told the Committee that the external investigation News International had commissioned had been “completely hands-off” (Q1384) and “very thorough” (Q1394). Tom Crone assured the Committee that “no evidence was found” (Q1398) that anyone other than Goodman had been involved with Mulcaire. To assist you, I attach a copy of the transcript.

On Friday 8 April 2011, News International issued a statement in which it admitted that “is its now apparent that our previous inquiries failed to uncover important evidence and we acknowledge our actions then were not sufficiently robust”. In the July 2011 evidence session, James Murdoch stated that when he signed off the out-of-court settlement for Gordon Taylor he was not aware of the contents of the “for Neville” email (Q 413).

According to media reports you have since disputed the account given by Mr Murdoch: “Just by way of clarification relating to Tuesday's Culture, Media Select Committee hearing, we would like to point out that James Murdoch's recollection of what he was told when agreeing to settle the Gordon Taylor litigation was cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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mistaken. In fact, we did inform him of the 'for Neville' email which had been produced to us by Gordon Taylor's lawyers”.3

In light of these developments, the Committee invites you to reconsider the evidence, quoted above, that you provided in 2009. It also invites you to submit written evidence, providing more details about the areas in which you dispute James Murdoch’s evidence. In particular, it would be helpful to know when and how you informed Mr Murdoch of the ‘for Neville’ e-mail and what significance you attached to this.

Please send your response to the Committee’s secretariat using the contact details above. I would appreciate your response no later than 11 August.

The Committee reserves the right to call you back to give further oral evidence.

I have written in the same terms to Tom Crone. 29 July 2011

Written evidence submitted by Tom Crone

Thank you for your letter of July 29.

You ask me to (a) Reconsider those bits of evidence, given by Mr Myler and myself to your committee in 2009, which are identified in the second paragraph of your letter, ie Q1384, Q1394 and Q1398, and (b) To provide more details about when and how I informed Mr Murdoch of the “for Neville” email and what significance I attached to this.

Taking your points in turn: (a) The three answers to which you refer, the first two by My Myler and the third by me, were given during a line of questioning by Paul Farrelly, the context and premise for which is set out by Mr Farrelly in Q1383 and Q1384. In short, he was asking about the basis for the evidence given by Mr Myler to the PCC in February 2007 and what had happened by way of internal investigation at the News of the World and News International upto that point. For ease of reference I enclose the whole of the relevant sequence of questions and answers which commence at Q1383 and conclude at Q1400. Although Mr Myler will, no doubt speak for himself, I have no doubt that the answers he gave about the internal inquiries pre-February 2007 and the basis for what he told the PCC that month were the truth as he knew it at the time. The same applies to my answer at Q1398 ie that was the truth as I then knew it. Since Q1397 makes reference to the “check” on 2500 emails which took place in early 2007, I should make it clear that I played no part in that process and until very recently my only knowledge of it was based upon the letter written by Harbottle and Lewis. For the record and lest there is any doubt, I entirely accept the statement issued by News International on April 8th, 2011, which is set out in the third paragraph of your letter. Before leaving this subject, I need to address what appears to be a misunderstanding on your part. In the second paragraph of your letter and, more directly, in the press conference you gave on the day you wrote your letter, ie July 29th, you suggest that we misled the CMS Committee in 2009 by maintaining that there was no evidence to suggest anybody else at the News of the World beyond Clive Goodman had been involved in phone-hacking. Several newspapers reported what you said. The following is from that day’s Guardian Online: “Asked ..... whether last week’s Myler/Crone statement raised questions about the evidence they gave to the committee in 2009, Whittingdale said: ‘I don’t think it just raises questions, it appears to be directly contradictory. “There is no question that Tom Crone and Colin Myler appeared before the Committee to give formal evidence and told us that they had discovered no evidence suggesting that anybody else beyond (former NoW editor) Clive Goodman was involved. “We are now told, we understand from the statement they issued to the media, that they had drawn James Murdoch’s attention to the significance of the ‘for Neville’ email. It appeared when they came before us, that they did not regard it as significant. But clearly they are now suggesting it is.” 3 See, for example, www.guardian.co.uk/media/2011/jul/21/james-murdoch-select-committee-evidence. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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With respect: 1. There is nothing contradictory between the statement we issued on July 21st, which is set out in the fourth paragraph of your letter, and the evidence we gave in 2009. 2. During our 2009 appearance before you, we clearly accepted the significance of the “for Neville” email and the fact that it was evidence of others at the News of the World apart from Clive Goodman being involved or complicit in phone hacking. In support of the above, particularly the second point, I refer you to: (i) Colin Myler’s opening statement to your Committee on July 21st 2009 in which he identified “three issues which need to be addressed by us ...”. The first was Operation Motorman, the second was Les Hinton’s evidence to the Committee in March 2007 and, “The third issue is the evidence which came to light in April 2008, and the reasons for settling our litigation with Gordon Taylor” He dismissed Operation Motorman as old and unconnected, he explained that Mr Hinton’s evidence had been truthfully based upon what he knew at the time and, in relation to the third issue, he said, “The Committee may disagree but we consider this issue (ie the ‘for Neville’ email evidence which came to light in April 2008) and the facts surrounding it to be the only new matters in this affair. We are here to answer whatever questions you have on this subject today.” (ii) Within minutes of the commencement of questioning I made it clear we accepted that the “for Neville email” was evidence that complicity in phone hacking at the News of the World went beyond Clive Goodman. In answer to your Q1339, I stated, “... At no stage during their (the police) investigation or our investigation did any evidence arise that the problem of accessing by our reporters, or complicity of accessing by our reporters, went beyond the Goodman/Mulcaire situation. The first piece of evidence we saw of that was a February 2005 holding contract and the second was the email that was discussed here last week”. (ie the “for Neville” email). (iii) Apart from identifying the email as the main issue “to be addressed” during our appearance before the Committee and “the second piece of evidence” (in reality, it was the first) of wider News of the World staff involvement, we highlighted its other “significance” very shortly after the above statement. At Q1341 your question and my answer were: “Q: When you did become aware of these two documents what did you do? A: We settled the case. We agreed to settle the case.” (b) I cannot remember the exact date but I believe the meeting at which I informed Mr James Murdoch of the “for Neville” email was in June 2008. The relevant background is as follows. Gordon Taylor served breach of privacy and confidence proceedings on News Group Newspapers Ltd (“NGN”) in 2007. Until April 2008, NGN resisted liability on the basis that Mr Taylor had produced no direct evidence that NGN or its staff were knowledgeable of or complicit in the hacking of Mr Taylor’s voicemail by Glenn Mulcaire. Mr Taylor’s case was circumstantial and NGN itself had neither found nor seen direct evidence to support it. That position changed in April 2008 when his lawyers served the “for Neville” email on us having obtained it from the Metropolitan Police under a court Disclosure Order.

I had numerous discussions about this document with our solicitors who, in turn, had discussions with senior and junior counsel. Their strong opinion, with which I agreed, was that the document removed any chance we might have previously had of successfully defending Mr Taylor’s action. Without waiving professional privilege or breaching the confidentiality undertaking which became part of the settlement with Mr Taylor, I can only say that early discussions with Mr Taylor’s lawyers indicated that a very large sum in damages was being demanded to settle the case. On the day of the meeting with Mr Murdoch, I had explained where we were in the Taylor case to Mr Myler. I told him that our outside solicitors and counsel advised, as did I, that the emergence of this document meant the case had to be settled. He agreed with that and said we would need to set up a meeting with News International’s Chief Executive, James Murdoch, as soon as possible to explain the situation to him and seek his authority to settle. Later the same day, Mr Myler called to say I should come to his office and we would immediately go to meet Mr Murdoch in his office which was at the other end of the same building. I do not have a note of the meeting with Mr Murdoch and cannot recollect it in any great detail but I can say that it did not last long, certainly no more than 15 minutes. My invariable practice when seeking authority for settlements would be to take a file of the relevant documents with me to such meetings so that, if asked or if necessary, I could illustrate whatever I was saying by reference to something in writing. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Since the “for Neville” document was the sole reason for settling and, therefore, for the meeting, I have no doubt that I informed Mr Murdoch of its existence, of what it was and where it came from. I do not recall if I produced it and showed him a copy of it. It may be important to note, also, that the document was not referred to or described in the meeting as a “for Neville” email or a “for Neville” document. I believe the first time I heard it described in that way was at the 2009 CMS Select Committee hearing. From memory, I would have described it as a transcript of voicemail messages left by or for Gordon Taylor. During the meeting I relayed to Mr Murdoch that the clear advice from our outside solicitors and counsel was to settle the case despite the fact that it was likely to be expensive. I told him that I agreed with that advice and I believe that Mr Myler also said that he could see no alternative but to go with the advice. On that basis, Mr Murdoch gave us authority to negotiate the best settlement deal we could achieve in order to conclude the action. In relation to the evidence we gave in 2009 which touches or focuses on this particular subject, I refer the Committee to: (a) Mr Myler’s opening statement ie “the third issue is the evidence that came to light in April, 2008, and the reasons for settling our litigation with Gordon Taylor.” (b) Q1341 in which I stated that what we did when we became aware of the document was to settle the case. (c) Q1511 and Q1512: “Mr Myler: The sequence of events, Mr Watson, is very simple, and this is very clear: Mr Crone advised me, as the editor, what the legal advice was and it was to settle. Myself and Mr Crone then went to see James Murdoch and told him where we were with the situation. Mr Crone then continued with our outside lawyers the negotiation with Mr Taylor. Eventually a settlement was agreed. That was it. Mr Watson: So James Murdoch took the ultimate decision? Mr Myler: James Murdoch was advised of the situation and agreed with our legal advice that we should settle.” Finally, You are reported to have said at your press conference last week “It appeared when they (Mr Myler and I) came before us, that they did not regard that it (the “for Neville” email) was significant. But clearly they are now suggesting it is”. In relation to the first limb of that statement, I have tried to deal above with the fact that, when we appeared before you in 2009, we did make clear the significance of the relevant email. As for the “now” situation to which you refer, the reason why we put out our statement on July 21st was because that morning’s newspapers, particularly The Guardian, were reporting that Mr Myler and I had “concealed” the “for Neville” email from Mr Murdoch. This damaging allegation was an interpretation of Q413 answered by James Murdoch on 19 July. During the course of 21 July I received several calls from journalists for The Guardian and other newspapers which led me to believe that the “concealment” allegation was going to be published even more widely the following day. I believe Mr Myler received similar calls. For that reason, and for that reason alone, I felt I had to clarify publicly that Mr Murdoch’s recollection on this narrow point was mistaken. After receiving your letter, I met and discussed the issues raised in it with Mr Myler. Before posting this letter to you, I have sent him a copy of it. He will, no doubt have his own recollection of the meeting with Mr Murdoch and other matters, but I understand he broadly agrees with the various points made about the evidence we gave in 2009.

Letter from the Chairman of the Culture, Media and Sport Committee to Tom Crone I write with regard to oral evidence that you and Colin Myler gave to the Culture, Media and Sport Committee on 21 July 2009 in the context of the oral evidence that James Murdoch gave to the Committee of the same name on 19 July 2011. In the July 2009 evidence session, Colin Myler told the Committee that the external investigation News International had commissioned had been “completely hands-off” (Q1384) and “very thorough” (Q1394). You assured the Committee that “no evidence was found” (Q1398) that anyone other than Goodman had been involved with Mulcaire. To assist you, I attach a copy of the transcript. On Friday 8 April 2011, News International issued a statement in which it admitted that “is its now apparent that our previous inquiries failed to uncover important evidence and we acknowledge our actions then were not sufficiently robust”. In the July 2011 evidence session, James Murdoch stated that when he signed off the out-of-court settlement for Gordon Taylor he was not aware of the contents of the “for Neville” email (Q 413). cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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According to media reports you have since disputed the account given by Mr Murdoch: “Just by way of clarification relating to Tuesday’s Culture, Media Select Committee hearing, we would like to point out that James Murdoch’s recollection of what he was told when agreeing to settle the Gordon Taylor litigation was mistaken. In fact, we did inform him of the ‘for Neville’ email which had been produced to us by Gordon Taylor’s lawyers”.4

In light of these developments, the Committee invites you to reconsider the evidence, quoted above, that you provided in 2009. It also invites you to submit written evidence, providing more details about the areas in which you dispute James Murdoch’s evidence. In particular, it would be helpful to know when and how you informed Mr Murdoch of the “for Neville” e-mail and what significance you attached to this.

Please send your response to the Committee’s secretariat using the contact details above. I would appreciate your response no later than 11 August.

The Committee reserves the right to call you back to give further oral evidence.

I have written in the same terms to Colin Myler. 29 July 2011

Written evidence submitted by Harbottle & Lewis LLP

Thank you for your letter of 29 July 2011.

As you know, we have received a limited waiver of confidentiality and legal professional privilege from News International Limited (“News International”) (we were not instructed by News Corp) so as to allow us to respond to your questions and those of The Rt Hon Keith Vaz MP of the Home Affairs Committee (“HAC”). We have now also had the meeting with the Metropolitan Police Service which was foreshadowed in our letter of 28 July 2011. The purpose of that meeting was to ensure that the release of information and documentation from our file would not prejudice their ongoing criminal investigation. They have indicated that they are content for us to provide the response attached to this letter subject to the redaction of certain names.

We have been requested by the Metropolitan Police not to include any reference at all to the contents of the emails which this firm reviewed in 2007 at the present time. This is not (for the avoidance of doubt) because those emails are being kept secret: full copies of the materials which the firm preserved in 2007 have been passed by us to the Metropolitan Police. Rather, it is because we have been advised by the police that it is essential to preserve the integrity of their criminal investigation that these emails are not released into the public domain at present.

Subject to the above, we are therefore now in a position to provide you and the HAC with a response to your questions.

We have, as requested, reconsidered the letter of 29 May 2007 (not 27 May 2009) which we understand was provided to the Committee by News International in 2009.

We have set out a very full answer to your questions and those of the HAC in the attached response document. The response document sets out in detail the background to our retainer and the work carried out as well as our comments on a number of matters. This is necessary in order to give a full response to your questions and to set our answers in the proper context.

We set out below a brief response to the questions appended to your letter (our cross references to paragraph numbers are to paragraphs in the attached response document). However, we would urge you to consider the full detail as set out in the response document.

1. When was Harbottle & Lewis first instructed in respect of matters concerning alleged or suspected phone- hacking?

Lawrence Abramson, then a partner in the firm, was contacted by Jon Chapman, Director of Legal Affairs at News International, by telephone on 9 May 2007. There is no note of the conversation on the file, but Mr Chapman then sent instructions to Mr Abramson by email on 10 May 2007. This email and the fax which followed it on the same day are at Appendix B of the response document. The instructions were limited to assisting News International in handling an internal appeal by Clive Goodman against his dismissal (please see paragraphs 6–13 of the response document), and were not instructions to conduct the longer and more detailed exercise apparently carried out by another firm, Burton Copeland (please see paragraphs 16–18 of the response document). 4 See, for example, www.guardian.co.uk/media/2011/jul/21/james-murdoch-select-committee-evidence. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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2. Were these instructions given on behalf of News International Ltd, News Group Newspapers Ltd, or on behalf of both? These instructions were given on behalf of News International Limited, of which Mr Chapman was Director of Legal Affairs.

3. Please could you provide details of the instructions, including a copy of any document in which the instructions were reduced into writing. The email of instruction of 10 May 2007 and the fax which followed it on the same day are at Appendix B of the response document. The instructions are described in paragraphs 5h and 5i and 6 to 13 of the response document. Certain names have been redacted from both at the request of the Metropolitan Police. They were the names of other individuals at The News of the World.

4. Which individual gave the instructions on behalf of News International Ltd/News Group Newspapers Ltd, and to which individual at Harbottle & Lewis were the instructions addressed? The instructions were given by Mr Chapman to Mr Abramson.

5. Please supply details of Harbottle & Lewis's primary point of contact at News International Ltd/News Group Newspapers Ltd. You have explained in your letter of 20 July to the Chairman that Mr Lawrence Abramson acted in this matter on a retainer from News International. Please confirm whether or not any other member of your firm was involved in preparing advice under this retainer, and please identify any such person. The firm’s primary point of contact at News International was Mr Chapman. There was also some contact with Daniel Cloke, News International’s Group Human Resources Director. Mr Abramson was the primary point of contact at the firm and was the only partner involved in the review of the emails, for which he used a team of two paralegals and a trainee solicitor (please see paragraph 5k of the response document).

6. What description of the emalls provided was supplied to Harbottle & Lewis by News International Ltd/ News Group Newspapers Ltd? Please supply a copy of any relevant letter or communication from the Correspondence File mentioned in your letter of 20 July. The description of the emails was set out in the original instruction which we received from News International in the email of 10 May 2007 at Appendix B of the response document.

7. Please indicate whether Harbottle & Lewis became aware at any time that the documentation supplied was incomplete and, if so, please describe in what way it was incomplete. For the purposes of its exercise, the firm was given remote electronic access to emails on News International’s server rather than being supplied with paper copies. The firm was therefore given instructions as to how to access “the Public Folder within the News International MS Exchange email system”. The emails which the firm was asked to review were contained in five sub-folders within the system. It seems that electronic access was not entirely straightforward: some emails appeared only in cut off form and there was difficulty in (for example) opening attachments to emails. Presumably for these reasons, the file shows that News International (Mr Lowndes) printed off some emails and sent them to the firm in hard copy by courier on 16 or 17 May 2007. (Even then some of the emails appeared only in cut off form.) (Please see paragraphs 5k to I of the response document.)

8. Please indicate whether any particular type of activity was excluded from the scope of the investigation commissioned from Harbottle & Lewis. The firm was instructed only to look for evidence (in five sub-folders provided by News International) suggesting either that certain named individuals knew of and supported Mr Goodman's involvement in phone hacking activities, or that others at The News of the World were also carrying out phone hacking activities. It was not retained to look for evidence of wider criminal activities and did not do so.

9. Did the investigation extend to other individuals at the newspaper, for instance Neville Thurlbeck and Ross Hindley/Hall if not, why not? We are not at present able to answer this question, at the request of the Metropolitan Police.

10. Please describe any additional documentation requested by Harbottle & Lewis in connection with their investigation. We did not request any further documents, because the task which Mr Abramson was asked to perform was confined to a review of the emails on the five sub folders on the News International email system. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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11. Please set out what advice was given orally, by whom, to whom, and when. We cannot answer this question because any oral advice to News International was provided, during the time period 10 May—29 May 2007, by Mr Abramson who left the firm on 30 May 2010. He is now a partner at Fladgate LLP.

12. Please set out what advice was given in writing, by whom, to whom, and when. The only written advice was the letter of 29 May 2007, the production of which is described in the response document (please see paragraphs 5n to r of the response document).

13. Please confirm whether or not the documents provided to Harbottle & Lewis provided any grounds for reasonable suspicion that a criminal act might have been or might be committed by an employee or director of News International Ltd or of News Group Newspapers Ltd, and if so, what advice was given by Harbottle & Lewis? As explained above, at the request of the Metropolitan Police, we are not in a position to comment on the content of the emails in question.

14. Please confirm when Mr Abramson closed his file and retained it in archived storage. Please also confirm whether or not the contents of the file retrieved from the archive earlier this year are the same as those of the file closed by Mr Abramson. The file went into archive storage with an external storage company, Restore, on 10 November 2008. It was not until 25 March of this year when the firm was asked by News International’s then solicitors, Burton Copeland, to provide papers from the file that it was retrieved from archive. We have no reason to believe that the file which went into storage in November 2008 did not contain the same documents as the file retrieved from storage in March 2011. (Please see further paragraph 22 of the response document.)

15. Please set out any matters in respect of which Harbottle & Lewis believes that this Culture, Media and Sport Select Committee or its predecessor may have been given misleading, or inaccurate information about the review undertaken by Harbottle and Lewis. We refer the Committee to paragraphs 14 to 18 of our response document. We trust that this letter and the enclosed response document cover in full all of your questions to this firm (within the confines of what may be said pending the criminal investigations). However, if we can assist the Committee any further, please let us know. 11 August 2011

Response from Harbottle & Lewis LLP to the Culture, Media and Sport Committee and the Home Affairs Committee Preliminary Matters 1. This document responds to questions raised by the Rt Hon Keith Vaz MP (Chairman of the Home Affairs Committee (“HAC”)) in a letter dated 21 July 2011 and by John Whittingdale OBE MP (Chairman of the Culture, Media and Sport Committee (“CMSC”)) in a letter dated 29 July 2011. Both letters are at Appendix A to this response. 2. This document proceeds as follows: a. First, a basic chronology of relevant events. b. Second, a detailed explanation of the limited nature of the work which News International instructed Harbottle & Lewis LLP (“the Firm”) to do. c. Third, some observations on the evidence given to the Committees by Messrs Murdoch (senior and junior) and others. d. Fourth, an explanation of the law of legal professional privilege and confidentiality, in order to deal with the misconception that a solicitor is permitted (or even obliged) to report to the police material supplied to him by his client if that material shows that the client has been involved in criminal conduct. e. Fifth, an explanation of what happened to the Firm’s file after the matter had been completed, in order to deal with suggestions from some quarters that it should have been unearthed earlier and that there is something untoward in the fact that it was not. 3. In view of the ongoing criminal investigation we have contacted the Metropolitan Police about the contents of this document. As a result we have been requested by the Metropolitan Police not to include any reference at all to the contents of the emails which the Firm reviewed in 2007 at the present time. This is not (for the avoidance of doubt) because those emails are being kept secret: full copies of the materials which the Firm preserved in 2007 have been passed by the Firm to the Metropolitan Police. Rather, it is because we have been cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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advised by the police that it is essential in order to preserve the integrity of their criminal investigation that these emails are not released into the public domain at present. This document therefore contains no references at all to their contents.

Basic Chronology

4. Before commencing the history, we should explain its sources. No-one who worked on this matter in 2007 is still at the Firm. Those involved at the time were: a. Lawrence Abramson, who was at the time a partner in the Firm. He was in overall charge of the exercise and was responsible for the letter of 29 May 2007 which is now the focus of attention. He left the firm on 31 May 2010 and became a partner in Fladgate LLP, another London firm of solicitors. b. An assistant solicitor specialising in employment law, who was brought into the matter because, as we explain in more detail below, the Firm’s retainer was a narrow one focused on an employment dispute with Clive Goodman. This assistant recorded only three hours 18 minutes of time on the file and (it is clear from the records held by the Firm) played no part in reviewing the emails in question. We have therefore thought it appropriate not to identify him/her by name, given the intensity of media scrutiny on this case. This assistant left the Firm’s employment in February 2010. c. A team of three junior employees: two paralegals and one trainee solicitor. Again, we have not felt it appropriate to identify them in the circumstances. They were given the task of sifting through the electronic records to which News International provided access. They respectively left the firm’s employment on 28 May 2007, 30 May 2007 and 28 January 2011.

Because there is no-one now at the Firm who has first hand personal knowledge of the relevant events in 2007, the Firm has had to place heavy reliance on what can be reconstructed from the documentary record.

5. The bulk of this section deals with the work done by the Firm, but some events before and after the Firm’s retainer (as evidenced by the documents contained in the Firm’s file and certain publicly available information) are included in order to put the Firm’s work (and some of the evidence given to the CMSC) in context. a. Mr Goodman and Glenn Mulcaire were arrested on 8 August 2006. A police investigation into their activities followed, and News International immediately engaged external solicitors (Burton Copeland, specialist criminal defence lawyers) to deal with that investigation. It is apparent from the evidence which was given to the CMSC in 2009 by Colin Myler, Tom Crone, Andy Coulson, Les Hinton and Stuart Kuttner that Burton Copeland undertook a very substantial exercise, far more substantial than that undertaken by the Firm. We return in more detail to this evidence below. b. Mr Goodman pleaded guilty on 29 November 2006 to conspiracy to intercept voicemail messages on mobile phones belonging to three members of the Royal Household. Sentencing was deferred to 26 January 2007, when Mr Justice Gross sentenced Mr Goodman to 4 months imprisonment. On the same day Mr Coulson announced that he was retiring as editor of the News of the World. c. On 5 February 2007, News International (Mr Hinton) wrote to Mr Goodman terminating his employment. The letter states “I recognise this episode followed many unblemished, and frequently distinguished, years of service to the News of the World. In view of this, and in recognition of the pressures on your family, it has been decided that upon your termination you will receive one year’s salary. In all the circumstances, we would of course be entitled to make no payment whatever. ... You will be paid, through payroll, on 6 February 2007, 12 months’ base salary, subject to normal deductions of tax and national insurance” We draw attention to this passage because the topic of payments to Mr Goodman after his conviction has been the subject of questions by the CMSC on more than one occasion5. We do not know what his annual salary was, nor the period of notice to which he was entitled, nor whether News International did in fact, as Mr Hinton said it was going to, pay Mr Goodman a year’s salary on 6 February 2007. Mr Hinton also explained that Mr Goodman had a right to appeal internally against his dismissal. d. On 2 March 2007, Mr Goodman wrote to News International’s Group Human Resources Director, Daniel Cloke (copied to Mr Kuttner and Mr Hinton), appealing against the dismissal. His first two grounds of appeal were as follows: “(i) The decision is perverse in that the actions leading to this criminal charge were carried out with the full knowledge and support of [REDACTED]. Payment for Glen Mulcaire’s services was arranged by [REDACTED]. (ii) The decision is inconsistent, because [REDACTED] and other members of staff were carrying out the same illegal procedures. ...” (The names and job titles of the News International employees mentioned here and at paragraphs 5(h)(iii), 5(n) and 5(o) below have been redacted at the request of the Metropolitan Police so as to preserve the integrity of their criminal investigation.) 5 Paragraph 445 of the CMSC’s Second Report dated 24 February 2010 refers to evidence from News International about the amounts paid to Mr Goodman on the termination of his employment. The paragraph summarises that evidence as being that Mr Goodman was paid “notice, legal costs and a compensatory award. The group declined to confirm the amounts but said the awards were below the £60,600 statutory minimum”. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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e. On 6 March 2007, Mr Hinton gave evidence to the CMSC in relation to its enquiry into self- regulation of the press. We refer to this extract from his evidence6: Q95 Chairman: You carried out a full, rigorous internal inquiry, and you are absolutely convinced that Clive Goodman was the only person who knew what was going on? Mr Hinton: Yes, we have and I believe he was the only person, but that investigation, under the new editor, continues. We do not know what the “full rigorous internal inquiry” was which Mr Hinton had in mind on 6 March 2007. Obviously it was not the exercise subsequently carried out by the Firm, since that had not yet begun. Nor can it have been the exercise in reading internal emails carried out by Jon Chapman, Director of Legal Affairs at News International, and Mr Cloke since it is clear that this was prompted only by Mr Goodman’s request for those emails on 14 March 2007 (see below). Perhaps this was a reference to the work done by News International and Burton Copeland in relation to the police enquiry. f. On 12 March 2007, Mr Cloke replied to Mr Goodman explaining the procedure for the appeal. Mr Cloke said “If there are any documents you wish to be considered at the appeal hearing, please provide copies as soon as possible. If you do not have these documents, please provide details so that they can be obtained.” g. On 14 March 2007, Mr Goodman therefore submitted a lengthy list of the documents which he wanted News International to provide for the purposes of his appeal. These included emails passing between himself and various News of the World executives on various topics. h. We do not know for certain what happened between the date of Mr Goodman’s request for documents on 14 March 2007 and the Firm being instructed on 9 May 2007. However, the following may reasonably be deduced from an email of instructions sent by Mr Chapman to Mr Abramson on 10 May 2007. (Copies of this document together with the fax from Mr Chapman to Mr Abramson to which it refers are at Appendix B. Certain names have been redacted at the request of the Metropolitan Police.) i. News International refused Mr Goodman’s request for documents. ii. News International gathered together all the emails “which [News International’s] IT department were able to recover from archive” fitting the categories set out by Mr Goodman in his request. It seems from an email from Simon Lowndes (Head of Managed Services in News International’s Information Technology Department) dated 14 May 2007 that these emails were placed into “5 sub-folders” in a Human Resources folder for Mr Cloke on News International’s server. iii. Mr Chapman and Mr Cloke had themselves been through these emails for the purpose of finding any evidence “to support the contentions made by Goodman in his letter of 2 March 2007, paragraphs i and ii—ie that his illegal activities were known about and supported by [REDACTED], and that [REDACTED], and others were carrying out similar illegal procedures”. Mr Chapman and Mr Cloke “found nothing that amounted to reasonable evidence of either of the above contentions”. i. On 9 May 2007 Mr Chapman telephoned Mr Abramson (then a partner in the Firm). They had worked together before on a number of civil litigation matters for News International. There is no note of the conversation on the file, but Mr Chapman then sent instructions to Mr Abramson by email on 10 May 2007 (see Appendix B). This email set out the history above about Mr Goodman’s dismissal and appeal, and the review which had already been carried out by Mr Chapman and Mr Cloke, and went on to say “Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions. We will make available to you access to the emails in question as soon as possible”. The limited nature of this retainer is the subject of further comment below. j. On 14 May 2007, Mr Abramson sent Mr Chapman a retainer letter and the Firm’s standard terms of engagement. Importantly these terms include the following: “Our advice is provided to you and may not, without our prior written consent, be disclosed to any other party. You will not refer to us or to our advice in any public documents or communication without our prior written consent”. We return to the purpose of this term, which is a common one in the contractual terms on which professionals such as solicitors and accountants are prepared to do business, below. k. For the purposes of its exercise, the Firm was given remote electronic access to emails on News International’s server rather than being supplied with paper copies. The Firm was therefore given instructions as to how to access “the Public Folder within the News International MS Exchange email system”. As mentioned above, the emails which the Firm was to review were contained in five sub-folders within the system. There has been some reference in the evidence of News International witnesses to a search of “2,500” emails, but because this was a remote access exercise only, the Firm is not now able to say how many emails were contained in those sub-folders. On 15 6 This evidence was given in relation to the CMSC’s Seventh Report of Session 2006–07, “Self-regulation of the press” published on 11 July 2007. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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May 2007 Mr Abramson assembled and briefed a team of three junior employees (a trainee solicitor and two paralegals). (It is standard practice in civil litigation to use junior employees to review large bodies of documentation because this is the most cost-effective process.) They were instructed to carry out the remote searches, assemble any material which might be of interest, and draw it to Mr Abramson’s attention for his review and consideration. l. It seems that electronic access was not entirely straightforward: some emails appeared only in cut off form and there was difficulty in (for example) opening attachments to emails. Presumably for these reasons, the file shows that News International (Mr Lowndes) printed off some emails and sent them to the Firm in hard copy by courier on either 16 or 17 May 2007. (Even then some of the emails appeared only in cut off form.) m. In relation to the review of the emails, the time records held by the Firm suggest the following as a summary of work during the retainer: i. The team of junior employees spent a total between them of about 46 hours (spread between 15 and 24 May 2007) on this matter, their time mostly being spent in searching through the email sub-folders by remote access. ii. Out of a total of eight hours 24 minutes recorded by Mr Abramson on this matter between 9 and 30 May 2007, 1 hour and 42 minutes were specifically attributed to reading the emails. On 18 May 2007, Mr Cloke emailed Mr Abramson asking “if we could have the results next week. I’d like to write to CG on Thursday if at all possible.” (We return below to what this indicates about the purpose of the exercise being done by the Firm.) Mr Abramson also recorded 30 minutes on 22 May 2007 in meeting the junior team to review progress, and this meeting almost certainly included some consideration of whatever emails had by then been found and thought of potential relevance. In addition, Mr Abramson made a time entry of 24 minutes for a telephone discussion with News International on 24 May 2007; there is no note of this conversation on the file. n. On Friday 25 May 2007, Mr Abramson sent an email to Mr Chapman at 13:13 headed “Draft for discussion this pm”. The email set out the proposed text of a letter recording the findings of the email review. It stated “We have on your instructions searched the emails that you were able to let us have access to from the accounts of [REDACTED]. I can confirm that we did not find any evidence that proved that [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other journalists at the News of the World were engaged in illegal activities prior to their arrest.” o. There was then a short telephone discussion, probably about the draft, that same day: emails from 24 May 2007 show a call being arranged for 14:15 on 25 May 2007, and Mr Abramson’s time records show a short call on 25 May 2007. Subsequently, at 16:12 on 25 May 2007, Mr Chapman sent an email to Mr Abramson suggesting some changes to the text. Mr Chapman’s suggested version stated as follows (we have added marking to show the changes): “We have on your instructions searched reviewed the emails that you were able to let us have access to to which you have provided access from the accounts of [REDACTED]. These emails cover the period from [ ] to [ ]. I can confirm that we did not find any evidence that proved anything which appeared to us to prove that either [REDACTED] or [REDACTED] knew that Clive Goodman, Glen Mulcaire or any other journalists at person employed or engaged by the News of the World were engaged was involved in illegal activities prior to their the arrest of Messrs Goodman and Mulcaire. 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 appeal put forward by him.” p. Mr Abramson responded briefly by email the same day at 17:53 : “I can’t say the last sentence [i.e. the sentence beginning “Equally”] in the penultimate para, I’m afraid. Can we discuss next week?” q. The time records do not show any further telephone discussion. Instead, at 12:50 on Tuesday 29 May 2007, Mr Chapman sent Mr Abramson an email (copied to Mr Cloke) which began “After discussing this further, Daniel and I would like to try to get slightly closer to the wording of my original instruction email which stated ...”. Mr Chapman then quoted his 10 May 2007 email, and went on “I would suggest the following”. He then set out what became the text of the 29 May 2007 letter, apart from a sentence which read (in Mr Chapman’s text) “These emails cover the period from []to[]”. r. At 13:03 on 29 May 2007, Mr Abramson sent Mr Chapman an email stating “I think I can say this. I’ll get it finalised. Would you prefer a letter or an email?”. Mr Chapman responded at 13:54 with “Great. Would be good to have it on letterhead”, and asking Mr Abramson to “drop the sentence which reads ‘These emails cover the period from [] to [ ]’.” which Mr Abramson did. The final letter was issued that day. s. At some point in July 2007, News International settled Mr Goodman’s potential claim for unfair dismissal. This was on the terms of a confidential compromise agreement which News International negotiated itself, without involving the Firm, directly with Mr Goodman’s solicitors. It involved a payment to Mr Goodman: the Firm does not know whether this payment was in addition to the year’s salary which Mr Hinton’s letter of 5 February 2007 had indicated would be paid to Mr Goodman on 6 February 2007. The Firm had no involvement whatever in this settlement (although Mr Abramson was subsequently instructed by News International in 2008 in relation to a complaint cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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by Mr Goodman that News International had breached a “non-disparagement” clause in the agreement, which is how the Firm has knowledge of the terms of settlement at all.) We have not set out the amount of the payment to Mr Goodman because the compromise agreement is expressed to be confidential, and it is for both News International and Mr Goodman to decide whether that confidentiality is to be waived. However, we comment below on the implications of this settlement, in July 2007, of Mr Goodman’s appeal for James Murdoch’s claim that News International was still “resting” on the letter of 29 May 2007 in 2008–2010.

The Retainer: what the Firm was asked to do 6. The Firm would like to draw the following points to your attention about its retainer in May 2007. 7. The retainer was expressly limited to the context of Mr Goodman’s employment dispute. The Firm was being asked to assist News International in dealing with Mr Goodman’s internal appeal against his dismissal. The instructions might fairly be paraphrased as: “If we reject Goodman’s appeal against dismissal and he brings employment tribunal proceedings, what is the risk of him establishing from these emails that other people were aware of his phone hacking activities, or were doing the same thing themselves?” The point of the exercise which the Firm was asked to do was directly, specifically and solely related to assisting News International in assessing how to handle Mr Goodman’s appeal against dismissal. Thus in context, the advice of the Firm in the letter of 29 May 2007 was only that if News International pushed this matter to an employment tribunal, there was nothing in the emails reviewed which provided “reasonable evidence” that Mr Goodman’s grounds of appeal were well founded. It went no further than that (and even in that context it seems not to have been relied upon by News International in any event, as we explain below.) 8. There was absolutely no question of the Firm being asked to provide News International with a clean bill of health which it could deploy years later in wholly different contexts for wholly different purposes. If the letter was to be communicated to any third party, then so far as the Firm was aware that third party would be Mr Goodman (as had been indicated in Mr Cloke’s email of 18 May 2007). But it went no further than that. The Firm was not being asked to provide some sort of “good conduct certificate” which News International could show to Parliament, or the police, or anyone else outside the context of Mr Goodman’s employment claim. Nor was it being given a general retainer, as Mr Rupert Murdoch asserted it was, “to find out what the hell was going on”7. The problem of clients seeking to use advice which is being provided for one purpose for another, different and unforeseen, purpose is one which arises regularly for professionals and it was therefore covered in the Firm’s standard terms and conditions: “Our advice is provided to you and may not, without our prior written consent, be disclosed to any other party. You will not refer to us or to our advice in any public documents or communication without our prior written consent”. 9. If News International had ever approached the Firm (as it should have done) to seek consent for the 29 May 2007 letter being deployed before Parliament as evidence of its corporate innocence, the Firm would not have agreed without further discussion. The reason for that is that the exercise which was done in 2007 was simply not one which was designed to bear the weight which News International now seeks to place upon it. It was a short review lasting only two weeks in total.8 By far the bulk of the time spent on it was recorded by three junior employees. The partner involved, Mr Abramson, had spent in total time amounting to only one working day on the exercise, and a great deal less than that in actually reviewing the emails. The exercise had been conducted only by civil practitioners, because this was a classic civil litigation question: a client asking the Firm to evaluate, in the context of a civil law employment dispute, what impact certain documents might have if they came to be disclosed in that potential litigation. No lawyers specialising in (or indeed with any real knowledge of) criminal law had been involved at all, precisely because this was a civil law question. No witnesses had been interviewed; this was a “desk top” exercise. The bill was £10,294 plus VAT 9 which is, in context, not a large sum (compare this with the evidence of Mr James Murdoch that News International was advised that the litigation costs for the Gordon Taylor and Max Clifford cases “were expected to be between £500,000 and £1 million”10). If, therefore, the Firm had been asked in 2009 or 2010 whether News International could use its 2007 advice, which had been given to assist in assessing how to handle Mr Goodman’s employment dispute, for the very different purpose of bolstering its stance before Parliament, or indeed for any other purpose outside the defunct Goodman employment dispute, the Firm would undoubtedly have refused unless it could have been satisfied that the letter was not going to be presented in a misleading manner. This would have required proper explanation to be given of the limited nature of the Firm's retainer, as well as the specific purpose of the exercise which had been performed in 2007 and its limited scope. 10. If the Firm had initially been given a retainer as broad as instructions “to find out what the hell was going on” or (to put it more formally) to undertake an investigation which News International could use for broader purposes, such as laying it before Parliament as independent support for the “one rogue reporter” theory, the Firm would have refused the instructions. Instructions of that nature would amount to asking whether there was evidence of wide criminal conduct by News International’s employees: this would have 7 Evidence given by Mr Rupert Murdoch before the CMSC on 19 July 2011 in answer to Q366. This is a reference to an uncorrected transcript of oral evidence, as are all the following references to the July 2011 evidence in this response. 8 Review of the emails began on 15 May 2007 and the letter was written on 29 May 2007. 9 It is noteworthy that the bill was sent to Mr Cloke in News International’s HR department and thus presumably came out of the HR budget, on the basis that it was an employment related matter. 10 Evidence given by Mr James Murdoch before the CMSC on 19 July 2011 in answer to Q265. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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been a criminal matter, and the Firm has no expertise in that field. Any solicitors accepting instructions of that nature would probably have done at least the following: a. insisted on unlimited access to all emails and other records of News International, rather than being restricted to a limited selection produced by News International itself, b. insisted on direct access to key witnesses, c. insisted on News International instructing both specialist criminal lawyers and forensic accountants, d. engaged specialists in forensic computer analysis to assist in finding emails and other electronic evidence; and e. required access to the documents seized by the police from Mr Mulcaire. A review of this nature would have taken a long time (as opposed to a fortnight, which is the period between the Firm commencing work through remote access to the emails on 15 May 2007 and the letter being written on 29 May 2007) and would have cost a very great deal of money (far more than £10,000). 11. The reason that none of these things happened is that what the Firm did was only a short and limited exercise, undertaken for the one specific purpose of assisting News International in deciding internally how to handle Mr Goodman’s employment claim. The Firm undertakes civil litigation and such a question was within the scope of its expertise; that was precisely why News International had instructed the Firm on this narrow civil law question. But the wider purposes for which News International now claims to have been relying upon the letter were not within the scope of the Firm’s expertise (or retainer). 12. In this context, the Firm would like to comment on some evidence given to the HAC on 19 July 2011 by Lord Macdonald (who has recently advised News Corporation on a small selection of the emails which were on the Firm’s file). Lord Macdonald stated that the Firm “prepared a letter that was to be forwarded to the DCMS Committee ... the communication was sent to the Committee, and that file remained, as I understand it, in Harbottle & Lewis’s offices”11, and also “There seemed to be a process whereby information was going to be given to a Select Committee—the DCMS Committee—about whether or not the company had come into possession of any more material relating to phone hacking or associated criminality”.12 The Firm would like to observe, with respect, that this is not accurate. The letter of 29 May 2007 was not prepared “to be forwarded” to the CMSC and the process in which the Firm was instructed was not one in which “information was going to be given to a Select Committee”. The letter of 29 May 2007 was not addressed to the CMSC and was not intended for use before Parliament. Nor was it so used until years after it had been written. As explained above, if the Firm had been asked for permission for the letter to have been used in that way, it would have refused unless it could have been satisfied that the letter was not going to be presented in a misleading manner. The Firm had no idea that News International was going to submit the 2007 letter to the CMSC in 2009–10, and first knew that this had been done only when the letter was (briefly) referred to in the CMSC’s Second Report dated 24 February 2010.13 13. Finally on the question of its retainer, the Firm would like to draw attention to the fact that its remit was specifically limited by News International to a search for evidence supporting Mr Goodman’s first two contentions in his 2 March 2007 letter: (a) that certain named individuals knew about and supported his interception of voicemail messages, and (b) that other News of the World staff were themselves carrying out the same activities (ie phone hacking). This was not a broad instruction to search for evidence of other criminal acts (and again, as civil litigators without criminal law expertise, the Firm would not have accepted such instructions). Whatever was shown to Lord Macdonald by Messrs Hickman & Rose, it cannot have been evidence relating to knowledge of phone hacking since, as Lord Macdonald has pointed out in his evidence, he was conflicted in relation to phone hacking and could not look at documents relating to that issue14.He said that the emails he was shown were “to do with an entirely separate issue” from phone hacking15.Itis apparent from Lord Macdonald’s own evidence, therefore, that the material on which he was commenting fell outside the scope of News International’s 2007 instructions to the Firm. As Lord Macdonald said in his evidence before the CMSC in July 201116: I do not know what Harbottle and Lewis were looking at it for. If they were looking at it in terms of whether it supplied more evidence of phone hacking, that is one question. If they were looking at it for evidence of wider criminality, that is another question. As explained above, the Firm was indeed engaged to look for “more evidence of phone hacking”, and was not engaged to look for “evidence of wider criminality”. 11 Evidence given by Lord Macdonald before the CMSC on 19 July 2011 in answer to Q1003–4. 12 Evidence given by Lord Macdonald before the CMSC on 19 July 2011 in answer to Q1018. 13 CMSC’s Second Report dated 24 February 2010 at para 435. It follows from the above that the Firm also, with respect, does not think that a remark which Mr Farrelly MP is widely reported to have made (“Harbottle & Lewis stand right up there with all the other people who have come to us and maintained there was only one rogue reporter.”) is accurate (if it was stated in the terms reported). The Firm did not “come to” the CMSC and did not write its letter for submission to the CMSC. 14 Evidence given by Lord Macdonald before the CMSC on 19 July 2011 in answer to Q1006: ‘I said, “I can’t look at anything that has anything to do with phone hacking.” They said, “This is an issue that isn’t to do with phone hacking; it’s entirely separate”.’ 15 Evidence given by Lord Macdonald before the CMSC on 19 July 2011 in answer to Q1020, and see too answers to Q1055–6 (“not connected with phone hacking”, “not to do with hacking”). 16 Evidence given by Lord Macdonald before the CMSC on 19 July 2011 in answer to Q1067. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 210 Culture, Media and Sport Committee: Evidence

Comments on various aspects of evidence given to Parliament 14. The Firm has been asked by the CMSC (question 15 of its letter of 29 July 2011) to set out any matters in respect of which it believes that the CMSC or its predecessor may have been given misleading or inaccurate information about the review undertaken by the Firm. 15. The principal point on which the Firm wishes to comment in this respect is the suggestion in the evidence of the Murdochs that Mr Abramson’s letter of 29 May 2007 was one of three things upon which News International relied (or as Mr James Murdoch frequently put it, “rested on”) in maintaining until late 2010 the belief that Mr Goodman was a solitary “rogue reporter”. The Firm does not accept that that is so. This is not perhaps the forum in which the proposition advanced by Mr James Murdoch can best be challenged, but for now the following points are made. a. As set out above, the exercise undertaken by the Firm was short, limited in terms of access to documents, without any access at all to witnesses, undertaken by civil practitioners, and undertaken for a narrow and specific purpose in an employment dispute. All these matters were known to News International, which therefore could not reasonably have relied upon it for any broader purpose and (it is to be inferred) did not in fact do so. b. It is notable that the evidence of Mr James Murdoch on 19 July 2011 is the very first time that any witness on behalf of News International suggested that the letter had been of such fundamental importance. Not one of Messrs Crone, Myler, Kuttner, Coulson or Hinton made any such suggestion in their evidence in 2009. Although there was extensive reference in their 2009 evidence to the exercise which had been done for News International by Burton Copeland (as set out below), not one of these witnesses referred to the letter of 29 May 2007 or even so much as mentioned the Firm’s name. The letter was only supplied to the CMSC, after oral evidence, as a result of, and in response to, CMSC Question 817. This would be a surprising sequence of events if News International had in fact been “resting” on the letter as was suggested. c. In fact, it is hard to see that News International “rested on” the letter even in 2007 and even for the limited purpose for which it was created. As set out above, that purpose was to assist News International in handling Mr Goodman’s appeal against dismissal. If News International had “rested on” the letter of 29 May 2007 as establishing that Mr Goodman’s grounds of appeal were ill-founded, it seems unlikely that it would have settled Mr Goodman’s claim on the terms of the July 2007 Settlement Agreement: it would have been more likely to have fought Mr Goodman through tribunal proceedings, especially given the terms of settlement previously indicated in Mr Hinton’s 5 February 2007 letter. d. The CMSC has suggested to witnesses that News International settled its litigation with Mr Taylor and/or Mr Clifford at the levels which it did because the civil disclosure exercise had produced evidence18 suggesting that phone hacking was not confined to Mr Goodman. If it transpires that this is the case, then it must follow that News International knew at that time that the letter could not be “rested on” in a wider context than that in which it had been provided. It must also follow that News International knew at that time that there was other evidence (not contained in the “five sub-folders”) which demonstrated that there was a wider problem at News International in respect of phone hacking. Thereafter, News International could not possibly have “rested on” the letter even assuming that it had done so before. e. In this context, the CMSC may wish to consider whether News International has waived any right to claim privilege over the legal advice it received (internally and externally) about the need to settle the Taylor litigation and the quantum of that settlement. In civil litigation, if a party deploys in evidence privileged material, then he waives privilege in all associated material so that the Court and the other party can see that what has been released from privilege is a fair account of the advice received, and that a misleading impression has not been created19. At the July 2011 hearing News International (by Mr James Murdoch and others) gave extensive evidence of the legal advice it received in settling the Taylor litigation as follows: Mr James Murdoch: Thirdly, the company sought distinguished outside counsel to understand that, if the case were litigated and if it were to be lost, which was the great likelihood, what the financial quantum would be or what that would cost the company. It was advised that, with legal expenses and damages, it could be between £500,000 and £1 million or thereabouts. I do not recall the exact number of the advice. I think that it was £250,000 plus expenses, plus litigation costs—something like that20 Mr James Murdoch: The advice was very, very clear as to what sort of damages could be expected to be paid and it was quite clear and quite likely that if litigated, the company would lose that case. 21 17 “Are there any written reports, either internal or by the lawyers you appointed, of the investigations into the activities of Goodman and Mulcaire, or other inquiry agents? If so the Committee would be grateful for sight of these.” 18 Such as the “For Neville” email. See Guardian Newspaper article dated 22 July 2011. 19 The classic authority is the decision of Mustill J (later Lord Mustill) in The Nea Kateria [1981] Com LR 138. 20 Evidence given by Mr James Murdoch before the CMSC on 19 July 2011 in answer to Q242. 21 Evidence given by Mr James Murdoch before the CMSC on 19 July 2011 in answer to Q255. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Q260 Mr Sanders: In 2009, Mr Crone and Mr Myler informed us that they decided to settle Mr Taylor’s claim on the advice of the company's external legal advisers. Was that advice from Farrer & Co. solicitors? James Murdoch: Farrer & Co. has done work for us. I do not know precisely which external counsel Mr Crone and Mr Myler engaged on that, but I can clarify it. Q261 Mr Sanders: Did you see the advice, whether it was from Farrer & Co. or anyone else? James Murdoch: No. I received the advice orally from Mr Myler and Mr Crone. Q262 Mr Sanders: What was their advice? James Murdoch: It was as I described it. Q263 Mr Sanders: Simply to settle? James Murdoch: And that outside legal advice had been taken on the expected quantum of damages. Their advice was that the case would be lost and that, in the absence of any new evidence—I was certainly not made aware of any new evidence—it was simply a matter related to events that came to light in 2007 and in the criminal trials before I was there. It was a matter in the past. Mr Murdoch: The amount paid rested on advice from outside counsel on the amount we would be expected to pay in damages, plus expenses and litigation costs.22 Mr Murdoch: What we knew, and what I knew, at the time was that we had senior distinguished outside counsel to whom we had gone to ask, “If this case were litigated, and if the company were to lose the case, what sort of damages would we expect to pay?” The company received an answer that was substantial.23 f. The CMSC may therefore consider asking (or indeed requiring) News International to disclose that advice and all related documents which go to show the reasons for the decision to settle at that quantum. This would extend not only to the advice received from external lawyers, whoever they were, but also to the advice from Mr Crone.24 It would be of interest to learn whether the dialogue between News International and its lawyers about whether to settle Mr Taylor’s claim, and if so at what level, included any reference to any documents which had emerged in the civil law disclosure exercise (including, but not limited to, advice given to News International about the impact of the “For Neville” email which was produced by Mr Taylor’s lawyers during that litigation.) g. The suggestion that News International could possibly have continued to “rest on” the letter even after the CMSC’s Second Report was published in February 2010, with its finding of “collective amnesia” by News of the World witnesses, is hard to credit. 16. In addition, the Firm would like to draw to the CMSC’s attention to the following evidence given to it in 2009.25 Mr Myler: I think the first thing to remember is that as soon as Mr Goodman and Mr Mulcaire were arrested News International had an outside firm of solicitors to absolutely oversee the investigation to cooperate with the police, to be a bridgehead, to give whatever facility the police required. It was completely hands-off, if you like, for transparency from the company's point of view. 26 Q1388 Paul Farrelly: Who were the solicitors who handled the investigation? Mr Crone: Burton Copeland. They are probably the leading firm in this country for white collar fraud. Q1389 Paul Farrelly: Did that investigation go wider than investigating the circumstances because the court case was coming up of the Mulcaire/Goodman connection? Did it go wider and ask people such as the deputy editor, the managing editor, the news editor, the chief reporter as to whether they had been involved in any way with Mr Mulcaire? Did it go wider? Mr Crone: Sorry, this is for me? Q1390 Paul Farrelly: No, this is to Mr Myler because Mr Myler gave evidence to the PCC. Mr Myler: I think Mr Crone is the best person to answer. 22 Evidence given by Mr James Murdoch before the CMSC on 19 July 2011 in answer to Q264. 23 Evidence given by Mr James Murdoch before the CMSC on 19 July 2011 in answer to Q286. It is worth noting the terms of the evidence given to the CMSC by Mr Myler on this topic on 21 July 2009: “Q1430 Adam Price: Some people have said that the fact you agreed to such a large sum suggests that you were concerned about some of the information which would leak out as a result of that case? Mr Myler: It was actually quite simple: our outside lawyers’ advice, who had taken counsel’s advice, was very strongly that we had to settle, and should settle. That advice was shared internally by our internal lawyers and I agreed. It really was as straightforward as that.” 24 Under English law, legal professional privilege applies just as much to the dialogue between a client and its in-house lawyer, like Mr Crone, as it does to the dialogue between a client and its external lawyer. Thus it is possible for News International to withhold documents or material from its evidence on the basis of legal professional privilege attaching to communications to and from Mr Crone. 25 This evidence was given in relation to the CMSC’s Second Report of Session 2009–10, “Press standards, privacy and libel” published on 24 February 2010. 26 Evidence given by Mr Myler before the CMSC on 21 July 2009 in answer to Q1384. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Q1391 Paul Farrelly: This is the basis of the evidence you gave to the PCC. Mr Myler: Mr Crone was there. This arrest took place, I believe, in August 2006. I think you should allow Mr Crone— Q1392 Paul Farrelly: To your knowledge, did that investigation go wider? Mr Myler: Wider than what? Q1393 Paul Farrelly: Than simply the relationship between Goodman and Mulcaire. Did the people either interview them or ask them to come forward under the basis of an amnesty if they had done something wrong to reveal themselves? Did it go to the accounts department? Mr Myler: I do not know whether or not the police— Q1394 Paul Farrelly: No, it is not the police. It is the News International investigation when you arrived. I want to know what your knowledge was of how far the remit went? Mr Myler: My recollection was that a very thorough investigation took place where there was a review of everything from how cash payments were processed. You have to remember that the Mulcaire contract, which the judge in the Goodman/Mulcaire trial said was absolutely above board and legal, meant that the staff had access to him 24/7. He was conducting enquiries perfectly legally and lawfully that meant journalists could call him for checks on electoral rolls or whatever. As I understand it, the inquiry was thorough; and to the executives that were there at the time they were happy with that. Q1395 Paul Farrelly: Mr Crone, how wide was the inquiry? You understand the questions I am asking? Mr Crone: Yes. I got back the Tuesday after the arrests. They were arrested on one Tuesday and I was there the week after. By the time I got back, which must have been August 15, Burton Copeland were in the office virtually every day or in contact with the office every day. My understanding of their remit was that they were brought in to go over everything and find out what had gone on, to liaise with the police— Q1396 Paul Farrelly: Everything to do with Mulcaire and Goodman? Mr Crone: Yes, but what you have got to realise is, at the time the only case being looked at was an access of a Royal household—voicemails. The other names did not become known to us or, as far as I know, anyone else apart from the prosecution and the police, and the defence lawyers probably knew slightly earlier; the other names did not come out until November 29, which is five months later. What I think was being enquired into was what had gone on leading to the arrests; what, in the relationship with Mulcaire, did we have to worry about. Burton Copeland came in; they were given absolutely free-range to ask whatever they wanted to ask. They did risk accounts and they have got four lever-arch files of payment records, everything to do with Mulcaire, and there is no evidence of anything going beyond in terms of knowledge into other activities. Q1397 Paul Farrelly: I want to wrap-up fairly shortly. When the other names came into the frame after November 29, did the remit of the investigation in News International broaden? Mr Crone: Yes, to some extent but the questions had already been asked. Was anyone involved with Mulcaire, or doing this, that or the other? Burton Copeland had looked at all of the financial records; and there was subsequently an email check done which went to 2,500 emails; and that produced no evidence either. Q1398 Paul Farrelly: The question: was anyone else involved with Mulcaire? The answer was: no. Nothing else was found? Mr Crone: No evidence was found. Q1663 Mr Farrelly: Can I just ask you about Clive Goodman. You say you were deceived. How was Clive Goodman able to pay £12,300 to Glenn Mulcaire? Was it actually in readies or did it go through the accounts department in a masked way? Mr Kuttner: I think the answer to the first part is it was in cash, it was a cash payment. The answer to the second part is that it was all accounted for in the documentation and that is the material that either directly on their own account to the investigating police team, or through Burton Copeland, the solicitor who was looking into these things at News International, was all disclosed. Q1719 Tom Watson: When you found out about the arrests. Presumably you commissioned an inquiry? Mr Coulson: Yes. Obviously we wanted to know internally very quickly what the hell had gone on.

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Q2168 Paul Farrelly: … Can I just ask you on what basis did you feel able to give that answer, that to your recollection Tom Crone said that various investigations had been undertaken internally as the facts established themselves as the charges and trial developed. Can you tell us on what basis you gave us that answer? Mr Hinton: … He [Andy Coulson] had numerous conversations, the charges were laid, he invoked the help of Tom Crone, who is a company lawyer with a lot of experience … We bought in a firm of solicitors and there were many, many conversations with the police, and not involving me. 17. Evidence was also given by News International to the Press Complaints Commission (“PCC”) on the role of Burton Copeland. The PCC report on phone message tapping allegations dated 9 November 2009 refers at paragraph 9.2 to Mr Myler’s evidence that “Burton Copeland were given ‘every financial document which could possibly be relevant’ to the paper’s dealings with Mulcaire and they confirmed that ‘they could find no evidence from these documents or their other enquiries which suggested complicity by The News of the World or other members of its staff beyond Clive Goodman in criminal activities’”. 18. The Firm draws attention to this evidence because it indicates that there has been some confusion in the mind of Mr Rupert Murdoch, or perhaps that he has been misinformed, about the role of the Firm. As stated above, his account of the instructions to the Firm were that it had been retained “to find out what the hell was going on”.28 It is quite clear that that is not what the Firm was instructed to do. But the evidence above suggests that Mr Rupert Murdoch may in fact have been thinking of the instructions given to Burton Copeland.29 Given that News International has waived privilege over its instructions to and advice from the Firm, the CMSC might consider asking News International similarly to waive privilege over its instructions to and advice from Burton Copeland.

Privilege and Confidentiality 19 It has been suggested that if the Firm had found evidence, in the course of its retainer by News International, of criminal offences having been committed by News International executives, then the Firm would have been entitled (or even obliged) to report its findings directly to the police. The Firm wishes to explain the correct position, as to which the law is clear. 20. When a client consults a lawyer to take advice in a relevant legal context, then what the client tells the lawyer is subject to legal advice privilege. This means that the lawyer is obliged to keep what he or she learns about the client’s affairs in the course of the retainer completely confidential, unless and until the client decides otherwise. (It is for this reason that it has been so difficult for the Firm to provide this response to the Committees.) We have set out in Appendix C a summary of the relevant law. 21. Even if, therefore, some emails reviewed by the Firm had been suggestive of criminal conduct by employees of News International, then the Firm could not possibly have reported this to the police without client consent. That would have been against the Firm’s obligations under clear modern law of the highest authority and a very serious breach of professional conduct. Further, neither common law, statute or regulation imposed any relevant obligation on the Firm to break its duties of confidence by reporting to any external authority. Criticism of the Firm for failing to report News International to the police or any other external body is therefore wholly misplaced, regardless of what the emails do or do not show.

What happened to the file 22. It has been suggested in some quarters that it is surprising that it took until April 2011 for the Firm’s file on this matter to have come to light. We therefore think it would be of assistance to the Committees to understand what happened. a. Once the Firm’s letter had been issued on 29 May 2007, this retainer came to an end.30 The Firm issued its bill on 13 June 2007, and News International paid it on 31 July 2007. The file went into archive storage with an external storage company, Restore, on 10 November 2008.31 b. One by one, all those who had been involved in the retainer left the Firm in the normal course of events, as set out above. After the last member of the junior reviewing team left on 28 January 2011, there was literally no-one left at the Firm who had had any involvement in the original retainer at all. 28 Evidence given by Mr Rupert Murdoch before the CMSC on 19 July 2011 in answer to Q366. 29 A further indication that Mr Rupert Murdoch may have been thinking of the role of Burton Copeland rather than the Firm is his answer to Q169 in his evidence before the CMSC on 19 July 2011: “Q169 Mr Watson: What did News International do subsequent to the arrest of Clive Goodman and Glenn Mulcaire to get to the facts? Rupert Murdoch: We worked with the police on further investigation and eventually we appointed—very quickly appointed—a very leading firm of lawyers in the City to investigate it further.” The Firm was not retained till May 2007, which cannot be viewed as being “very quickly appointed” after the arrests in August 2006. 30 Apart from a small amount of time spent in June-July in obtaining for News International, at its request, a transcript of the sentencing remarks of Mr Justice Gross on 26 January 2007. A separate bill for this task of £560 plus VAT and disbursements was issued on 31 July 2007. 31 The file would have been archived sooner but for the fact that, as mentioned in paragraph 5s above, Mr Abramson was subsequently instructed by News International in February 2008 in relation to an alleged breach by News International of the compromise agreement it had entered into with Mr Goodman. This work was carried out on the same file using the same file number. The documents were stored on the same paper and electronic files as those relating to the previous retainer. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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c. The first time that the Firm’s 2007 involvement was mentioned to Parliament, so far as the Firm can ascertain, was in the evidence given to the CMSC leading to its Second Report dated 24 February 2010. The Firm’s name was not mentioned in oral evidence, but was mentioned in written evidence and this was recorded in the appendices to the Second Report (which also quoted in full the letter of 29 May 2007). The letter was referred to in para 435 of the Report, which commented that Mr Abramson’s conclusions made “interesting reading”. There was no criticism of the letter and no-one made any request of News International or the Firm for the file or materials related to the retainer. It simply did not occur to the Firm to retrieve the file from archive to see if any original documents from the 2007 had been retained on it. d. It is worth recalling that what is of principal interest on the file is not the documents which evidence the dialogue between lawyer and client, but the hard copies of emails which were either supplied in hard copy on 16 or 17 May 2007, or were printed off by the reviewing team at the Firm and given to Mr Abramson for his consideration. It is not surprising that the Firm should have retained these documents: its practice, as is common among solicitors, is to preserve and retain documents at the end of a retainer for a number of years. As a result, this selection of documents from News International’s records was preserved and still existed on the file. It seems that the Firm’s copies of these documents from News International’s own records are now the only remaining copies (on paper or in electronic form) still in existence. e. It was not until 24 March of this year when the Firm was asked by News International’s then solicitors, Burton Copeland, to provide papers from the file that it was retrieved from archive. A full set of the News International emails was provided to Burton Copeland on 1 April 2011.

Conclusion 23. On 14 July 2011, Mr Rupert Murdoch gave an interview to the Wall Street Journal. The article reads “Mr Murdoch said the company had handled the crisis “extremely well in every way possible”, making just “minor mistakes”. He asserted, however, that a London law firm the company initially hired to investigate, Harbottle & Lewis LLP, had made a “major mistake” in underestimating the scope of the problem.?>” 24. The Firm rejects News International’s self-serving view of the Firm’s role in events. The Firm’s position is summarised as follows. a. It was instructed only to look for evidence (in five sub-folders provided by News International) suggesting either that certain named individuals knew of and supported Mr Goodman’s involvement in phone hacking activities, or that others at The News of the World were also carrying out phone hacking activities. It was not retained to look for evidence of wider criminal activities and did not do so. b. It was not given free rein to look through whatever it wanted. It was asked to search through some emails which had been assembled by News International and isolated into a specific area on News International’s server (the “five sub-folders”). It was given no access to other documents or to witnesses. c. Its exercise was specifically and only to assist News International in handling an internal appeal by Mr Goodman against his dismissal. This was a classic civil litigation exercise in assessing the potency of documentary evidence in an employment dispute. It was a short and limited exercise lasting two weeks and mostly involving junior employees. All this was known to News International. d. The desktop exercise done by the Firm is to be contrasted with the far longer, far more detailed and (no doubt) far more expensive exercise undertaken by Burton Copeland in the 9 months which that firm is said to have spent in the News International offices. It may therefore be that Mr Rupert Murdoch was confused or misinformed as to which lawyers had been retained for what purpose when he gave evidence that the Firm had been retained to “find out what the hell was going on”. At any rate, this was an inaccurate and misleading account of the Firm’s retainer. e. The Firm was not retained to provide News International with a “good conduct certificate” which it could show to Parliament, or anyone else, years after the event and for a wholly different purpose. Such use of the Firm’s advice was expressly prohibited under its terms of engagement. The Firm did not know that News International was subsequently going to deploy its 2007 advice in this way (in 2009–2010) and would not have given its consent to that use had it been sought. f. The Firm rejects the evidence of Mr James Murdoch that News International “rested on” the letter of 29 May 2007 for its alleged belief (until late 2010) that Mr Goodman was a lone “rogue reporter”. It is noteworthy that it has taken until 2011 for News International to make this assertion. g. The Firm could not possibly have reported News International to the police if in the course of its 2007 retainer it had formed a view that News International employees had been guilty of criminal activity. This would have been contrary to settled law on the right of a client to have his affairs kept confidential by his lawyer, and would have been improper as a matter of professional conduct. 25. We believe that the above response together with the Firm’s covering letters to the Committees answers in full (within the confines of what may be said pending criminal investigation) all the questions asked in the letters to the Firm from the Rt Hon Keith Vaz MP, Chairman of HAC, (letter dated 21 July 2011) and from cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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John Whittingdale OBE MP, Chairman of the CMSC (letter dated 29 July 2011). However, if we can assist further please let us know. 11 August 2011

APPENDIX B From: Chapman, Jon Sent: 10 May 2007 15:43 To: Lawrence Abramson Cc: Cloke, Daniel

Subject: Our conversation

Privileged and Confidential Lawrence On 5 February 2007, we terminated the employment of Clive Goodman, the Royal Correspondent of the News of the World, following his imprisonment for conspiracy to intercept voicemail messages. This interception was carried out through a private investigator, Glen Mulcaire, who was also imprisoned. I have faxed you the termination letter and letters of 2 March, 12 March and 14 March relating to an appeal against dismissal. The letter of 14 March requests, at paragraphs iv, v, vi, vii and viii, certain emails which Goodman believed to be potentially relevant to his appeal. This request was refused. However, both myself and Daniel Cloke, our head of HR, went through all the emails fitting into the above categories which our IT department were able to recover from archive. The purpose of this exercise was to find any evidence in such emails to support the contentions made by Goodman in his letter of 2 March, paragraphs i and ii—ie that his, illegal, actions were known about and supported by [REDACTED] and that [REDACTED] and others were carrying out similar illegal procedures. We found nothing that amounted to reasonable evidence of either of the above contentions. Because of the bad publicity that could result in an allegation in an employment tribunal that we had covered up potentially damaging evidence found on our email trawl, I would ask that you, or a colleague, carry out an independent review of the emails in question and report back to me with any findings of material that could possibly tend to support either of Goodman’s contentions. We will make available to you access to the emails in question as soon as possible. Please don’t hesitate to contact me for any further clarification. Thanks and best wishes. Jon Jon Chapman Director of Legal Affairs News International Limited

News International Limited FACSIMILE MESSAGE FROM CORPORATE LEGAL AFFAIRS To: Lawrence Abramson From: Jon Chapman Date: 10 May 2007

[On headed notepaper] Private & Confidential By Courier Clive Goodman Esq 5 February 2007 Dear Clive I am sorry to have to be writing this letter, but am afraid that events of the last few days and months provide us no choice but to terminate your employment with News Group Newspapers Limited. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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This action, I know you understand, is the consequence of your plea of guilty, and subsequent imprisonment on 26 January, in relation to conspiracy to intercept voicemail messages. This obviously constitutes a very serious breach of your obligations as an employee, such as to warrant dismissal without any warnings. In the circumstances of your plea and the court’s sentence, it is reasonable for us to dismiss you without any further enquiries. I recognise this episode followed many unblemished, and frequently distinguished, years of service to the News of the World. In view of this, and in recognition of the pressures on your family, it has been decided that upon your termination you will receive one year’s salary. In all the circumstances, we would of course be entitled to make no payment whatever. To summarise, in formal language, the following arrangements apply with immediate effect (but may be varied or revoked in the event of a successful disciplinary appeal): (a) Your dismissal takes effect immediately and your final day of employment is therefore today. (b) You will be paid, through payroll, on 6 February 2007, 12 months’ base salary, subject to normal deductions of tax and national insurance. (c) You must arrange for the return of any property, such as any laptop computer or mobile phone, belonging to us, in good condition, by 28 February. (d) We shall forward your P45 to you in due course. Again, Clive, I am deeply sorry we have found it necessary to take this measure, but we have no other choice. Of course, you have the right to appeal against your dismissal. If you wish to appeal, you (or your legal representative) must do so in writing to Stuart Kuttner within two weeks of the date of this letter. You would then have the opportunity to present your case at an appeal hearing in accordance with our disciplinary procedure. You may be accompanied at the hearing by a fellow employee or a NISA representative. Lodging an appeal will not delay the dismissal taking effect. If you have any questions, please contact Stuart Kuttner. Yours sincerely, Les Hinton Executive Chairman News International Limited ______Daniel Cloke Esq Group Human Resources Director News International 2 March 2007 Dear Mr Cloke,

Re: Notice of Termination of Employment I refer to Les Hinton’s letter of 5 February 2007 informing me of my dismissal for alleged gross misconduct. The letter identifies the reason for the dismissal as “recent events”. I take this to mean my plea of guilty to conspiracy to intercept the voicemail messages of three employees of the royal family. I am appealing against this decision on the following grounds: (i) The decision is perverse in that the actions leading to this criminal charge were carried out with the full knowledge, and support of [REDACTED]. Payment for Glen Mulcaire’s services was arranged by [REDACTED]. (ii) The decision is inconsistent, because [REDACTED] and other members of staff were carrying out the same illegal procedures. The prosecution counsel, the counsel for Glen Mulcaire, and the Judge at the sentencing hearing agreed that other News of the World employees were the clients for Mulcaire’s five solo substantive charges. This practice was widely discussed in the daily editorial conference, until explicit reference to it was banned by the Editor. As far as I am aware, no other member of staff has faced disciplinary action, much less dismissal. (iii) My conviction and imprisonment cannot be the real reason for my dismissal. The legal manager, Tom Crone, attended virtually every meeting of my legal team and was given full access to the Crown Prosecution Service’s evidence files. He, and other senior staff of the paper, had long advance knowledge that I would plead guilty. Despite this, the paper continued to employ me. Throughout my suspension I was given book serialisations to write and was consulted on several occasions about royal stories they needed to check. The paper continued to employ me for a substantial part of my custodial sentence. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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(iv) Tom Crone and the Editor promised on many occasions that I could come back to a job at the newspaper if I did not implicate the paper or any of its staff in my mitigation plea. I did not, and I expect the paper to honour its promise to me. (v) The dismissal is automatically unfair as the company failed to go through the minimum required statutory dismissal procedures. Yours sincerely, Clive Goodman cc Stuart Kuttner, Managing Editor, News of the World Les Hinton, Executive Chairman, News International Ltd

News International Newspapers Limited Private & Confidential 12 March 2007 Mr Clive Goodman Dear Mr Goodman, Thank you for your letter of 2nd March 2007. I would like to request your attendance at an appeal hearing on Tuesday 20 March 2007 at 10.00 am at the offices of News Magazines Limited at 2 Chelsea Manor Gardens, London SW3 5PN (when you arrive there, please ask for me at Reception). The purpose of the hearing is to consider, under the News International disciplinary procedure, your appeal against your dismissal on 5 February, on the grounds raised in your letter of 2 March. The appeal will be heard by Colin Myler, Editor of the News of the World, and I will also be in attendance. In addition, there will be a note taker present. You are entitled to be accompanied as specified in the Company’s Disciplinary procedure. Please let me know in advance if you decide to bring a companion and their name and contact details. If there are any documents you wish to be considered at the appeal hearing, please provide copies as soon as possible. If you do not have those documents, please provide details so that they can be obtained. I should point out that appeals against dismissal under our disciplinary procedure would generally be considered by the Dismissal Appeals Panel, which consists of employee and management representatives. However, News International has the right to disregard or disapply any part of this procedure on a case-by- case basis in exceptional circumstances and where there are reasonable grounds for doing so. Given that your notice of appeal makes extremely serious allegations against a number of employees, it is clearly inappropriate for your appeal to be considered by this Panel. I would be grateful if you could confirm that you have received this letter and that you will attend at the time stated above. If, for any unavoidable reason, you or your companion cannot attend at that time, please contact me by telephone. If you have any other questions, please contact me as soon as possible. Yours sincerely, Daniel Cloke Group Human Resources Director

Daniel Cloke Esq Group Human Resources Director News International 14 March 2007 Dear Mr Cloke Thank you for your letter of March 12. Although I can confirm that I will be able to attend the planned appeal hearing on March 20, for the reasons set out below, I believe it would be sensible and reasonable to postpone the hearing. I note that you are proposing to alter substantially the normal procedure for such a hearing. I am not convinced that the proposed alterations are necessary. However, in light of the exceptional circumstances you identify in your letter, I think it would be sensible for me to be accompanied by my legal representative rather than a work colleague. Please confirm to me you are happy to proceed on this basis. I will let you have copies of relevant documents in my possession as soon as possible. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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In the meantime, I would be grateful if you could provide the following documents: (i) A transcription of the sentencing hearing from the Old Bailey on 26 January 2007. (ii) Full details available by a print out of every story payment requested by me from October 2005 until my arrest—to include details of which executive approved each credit for payment, which executive authorised each credit for final payment, and from which budget each credit came. Also, the same audit trail for story payment requests from me that were not authorised for payment. (iii) Emails and other documents relating to my transfer from the Editorial Management budget to the News budget and any further relevant documents. (iv) Copies of emails passing between [REDACTED] and me, [REDACTED] and me, [REDACTED] and me, [REDACTED] and me, and [REDACTED] and me for the period October 2005 until 26 January 2007. (v) Copies of emails passing between [REDACTED] and [REDACTED] for the period October 2005 until the present day insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or “Alexander” or any work carried out by him. (vi) Copies of emails passing between [REDACTED] and [REDACTED] for the period October 2005 until the present day insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or “Alexander” or any work carried out by him. (vii) Copies of emails passing to and from [REDACTED] and [REDACTED] for the period October 2005 until the present day insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or “Alexander” or any work carried out by him. (viii) Copies of emails passing between [REDACTED] and [REDACTED] and [REDACTED] during the period from August 2006 to the present day Insofar as they relate to me or any work carried out by me, or relate to Glen Mulcaire or “Alexander” or any work carried out by him. Further, copies of any emails passing between [REDACTED] and [REDACTED] relating to my criminal case. (ix) Copies of [REDACTED] mobile phone records for 2005, 2006 and 2007 showing calls to and from Glen Mulcaire. (x) Copies of [RECACTED] appointments diary for the period from August 2006 to the present date. (xi) A full transcription of Les Hinton’s testimony to the Department of Culture, Media and Sport’s select committee hearing into the self regulation of the Press, given on March 6 2007. In view of the additional documents that are essential in order for me to prepare properly for the appeal hearing, I think it sensible and reasonable to reschedule Tuesday’s meeting until I have been given reasonable time to consider these further documents. I look forward to your response as soon as possible. Yours sincerely, Clive Goodman

APPENDIX C LEGAL PROFESSIONAL PRIVILEGE 1. The privilege belongs to the client, not the lawyer. This is absolutely clear on the law. The lawyer has no power to decide what is and is not released from privilege: only the client can do this. In fact, the lawyer has a positive professional obligation to assert the privilege on behalf of his client unless it has been waived (R v Central Criminal Court ex p Francis & Francis [1989] 1 AC 346; Bolkiah v KPMG [1999] 2 AC 222) and so the Court may intervene to prevent a lawyer from breaking a client’s privilege (Harmony Shipping v Saudi Europe Line [1979] 1 WLR 1380). 2. The right to communicate in absolute confidence with a lawyer is now recognised by the House of Lords as a fundamental human right: Morgan Grenfell v Special Commissioner of Income Tax [2003] 1 AC 563. The absolute nature of the right is graphically illustrated by the decision of the House of Lords in Rv Derby Magistrates ex p B [1996] 1 AC 487, in which it was held that privilege even protects a confession to a lawyer of having committed murder. 3. This is not a balancing act, in which the Courts (still less the lawyers) weigh up the relative importance of the information against the right of the client to preserve privilege. Privilege is absolute unless over- ridden by express primary legislation. In one of the leading modern cases in the subject, Three Rivers DC v Bank of England [2005] 1 AC 610, Lord Scott explained this at para 24: if a communication or document qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest. It can be waived by the person, the client, entitled to it and it can be overridden by statute (cf R (Morgan Grenfell & Co Ltd) v Special Comr of Income Tax [2003] 1 AC 563), but it is otherwise cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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absolute. There is no balancing exercise that has to be carried out: see B v Auckland District Law Society [2003] 2 AC 736, 756–759, paras 46–54). The Supreme Court of Canada has held that legal professional privilege although of great importance is not absolute and can be set aside if a sufficiently compelling public interest for doing so, such as public safety, can be shown: see Jones v Smith [1999] 1 SCR 455. But no other common law jurisdiction has, so far as I am aware, developed the law of privilege in this way. Certainly in this country legal professional privilege, if it is attracted by a particular communication between lawyer and client or attaches to a particular document, cannot be set aside on the ground that some other higher public interest requires that to be done. 4. The reason for this absolute privilege existing is because all over the world, it has been recognised that the proper administration of justice requires that a client can consult a lawyer in the absolute certainty that whatever the client tells the lawyer, whatever the lawyer learns about the client, the lawyer is bound not to communicate that information to any third party. As Lord Millett put it in B v Auckland District Law Society [2003] 2 AC 736 at para 47: a lawyer must be able to give his client an absolute and unqualified assurance that whatever the client tells him in confidence will never be disclosed without his consent. 5. This is not a peculiarity of English law. In the Three Rivers decision, Lord Scott set out authorities not only from this jurisdiction but also from the United States, Europe, Canada, Australia and New Zealand which all speak with one voice (see paras 31–34). Lord Scott concluded that all these authorities: recognise that unless the clients can be assured that what they tell their lawyers will not be disclosed by the lawyers without their (the clients’) consent, there will be cases in which the requisite candour will be absent and concluded that it is necessary as a matter of policy that: communications between clients and lawyers, whereby the clients are hoping for the assistance of the lawyers’ legal skills in the management of their (the clients’) affairs, should be secure against the possibility of any scrutiny from others, whether the police, the executive, business competitors, inquisitive busybodies or anyone else. 6. Unsurprisingly this state of the law is reflected in the Code of Conduct issued by the Solicitors Regulation Authority: see Rule 4.01 (“You and your firm must keep the affairs of clients and former clients confidential except where disclosure is required or permitted by law or by your client (or former client).”) There are very few circumstances in which disclosure is either required or permitted by law, none of which arise in this case. The only one which could have any relevance is what is known as the “fraud exception”: privilege never attaches to communications between lawyer and client if the client has a secret intention of using the advice to enable him to further or facilitate crime or fraud. Please note that this applies only where the client consults a lawyer with the motive of obtaining advice which will assist him in the commission of an offence (not privileged), as distinct from a client consulting a lawyer about an offence which has already been committed (privileged). This distinction runs through all the authorities but is neatly encapsulated in a dictum of Lord Sumner in O’Rourke v Darbishire [1920] AC 581 at 613: To consult a solicitor about an intended course of action, in order to be advised whether it is legitimate or not, or to lay before a solicitor the facts relating to a charge of fraud, actually made or anticipated, and make a clean breast of it with the object of being advised about the best way to meet it, is a very different thing from consulting him in order to learn how to plan, execute or stifle an actual fraud. For the lawyer to appreciate that this exception is engaged, however, the lawyer must have prima facie evidence suggesting that he is being used by the client in that way. The Firm had no such evidence (and for the avoidance of doubt, is making no suggestion in this response that News International had such a purpose).

Letter from the Chair of the Culture, Media and Sport Committee to Harbottle & Lewis Thank you for your letters of 20, 21 July and 28 July. I am pleased to note that you have received a waiver of privilege from News Corp and News International, in relation to questions from the Select Committee. You will be aware that in his evidence to the CMS Committee on 19 July 2011, James Murdoch referred to the review of internal emails that Harbottle and Lewis carried out for News International in May 2007. On 27 May 2007, Harbottle and Lewis wrote to Jon Chapman, News International’s Director of Legal Affairs at the time, that: We have on your instructions reviewed the emails to which you have provided access from the accounts of: Andy Coulson, Stuart Kuttner, Ian Edmondson, Clive Goodman, Neil Wallis, Jules Stenson I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman’s illegal actions were known about and supported by both or either of Andy Coulson, the Editor, and Neil Wallis, the Deputy Editor, and/or that Ian Edmondson, the News Editor, and others were carrying out similar illegal procedures. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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On 19 July 2011, James Murdoch told the Committee that the review of emails conducted by Harbottle & Lewis was one of the things that News International rested on when reassuring the Committee in 2009 that phone hacking was the work of one rogue reporter (Q346, Q362). James Murdoch told the Committee that when News International re-examined the file of emails retained by Harbottle and Lewis in 2011 it determined that there was a requirement to bring it to the attention of the police (Q335, Q339, Q363 and Q365). The Committee invites you to reconsider the letter of 27 May 2009 accepted as evidence by the Committee in 2009. The Committee also requests that you respond in writing to the questions appended to this letter. I note that some of the questions would normally have been covered by legal professional privilege. It is, however, our view that, by putting in issue the legal advice it received, and by expressly referring to it to support a claimed lack of guilty intent, News International has waived its legal professional privilege. I would, therefore, expect you to be able to respond. I note that you have undertaken to write to the Committee once you have had a meeting with the Metropolitan Police. However, it would be helpful if you could respond to the Committee’s secretariat using the contact details above. I would appreciate your response no later than 11 August. 29 July 2011

Questions for Written Answer 1. When was Harbottle and Lewis first instructed in respect of matters concerning alleged or suspected phone-hacking? 2. Were these instructions given on behalf of News International Ltd, News Group Newspapers Ltd, or on behalf of both? 3. Please could you provide details of the instructions, including a copy of any document in which the instructions were reduced into writing. 4. Which individual gave the instructions on behalf of News International Ltd/News Group Newspapers Ltd, and to which individual at Harbottle and Lewis were the instructions addressed? 5. Please supply details of Harbottle and Lewis’s primary point of contact at News International Ltd/News Group Newspapers Ltd. You have explained in your letter of 20 July to the Chairman that Mr Lawrence Abramson acted in this matter on a retainer from New International. Please confirm whether or not any other member of your firm was involved in preparing advice under this retainer, and please identity any such person. 6. What description of the emails provided was supplied to Harbottle and Lewis by News International Ltd/News Group Newspapers Ltd? Please supply a copy of any relevant letter or communication from the Correspondence File mentioned in your letter of 20 July. 7. Please indicate whether Harbottle and Lewis became aware at any time that the documentation supplied was incomplete and, if so, please describe in what way it was incomplete. 8. Please indicate whether any particular type of activity was excluded from the scope of the investigation commissioned from Harbottle and Lewis. 9. Did the investigation extend to other individuals at the newspaper, for instance Neville Thurlbeck and Ross Hindley/Hall if not, why not? 10. Please describe any additional documentation requested by Harbottle and Lewis in connection with their investigation. 11. Please set out what advice was given orally, by whom, to whom, and when. 12. Please set out what advice was given in writing, by whom, to whom, and when. 13. Please confirm whether or not the documents provided to Harbottle and Lewis provided any grounds for reasonable suspicion that a criminal act might have been or might be committed by any employee or director of News International Ltd or of News Group Newspapers Ltd, and if so, what advice was given by Harbottle and Lewis? 14. Please confirm when Mr Abramson closed his file and retained it in archived storage. Please also confirm whether or not the contents of the file retrieved from the archive earlier this year are the same as those of the file closed by Mr Abramson. 15. Please set out any matters in respect of which Harbottle and Lewis believes that this Culture, Media and Sport Select Committee or its predecessor may have been given misleading, or inaccurate information about the review undertaken by Harbottle and Lewis. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Written evidence submitted by Baroness Buscombe, Chairman, Press Complaints Commission I write further to your public hearing on 19 July. In it, you will recall, Mr James Murdoch made reference to News International “relying” on—among other things, including the police investigation—Press Complaints Commission reports regarding the extent of the alleged criminal activity at the News of the World. For the record, I would like to make clear that the two reports issued by the PCC in connection with phone hacking (the latter of which has been withdrawn) were largely based on disclosures made to the PCC by the News of the World itself. The PCC, in common with police, was relying upon information given to it by the newspaper. As is now clear, the information provided to the PCC was not correct. 26 July 2011

Written evidence submitted by Mark Lewis, Taylor Hampton Solicitors I understand that the committee is seeking to understand in detail, who was involved in the negotiations that led to the settlement between Gordon Taylor and News Group Newspapers. I acted for Gordon Taylor and conducted the negotiations with Julian Pike (“Mr Pike”) of Farrer & Co. There is one matter of the negotiations regarding the Gordon Taylor settlement that is likely to be very relevant to the deliberations of the Select Committee. I would be able to attend to give further evidence if required. It relates to a conversation that I had with Mr Pike leading up to the settlement. James Murdoch gave evidence to the Select Committee about advice from “external counsel”. In doing so he has waived the privilege in that advice. In that context it becomes relevant that during the negotiations Julian Pike said to me “you are negotiating with Murdoch”. I did not know whether he meant Rupert Murdoch or James Murdoch at that time but it seems likely that the reference was to James. As News Group have given limited permission to Harbottle and Lewis to provide information they might (without breaching the confidence of Gordon Taylor) also give permission to Farrer & Co to provide copies of their “file/attendance notes” showing who they got instructions from, and if relevant who the person giving those instructions said they had consulted and what advice had been given as to the quantum of the claim. I presume that such documentary evidence (redacted to preserve the confidentiality of Mr Taylor's settlement) would assist in determining the truth of the position. When I gave evidence on 2 September 2009 I indicated that I was under a threat of an injunction from News Group through Farrer & Co solicitors that I characterised as “please do not act you know too much”. I never heard any more of that threat. I realise that one matter that I knew that the other solicitors who were not under threat did not was the conversation that I had with Mr Pike who told me the ultimate source of his instructions. I would hope that News Group Newspapers and Farrer & Co will cooperate as this should indicate why Mr Pike made his statement to me. 15 August 2011

Written evidence submitted by Linklaters LLP We write on behalf of the Management and Standards Committee of News Corporation. The purpose of this letter is to supplement Mr James Murdoch’s answers, provided in his letter of 11 August 2011, to questions 5 and 6 of your letter of 29 July 2011 in light of information brought to the Management and Standards Committee’s attention. The Committee assisted Mr Murdoch in providing answers to a number of your questions, including questions 5 and 6, as the answers to those questions were not within Mr Murdoch’s personal knowledge. As Mr Murdoch is currently on vacation, the Committee wishes to draw the matters below directly to your attention. As noted in News International’s written evidence of January 2010 to your Committee, following the termination in January 2007 of the contract between News Group Newspapers Limited (“NGN”) and one of Mr Mulcaire’s companies, Nine Consultancy Limited, Mr Mulcaire commenced Employment Tribunal proceedings against NGN. In around June 2007, NGN compromised the proceedings and agreed to pay Mr Muclaire £80,000 plus legal fees of £5,000 (plus VAT). At Mr Mulcaire’s request, the compromise amount was split such that NGN agreed to pay Mr Mulcaire £27,500 personally and to pay £52,500 to a company called Eight Consultancy Limited (which, we understand, was also owned by Mr Mulcaire). The arrangements were confirmed in confidential settlement agreements. We understand that the arrangements were approved by Mr Les Hinton (formerly the Executive Chairman of News International) and the payments authorised by Mr Stephen Daintith (formerly the Finance Director of News International). As set out in the January 2010 evidence, Mr Hinton and Mr Daintith also knew of and authorised the arrangements with Mr Goodman that were described in Mr Murdoch's letter. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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In addition, we understand that £16,152 was paid to Nine Consultancy Limited in eight regular instalments of £2019 between 5 December 2006 and 18 January 2007 in accordance with the payment terms of the contract between Nine Consultancy Limited and NGN. We believe these payments were authorised by, at least, Mr Stuart Kuttner (then managing editor of the News of the World), but our client is still looking into the matter. 15 August 2011

Written evidence submitted by Rebekah Brooks, former CEO, News International

In your letter of the 29 July 2011 you refer to the commitment I made to write to the Committee with further information as to how often I either spoke to or met the various Prime Ministers since I became Editor of the News of the World,ofThe Sun and Chief Executive of News International.

When I provided this response to the Culture, Media and Sport Select Committee, it was in the genuine hope and expectation that I would obtain access to my paper and electronic diaries to assist me with this task. Unfortunately, I do not currently have access to my diaries and contemporaneous records for this period and without access to such material, any answer that I give is likely to be inaccurate and provide little, if any, additional information to the Committee beyond the evidence I gave on the 19 July. I will endeavour to get this information to you as soon as I can. In addition, as there was no requirement for me to maintain a log of calls and meetings, even when I do have full access to my diaries and contemporaneous documents, it is unlikely that these will capture every time I spoke to or met the various Prime Ministers.

As with all meetings and contact with Media Executives I am sure that Downing Street would have kept records of the frequency of meetings and conversations held with the various Prime Ministers during this twelve year period. These records will be far more definitive than anything that I could supply and therefore be of more assistance to the Committee.

In relation to your letter of 16 August 2011, I was not involved in the settlement with Clive Goodman and the information provided in the letter of the 4 November 2009 was provided to me by Jon Chapman who has given evidence to you. The answer to the question relating to Mr Goodman's settlement is in fact prefaced with the sentence:

“I have asked Jon Chapman, News International's Director of Legal Affairs, to deal with this question directly and this is his response:”. The remainder of the answer is a direct response from Mr Chapman.

I am unable to provide any further assistance as to any discrepancy with the letter provided by James Murdoch on 11 August 2011. 12 September 2011

Letter from the Chair of the Culture, Media and Sport Committee to Rebekah Brooks, former CEO, News International

Thank you for your letter in response to a request for further information made to you on 29 July 2011.

In your letter you asked for an extension to the deadline for your response. The Committee discussed this matter at its meeting on 16 August and would be happy to give you more time to reply. I would, however, be grateful if you could have your response with the Committee by 12 noon on 12 September at the latest.

I would be grateful if by the same deadline you could provide a response to the additional matter detailed below.

In a letter to the Committee’s predecessor dated 4 November 2009 you referred to the settlement made with Clive Goodman by News Group Newspapers Limited. In your letter you state that: “Pursuant to the agreement, Mr Goodman was paid his notice and an agreed amount representing a possible compensatory award at tribunal (which was some way below the then £60,600 limit on such awards). It should be noted that, as a matter of policy, News International companies tend always to pay notice, even in cases of summary dismissal (which is not unusual). As is normal under the terms of compromise agreements, Mr. Goodman’s legal costs relating to his employment claims and their settlement by compromise agreement were paid by News Group Newspapers Limited”. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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In a letter to the Chairman dated 11 August, James Murdoch stated that: “Mr Goodman was paid £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” (PH 15, enclosed in this letter for your reference). There is an obvious discrepancy between your statement that Mr Goodman’s settlement was “some way below the then £60,600 limit on such awards” and the amounts detailed in Mr Murdoch’s written evidence. I would be grateful if you could account for this discrepancy. With many thanks for your continued cooperation. 16 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Rebekah Brooks, former CEO, News International During the Committee’s recent evidence session on 19 July 2011, you made a commitment to write to the Committee with further information as to how often you either spoke to or met the various Prime Ministers since you became Editor of News of the World,ofThe Sun, and Chief Executive of News International. In your evidence, you stated that part of the main focus of your editorship of the News of the World was campaigning in support of “Sarah’s Law”. Given this, we would be grateful if you would state when you first became aware that the phone of Sara Payne and possibly that of DCI Martyn Underhill had been hacked, and state who was responsible. For your convenience, I have attached the relevant page of the transcript. Please send the response to the Committee’s secretariat using the contact details above. I would appreciate your response no later than 11 August. 29 July 2011

Written evidence submitted by Mr Daniel Cloke

1. I have been asked to assist the Parliamentary Culture, Media and Sport Committee with my account of events detailed in the evidence provided to the Committee by Harbottle and Lewis LLP and Mr Jon Chapman, News International’s former Director of Legal Affairs. They were asked for statements in relation to an email review conducted in the Summer of 2007 arising from disciplinary proceedings against Mr Clive Goodman, a former employee of the News of the World. 2. I have read the statements and representations made by Mr Chapman, Harbottle and Lewis LLP and Mr Colin Myler, the former Editor of the News of the World. This statement is made without any access to original documentation and is therefore made to the best of my recollection. 3. I was appointed Director of Human Resources by News International (“the Company”) towards the end of 2003. I resigned in August 2010 for personal reasons not linked in any way to this matter and left the Company in November 2010. 4. My role within the Company was broad, having developed from the early days of primarily managing some large scale change programmes, through to the introduction and development of Human Resources initiatives across the Company. This included all commercial, corporate, manufacturing, distribution and eventually editorial operations within the four national newspaper publications. At the time of the events in question, my immediate reporting line was to Mr Les Hinton, the Executive Chairman. 5. In March 2007 I received a letter from Mr Goodman appealing against the finding of the Company that he should be dismissed for gross misconduct. He had been informed of the Company’s decision in a letter dated 5 February 2007, from Mr Hinton. 6. At this stage I had played no part in the disciplinary proceedings against Mr Goodman, nor had I been consulted during the course of the criminal proceedings against him. 7. As I recall, Mr Goodman set out his grounds of appeal in his letter. These were in essence, that he had been involved in the voicemail interception activities (for which he had been dismissed) with the knowledge and support of some other individuals in the News of the World; had been promised continuous employment and that the Company had failed to abide by minimum required statutory dismissal procedures. 8. My brief was to ascertain whether there were any grounds for wrongful dismissal and with this aim I wrote to Mr Goodman on 12 March 2007 inviting him to attend an appeal hearing on 20 March 2007 at 10am. He was informed that the Appeal was to be heard by Mr Myler, and that I would also be in attendance together with a note taker. He was informed that his appeal would ordinarily been heard by the Dismissal Appeals cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Panel, but as a result of the serious allegations made against employees of the Company it was inappropriate for the Panel to hear his appeal. This was in accordance with the Company’s disciplinary policy.

9. On, or around 14 March 2007, I received a further letter from Mr Goodman in which he requested disclosure of a number of documents and requested that the hearing be postponed. In consultation with Mr Chapman and Mr Hinton, it was agreed that we would look at various documents to see if there was any evidence contained within them that would support his contentions. Mr Myler also agreed. I agree with the characterisation of the review as set out in both Harbottle and Lewis LLP and Mr Chapman’s statements that the exercise was never intended to be a general internal inquiry or investigation into the issue of voicemail interception at the News of the World. It was related to a specific employment matter.

10. Alongside Mr Chapman I then carried out a review of emails with a view to determining whether the individuals specified in Mr Goodman’s letter knew about his voicemail interception activities. Mr Myler and I also questioned those individuals.

11. I recall reviewing about 2000 emails but cannot be sure of the exact number. The emails had been retrieved by our Information Technology Department against specific search terms related to the names of the individuals named in Mr Goodman's letter. I believe we carried out the search carefully and diligently and did not find anything that in our view provided proof that Mr Goodman’s activities were known about or supported by the parties he had identified.

12. I reported our initial findings to Mr Hinton and Mr Myler. I was concerned that as I was inexperienced in this area and as a result might have missed something, that there be a further and independent review. I was also heavily engaged at the time in other activities other than the Appeal. I believe I suggested to Mr Chapman and subsequently Mr Hinton that an external review by a law firm or barrister might be a good idea and both readily agreed as did Mr Myler.

13. Harbottle and Lewis LLP were then instructed by Mr Chapman to review the emails. I was copied in on these instructions. The email makes it clear that the purpose of the review was to prevent bad publicity that could ensue from allegations at an Employment Tribunal that we had in some way covered up potentially damaging evidence found in our email trawl. The product of the review has been seen by the Committee and in my view at the time gave us comfort that our original review had been properly carried out. Mr Hinton and Mr Myler were informed of the Harbottle and Lewis LLP findings.

14. As a result, the decision was taken that the Appeal should proceed and the original decision to dismiss was upheld after two meetings with Mr Goodman. As I recall it was upheld on the basis that immaterial of his unproven allegations, his dismissal was correct on the grounds of his own misconduct which had led to his conviction.

15. The case was passed to Mr Chapman. As is usual in contentious employment cases, Mr Chapman as Director of Legal Affairs to the Company assessed the matter to make a recommendation as to whether to settle or try to defend the case.

16. As he has reported to the Committee, I understand that he made this on the basis of the time, cost and resources to deal with the matter and publicity it would attract. Mr Chapman made the recommendation (with which I agreed) to try and settle the case on reasonable grounds which after negotiation with Mr Goodman’s lawyers was approved by Les Hinton.

17. To the best of my recollection that concluded my substantive involvement in the matter. 31 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Daniel Cloke

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee’s 2009 inquiry into Press Standards, Privacy and Libel.

You will note that the Committee has published written evidence from Jonathan Chapman and Harbottle and Lewis (enclosed with this letter) in connection with an email review carried out by Harbottle Lewis for News Corporation. The Committee would be grateful if you could supply your own account of the events detailed in that evidence.

The Committee would be grateful for a response to arrive no later than 4 pm on Wednesday 31 August, 2011.

In addition, the Committee would like you to give oral evidence alongside Jonathan Chapman at 10.30 a.m. on Tuesday 6 September. I would be grateful if, as a matter of urgency, you could confirm that you will be able to attend this session. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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With many thanks for your assistance in this matter. 16 August 2011

Written evidence submitted by Anthony Burton, Partner, Simons Muirhead & Burton

I act for Stuart Kuttner (Mr Kuttner). Mr Kuttner has received your letter dated 16 August 2011.

You will know that following his arrest Mr Kuttner is currently the subject of a police investigation (Operation Weeting) into allegations of phone hacking and corrupt payments to the police involving persons connected with or formerly employed by the News of the World. He is scheduled to attend a further police interview in the near future. While Mr Kuttner remains willing to assist the Committee, as he did in 2003 and 2009, given his current circumstances which includes his ill health following a heart attack and stroke last year and a further heart attack last month, it is inappropriate for him to submit to further questioning by the Committee or to make written submissions pending the outcome of the police inquiry.

He thanks you for the opportunity but at this stage respectfully declines your invitation to reconsider, or make additional comments on, the evidence he gave on 21 July 2009. 25 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Stuart Kuttner

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee's 2009 inquiry into Press Standards, Privacy and Libel.

Following the Committee’s recent evidence session with James and Rupert Murdoch on 19 July, we have now received further written evidence from James Murdoch, Harbottle and Lewis, Colin Myler, Jonathan Chapman, Rebekah Brooks and Tom Crone.

In light of this evidence, in particular the letter from Clive Goodman contained in the evidence from James Murdoch and also from Harbottle and Lewis, I am now writing to ask whether you wish to reconsider, or make any additional comments on, the evidence you gave to the Committee on 21 July 2009.

I have enclosed a copy of the evidence from James Murdoch and from Harbottle and Lewis for your convenience. Copies of all the evidence the Committee has received, as well as the transcript of your 2009 evidence, is available on our website: www.parliament.uk/cmscom

Please send your response to the Committee secretariat using the contact details above. I would appreciate your response no later than 31 August. 16 August 2011

Written evidence submitted by Farrer & Co Solicitors

We write further in response to your letter of 16 August and our letters of 24 and 31 August 2011.

Dealing with each of the Committee’s requests in turn:

1. The role that Farrer and Co played in advising News Corporation on whether or not to settle with Gordon Taylor.

Farrer and Co (“the Firm”) was not retained by News Corporation. The Firm was instead instructed by News Group Newspapers Limited (“NGN”), a subsidiary of News International Limited, to act for it in the claim issued by Gordon Taylor. NGN was the publisher of the News of the World. The Firm’s advice on defending the claim included advising NGN on whether to settle the proceedings and the terms of the settlement.

2. Assuming that Farrer and Co were engaged to provide advice on the Gordon Taylor settlement, the Committee would be grateful to receive details of that advice, including on the amount of the settlement and the extent to which it rested on a confidentiality agreement.

Following the disclosure of documents by the Metropolitan Police and others to Mr Taylor, which were then disclosed by Mr Taylor to NGN, Mr Taylor demanded £1 million by way of settlement, plus costs. We suggested making an initial settlement offer of £50,000. However, we advised that it was inevitable that Mr Taylor cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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would want more in view of the fact that his initial demand for £250,000 had been increased by £750,000 to £1 million.

An oral offer was made in the sum of £50,000 by way of damages, in addition to costs and NGN providing various undertakings which reflected other relief sought by Mr Taylor. This offer was rejected.

We then advised that if NGN wished to resolve the litigation before trial, it should increase the offer by a substantial amount. We suggested increasing the offer to £150,000 plus costs and undertakings. We also suggested that this offer be made by way of Part 36 of the Civil Procedure Rules, which provides protection on the question of costs. That offer was rejected. The Firm was informed by Mr Lewis that Mr Taylor was not interested in negotiating and wanted to take the case to trial.

The Firm advised NGN to obtain the advice of Leading Counsel, who advised that the level of damages which a Judge would award could not be predicted with any certainty. His view was that the court might award a sum at any level from £25,000 to £250,000 or possibly even more, although that was extremely unlikely. His view was that the award would either be about £100,000 or about £250,000 depending upon the personal reaction of the judge who heard the claim. He further advised to increase the Part 36 offer and suggested the figure of £250,000. This advice preceded the judgment in Mosley v NGN.

The Firm was instructed to increase the Part 36 offer to £350,000. This offer was also rejected. Mr Lewis informed Mr Pike that Mr Taylor “wanted to be vindicated or made rich”.

In response, it was agreed to extend the period in which Mr Taylor had to accept the Part 36 offer and to accede to certain of Mr Taylor’s other requests.

Following some further negotiations, final terms were agreed which included the payment of £425,000 damages plus costs, and the provision of undertakings and an affidavit.

As regards confidentiality, our recollection is that both parties were interested in confidentiality provisions. That appears to be reflected in the Committee’s Second report on Press Standards, Privacy and Libel, printed on 09 February 2010 (paragraphs 451–455). An element of the sum paid to Mr Taylor would have reflected the agreement to keep the matter confidential but no precise figure was attributed to that element that we are aware of.

3. Again assuming that Farrer and Co were engaged to provide advice on the Gordon Taylor settlement, information on when—if at all—the firm’s attention was drawn to the “for Neville” email, and by whom.

The Firm’s attention was first drawn to the existence of what is now known as the “for Neville” email on 1 November 2007, when it was referred to by the Metropolitan Police in response to an inquiry made by the Firm on 28 September 2007. The Police’s response did not quote from or include a copy of the email.

On 7 December 2007 Mr Taylor obtained a court order requiring disclosure of documents by the Metropolitan Police. The disclosure obtained pursuant to this order included the “for Neville” email.

The Firm first saw the “for Neville” email when it was disclosed to it by Mr Taylor’s solicitors on 2 April 2008.

4. Whether Mr Pike told Mark Lewis that he was “negotiating with Murdoch” and whether this was a reference to James Murdoch or Rupert Murdoch.

Mr Pike does not recall making the statement Mr Lewis claims to have been made, nor anything similar to it. Mr Pike has negotiated numerous settlements on behalf of NGN and save for disclosing that he would need to take instructions from the relevant in house lawyer, he has not and would not reveal which other individuals within NGN might be involved in giving instructions, other than if an Editor’s specific approval is required, such as in respect of the wording of an apology. As a matter of fact, in Mr Taylor’s case, Mr Lewis was not negotiating with Mr Murdoch; he was negotiating with Farrer & Co, and specifically with Mr Pike. In turn, Mr Pike obtained instructions from Mr Crone. Mr Pike never had any contact with Rupert or James Murdoch regarding the settlement negotiations. It is therefore inherently unlikely that Mr Pike would have made the statement Mr Lewis now seeks to attribute to him. 2 September 2011 cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Letter from the Chair of the Culture, Media and Sport Committee to Farrer and Co

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee’s 2009 inquiry into Press Standards, Privacy and Libel.

You will note that Farrer and Co was referred to during an exchange between James Murdoch and Adrian Sanders at an evidence session on 19 July (see Q260 to Q263 in the enclosed transcript).

In this context the Committee would be grateful if you could set out in writing the following information:

1. The role that Farrer and Co played in advising News Corporation on whether or not to settle with Gordon Taylor.

2. Assuming that Farrer and Co were engaged to provide advice on the Gordon Taylor settlement, the Committee would be grateful to receive details of that advice, including on the amount of the settlement and the extent to which it rested on a confidentiality agreement.

3. Again assuming that Farrer and Co were engaged to provide advice on the Gordon Taylor settlement, information on when—if at all—the firm’s attention was drawn to the “for Neville” email, and by whom.

In addition to the above information, the Committee would like Farrer and Co to comment on written evidence supplied to the Committee by Mark Lewis (PH22, enclosed). Mark Lewis says that Mr Pike told him that, in the context of the Gordon Taylor settlement, he was “negotiating with Murdoch”. The Committee would be grateful for clarification on this point, specifically whether Mr Pike was referring to James Murdoch or Rupert Murdoch, and how he knew this to be the case.

The Committee would be grateful for a response to arrive no later than 4 pm on Wednesday 31 August, 2011.

With many thanks for your assistance in this matter. 16 August 2011

Written evidence submitted by Lawrence Abramson, Partner, Fladgate LLP

I refer to your letter of 16 August 2011.

I have read the letters to you dated 11 August 2011 from Harbottle & Lewis (together with their attached response document) as well as Jon Chapman's statement as published on your website. I agree with everything that both Harbottle & Lewis and Jon Chapman have said. I therefore do not intend to repeat what either of them have said, and will instead confine this letter to filling in a couple of gaps with regard to telephone conversations, where for understandable reasons Harbottle & Lewis have been unable to assist.

There were two telephone conversations of significance that are not detailed in Harbottle & Lewis’ response, namely those on 9 May 2007 and 24 May 2007. On 9 May 2007, Jon Chapman telephoned me and briefed me orally on what Harbottle & Lewis were about to be asked to do (as subsequently set out in Jon Chapman's email of 10 May 2007). The conversation was relatively short, somewhere between seven and 12 minutes. I have a contemporaneous handwritten note of the conversation which I will make available to the Committee once I have obtained permission from the Metropolitan Police to do so.

On 24 May 2007, I had a longer telephone conversation with Jon Chapman lasting between 18 and 24 minutes. Having reviewed a limited number of e-mails that the Junior lawyers had produced to me, I was able to satisfy myself in most instances that they fell outside the scope of what Harbottle & Lewis had been instructed to consider. There remained somewhere in the order of a dozen e-mails that I had a query about. I therefore spoke to Jon Chapman and discussed these e-mails with him. During the course of that conversation, Jon Chapman explained and I accepted why those e-mails fell outside the scope of what News international Limited (‘News’) had instructed Harbottle & Lewis to consider. In one specific case, Jon Chapman told me to look at News’ server myself to put the e-mail in its context which I duly did. I then provided the opinion in my letter dated 29 May 2007 which accurately reflected the conclusion reached as a result of the review carried out by Harbottle & Lewis within the limited scope of the retainer.

The only other point on which I might be able to assist the Committee is that in or about the middle of April 2011, I was contacted by representatives of BCL Burton Copeland and asked If I would attend a meeting to discuss the work I did for News in relation to this matter. At this stage, I did not know what BCL Burton Copeland's involvement was with the matter and therefore telephoned Jon Chapman for instructions. He informed me that BCL Burton Copeland were advising News in connection with the criminal aspects of the matter and that I should give them my full assistance. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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I therefore attended a meeting on 7 June 2011 with Michael Drury, a partner in BCL Burton Copeland, and his assistant. The meeting lasted just under two hours and I explained to the representatives of BCL Burton Copeland precisely what my role had been and how I had gone about it. I do not know to whom if anyone at News BCL Burton Copeland reported on the outcome of this meeting nor whether the content of that meeting was reported to either of the Murdochs before they gave evidence before the Select Committee on 19 July 2011.

Please let me know if I can assist any further. 24 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Lawrence Abramson, Partner, Fladgate LLP

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee’s 2009 inquiry into Press Standards, Privacy and Libel.

You will note that the Committee has published written evidence from Harbottle and Lewis (enclosed with this letter). The Committee would be grateful if you could supply your own account of the events detailed in that evidence.

The Committee would be grateful for a response to arrive no later than 4 p.m. on Wednesday 31 August 2011.

With many thanks for your assistance in this matter. 16 August 2011

Written evidence submitted by BCL Burton Copeland

Thank you for your letter of 16 August 2011 relating to the investigation of claims that the Committee was misled during its predecessor's 2009 inquiry into Press Standards, Privacy and Libel.

We are happy to provide the information you request. We understand that Messrs Linklaters solicitors, on behalf of the Management and Standards Committee of News Corporation, wrote to you on 22 July 2011 setting out the position in respect of BCL Burton Copeland (‘BCL’).

BCL was not instructed by News Corporation (or News Group Newspapers Ltd or News International Ltd) at any time in 2007. The involvement of BCL prior to 2007 is set out below.

On 16 August 2006, BCL was instructed by News Group Newspapers Ltd to assist in dealing with requests from the Metropolitan Police Service for information relating to its then investigation consequent on the arrest of Clive Goodman and Glenn Mulcaire on 8 August 2006 for “phone hacking”. On behalf of News Group Newspapers Ltd, BCL subsequently provided information and documentation to the Metropolitan Police Service in response to its requests and consequently no formal Court Order under the Police & Criminal Evidence Act 1984, as had originally been contemplated, was sought or obtained by the police.

On 21 September 2006 BCL wrote to the Metropolitan Police Service responding to requests and offering any further assistance which it may have required. That letter was collected by hand on 25 September 2006 and no further requests for assistance were received by BCL relating to that investigation. Therefore BCL acted for News Group Newspapers Ltd between 16 August and 25 September 2006.

BCL was not instructed to carry out an investigation into “phone hacking” at the ‘News of the World’.

BCL did not act again for News Group Newspapers Ltd or News International Ltd until instructions were received on 25 January 2011 with regard to what were to become the present police investigations.

We trust this information is of assistance. 30 August 2011

ANNEX: Letter from Linklaters LLP

We are instructed by the Management and Standards Committee of News Corporation.

We wish to clarify a point given in evidence before your Committee on the 21 July 2009 by Mr Colin Myler and Mr Tom Crone. That evidence suggested that, in 2007, a firm of solicitors, BCL Burton Copeland LLP (“BCL”), undertook an investigation into wrongdoing at the News of the World.

In fact, BCL were not instructed to and did not carry out any such investigation. BCL were instructed solely in relation to providing assistance to, and co-operation with, the Metropolitan Police service. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 229

The only external investigation carried out was the email review undertaken by Messrs Harbottle & Lewis in the context of the appeal from dismissal brought by Mr Goodman. That is the review which was the subject of evidence given to your Committee on Tuesday and which resulted in the letter of advice from Harbottle & Lewis dated 29 May 2007, a copy of which has already been provided to your Committee. 22 July 2011

Letter from the Chair of the Culture, Media and Sport Committee to BCL Burton Copeland

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee’s 2009 inquiry into Press Standards, Privacy and Libel.

You will note that BCL Burton Copeland has been referred to several times in evidence to the Committee and its predecessor. Of particular relevance is written evidence to the Committee from Harbottle and Lewis, which is enclosed with this letter,

I would be very grateful if, as part of this investigation, you could provide the Committee with the following information:

1. The Committee understands that, in 2007, BCL Burton Copeland took instruction from News Corporation. It would be very helpful if you could provide information about the nature of those instructions, including dates, names of News Corporation contacts and documentation wherever possible.

2. The Committee would be grateful if you could supply the advice given by Burton Copeland to News International in connection with the instructions referred to in question (1), above.

3. The Committee would be grateful if you could provide any other information that you, might deem relevant in the context of the written evidence provided to the Committee by Harbottle and Lewis (enclosed).

The Committee would be grateful for a response to arrive no later than 4 pm on Wednesday 31 August, 2011.

With many thanks for your assistance in this matter. 16 August 2011

Written evidence submitted by Les Hinton, former Executive Chairman, News International

Thank you for your letter of 16 August 2011. Your letter asks whether, in light of recent submissions to your Committee, in particular the letter from Clive Goodman, I wish to reconsider or make any additional comments on the evidence I gave to the Committee during my appearances in March 2007 and September 2009.

I am aware that the Committee has a considerable amount of material to consider and that its investigations are ongoing. I have therefore endeavoured in this response to be concise and to focus on the fundamental issues at hand.

I appeared before the Committee on 6 March 2007 and 15 September 2009. On each occasion, I answered all questions truthfully and to the best of my knowledge and recollection.

When I appeared before the Committee on 6 March 2007, I said I believed Mr Goodman was the only person at the News of the World who knew about the illegal conduct that led to his imprisonment, but that investigation was continuing under the new editor, Colin Myler.

Mr Myler’s previous evidence refers to the investigations and reviews that took place prior to, and after, his arrival at the newspaper.

The allegations in Mr Goodman’s 2 March 2007 letter were made in response to my letter to him dated 5 February 2007 summarily terminating his employment. You have already been given evidence that these allegations were taken seriously and investigated.

You have also been told in recent evidence that inquiries were made by Mr Myler and Daniel Cloke, Group Human Resources Director, as well as the review of 2,500 emails by Mr Cloke and Jon Chapman, Director of Legal Affairs for News International. All three were experienced, capable and respected senior employees, and none had been involved in any of the matters at issue. The law firm of Harbottle & Lewis LLP was then retained, and the results of their work are set forth in their letter dated 29 May 2007.

The recent submissions, including those by Mr Myler, Mr Chapman, and Harbottle & Lewis LLP, refer in greater detail to the actions that followed receipt of Mr Goodman’s letter. As for Mr Goodman's assertion that he had been promised he could come back to a job at the newspaper “if [he] did not implicate the paper or any of its staff in [his] mitigation plea,” I had no reason to believe that his allegation was accurate, and am cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 230 Culture, Media and Sport Committee: Evidence

not aware of any evidence to support it. Accordingly, as I testified before the Committee in 2009, no evidence was provided to me that the conduct of Mr Goodman had spread beyond him.

I hope the Committee finds these comments helpful. While grateful for the opportunity offered to reconsider my previous evidence and to make additional comments, as my evidence was given honestly, and as I left News International in December 2007, I have nothing further to add. 31 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Les Hinton, former Executive Chairman, News International

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee’s 2009 inquiry into Press Standards, Privacy and Libel.

Following the Committee’s recent evidence session with James and Rupert Murdoch on 19 July, we have now received further written evidence from James Murdoch, Harbottle and Lewis, Colin Myler, Jonathan Chapman, Rebekah Brooks and Tom Crone.

In light of this evidence, in particular the letter from Clive Goodman contained in the evidence from James Murdoch and also from Harbottle and Lewis, I am now writing to ask whether you wish to reconsider, or make any additional comments on, the evidence you gave to the Committee on 15 September 2009 and 6 March 2007.

I have enclosed a copy of the evidence from James Murdoch and from Harbottle and Lewis for your convenience. Copies of all the evidence the Committee has received, as well as the transcript of your 2009 evidence, is available on our website: www.parliament.uk/cmscom

Please send your response to the Committee secretariat using the contact details above. I would appreciate your response no later than 31 August. 16 August 2011

Written evidence submitted by DLA Piper UK LLP

Thank you for your letter of 16 August 2011 to our client, Mr Coulson.

We have expressed our concerns to you previously about the effects of the parallel inquiries and investigations and the publicity generated by them. Given those concerns and in the circumstances, our client does not wish to make any additional comments on the evidence he gave to the Committee. 31 August 2011

Letter from the Chair of the Culture, Media and Sport Committee to Andy Coulson

Following the Committee’s evidence session with James and Rupert Murdoch on 19 July, we have now received further written evidence from James Murdoch, Harbottle and Lewis, Colin Myler, Jonathan Chapman, Rebekah Brooks and Tom Crone.

In light of this evidence, in particular the letter from Clive Goodman contained in the evidence from James Murdoch and also from Harbottle and Lewis, I am now writing to ask whether you wish to reconsider, or make any additional comments on, the evidence you gave to the Committee on 21 July 2009.

I have enclosed a copy of the written evidence from James Murdoch and Harbottle and Lewis for your convenience. Copies of all the evidence the Committee has received, as well as the transcript of your 2009 evidence, is available on our website: www.parliamen.uk/cmscom

Please send your response to the Committee secretariat using the contact details above. I would appreciate your response no later than 31 August. 16 August 2011 cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 231

Written evidence submitted by Linklaters LLP

In his letter to you of 11 August, Mr James Murdoch enclosed a copy of a letter dated 2 March 2007 from Mr Clive Goodman to Mr Daniel Cloke. There were a number of redactions on the face of that letter. All of the redactions were made clear. The redaction of individual words and phrases was plain as they were “blacked out”. The redaction of paragraphs (iii) and (iv) was clear because the paragraph numbering went from (ii) to (v) thereby showing that the intervening paragraphs had been redacted.

There has been some media comment over the last two days suggesting that News International made these redactions in order to “cover up” the truth. That is not correct. News International voluntarily submitted this letter in unredacted form to the Metropolitan Police in June of this year. It cannot fairly be asserted that the company was trying to “cover up” this letter when it had itself given the entire letter to those responsible for the relevant criminal investigation.

The redactions were made following guidance from the Metropolitan Police. Those redactions were made by a partner in this firm. No News International or News Corporation officer or employee took any part in deciding what to redact. The redactions were made in order to remove any content which might identify any individual or group and to avoid any prejudice to any new line of enquiry. The Metropolitan Police are anxious to ensure that their investigations are not prejudiced and that any trial is not rendered unfair by widespread publicity. News International shares this concern. 18 August 2011

Written evidence submitted by Rebekah Brooks, Chief Executive Officer, News International Limited

Thank you for your letter of 20 October. Like the Committee, we are very keen to bring this long-standing matter to a close and trust that the answers to the further questions you have raised, which we provide below, will now do that.

“The grounds on which advice was given to settle the claims of both Clive Goodman and Glenn Mulcaire, and the level of payments made (including the relation to salary and/or contractual payments if necessary).”

I have asked Jon Chapman, News International’s Director of Legal Affairs, to deal with this question directly and this is his response:-

“Whilst I note Mr. Whittingdale’s comments on confidentiality, we do not necessarily agree entirely with his legal analysis. I will be as open in my explanation of the two settlement arrangements and their background as I believe I can be and would request, in return, that the Select Committee treats the information provided below in strict confidence.

Clive Goodman

“Clive Goodman’s employment with News Group Newspapers Limited was terminated in early February 2007. Subsequently, he engaged a City law firm with a view to bringing employment tribunal proceedings, the primary claim being that News Group Newspapers Limited failed to follow the statutory dismissal and disciplinary procedure in relation to termination of his employment. This procedure was introduced in October 2004 (it ceased to apply earlier this year) and contained minimum requirements to be met in relation to any dismissal. Failure to meet such requirements made a dismissal automatically unfair, entitling the affected employee to bring an unfair dismissal claim, with a potential compensatory award of (what was then) up to £60,600 (in addition to any contractual notice pay entitlement).

News Group Newspapers Limited had not followed the requirements of the statutory procedure, so the dismissal was undoubtedly unfair under the statutory dismissal and disciplinary procedure. In such circumstances, it is open to an employer to argue before the tribunal that, even if the statutory procedure had been followed to the letter, the outcome would have been the same and that the employee was not, thereby, prejudiced. The options were, thus, for News Group Newspapers Limited to defend the matter in tribunal relying on this defence (which, it has to be said, even in gross misconduct cases where correct procedure has not been followed, is by no means guaranteed to succeed) or to try to reach a settlement of the matter on reasonable terms. In all contentious employment cases in the News International group, a recommendation as to whether to defend or to try to settle is made by me to relevant senior management, based primarily on cost (to settle or legal and other costs to defend), the very significant internal time and resource required to deal cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 232 Culture, Media and Sport Committee: Evidence

with a defence, likelihood of success and publicity the matter may attract. I applied this analysis to the Goodman claim and recommended to Les Hinton, our then Executive Chairman, that we explore settlement on reasonable terms. After some discussion with Mr.Goodman’s lawyers, a proposed settlement was reached which was approved by Les Hinton and Daniel Cloke, our Director of Human Resources. This was then embodied in a compromise agreement. This is a type of settlement agreement required to be used in employment cases and which complies with the specific requirements of section 203 of the Employment Rights Act 1996. In this case, we used a standard-form News International compromise agreement and only minor changes were made to it. In particular, there was nothing tailored specifically to Mr. Goodman’s possible future activities.

Pursuant to the agreement, Mr. Goodman was paid his notice and an agreed amount representing a possible compensatory award at tribunal (which was some way below the then £60,600 limit on such awards). It should be noted that, as a matter of policy, News International companies tend always to pay notice, even in cases of summary dismissal (which is not unusual). As is normal under the terms of compromise agreements, Mr. Goodman’s legal costs relating to his employment claims and their settlement by compromise agreement were paid by News Group Newspapers Limited.

I should conclude, in relation to Mr. Goodman, by stating that, in my view, there was nothing at all underhand about this compromise agreement. It was achieved following negotiation with a senior employment lawyer from a City firm and was implemented through a standard-form News International precedent. It was entered into in July 2007, some time after Mr. Goodman’s release from prison, and, in my view, far too late for any silence effectively to be “bought” (which I know has been the suggestion from some quarters). The sum paid to Mr. Goodman was not, in any event, of an amount consistent with a desire on either side to buy silence but was entirely consistent with a normal unfair dismissal settlement. It should be noted that Mr. Goodman, through his lawyer, had initially intimated a potential claim against News Group Newspapers Limited under the Public Interest Disclosure Act 1998 (the so-called whistle-blowing legislation) on the basis that his employment had been terminated for “whistle-blowing”. Had News Group Newspapers Limited really wished and intended to pay Mr. Goodman a substantial amount to “buy his silence” under the guise of a compromise agreement, we could readily have accepted this as a claim, as such a claim carries unlimited compensation at tribunal and this would then have allowed payment of a far larger amount to Mr.Goodman. In fact, we resisted this claim very strongly from the outset and it was ultimately dropped by Mr.Goodman and his lawyer.

Glenn Mulcaire

The News of the World treated Mr. Mulcaire as a contractor at all times and his contract was simply terminated in January 2007. Subsequently, Mr. Mulcaire instructed an employment lawyer and, in April 2007, employment tribunal proceedings were served on News Group Newspapers Limited. These alleged that Mr. Mulcaire had full employment rights based on such factors as mutuality of obligation (ie he expected to be provided with work and the News of the World expected him to be available for work). As with Mr. Goodman, he principally claimed unfair dismissal based on News Group Newspapers Limited’s failure to follow the statutory dismissal and disciplinary procedure. On consideration, we took the view that there was a significant risk a tribunal might find he had employment rights. A similar analysis to that carried out for Mr. Goodman’s claim was then followed and a similar internal procedure was followed in relation to potential settlement. Again, we used a standard-form News International compromise agreement and only minor changes were made to it and there was nothing tailored specifically to Mr. Mulcaire’s possible future activities.

Under the agreement, Mr. Mulcaire was paid his notice and an agreed amount representing a possible compensatory award at tribunal (which, again, was some way below the then £60,600 limit on such awards). Part of the settlement payment was made, at Mr. Mulcaire’s request and for tax-planning reasons, direct to his consultancy company. As is normal under the terms of compromise agreements, Mr. Mulcaire’s legal costs relating to his employment claims and their settlement by compromise agreement were paid by News Group Newspapers Limited.

All my comments (in the final paragraph above relating to Mr. Goodman) about the nature of Mr. Goodman’s settlement apply equally to Mr. Mulcaire (the compromise agreement with him was entered into in June 2007). In particular, there was again, in his case, a Public Interest Disclosure Act 1998 claim which we resisted and which was ultimately dropped by him and his lawyer,”

Question 1.

James Murdoch, Executive Chairman of News International Limited and a director of News Group Newspapers Limited, authorised the settlements and payments following discussions with Colin Myler and Tom Crone. No other directors of News Group Newspapers Limited knew about the settlements and payments at that time. There was no requirement (either as a matter of company law or under the constitution of News Group Newspapers Limited) for formal authorisation of these matters by the board of News Group Newspapers Limited. As Executive Chairman of News International Limited, Mr. Murdoch had authority to address this type of matter both for News International Limited and for its subsidiaries. As there were no board proceedings, there is no minute of the authorisation. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 233

Question 2. As stated above, Jon Chapman and Daniel Cloke, both of whom are still employees of News International.

Question 3. Les Hinton, then Executive Chairman of News International Limited and a director of News Group Newspapers Limited, authorised the settlement with, and payment to, Clive Goodman, following discussions with Jon Chapman and Daniel Cloke. He also authorised the settlement with, and payment to, Glen Mulcaire, following discussions with Jon Chapman (Daniel Cloke was aware this matter was settled but not of the terms of settlement). Stephen Daintith, then Finance Director of News International Limited and a director of News Group Newspapers Limited, was also aware of these settlements. Tom Crone was aware the matters had been settled but was not aware of the terms of settlement. No other directors of News Group Newspapers Limited knew about the settlements and payments at that time. There was no requirement (either as a matter of company law or under the constitution of News Group Newspapers Limited) for formal authorisation by the board of News Group Newspapers Limited. As Executive Chairman of News International Limited, Mr. Hinton had authority to address this type of matter both for News International Limited and for its subsidiaries. As there were no board proceedings, there is no minute of the authorisation.

Question 4. Attached is a list of published articles which we are able to identify as resulting from the payments, and copies of those articles.

Question 5. The payments themselves would have been shown in News Group Newspapers Limited’s editorial accounts and thereby formed part of the company's tax return.

Question 6. The Managing Editor and the Editorial Accounts personnel would have known that cash payments were being made to a confidential source called “Alexander” but they did not know the source’s identity.

Question 7. News Group Newspapers Limited paid for Clive Goodman’s legal representation in the criminal proceedings involving him. Throughout those proceedings, he was an employee of News Group Newspapers Limited.

Question 8. Any initial reporting on these matters was communicated orally. In May 2007, as the Committee knows, all emails which were then on News International’s IT systems between Clive Goodman and Andy Coulson, Stuart Kuttner, Ian Edmondson, Neil Wallis and Jules Stenson were identified and copied from the systems and reviewed by Jon Chapman and Daniel Cloke, before being passed to Lawrence Abramson, Managing Partner of Harbottle & Lewis, an external law firm, for further review. A copy of a letter dated 29 May 2007 on this subject from Mr. Abramson is attached.

Question 9. One

Question 10. We believe we have made the position on this clear to the PCC. In any event, the Committee’s proceedings relate to the News of the World and the internal administration procedures of other newspaper titles which happen to be within the same group of companies, but which otherwise have no particular relationship with the News of the World, are not, in our view, relevant. Once again, we trust that the answers given in this letter can now bring matters to a close. 4 November 2009 cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 234 Culture, Media and Sport Committee: Evidence

ATTACHMENT Letter from Lawrence Abramson, Harbottle & Lewis to Jon Chapman, News International Limited 29 May 2007 Dear Jon

Re: Clive Goodman We have on your instructions reviewed the emails to which you have provided access from the accounts of:- Andy Coulson Stuart Kuttner Ian Edmonson Clive Goodman Neil Wallis Jules Stenson I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman's illegal actions were known about and supported by both or either of Andy Coulson, the Editor, and Neil Wallis, the Deputy Editor, and/or that Ian Edmondson, the News Editor, and others were carrying out similar illegal procedures. Please let me know if we can be of any further assistance. Thanks and best wishes. Yours sincerely, Lawrence Abramson 29 May 2007

Written evidence submitted by James Saunders, Saunders Law Ltd As previously advised, I am instructed by Mr Chapman in relation to his appearance before your Committee next Tuesday 6 September, and matters generally arising from his employment by News International. It has been variously reported in the media that on resigning from News International Mr Chapman became entitled to a severance payment of some £1.6 million, payable in such a manner that he will not have received the full sum by 6 September. In view of the innuendo inherent in such reporting, may I inform you that the payment provided for in Mr Chapman's compromise agreement with News International was a small fraction of £1.6 million, and I understand that News International had settled in full by 18 August 2011. For completeness, Mr Chapman continues to have the benefit of company private medical insurance until September 2012. I have not copied this letter to others, and am happy to leave it within your discretion as to whether it should be on the published record. 1 September 2011

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee Thank you for your letter of 6 September. The discussion with the Metropolitan Police took place on the morning of 11 August 2011, at approximately 11 am, at Thomas More Square. The meeting followed a longer meeting held that morning to discuss a variety of issues relevant to the criminal inquiry. At the end of that longer meeting, our Mr John Turnbull, Mr Simon Greenberg (a member of the Management and Standards Committee of News Corporation) and a senior police officer, went into Mr Greenberg’s office and the discussion commenced. No note was taken of the meeting and no written advice was provided. The meeting was short—no more than fifteen minutes or so. The police officer made it clear that he would not direct or instruct the company—the final decision regarding redactions had to be for the company alone. There was a general discussion about the issue of redactions—in particular, the potential difficulties that can be caused in a police investigation if names and new lines of inquiry are put into the public arena prematurely. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 235

After the meeting concluded, Mr Turnbull then telephoned a colleague at Linklaters and told him about the discussion. Mr Turnbull had formed his own judgment about what redactions were appropriate in light of the discussion at the meeting. He decided to take out anything in the papers which identified any individuals by name, title or group. He also decided to redact paragraphs (iii) and (iv) of the 2 March letter, because those paragraphs did not relate to matters Harbottle & Lewis had been instructed to investigate and Mr Turnbull thought that they suggested a new line of enquiry which could be prejudiced if made public. Mr Turnbull did not go through each point to be redacted individually but rather gave some examples and explained in general terms what he wanted to achieve.

Lawyers from Clifford Chance were on that call. Clifford Chance act for James Murdoch and were putting together the final letter and enclosures for signature by their client. Clifford Chance and Linklaters then produced the enclosures bearing the proposed redactions. Mr Turnbull discussed these with his colleague on his way back to the office and satisfied himself that the redactions accorded with his instructions. The documents were then sent by Linklaters to Jeffrey Palker (a member of the Management and Standards Committee of News Corporation). Mr Palker also sent the enclosures bearing the redactions to Matthew Anderson (a senior communications executive with News International), Frederic Michel (a senior government relations executive at News International), Simon Greenberg and Jessica Rivett (a lawyer employed by Olswang and seconded to the Management and Standards Committee of News Corporation).

Mr Palker suggested that Mr Cloke’s mobile phone number be redacted just in case Mr Cloke still used the number. That was done. Apart from that no further redactions were made or existing redactions altered and no News International or News Corporation officer or employee suggested any redaction to Linklaters. We understand that Clifford Chance sent the enclosures bearing the redactions to Jeffrey Palker, Tracey Iles (personal assistant to James Murdoch) and Kate McEwan (personal assistant to Jeffrey Palker). None of those individuals or James Murdoch suggested any redactions (other than the earlier redaction suggested by Mr Palker and referred to above).

Neither we nor Clifford Chance are aware of any other News International or News Corporation officer or employee being aware of the redactions before the letter of 11 August 2011 was sent to you. 12 September 2011

Letter from the Chair of the Culture, Media and Sport Committee to Linklaters LLP

As you are aware, the Culture, Media and Sport Select Committee has been investigating claims that it was misled during its predecessor Committee’s 2009 inquiry into Press Standards, Privacy and Libel.

You wrote to the Committee on 18 August 2011 about the redaction of a letter from Mr Clive Goodman to Mr Daniel Cloke which was submitted by Mr James Murdoch as evidence to the Committee. As you are aware, the same letter was submitted by Harbottle and Lewis as evidence to the Committee but had been redacted in a different way.

We are grateful for your explanation of the matter, but would like further clarification on the following points:

1. Please provide some more detail on the advice given by the Metropolitan Police to Linklaters and News International on the subject of the redactions it had requested, either by means of a copy of the written advice or a copy of the note taken of any oral advice.

2. You state that no News International or News Corporation officer or employee took any part in the decision on what to redact. Please could you clarify whether or not any News International or News Corporation officer or employee was made aware of the extent of the redactions, specifying how this information was communicated, by whom and to whom.

Please send your response to the Committee secretariat using the contact details above. I would appreciate your response no later than noon on 12 September. 6 September 2011 cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 236 Culture, Media and Sport Committee: Evidence

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation Thank you for your letter of 13 September 2011. I am happy to be of further assistance to the Committee. I can confirm that Mr Mulcaire’s legal fees are not being paid by News International or any of its subsidiaries. On 20 July 2011, News International announced that it would no longer pay Mr Mulcaire’s legal fees. This decision was communicated by News International’s solicitors to Mr Mulcaire’s solicitors on 28 July 2011 and again on 11 August 2011. As a result, on 17 August 2011, Mr Mulcaire commenced legal proceedings against News Group Newspapers Limited. News Group Newspapers Limited is vigorously defending those proceedings. In April of this year, News Group Newspapers Limited admitted in the telephone interception litigation that it was vicariously liable for Mr Mulcaire’s actions. This admission was made, and will be made, in cases where it is apparent that Mr Mulcaire had acted on instructions from News of the World staff. I understand this means that, as a matter of law, if Mr Mulcaire’s actions result in News Group Newspapers being obliged to pay damages, it will do so. I hope this information is helpful to the Committee. 3 October 2011

Written evidence submitted by Mark Lewis, Taylor Hampton Solicitors Thank you for your letter of 24 October 2011. I have checked the position by seeking information from George Davies LLP. 1. The meeting with Tom Crone in Manchester took place on 3 May 2007. 2. The “El Vino” meeting took place on 12 November 2008 (later than I thought). I enclose some helpful entries confirming that and also the friendly level of cooperation that I had described as existing between me and Julian Pike at that time. In order to correct other matters: 3. Although I suggested that there was another category of source for the Guardian story in 2008, in fact there were other potential sources. In addition to the four categories that you mentioned and the fifth that I added (the Metropolitan Police Service), I forgot to point out that Glenn Mulcaire was represented in the case by David Price Solicitors and Advocates. As such there were at least two more sources. 4. Although Mrs Louise Mensch MP seemed keener on accusing me of breaching client confidentiality (which I made clear I did not) than determining where responsibility lay for the unlawful intrusion into people’s voicemail, I realised afterwards that Mrs Mensch had not been a member of your committee on 2 September 2009 when I had made it clear that there were limitations to the evidence that I could give because of inter alia issues of client confidentiality. I would not wish Mrs Mensch to get distracted from the proper investigation into voicemail hacking as a result of her concern about issues relating to me. The issue was whether I could assist you in showing that the ultimate instructions came to Mr Pike from Mr James Murdoch. Although I can understand why Mr Pike might not recall his statement to me, it does not escape me that he has confirmed that Mr James Murdoch was the ultimate source of those instructions. Of course, I would not have known that he was aware of that fact unless he had told me, at the time I made my statement. I hope this helps in the investigation. 25 October 2011

Letter from the Chair of the Culture, Media and Sport Committee to Mark Lewis, Taylor Hampton Solicitors I write following your appearance before the Committee on 19 October 2011 with further questions for written answer. 1. Please provide the date of your meeting with Tom Crone in Manchester, which you thought took place in either April or May 2007 (Qq 1237 and 1259). 2. Please provide the date of your lunchtime meeting with Tom Crone at El Vino wine bar (Q 1244). I enclose a transcript of the evidence session for your reference. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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I would be grateful if you could send your response to the Clerk of the Committee at the above address by no later than noon on Monday 31 October. 24 October 2011

Written evidence submitted by Michael Silverleaf QC

Thank you for your letter of 24 October 2011. My responses to your questions are as follows:

1. I understand that you have been sent under cover of a letter of 31 October 2011 from Farrer & Co., a copy of the written opinion I gave to NGN on 3 June 2008 in relation to the claim by Mr Taylor against NGN and Mr Mulcaire. Paragraphs 9 to 17 of that opinion set out the reasoning underlying the advice quoted in the second paragraph of your letter.

2. In paragraphs 18 to 24 of the opinion I discussed the tactics for dealing with Mr Taylor’s claim with reference to the potential risks and benefits of any particular approach. Those paragraphs summarise my views at the time of the relative merits of compromising or fighting the claim. I identified the various approaches which could be taken to address the potential consequences of the claim. The advice I gave there was in my view entirely conventional. I draw your attention to paragraphs 18 and 19 which contain my view on the commercial reality of the decisions facing my client. I also draw your attention to paragraph 24 where I said that “I appreciate that this advice requires a number of difficult decisions to be taken and that the correctness of those decisions may be very difficult to determine.” Having reviewed my comments in those paragraphs, I remain of the views I expressed there.

3. I draw your attention to the statement in the first sentence of paragraph 16 of my opinion which reads as follows: “There are no precedents for awards of damages in such cases”.

4. I was not involved in the negotiations which led to the compromise of Mr Taylor’s claim. Consequently, I was not asked to and did not consider or comment on the terms of the settlement agreed with Mr Taylor.

I hope that the above responses answer your questions. However, if I can be of any further assistance, please let me know. 31 October 2011

Letter from the Chair of the Culture, Media and Sport Committee to Michael Silverleaf QC

On 19 October 2011 Julian Pike, a Partner at Farrer & Co, gave evidence to the Committee as part of its work on phone-hacking.

In his evidence, Julian Pike stated that you provided an opinion to News Group Newspapers on the amount that Gordon Taylor would have been likely to have been awarded had he taken his case to trial and won (Q 1116). According to written evidence from Farrer & Co (PH 27), the advice that you gave was as follows: The court might award a sum at any level from £25,000 to £250,000, or possibly even more, although that was extremely unlikely.

The Committee would be very grateful if you could:

1. Provide an account of the reasoning that informed this opinion.

2. Give your view on Julian Pike’s assertion that offering £100,000 more than the maximum amount cited in your opinion amounted to “a perfectly standard approach” (Q 1084) in view of the “economics of litigation” (Q1087).

3. State whether or not you agree with Julian Pike’s assertion that the Gordon Taylor case “was an unprecedented case full stop” (Q 1085), and explain why.

4. State whether or not you considered the final settlement amount (£425,000) in the Gordon Taylor case to be reasonable or not, and why.

I enclose a transcript of the evidence session on 19 October and a copy of the written evidence from Farrer & Co for your reference. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 238 Culture, Media and Sport Committee: Evidence

I would be grateful if you could send your response to the Clerk of the Committee at the above address by no later than noon on Monday 31 October. 24 October 2011

Written evidence submitted by Colin Myler

Thank you for your letter of 24 October 2011. You have asked me to answer a number of questions in light of the evidence provided to the Committee by Julian Pike and Mark Lewis on 19 October 2011. I have read the transcript of their evidence.

Mr Pike has said that Tom Crone sent me a briefing note by email on 24 May 2008, in preparation for a meeting that I had with James Murdoch on 27 May 2008, and that I spoke to Mr Pike by telephone following that meeting.

During the course of the hearings of the Committee, I have assisted the Committee to the best of my recollection. Since the closure of the Newspaper, I have not had access to my work emails, to other News of the World documents or to my business diary. I have therefore not been able to refresh my memory of events from contemporaneous documents. I have no reason to doubt that Mr Pike’s account is correct, although I am unable to check this. I wrote to News International, to ask if the company could provide me with copies of the relevant documents, but I have been told that the company cannot assist with my request.

As I have previously explained to the Committee, I recall that I had a meeting with Mr Murdoch and Mr Crone. The reason for that meeting was to obtain approval to a settlement with Gordon Taylor. As I stated when I gave evidence to the Committee on 21 July 2009 (in response to Mr Watson’s question at Q1511):

“The sequence of events, Mr Watson, is very simple, and this is very clear: Mr Crone advised me, as the editor, what the legal advice was and it was to settle. Myself and Mr Crone then went to see James Murdoch and told him where we were with the situation. Mr Crone then continued with our outside lawyers the negotiation with Mr Taylor. Eventually a settlement was agreed. That was it.”

I do not recall precisely when that meeting took place, but note that Mr Murdoch told the Committee, in his letter of 11 August 2011, that it was on 10 June. I have no reason to doubt this.

Without recourse to my emails and files, I cannot remember the precise dates when particular meetings or discussions took place. However, I am able to comment on the sequence of events relating to the settlement with Mr Taylor.

In April 2008, the Newspaper received a copy of what is now being referred to as the “for Neville” email from Mr Taylor’s solicitors. From that point until 10 June 2008, when Mr Crone and I met Mr Murdoch, the process of obtaining and considering legal advice was undertaken by Mr Crone with the Newspaper’s external lawyers, including Leading Counsel. Once legal advice had been obtained, I was briefed on the advice by Mr Crone and we both then briefed Mr Murdoch.

As I said in my response to Q1511 (above), the meeting with Mr Murdoch in June was to update him on where the case had got to. That meeting cannot have been the first time Mr Murdoch was made aware of matters relating to Mr Taylor’s case. If Mr Pike is correct in his recollections, which I am sure that he is, the purpose of the meeting on 27 May was so that I could inform Mr Murdoch of developments with Mr Taylor’s case.

Even now, with the benefit of having spent some time considering the issues surrounding the “for Neville” email, I cannot remember precisely when I first learnt of the email or when my first discussion with Mr Murdoch took place. I may, however, be able to assist the Committee further on this point if the Committee is able to provide me with copies of the relevant documents. 31 October 2011

Letter from the Chair of the Culture, Media and Sport Committee to Colin Myler

On 19 October 2011 Julian Pike, a Partner at Farrer & Co, and Mark Lewis, a Partner at Taylor Hampton Solicitors, gave evidence to the Committee. Their evidence gave rise to further questions that the Committee would like you to answer in writing.

1. Julian Pike referred to a briefing note prepared by Tom Crone for you to use in a meeting with James Murdoch on 27 May 2008 (Q1151). If you still have a copy of that note, please could you submit it to the Committee. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 239

2. Please could you provide the Committee with details of your meeting with James Murdoch on 27 May 2008 (Q 1117), in particular your recollection of: (a) any discussion that took place about the “for Neville” e-mail, either with specific reference to Neville Thurlbeck or otherwise, and (b) any discussion that took place about Julian Pike’s assertion that, in the light of the “for Neville” e- mail there was a “powerful case that there was evidence to support illegal accessing of information in order to obtain stories” (Q 1197).

3. Please could you provide the Committee with details of your telephone conversation with Julian Pike of 27 May 2008, in which you gave an account of your meeting with James Murdoch on that day.

4. In the light of Julian Pike’s reference to the briefing note of 24 May 2008 and your meeting with James Murdoch of 27 May 2008, the Committee invites you to reconsider the oral evidence you gave on 6 September, in which you stated that you were first made aware of the “for Neville” e-mail and its significance on 10 June 2008 (Q 745: “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”).

I enclose a transcript of the evidence session on 19 October for your reference. The Committee has written in similar terms to Tom Crone.

I would be grateful if you could send your response to the Clerk of the Committee at the above address by no later than noon on Monday 31 October. 24 October 2011

Letter from Farrer & Co to the Chairman

Evidence of Mr Pike: 19 October 2011

We refer to the requests made during Wednesday’s session for us to disclose certain documents relating to Mr Pike’s evidence that there were a number of meetings within News International following the disclosure of the “For Neville” email.

Please find enclosed: 1. A copy of the email from Mr Crone to Mr Myler dated 24 May 2008 (JCP1) attaching Mr Crone’s Briefing Note (JCP2–3). For the avoidance of doubt, the Firm was not involved in drafting the Briefing Note. Mr Pike’s mobile number has been redacted from the last paragraph of the Note. Otherwise, there are no redactions. 2. A partially redacted copy of a second email from Mr Crone to Mr Pike dated 24 May 2008 (JCP4) confirming that Mr Myler was, to speak with Mr James Murdoch during the following week. The redactions have been made for reasons of confidentiality given the on-going police investigation. 3. A copy of Mr Pike’s contemporaneous manuscript note of his conversation with Mr Myler on 27 May 2008, together with a transcript of the handwritten note (JCP5–7). Mr Pike had a conversation with Mr Myler on 28 May 2008 for which he does not have a note. 4. Relevant attendance notes and manuscript notes relating to the evidence given by Mr Pike as regards the period 24 May to 10 June 2008 together with transcripts as necessary are enclosed (JCP8–13). 5. A copy of redacted time entries from our time system recorded on the News Group Newspapers—Gordon Taylor file recording salient conversations between 24 May 2008 and 10 June 2008. We have redacted irrelevant entries covering communications with Counsel, internal entries and with Mr Mulcaire's lawyers (JCP14–19). 6. A copy of the Opinion of Michael Silverleaf QC dated 3 June 2008 which was sent to Mr Crone on the same date (JCP20–26). Counsel’s Opinion has been redacted to take account of: (a) the ongoing investigation; and (b) to protect the privacy of Mr Taylor. For the avoidance of doubt, we have previously obtained Mr Taylor's consent to us giving evidence provided we respect his privacy. The further advice referred to in the last paragraph of the Opinion does not concern the Committee's deliberations. 7. A copy of the pre-publication contract dated 4 February 2005 (JCP27) with certain information relating to Mr Taylor and the name of the individual at the News of the World who signed the agreement redacted. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 240 Culture, Media and Sport Committee: Evidence

Separately, in relation to Mr Farrelly’s suggestion that Mr Pike should have done more when on notice of incorrect evidence having been given, the Committee were reminded of the submission made by Harbottle & Lewis LLP of 11 August that there is a positive lack of obligation to report such a matter. Mr Pike told the Committee that he adopted Harbottle’s submission. For the Committee’s ease of reference, Members are referred to paragraphs 19–21 and Appendix C of Harbottle’s Response Document. Copies of the relevant pages are attached for ease of reference (JCP28–32). If we can be of any further assistance, please let us know. 31 October 2011

Attachments (JCP 1) Pike, Julian From: Tom Crone Sent: 24 May 2008 18:10 To: Colin Myler Cc: Julian Pike Subject: strictly private and confidential and legally privlieged. Attachments: taylordoccopy.doc There it is CoIin … as concise as I could do it. Julian is getting a copy. His tel no. is in last par of the memo and email address should be above.

(JCP 2Ð3) Strictly private and confidential and legally privileged. Gordon Taylor v News Group Newspapers Ltd Background 1. In January 2007 News of the World Reporter, Clive Goodman and private detective, Glenn Mulcaire were sentenced to four and six months respectively for conspiracy to access telephone voicemail messages of three members of the Royal Household staff. Mulcaire also pleaded guilty to accessing the voicemails of five other famous people one of whom was Gordon Taylor, Chief Executive of the Professional Footballers Association (“the PFA”). 2. Mulcaire’s relationship with the News of the World went back to around 2000. Through one or other of his companies he had been contracted annually to supply a “research and information service” on an exclusive basis. 3. Gordon Taylor is the only one of the victims to issue civil proceedings (though the others could still do so). He is suing NGN Ltd and Mulcaire jointly for breach of confidence, misuse of private information and invasion of privacy. And alleges that acting in concert we accessed, listened to and recorded his voicemail messages from about January 2005 until May 2006. 4. Taylor served a full pleaded claim on us which did not seem to be supported by any evidence and we filed a defence denying any involvement in accessing or making use of information from his voicemails, Mulcaire, it seems, was never properly served with the Claim and until recently has played no part in the proceedings.

Current position 5. Unknown to us, a few months ago Taylor applied to and obtained from the court an Order obliging the Police to release the criminal prosecution paperwork and evidence to his lawyers. He obtained another Order obliging the Information Commissioner to release the evidence for his “What Price Privacy” papers on the unlawful trade in private information (these contain a “league table” of newspapers and Data Protection Act infringements). 6. Amongst the prosecution paperwork were the documents seized when they raided Mulcaire’s property, one of which was a contract dated 4 February, 2005, between Mulcaire and the News of the World to pay him £7,000 for information on an affair being conducted by Graham Taylor. Another was an email from a News of the World reporter to Mulcaire enclosing a large number of transcripts of voicemails from Taylor’s telephone. 7. Amongst the documents from the Information Commissioner is a list of named News of the World journalists and a detailed table of Data Protection infringements between 2001 and 2003 (this is based upon evidence seized in a raid on another private investigator who was subsequently prosecuted). A number of those names are still with us and some of them have moved to prominent positions on NoW and The Sun. Typical infringements are “turning round” car reg and mobile phone numbers (illegal). cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Culture, Media and Sport Committee: Evidence Ev 241

8. This evidence, particularly the email from the News of the World is fatal to our case.

9. Taylor has now amended his pleadings to include this material and we have to file an amended Defence by 9 June. He has also finally served Mulcaire who also has the 9 June deadline.

10. Recognising the inevitable, I authorised our solicitors, Farrers, to make a formal offer to Taylor of £150K plus costs. We thought it unlikely he would take it but hoped it would open negotiations which would lead to a confidential settlement. The response from his solicitors is that he “is not interested in settling, it’s a matter of principle and he wants to take it to trial”.

Where we go

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

12. We will be getting guidance from a senior QC next week about our next step. Inevitably this will be at the very least an admission of liability to a large part of the claim and an attempt to put Taylor under costs pressure by making a formal offer of substantial damages and his costs. He is claiming both ordinary damages and exemplary (punitive) damages and will succeed on both claims. This case will be expensive.

13. Mulcaire is likely to offer no defence and will have judgement entered against him. He wants us to indemnify him and I think we should. The damages awarded will effectively be against him and us jointly and we do not want Mulcaire fighting against us.

14. Julian Pike at Farrers is handling our case he’s on [REDACTED].

(JCP 4)

Pike, Julian From: Tom Crone Sent: 24 May 2008 19:25 To: Julian Pike Subject: FW: Festival Travel and Charlie Talbot

… in case it’s not clear it seems Talbot is nothing to do with us … the way it’s written couldn’t be a NoW journo anyway … it’s drivel. From: Tom Crone Sent: 24 May 2008 19:23 To: Julian Pike Subject: FW: Festival Travel and Charlie Talbot

Julian,

I went thru the new Taylor docs with [REDACTED] today. [REDACTED] now remembers the transcripts … he was given the story only at the end to do the showdown and write it up … Mulcaire had been dealing with Greg Miskiw for months on it before that.

I showed [REDACTED] the Charlie Talbot email … he had no knowledge of it but reckoned it was a wird Mulcaire angle to suggest a real source … Mulcaire did this project as something entirely self-initiated (something he did from time to time) and brought it in to us as a package for sale ... hence the separate contract.

Taylor was one of his fixations (he is an obssessive) … he was always claiming close contacts with the PFA … and hinting he knew Taylor … every year he would invite [REDACTED] to the PFA dinner and sort of hint he’d got the tickets from Taylor.

[REDACTED] went looking on internet for the Talbot email address … he found it in sec … it’s a travel agent in Haydns Rd, Wimbledon … then he looked for Charlie Talbot … he’s a Wimbledon AFC player … see websites below and on my next email.

You’ll have seen the memo I did for Colin M … he’s going to use it as the basis for his chat with Chief Exec James Murdoch … BUT he’d very much like us to get a view on next step and how much from our QC first … please report to him direct next week … and he has your mobile.

Tom cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 242 Culture, Media and Sport Committee: Evidence

From: [REDACTED] Sent: 24 May 2008 17:31 To: Tom Crone Subject: Festival Travel and Charlie Talbot Festival Travel http://www.britishservices.co.uk/travela/london/wimbledon.htm Charlie Talbot http://www.afcwimbledon.co.uk/players.php?squad+56&Psection_Id=3&Psub_section_Id=3&player_Id= 1199&position=Defender Charlie Talbot—do a search on this site for “Charlie Talbot” and you will see he is the “club journalist” and web designer for AFC Wimbledon http://wwvv.surreyfa.co.uk/wImmag/apr04mag.pdf

(JCP 5Ð7) Transcript of Pike Notes of Call with Colin Myler 27 May 2008 Spoke to James Murdoch — not any options—wait for silks view — one result of Goodman—CG sprayed around allegations. horrid process,—1E, NW + SK Ross Hall, IE Associate Ed, GM, Mulcaire didn’t believe culture in the newsroom—Editor didn’t know a [indecipherable] here investigation into IE, NW, SK RH reporter—diligent reporter — Assurances to PCC — " made by CM to staff — Les evidence to committee — new contracts for emees + freelancers — seminars — info commissioner — CM my position as Editor—cannot ignore it—back to CG +—appealed agst his sacking failed to give direct evidence.—had to be seen new editor cldn’t be seen to dismiss their allegations— have email from member of staff [NEXT PAGE] Les no longer here—James wld say get rid of them—cut out cancer

(JCP 8) Record of Attendance Client: NGN Matter: Taylor Date: 3 June 2008 Ref: JCP/kp

JCP telephoning to speak to Mark Lewis Told he was on holiday. Leaving a message for Jessica Kraja to call.

Attending JK on her calling back Speaking without prejudice. Said that we were about to send a further Part 36 Offer in the sum of £350,000. We were very comfortable that this would not be beaten by the Claimant if this matter were to proceed to trial. However, there was an opportunity to resolve this matter now and the client was willing to pay something more—not a stratospheric amount—to resolve it this week on the basis that drew a line in the sand and that the deal was confidential. cobber Pack: U PL: COE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

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Said that we appreciated it might be sensible from Taylor’s point of view if Mark Lewis was back from holiday and we thought in those circumstances, it might be sensible to agree an extension of say 7 or 14 days for service of the Amended Defence. JK said she would speak to Mark Lewis.

(JCP 10) Transcript of Pike Notes of Call with Mark Lewis 6 June 2008 £1.2m confidentiality Apart—[“5” or “s”] Mark Lewis Don’t know if that is a [indecipherable] 7 figures not to open his mouth be vindicated or rich paid £1 million all costs — indemnity costs 200k inc barrister + VAT He won’t be beat advised not be casual not at risk any more—j might think been generous I want to carry on because of issues because NGN is wrong then carry on — one way or another this is going to hurt want to show NoW stories—NoW doing this—rife in organisation—Palt enquiries told this not happening when it was I want to speak out about this.

(JCP 11) Record of Attendance Client: NGN Matter: Gordon Taylor Date: 6 June 2008 Ref: JCP/ny

JCP telephoning Mark Lewis and leaving messages for him to call Subsequently attending Mark Lewis. Said that JCP had sent across a part 36 letter in the sum of £350,000. Said there might be a little bit on the table if a confidentiality deal could be agreed. ML said that he had not spoken to his clients in the last couple of days about precisely what he wanted, but from early discussions, he had clearly been of the view that he wanted seven figures not to open his mouth. He wanted to be vindicated or made rich. As well as £1 million, he wanted all his costs being paid. ML said that his costs were approximately £200,000 including counsel’s fees plus VAT. Said that there was no prospect of his client beating the £250,000 in court. ML confirmed that he had advised his client that he was no longer casually not at risk with the £350,000 paid in. The judge might think he was being generous towards Taylor with any award that still falls short of the money in court. ML said that Taylor wanted to carry on because of all the issues surrounding what NGN had done. One way or another, this was going to hurt NGN. Taylor wanted to show that the News of the World stories had been illegally obtained. He wanted to demonstrate that The NOW had been doing this and that it was rife in the organisation when The NOW had been making public statements including statements in parliament telling them that they were simply a rogue trader. Taylor was not happy about this. He wanted to speak out about all of this. Said we thought there was little point in Taylor proceeding to a trial. He was not going to be vindicated by going to trial and failing to beat the payment in court. Did he really want to face the prospect of having to pay or not receiving full payment because he wanted to proceed not withstanding the money on offer. ML said that his client was quite aware of that possibility. He wanted to push it. Asked about extending time for service of the defence. We thought it would be helpful to both sides if an opportunity could be given to resolve this matter during the course of next week. We were probably looking to put the defence back until Friday. ML said he would take instructions. cobber Pack: U PL: COE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07 Source: /MILES/PKU/INPUT/012695/012695_w103_steve_PH 61A Chair to Linklaters MSC 6 March 2012.xml

Ev 244 Culture, Media and Sport Committee: Evidence

(JCP 13) Transcript of Pike Notes of Call with Tom Crone 10 June 2008 Tom Mtg with JM + CM JM sd he wanted to think through options CM moving towards to tell Taylor to fuck off — on the end of drip drip—do a deal with them — paying them off + then silence fails — if intriguing progress GM in more deeply—if damages award admitting liability—be in jointly for +ifheis cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 245 Report Date & Time: 21/10/2011 10:22:36 0.20 Type Status Number Rate Value Value Value Time Value BILLED TIME DETAIL REPORT BETWEEN 24/05/2008 AND 10/06/2008 General call to c mylr’scall office from (6 c mins); mylercall (18 to mins); george daviesmins); office (6 Phone In c myler Phone Out m silverleaf General considering counsel’s draft advice, making amends and emailingsilverleaf m Letters In m silverleaf in and out Phone Out jessica kraja w/p Date27/05/2008 Fee Earner JCP Details Pike, Julian28/05/2008 JCP02/06/2008 JCP Pike, Julian02/06/2008 Charge JCP Pike, Julian C WIP Bill03/06/2008 Pike, Julian JCP B Rate03/06/2008 C JCP Special Pike, Julian Hours C B Base Pike, Julian C To B Bill Billed B Cum Cum 1.00 C B 0.50 0.30 0.90 0.10 FARRER&CO Client DetailsMatter DetailsClient PartnerTeamOpening Base Time BalanceOpening Base Value Balance New Group Newspaper Gordon Ltd Taylor JCP Pike, Julian Media Disputes 0.00 0.00 Billed Time Balance Billed Value Balance (JPC 14Ð19) cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 246 Culture, Media and Sport Committee: Evidence Type Status Number Rate Value Value Value Time Value Phone In call j kraja w/p Phone In tgc (12 mins); Letters Out emails tgc and m silverleaf General w/p call m lewiscall (6 to mins); m lewismins); re extension (6 General call with t crone; emails to tPhone crone In tgc post meeting with j murdoch Date03/06/2008 Fee Earner JCP Details03/06/2008 JCP Pike, Julian03/06/2008 JCP Pike, Julian06/06/2008 JCP Pike, Julian Charge10/06/2008 Pike, Julian C WIP JCP10/06/2008 Bill C JCP B Pike, Julian Rate C B Special Pike, Julian Hours C B Base To B Bill C Billed Cum C B Cum 0.10 B 0.60 0.30 1.10 1.70 0.20 cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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(JCP 20Ð26) Opinion Introduction 1. My client, News Group Newspapers Limited (NGN) is the defendant to proceedings brought by Gordon Taylor, the chief executive of the Professional Footballers Association (PFA). NGN is the publisher of both The Sun and the News of the World. Mr Taylor was one of a number of prominent individuals whose mobile telephone voicemails were illegally accessed during 2005 and 2006 by Glenn Mulcaire, a private investigator contracted to NGN to carry out research. In November 2006 Mr Mulcaire pleaded guilty to a charge of illegal access to Mr Taylor’s voicemail and a number of similar charges. On 27 January 2007 he was sentenced to a period of two months’ imprisonment on this charge to run concurrently with sentences for four other similar charges and consecutively to a sentence of four months’ imprisonment on a charge of conspiracy to access the voicemails of three members of the Royal household. At the same hearing the then Royal editor of the News of the World, Clive Goodman, was sentenced to a period of four months’ imprisonment on the conspiracy charge. 2. In his action Mr Taylor claims that the accessing of his voicemail messages was a breach of confidence, a misuse of private information and an invasion of privacy. He brings claims against both NGN and Mr Mulcaire. Mr Taylor claims an injunction and damages for these wrongful acts together with delivery up of any material embodying information obtained from the illegal accessing of his voicemails in the possession of either defendant. Mr Taylor also complains that NGN has failed to deal properly with a data subject access request under the Data Protection Act 1998. He seeks an order that NGN complies with the request. 3. At the outset, NGN’s response to the claim was to deny liability on the basis that Mr Mulcaire was acting on his own initiative in accessing Mr Taylor’s e-mails and that accordingly NGN was not responsible for anything that he did. The position has now changed. In January this year, Mr Taylor obtained orders against the Metropolitan Police and the Information Commissioner for disclosure of information relating to the accessing of his voicemail messages. The material obtained from the Metropolitan Police has disclosed that at least three NGN journalists (Greg Miskiw, [REDACTED], and Ross Hindley) appear to have been intimately involved in Mr Mulcaire’s illegal researching into Mr Taylor’s affairs. The disclosure from the Information Commissioner comprises material obtained by the Commissioner during an enquiry called Operation Motorman into the practices of journalists in seeking Information from enquiry agents which, on the face of it, required illegal access to data sources. 4. The results of the third party disclosures have been very damaging to NGN. It seems clear that Mr Mulcaire was specifically asked to look into certain activities by Mr Taylor, in particular, whether [REDACTED].There is a document dated 4 February 2005 and signed by Mr Miskiw on behalf of the News of the World, agreeing to pay Paul Williams £7,000 on publication of a story concerning [REDACTED] based on information provided by Mr Williams. Paul Williams is known to be an alias used by Mr Mulcaire. There are transcripts of a number of Mr Taylor’s voicemails and also of [REDACTED] voicemails made, or at least collated into an e-mail, by Mr Hindley. There is a draft article (which may have been written by [REDACTED] under a pseudonym although I understand [REDACTED] disputes this) based upon the contents of these voicemail messages disclosing [REDACTED] both of whom are identified by aliases. 5. As an aside, the information obtained by Mr Mulcaire, establishes to a high degree of likelihood that [REDACTED]. This, however, is irrelevant. [REDACTED] there is no public interest (as opposed to [REDACTED] in its exposure. In particular, there is no overriding interest in its disclosure which could possibly justify the use of unlawful means to obtain information about it. 6. In the light of these facts, it seems to me, as it seems to both my instructing solicitors and junior counsel, that NGN’s prospects of avoiding liability for the claims of breach of confidence and invasion of privacy made by Mr Taylor are slim to the extent of being non-existent. NGN must be vicariously liable for the conduct of its employees unless they were acting on a frolic of their own. The latter claim appears on the information now available to be impossible to establish. There is overwhelming evidence of the involvement of a number of senior NGN journalists in the illegal enquiries into [REDACTED]. In addition there is substantial surrounding material about the extent of NGN journalists’ attempts to obtain access to information illegally in relation to other individuals. In the light of these facts there is a powerful case that there is (or was) a culture of illegal information access used at NGN in order to produce stories for publication. Not only does this mean that NGN is virtually certain to be held liable to Mr Taylor, to have this paraded at a public trial would, I imagine, be extremely damaging to NGN’s public reputation. 7. I should at this point mention that when Mr Mulcaire was sentenced for the offences noted above, it seems to have been accepted by the prosecution and the court that his contract with NGN to provide research services was for legitimate activities and a confiscation order was made only in relation to additional cash payments made to him by Mr Goodman for the particular activities relating to the members of the Royal Household. The recently disclosed information seems to throw that acceptance into considerable doubt: if the trial proceeds, there would seem to be little doubt that Mr Taylor’s case will be advanced on the basis that Mr Mulcaire was specifically employed by NGN to engage in illegal information gathering to provide the basis for stories to appear in NGN’s newspapers. I would not imagine that NGN wishes this kind of allegation to be given any more publicity than is inevitable from the bringing of the claim. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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8. In these circumstances I have been asked to provide advice on the likely quantum of damages and on tactics for dealing with Mr Taylor’s claim.

Quantum 9. Mr Taylor claims both aggravated and exemplary damages for the torts of which he complains. The pleadings set out in some detail the basis for these claims. They include the sensitive private nature of the information on his voicemails, the fact that his work requires that many well-known individuals and people in positions of influence and power are able to trust him and treat his voicemail as entirely confidential, the hurt to his family and friends on discovering that their private words have been accessed, the increased difficulty Mr Taylor has experienced in doing his job now that his voicemail is not trusted and other similar matters. 10. To support the claim for exemplary damages, it is expressly pleaded that NGN calculated that the profits to be obtained from illegal access to voicemails outweighed any loss and damage that Mr Taylor might recover and that NGN ought accordingly to be “financially punished for the improper and grossly offensive acts of its journalists and persons that it engages to carry out such acts” (Amended Particulars of Claim paragraph 50(8)). 11. It seems to me to be dear, first, that on the current state of the authorities, both aggravated and exemplary damages are available to Mr Taylor. Reference to the speeches in the House of Lords in Rookes v Barnard ([1964] AC 1129) and the subsequent consideration of that case in more recent authorities such as Kuddus v Chief Constable of Leicestershire ([2002] 2 AC 122) makes it plain that both kinds of damages are in principle capable of being awarded in appropriate circumstances in a claim for breach of confidence. Exemplary damages are only available where “the defendant’s conduct has been calculated by him to make a profit for himself which may well exceed the compensation payable to the plaintiff” (per Devlin J in Rookes v Barnard at 1226). 12. It also seems clear that the nature of the wrongs complained of by Mr Taylor and the conduct by NGN’s journalists makes it almost inevitable that the court will wish to mark its disapproval of their activities by awarding an enhanced level of damages. The accessing of Mr Taylor’s and [REDACTED] voicemails was not only illegal but will be seen as immoral and repugnant by any judge who is likely to hear the action. Gross J, who sentenced Mr Mulcaire, described it as “the lowest of the low” and his reaction may be considered typical. 13. Whether the enhanced award of damages is constituted by aggravated or exemplary damages may be thought to be academic, but it is important to remember that they are different in principle. Aggravated damages are by way of compensation for increased levels of hurt to the claimant. Exemplary damages are unique to the common law and are expressly designed to punish the defendant. Lord Devlin in his speech in Rookes v Barnard made it clear that he regarded exemplary damages as entirely exceptional and to be confined within moderate limits. At 1227–8 he made the following instructive comments: “the power to award exemplary damages constitutes a weapon that, while it can be used in defence of liberty, as in the Wilkes case, can also be used against liberty. Some of the awards that juries have made in the past seem to me to amount to a greater punishment than would be likely to be incurred in the conduct were criminal; and, moreover, a punishment imposed without the safeguard which the criminal law gives to an offender. I should not allow the respect which is traditionally paid to an assessment of damages by a fury to prevent me from seeing that the weapon is used with restraint. … In a case in which exemplary damages are appropriate, a Jury should be directed that if, but only if, the sum which they have in mind to award as compensation (which may, of course, be a sum aggravated by the way in which the defendant has behaved to the plaintiff) is inadequate to punish him for his outrageous conduct, to mark their disapproval of such conduct, and to deter him from repeating it, then it can award some larger sum.” It seems clear that Lord Devlin at least envisaged that awards of exemplary damages would be likely to be made only in cases where aggravated damages were also awarded and that, in such cases, a relatively modest uplift to the aggravated damages should be given. My researches have not (yet) found any more recent cases in which this approach has been doubted. However, whilst this principle is easy to state, its application to the present case is fraught with difficulty and uncertainty. 14. It is also clear that Lord Devlin was alert to the risks inherent in imposing a punishment on a defendant without the safeguards of the criminal law. Such risks are all the greater where the conduct is in fact criminal and the defendant has either been prosecuted and therefore punished already or has not been prosecuted at all. It seems to me to be at the very least arguable that exemplary damages ought not to be awarded in such cases. The relevant prosecuting authorities have already considered the facts and brought the charges they considered appropriate in the circumstances. The appropriate criminal defendants have been punished to the appropriate extent. No further punishment is justifiable. I propose, nevertheless, to proceed on the basis that exemplary damages may be awarded in this case. In doing so, I shall adopt Lord Devlin’s approach and take it that they are likely to represent a relatively small uplift on any aggravated damages awarded. 15. The starting point for assessment of damages in this case is that Mr Taylor has suffered no apparent financial loss or special damage. The damages to be assessed are general damages for the hurt he and those around him have suffered as aggravated by the wickedness of Mr Mulcaire’s and NGN’s conduct. Damages cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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are therefore at large and will in my view be assessed by the judge as a round sum aiming at an overall figure which the judge thinks represents a reasonable assessment of the size of the sum which should be given to reflect the gross and illegal intrusion into Mr Taylor’s private and professional life and the defendants’ motives in making this intrusion. 16. There are no precedents for awards of damages in such cases and analogies with other causes of action are unhelpful. Damages in libel cases reflect the effect of the publicity given to the false allegations. Here there was none. Damages in a conventional breach of confidence case reflect either the commercial value of the information or the personal hurt its exposure has caused. Here again, there is no exposure save to the extent that Mr Taylor establishes that the way his friends, family and colleagues behave towards him has changed. The reality is that such evidence is likely to establish little alteration in patterns of conduct save possibly for a short period after Mr Mulcaire’s activities became public. Accordingly, any rational assessment of damages leads to a relatively small sum. I share with my instructing solicitors the view that such a conclusion is improbable. The court is bound to wish to mark its disapproval of the defendants’ conduct by awarding a substantial sum by way of damages. 17. In these circumstances it is impossible to arrive with any certainty at the likely level of damages which will be awarded. My view is that the court might award a sum at any level from £25,000 to £250,000 or possibly even more, although I think this extremely unlikely. My best guess is that the award will be either about £100,000 or about £250,000 depending upon the personal reaction of the judge who hears the claim. These are to my mind the sorts of figure which are likely to commend themselves to a judge trying to reflect both disapproval and deterrence. Regrettably, I do not see how one can provide any more precise assessment at this stage.

Tactics 18. I do not think that the level of damages at which a judge will ultimately settle can be predicted with any certainty. It follows that all my client can do is make commercial calculations about the risks and benefits of adopting any particular position. It is therefore necessary to consider whether the claimant will settle if offered enough money or whether he wants his day in court (as he now says although did not originally). It is also in my view necessary to consider the extent to which admissions of liability can or should be made both to minimise NGN’s attempt to defend a claim the court will consider indefensible and to minimise the likelihood of harmful publicity. 19. I have specifically been asked to advise whether the present Part 36 Offer of £150,000 should be increased. In my view it probably should unless NGN is prepared to risk some form of public trial although I recognise that this is a very finely balanced decision and it might be sensible at least to defer an increased offer until the defence has been amended as I suggest below. Mr Taylor originally indicated that he would settle for £250,000 plus costs. If the offer is increased to that level, he may take it. If he does not, NGN is no worse off than it is now. If Mr Taylor changes his mind later and wishes to accept the increased offer, then we can negotiate the terms and the problem will have gone away. If he does not, then the claim will have to be litigated to some extent, subject to what follows, just as it will now. The alternative of leaving the offer as it stands exposes NGN to the risk that the court will ultimately settle on a higher figure. Whilst this may be relatively unlikely, I can see very little downside (save an additional exposure of £100,000) to protect itself from that risk. 20. When I first read my instructions, my immediate reaction was that NGN should submit to judgment on liability (except possibly in relation to the Data Protection Act claim as to which I do not at present have enough information to assess its merits), On reading the Amended Particulars of Claim, however, it seemed to me that total acceptance of the allegations made was likely to be difficult. It may therefore be the case that NGN can only make limited admissions. It seems to me that it is obvious that this should be done at the earliest opportunity if only to minimise the extent to which allegations which are obviously going to be accepted by the court are challenged by NGN. 21. In the limited time available I have not been able to form a clear view as to the extent of the admissions that can reasonably be made. My approach, however, would be to endeavour to make sufficient admissions to ground liability and to offer to submit to judgment on the basis of such admissions. That would place Mr Taylor in the position of having to decide whether to press on with the more extensive allegations or to accept that liability is established on the basis of the admissions made. If he chooses to press on, his costs will be increased. If a larger offer has been made, he is then at even greater risk on costs because he will have to establish not only liability but also the truth of the more extensive factual allegations and that they increase the extent of liability to justify a claim to costs from now on. 22. I would therefore strongly recommend that NGN amends its defence in response to the Amended Particulars of Claim to make sufficient admissions to enable it to admit liability and offer to submit to judgment on those admissions. The precise extent of the admissions will need very careful consideration. 23. There will also be significant further tactical decisions to be taken very shortly. I consider that to address these with a basic approach has been decided is premature and complex. For example, one will need to consider further disclosure and the appropriate approach to evidence in the light of the admissions. That cannot realistically be done until the extent of the admissions has been determined. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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24. I trust that this advice is sufficient to enable my instructing solicitors and client to decide how best to proceed. I appreciate that this advice requires a number of difficult decisions to be taken and that the correctness of those decisions may be very difficult to determine. I am more than happy to discuss any points arising from this advice and to consider any consequential issues whenever convenient. Finally, I should note that since I wrote this opinion yesterday I have been asked two further questions. Those questions are answered in an e- mail this morning and this opinion should be read in conjunction with the comments in that e-mail. Michael Silverleaf QC 3 June 2008

(JCP 27) THE NEWS OF THE WORLD undertakes not to publish any information/pictures supplied by PAUL WILLIAMS in connection with [REDACTED] PFA Chief Executive Gordon Taylor. The News of the World agrees to pay a minimum sum of £7,000.00 on publication of the story based on Information provided by Mr. Williams. This figure will be re-negotiable on the basis of prominence given to the story. Signed...... Dated: 4 February 2005

(JCP 28Ð29) … paragraph 9.2 to Mr Myler’s evidence that “Burton Copeland were given ‘every financial document which could possibly be relevant’ to the paper’s dealings with Mulcaire and they confirmed that ‘they could find no evidence from these documents or their other enquiries which suggested complicity by The News of the World or other members of its staff beyond Clive Goodman in criminal activities’”. 18. The Firm draws attention to this evidence because it indicates that there has been some confusion in the mind of Mr Rupert Murdoch, or perhaps that he has been misinformed, about the role of the Firm. As stated above, his account of the instructions to the Firm were that it had been retained “to find out what the hell was going on”.32 It is quite (clear that that is not what the Firm was instructed to do. But the evidence above suggests that Mr Rupert Murdoch may in fact have been thinking of the Instructions given to Burton Copeland.33 Given that News International has waived privilege over its instructions to and advice from the Firm, the CMSC might consider asking News International similarly to waive privilege over its instructions to and advice from Burton Copeland.

Privilege and Confidentiality 19. It has been suggested that if the Firm had found evidence, in the course of its retainer by News International, of criminal offences having been committed by News International executives, then the Firm would have been entitled (or oven obliged) to report its findings directly to the police. The Firm wishes to explain the correct position, as to which the law is clear. 20. When a client consults a lawyer to take advice in a relevant legal context, then what the client tells the lawyer is subject to legal advice privilege. This means that the lawyer Is obliged to keep what he or she learns about the client’s affairs in the course of the retainer completely confidential, unless and until the client decides otherwise. (It is for this reason that it has been so difficult for the Firm to provide this response to the Committees.) We have set out in Appendix C a summary of the relevant law. 21. Even if, therefore, some emails reviewed by the Firm had been suggestive of criminal conduct by employees of News international, then the Firm could not possibly have reported this to the police without client consent. That would have been against the Firm’s obligations under clear modern law of the highest authority and a very serious breach of professional conduct. Further, neither common law, statute or regulation imposed any relevant obligation on the Firm to break its duties of confidence by reporting to any external authority. Criticism of the Firn for failing to report News International to the police or any other external body is therefore wholly misplaced, regardless of what the emails do or do not show.

What happened to the file 22. It has been suggested in some quarters that it is surprising that it took until April 2011 for the Firm’s file on this matter to have come to light. We therefore think it would be of assistance to the Committees to understand what happened. 32 Evidence given by Mr Rupert Murdoch before the CMSC on 19 July 2011 in answer to Q366. 33 A further indication that Mr Rupert Murdoch may have been thinking of the role of Burton Copeland rather than the Firm is his answer to Q169 in his evidence before the CMSC on 19 July 2011: “Q169 Mr Watson: What did News International do subsequent to the arrest of Clive Goodman and Glenn Mulcaire to get to the facts? Rupert Murdoch: We worked with the police on further investigation and eventually we appointed—very quickly appointed—a very leading firm of lawyers in the City to investigate it further.” The Firm was not retained till May 2007, which cannot be viewed as being “very quickly appointed” after the arrests In August 2006. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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(a) Once the Firm’s letter had been issued on 29 May 2007, the retainer came to an end.34 The Firm issued its bill on 13 June 2007, and News International paid it on 31 July 2007. The file went into archive storage with an external storage company, Restore, on 10 November 2008.35 (b) One by one, all those who had been involved in the retainer left the Firm in the normal course of events, as set out above. After the last member of the junior reviewing team left on 28 January 2011, there was literally no one left at the Firm who had had any involvement in the original retainer at all. (c) The first time that the Firm’s 2007 involvement was mentioned to Parliament, so far as the Firm can ascertain, was in the evidence given to the CMSC leading to its Second Report dated 24 February 2010. The Firm’s name was not mentioned in oral evidence, but was mentioned In written evidence and this was recorded in the appendices to the Second Report (which also quoted in full the letter of 29 May 2007). The letter …

(JCP 30Ð32)

APPENDIX C

Legal Professional Privilege

1. The privilege belongs to the client, not the lawyer. This is absolutely clear on the law. The lawyer has no power to decide what is and is not released from privilege; only the client can do this. In fact, the lawyer has a positive professional obligation to assert the privilege on behalf of his client unless it has been waived (Rv Central Criminal Court ex p Francis & Francis [1989] 1 AC 346; Bolkiah v KPMG [1999] 2 AC 222) and so the Court may intervene to prevent a lawyer from breaking a client’s privilege (Harmony Shipping v Saudi Europe Line [1979] I WLR 1380).

2. The right to communicate in absolute confidence with a lawyer is now recognised by the House of Lords as a fundamental human right: Morgan Grenfell v Special Commissioner of Income Tax [2003] 1 AC 563. The absolute nature of the right Is graphically illustrated by the decision of the House of Lords in R v Derby Magistrates ex p B [1996] 1 AC 487, in which it was held that privilege even protects a confession to a lawyer of having committed murder.

3. This is not a balancing act, in which the Courts (still less the lawyers) weigh up the relative importance of the information against the right of the client to preserve privilege. Privilege is absolute unless over-ridden by express primary legislation. In one of the leading modern cases in the subject, Three Rivers DC v Bank of England [2005] 1 AC 610, Lord Scott explained this at para 24: If a communication or document qualifies for legal professional privilege, the privilege is absolute. It cannot be overridden by some supposedly greater public interest. It can be waived by the person, the client, entitled to it and it can be overridden by statute: (cf R (Morgan Grenfell & Co Ltd) v Special Comr of Income Tax [2003] 1 AC 563), but it is otherwise absolute. There to no balancing exercise that has to be carried out: see B v Auckland District Law Society [2003] 2 AC 736, 756–759, paras 46–54). The Supreme Court of Canada has held that legal professional privilege although of great importance is not absolute and can be set aside if a sufficiently compelling public interest for doing so, such as public safety, can be shown: see Jones v Smith [1999] 1 SCR 455. But no other common law Jurisdiction has, so far as I am aware, developed the law of privilege in this way. Certainly in this country legal professional privilege, if it is attracted by a particular communication between lawyer and client or attaches to a particular document, cannot be set aside on the ground that some other higher public interest requires that to be done.

4. The reason for this absolute privilege existing is because all over the world, it has been recognised that the proper administration of justice requires that a client can consult a lawyer In the absolute certainty that whatever the client tells the lawyer, whatever the lawyer learns about the client, the lawyer is bound not to communicate that information to any third party. As Lord Millett put it in B v Auckland District Law Society [2003] 2 AC 736 at para 47: a lawyer must be able to give his client an absolute and unqualified assurance that whatever the client tells him in confidence will never be disclosed without his consent. 34 Apart from a small amount of time spent in June and July in obtaining for News International, at its request, a transcript of the sentencing remarks of Mr Justice Gross on 26 January 2007. A separate bill for this task of £560 plus VAT and disbursements was issued on 31 July 2007. 35 The file would have been archived sooner but for the fact that, as mentioned in paragraph 5a above, Mr Abramson was subsequently instructed by News International in February 2008 in relation to an alleged breach by News International of the compromise agreement It had entered Into with Mr Goodman. This work was carried out on the same file using the same file number. The documents were stored on the same paper and electronic files as those relating to the previous retainer. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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5. This is not a peculiarity of English law. In the Three Rivers decision, Lord Scott set out authorities not only from this jurisdiction but also from the United States, Europe, Canada, Australia and New Zealand which all speak with one voice (see paras 31–34), Lord Scott concluded that all these authorities: recognise that unless the clients can be assured that what they tell their lawyers will not be disclosed by the lawyers without their (the clients’) consent, there will be cases In which the requisite candour will be absent and concluded that it is necessary as a matter of policy that communications between clients and lawyers, whereby the clients are hoping for the assistance of the lawyers’ legal skills in the management of their (the clients’) affairs, should be secure against the possibility of any scrutiny from others, whether the police, the executive, business competitors, Inquisitive busybodies or anyone else.

6. Unsurprisingly this state of the law is reflected in the Code of Conduct issued by the Solicitors Regulation Authority: see Rule 4.01 (“You and your firm must keep the affairs of clients and former clients confidential except where disclosure is required or permitted by law or by your client (or former client).”) There are very few circumstances in which disclosure is either required or permitted by law, none of which arise in this case. The only one which could have any relevance is what is known as the “fraud exception”: privilege never attaches to communications between lawyer and client if the client has a secret intention of using the advice to enable him to further or facilitate crime or fraud. Please note that this applies only where the client consults a lawyer with the motive of obtaining advice which will assist him in the commission of an offence (not privileged), as distinct from a client consulting a lawyer about an offence which has already been committed (privileged). This distinction runs through all the authorities but is neatly encapsulated in a dictum of Lord Sumner in O’Rourke v Darbishire [1920] AC 581 at 613: To consult a solicitor about an intended course of action, in order to be advised whether it is legitimate or not, or to lay before a solicitor the facts relating to a charge of fraud, actually made or anticipated, and make a clean breast of it with the object of being advised about the best way to meet it, is a very different thing from consulting him in order to learn how to plan, execute or stifle an actual fraud.

For the lawyer to appreciate that this exception is engaged, however, the lawyer must have prima facie evidence suggesting that he is being used by the client in that way. The Firm had no such evidence (and for the avoidance of doubt, is making no suggestion in this response that News International had such a purpose).

Letter from the Chair of the Culture, Media and Sport Committee to Julian Pike, Partner, Farrer & Co

I write to request documentation following your appearance before the Committee on 19 October 2011.

The Committee would be grateful if you could supply the following:

1. A copy of the briefing note produced by Tom Crone for Colin Myler in preparation for a meeting between Colin Myler and James Murdoch. You were sent a copy of this note on 24 May 2008 (Qq 1151 and 1215).

2. A copy of the note you took of the telephone conversation you had with Colin Myler on 27 May 2008, during which he gave you an account of his meeting with James Murdoch on that day (Q 1155).

3. A record of all telephone conversations that you had in relation to the Gordon Taylor case between 24 May and 10 June 2008 (Q 1156).

4. A copy of the pre-publication contract of 4 February 2005 (Qq 1185–1186).

5. A copy of your written advice to Tom Crone (Qq 1198–1200).

I enclose a transcript of the evidence session on 19 October for your reference.

I would be grateful if you could send your response to me, the Clerk of the Committee, at the above address by no later than noon on Monday 31 October. 20 October 2011 cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Written evidence submitted by Tom Crone I apologise for missing your requested date for reply. In answer to the questions in your letter of October 24: 1. I did not have a copy of the briefing note until it appeared on your website. 2. I did not have a copy of the opinion from counsel until it appeared on your website. 3. The evidence I gave to your Committee on September 6 was at the time my best recollection of the relevant events. Having seen the evidence given by Julian Pike and the documents produced by him which now appear on your website, I accept that my recollection was incorrect in relation to certain details. I apologise for that. By way of explanation, since my departure from News International in early July I had no access to office files or contemporaneous records of any kind relating to relevant 2008 meetings, conversations, etc, and, in fact, had probably not looked at such records since 2009. In respect of the statement to which you specifically refer (Q979), it is an accurate account of the reasons for and matters discussed at the meeting I attended on June 10th though it now seems from the records produced by Mr Pike that Mr Murdoch already had knowledge of the new evidence (the “for Neville” email) as a result of his May 27 meeting with Mr Myler. In answer to the request you make in 3.a) I did not mention the briefing note because at the time I had no memory either of the note or of the May 27 meeting between Colin Myler and James Murdoch. Since I had discussed relevant matters with Colin Myler prior to appearing before you on September 6, I know that he did not remember these things either. We may both be criticised for this, but I think it is probably not unusual for busy people to fail to recall detail (or even the existence) of meetings and conversations from more than three years earlier without being able to refer to written records. Having seen the documents on your website, it is clear that my first conversation with Mr Myler about the emergence of the new evidence from Gordon Taylor’s lawyers and its impact on our defence case was earlier than I had previously thought and must have occurred a day or two prior to Saturday May 24. Following that conversation a meeting for Mr Myler to discuss the evidence and the need to settle the Taylor case with James Murdoch was fixed for the following Tuesday, May 27. Normally I would have attended that meeting but was due to be away on holiday for the whole of the following week. Mr Myler therefore requested I produce a briefing note setting out the background to the case and the significance of the new evidence so that he could accurately explain it to Mr Murdoch. He was also keen on getting a written opinion from our leading counsel as soon as possible on quantum of likely damages and tactics in the Taylor case given the obvious impact of the documents obtained by the other side from the police. As you know, I sent the briefing note to him and copied it to Julian Pike late on Saturday, May 24. I also asked Mr Pike to instruct our leading counsel to produce an urgent written Opinion on quantum and tactics. 4. Without access to the relevant files or any other contemporaneous record I do not have a detailed memory of my meeting with Mr Lewis in Manchester. It was certainly my suggestion and I think it took place after he had issued (as opposed to threatened) High Court proceedings. Prior to the meeting I believe I told him that I thought it would be sensible to have a chat to see whether there was any common ground between us which might lead to the matter being resolved. As far as I can recall, at the meeting I told him that we had been unable to find any direct evidence that the News of the World or any of its reporters or executives were implicated in Glenn Mulcaire’s illegal accessing of Gordon Taylor’s phones. I told him that I had spoken to those who could conceivably have been involved and they said they had no knowledge of Mulcaire’s activities in this area. Mr Lewis suggested they may not be telling the truth. We talked around the subject for a while—maybe 25 minutes—I do not remember Mr Lewis telling me that his client wanted £250,000 during the meeting. I thought that figure was relayed to us later. I did tell him, however, that because we recognised that Mr Taylor had clearly had his phone accessed by someone whose services the News of the World used to use, we were prepared without necessarily admitting liability to make a payment to him in settlement of his action. I suggested £25,000. He said he did not think that would satisfy him but he would take Mr Taylor’s instructions. The meeting then ended. My best memory is that the figure of £250,000 was first mentioned when Mr Lewis subsequently got back to us with instructions from his client. 5. Again, I don’t have a particularly clear recollection of the lunch I had with Mr Lewis. It was after Gordon’s Taylor’s case settled and the invitation was mine and made through Julian Pike who still had contact with Mr Lewis over wrapping up the loose ends of the settlement. Mr Pike was also invited to and attended the lunch which was at a restaurant above a pub in Fetter Lane. As far as I was concerned the lunch was purely a social occasion with someone with whom we had done business. Mr Lewis’s recollection in evidence that Mr Pike was not there is wrong—he was. Mr Pike left at the end of the meal. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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After I paid the bill, Mr Lewis and I went downstairs to the bar area. He told me there that we would be hearing from him with claims for Ms Armstrong and another person. We briefly discussed those matters and I left him there finishing the drink I had bought him. For the record, I had raised the probability of hearing from Ms Armstrong with Mr Pike a long time before the lunch. Mr Lewis’s recollection of “watching me go pale” is mistaken.

Once again, I apologise for missing your requested deadline for this response. 5 November 2011

Letter from the Chair of the Culture, Media and Sport Committee to Tom Crone

On 19 October 2011 Julian Pike, a Partner at Farrer & Co, and Mark Lewis, a Partner at Taylor Hampton Solicitors, gave evidence to the Committee. Their evidence gave rise to further questions that the Committee would like you to answer in writing.

1. Julian Pike referred to a briefing note that you prepared for Colin Myler to use in a meeting with James Murdoch on 27 May 2008 (Q1151). If you still have a copy of that note, please could you submit it to the Committee.

2. Julian Pike referred to written advice that he supplied to you setting out his view that the “for Neville” e-mail meant that “there was a powerful case that there was evidence to support illegal accessing of information in order to obtain stories” (Qq 1197–1199). If you still have a copy of that note, please could you submit it to the Committee.

3. In the light of Julian Pike’s reference to your briefing note of 24 May 2008, the Committee invites you to reconsider the oral evidence you gave on 6 September, in which you implied that Mr Murdoch was first made aware of the “for Neville” e-mail and its significance on 10 June 2008 (Q 979: “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”). (a) Please explain to the Committee why you did not mention your briefing note to Colin Myler of 24 May 2008 and Colin Myler’s 27 May 2008 meeting with James Murdoch when you gave oral evidence on 6 September 2011.

4. Mark Lewis referred to a meeting you had with him in Manchester in March or April 2007 (Q 1237). Please provide the date and an account of that meeting.

5. Mark Lewis referred to a meeting you had with him over lunch in El Vino wine bar (Q 1244). Please provide the date and an account of that meeting.

I enclose a transcript of the evidence session on 19 October for your reference. The Committee has written in similar terms to Colin Myler.

I would be grateful if you could send your response to the Clerk of the Committee at the above address by no later than noon on Monday 31 October. 24 October 2011

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee

In his letter to you of 11 August, in response to question 5 of your letter of 29 July, Mr James Murdoch listed payments made to Mr Clive Goodman subsequent to his guilty plea (on 29 November 2006). The Management and Standards Committee of News Corporation (the “Committee”), on whose behalf we write, assisted Mr Murdoch in providing those answers to you as they were not within Mr Murdoch’s personal knowledge. We write to you because the Committee has become aware of further information relevant to your question.

Mr Goodman was paid a total of £22,504.71 in salary after the date of his guilty plea, in three equal instalments on 6 December 2006, 6 January 2007 and 6 February 2007. The payment of Mr Goodman’s salary on 6 February 2007 (which occurred after he was dismissed) was requested by Mr Stuart Kuttner, then the Managing Editor of the News of the World.

The 11 August letter refers to a payment of £90,502.08 to Mr Goodman made in April 2007. The Committee has since been informed that the payment was made on 8 February 2007, though not processed through the payroll system until April 2007. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Mr Murdoch's letter of 11 August refers to payments of £153,000 to Mr Goodman between October 2007 and December 2007. The Committee has been informed that these payments were in fact made between July and October 2007.

News International has previously informed you that News Group Newspapers Limited paid for Mr Goodman’s legal representation in the criminal proceedings involving him. The Committee has recently become aware that between February and April 2010 News Group Newspapers Limited paid a further £9,631.50 in legal fees relating to Mr Goodman. The payment of these invoices was approved by Tom Crone. The records held by News International in relation to these fees are extremely limited, but it appears that they may have been incurred in connection with the then current Culture, Media and Sport Committee inquiry. 4 November 2011

Written evidence submitted by Colin Myler

Thank you for your letter of 16 November 2011. You have asked me to answer a number of questions following up on the evidence provided to the Committee by James Murdoch on 10 November 2011. I will address each of your questions in turn below.

1a. Were you involved in any discussions about increasing the Taylor settlement above £50,000 before James Murdoch was informed? If so, with whom?

I was sent the briefing note by Tom Crone on 24 May 2008. In addition, he may have briefed me, whether in person or on the telephone, about the general background to Mr Taylor’s claim and the status of the settlement. It is unlikely that he would have spoken to me in advance about increasing the amount to be offered to Mr Taylor in settlement of his claim. This was not a matter in relation to which I had any direct responsibility. Mr Crone was the Newspaper’s Legal Manager and it was his role to manage cases and to seek advice from external lawyers and counsel where necessary on general strategy and quantum. Mr Crone or the Managing Editor did keep me abreast of the status of particular cases, if it became necessary to make me aware of developments that had arisen. The disclosure of the “for Neville” email is such an example.

1b. Whose decision was it to increase the settlement offer to £150,000?

I do not know who made that decision.

1c. On whose authority was the settlement offer increased to £150,000?

I do not know who gave authority to increase the settlement offer to £150,000. The briefing note which Mr Crone sent to me on 24 May 2008, states that Mr Crone “authorised our solicitors, Farrers, to make a formal offer to Taylor of £150k plus costs”.

2a. As Editor of the News of the World what knowledge did you have of the commissioning of private investigators and News of the World journalists to conduct surveillance on members of the Committee or lawyers involved in phone-hacking cases?

I was not aware that any surveillance had been conducted upon members of the Committee or upon lawyers involved in phone hacking cases. Nor was I aware of any instructions having been given for such surveillance.

3. James Murdoch said that he thought your evidence and that of Tom Crone to the Committee was misleading and he refuted it [Q1508]. Would you like to change anything or add anything to the evidence that you have already given to the Committee?

Mr Murdoch told the Committee that the evidence which Mr Crone and I gave to the Committee in 2011, regarding his state of knowledge, was inconsistent and not right. My evidence to the Committee has been accurate, consistent and truthful. I stand by my account of the meeting with Mr Murdoch on 10 June 2008. I have been clear and consistent throughout my evidence to the Committee about the significance of the “for Neville” email. I made clear to the Committee in my opening statement on 21 July 2009 that by that time it was obvious that Mr Goodman was not a single “rogue reporter” because the significance of the “for Neville” email and the implications of it were recognised. The fact that I emphasised the significance of the email in my opening statement demonstrated the importance I placed upon it. 28 November 2011 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Letter from the Chair of the Culture, Media and Sport Committee to Colin Myler On 10 November 2011 James Murdoch gave evidence to the Committee. His evidence gave rise to further questions that the Committee would like you to answer in writing. 1. James Murdoch said that, at the time of the Gordon Taylor settlement, Tom Crone was only authorised to settle cases up to £10,000 [Q1582] and that you were authorised to sign-off payments up to £50,000 [Q1597]. Mr Murdoch said that it appears that Mr Crone “took it upon himself” to authorise the Taylor settlement at £50,000 and raise it to £150,000 and subsequently to £350,000 without Mr Murdoch’s knowledge or without the proper authority to do so [Q1583]. Mr Murdoch also said that “presumably [Mr Crone], Mr Myler and Mr Pike had discussed [the settlement] but did not come to me until 10 June” [Q1584]. (a) Were you involved in any discussions about increasing the Taylor settlement above £50,000 before James Murdoch was informed? If so, with whom? (b) Whose decision was it to increase the settlement offer to £150,000? (c) On whose authority was the settlement offer increased to £150,000? 2. When Mr Crone gave evidence to the Committee on 6 September 2011 he said that he had never commissioned private investigators to order surveillance [Q883]. On 10 November James Murdoch said “Mr Crone and another News of the World employee at the time did engage certain private investigators [...] to surveil plaintiff's lawyers” [Q1652]. There have subsequently been reports that all Members serving on the Committee in 2009 were put under surveillance by News of the World journalists and by private investigators commissioned by the News of the World. (a) As Editor of the News of the World what knowledge did you have of the commissioning of private investigators and News of the World journalists to conduct surveillance on members of the Committee or lawyers involved in phone-hacking cases? 3. James Murdoch said that he thought your evidence and that of Tom Crone to the Committee was misleading and he refuted it [Q1508]. Would you like to change anything or add anything to the evidence that you have already given to the Committee? The transcript of the evidence session on 10 November is enclosed for your convenience. It is also on the Committee's website along with transcripts of all previous evidence sessions and all of the written evidence that we have received. The Committee has written in similar terms to Tom Crone. I would be grateful if you could send your response to the Clerk of the Committee at the above address by no later than noon on Monday 28 November. 16 November 2011

Letter from the Chair of the Culture, Media and Sport Committee to Colin Myler Further to my letter of 16 November 2011, the Committee has agreed that it would like to ask you further questions on phone-hacking, specifically in relation to the advice provided by Michael Silverleaf QC and on the settlement with Max Clifford. In answer to Q1525 of the transcript (enclosed with my letter of 16 November), James Murdoch stated that “I did not receive Mr Silverleaf’s opinion. Mr Crone and Mr Pike had received Mr Silverleaf’s opinion and I don’t know what they discussed about it with Mr Myler”. I would be grateful, therefore, if you could respond to the following questions: 1. Were you given a copy of Michael Silverleaf QC’s opinion, or were you made aware of its content? If so, by whom? 2. Was James Murdoch given a copy of Michael Silverleaf QC’s opinion, or was he made aware of its content? If so, by whom? In relation to the settlement made by News International with Max Clifford (see Qq 1702–1714 of the transcript), I would be grateful if you could answer the following questions: 3. Please confirm who authorised the settlement with Max Clifford and when. 4. Please supply the date on which the settlement was concluded. 5. Were details of the settlement, or the proposal to settle, discussed by the boards of News Group Newspapers (NGN), News International (NI) or News Corporation? If not, please explain why not. 6. What role did you play in the authorisation of the settlement and agreement of its terms? 7. Was the authorisation of the Chairman of NI (or NGN) necessary under the company’s procedures, or was authority delegated to the Chief Executive, Rebekah Brooks, at the time? cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 257

8. Did Max Clifford serve a claim—either formally, or in draft form, with or without full particulars— against the News of the World (NotW), NGN, NI, any named employee of the group? 9. Was any defence made or attempted against Max Clifford’s action or threatened action? 10. Did Mr Clifford’s claim or allegations implicate any other employee, agent, consultant, adviser, sub- contractor or person connected to NotW, NGN, NI, News Corp or any other group publications? 11. Was a legal opinion from Counsel or any other legal source commissioned prior to the settlement with Max Clifford, as it was in the Taylor case? If so, who provided the opinion? If an opinion was not commissioned, please explain why the process differed from that employed in the Taylor case? 12. What role, if any, did Jonathan Chapman play in the settlement of the Clifford case? 13. To your knowledge, was Rebekah Brooks shown—or did she ask to be shown—the legal advice received in the Taylor settlement prior to settling with Max Clifford? 14. Did the settlement with Max Clifford involve settling with any other connected parties at or around the same time, or subsequently? 15. To what extent was James Murdoch aware of the claims made by Max Clifford and of the details of the settlement with him? The Committee has written on similar terms to James Murdoch and Tom Crone. It has also written to Max Clifford to ask whether he would be able to assist the Committee regarding his settlement with News International, with appropriate safeguards to protect his privacy. The Committee would be grateful to receive your response as soon as possible, but in any case by no later than noon on Thursday 1 December. 22 November 2011

Written evidence submitted by Colin Myler Thank you for your letter of 22 November 2011. You have asked me to answer a number of questions in relation to the advice provided by Michael Silverleaf QC and the settlement with Max Clifford. I will address these questions in turn below.

Gordon Taylor Settlement 1. Were you given a copy of Michael Silverleaf QC’s opinion, or were you made aware of its content? If so, by whom? I do not believe that I read a copy of Michael Silverleaf QC’s opinion. Tom Crone and Julian Pike had instructed Counsel to provide an opinion and it was provided to them. However, in advance of the meeting with Mr Murdoch on 10 June 2008, Mr Crone briefed me that the substance of Counsel’s firm advice was to settle Mr Taylor’s claim.

2. Was James Murdoch given a copy of Michael Silverleaf QC’s opinion, or was he made aware of its content? If so, by whom? I do not know whether Mr Murdoch was given a copy of Mr Silverleaf’s opinion. I did not give him a copy. However, Mr Crone and I briefed Mr Murdoch at the meeting on 10 June 2008 that Counsel’s advice was to settle Mr Taylor’s claim.

Max Clifford Settlement My involvement in negotiating the settlement with Mr Clifford was limited and, without access to any of the relevant records in the possession of News International, I only have a limited recollection of matters concerning his claim. The settlement negotiations were overseen and directed by the Chief Executive, Rebekah Brooks. She knew Mr Clifford well and I believe it is likely that she spoke directly to Mr Clifford about his claim. Mr Crone and Mr Pike were also involved in the settlement discussions. As far as I am able to recollect, the only involvement I had concerning Mr Clifford’s claim arose at a meeting I attended with Mrs Brooks, Mr Crone and Mr Pike, in Mrs Brooks’ office. Without access to my office diary and emails, I do not recall when this meeting took place. It must have been prior to the settlement being agreed with Mr Clifford because I remember Mr Crone and Mr Pike advising Mrs Brooks that the amount she indicated that she was prepared to offer Mr Clifford in settlement of his claim was more than they advised was necessary. I cannot recall if Jon Chapman was present at that meeting. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Mrs Brooks instructed that Mr Clifford’s settlement would be paid in tranches. She requested that this be met from the News of the World’s editorial budget. Accordingly, after the settlement I was from time to time shown invoices from Mr Clifford by the Managing Editor or Finance Director. The Managing Editor then processed the invoices for payment. The answers to your specific questions are as follows:

3. Please confirm who authorised the settlement with Max Clifford and when. I believe that the settlement was authorised by Mrs Brooks. I do not know when this occurred.

4. Please supply the date on which the settlement was concluded. I do not recall when the settlement was concluded. I no longer have access to any of the Newspaper’s documents so I am unable to check this.

5. Were details of the settlement, or the proposal to settle, discussed by the boards of News Group Newspapers (NGN), News International (NI) or News Corporation? If not, please explain why not. I do not know whether or not the settlement or proposal to settle was discussed by the boards of any of these companies. It was Mrs Brooks’ responsibility to take this issue to the boards.

6. What role did you play in the authorisation of the settlement and agreement of its terms? I did not play any role in the authorisation of the settlement or the agreement of its terms. I was present at the meeting referred to above when the amount being offered to Mr Clifford was discussed.

7. Was the authorisation of the Chairman of NI (or NGN) necessary under the company’s procedures, or was the authority delegated to the Chief Executive, Rebekah Brooks, at the time? I do not know whether Mrs Brooks would have needed to seek authorisation from Mr Murdoch concerning the settlement with Mr Clifford.

8. Did Max Clifford serve a claim—either formally, or in draft form, with or without full particulars—against the News of the World (NotW), NGN, NI, any named employee of the group? I understood that Mr Clifford did serve a claim. I cannot recall whether that was done by a formal claim or in draft. I do not believe that I was shown a copy.

9. Was any defence made or attempted against Max Clifford’s action or threatened action? I do not know whether any defence was made or attempted against Mr Clifford’s action. Any such decision and any consequential document was the responsibility of Mrs Brooks, Mr Crone and Mr Pike.

10. Did Mr Clifford’s claim or allegations implicate any other employee, agent, consultant, adviser, sub- contractor or person connected to NotW, NGN, NI, News Corp or any other group publications? I do not know whether Mr Clifford’s claim implicated any other person, company or publication connected to News International.

11. Was a legal opinion from Counsel or any other legal source commissioned prior to the settlement with Max Clifford, as it was in the Taylor case? If so, who provided the opinion? If an opinion was not commission, please explain why the process differed from that employed in the Taylor case? I do not know whether or not an opinion from Counsel was sought or the extent to which the process may have differed from the Taylor case.

12. What role, if any, did Jonathan Chapman play in the settlement of the Clifford case? Mr Chapman may have been present at the meeting referred to above. He was involved in some of the civil claims brought by phone hacking victims but I cannot recall if he was involved in this one.

13. To your knowledge, was Rebekah Brooks shown—or did she ask to be shown—the legal advice received in the Taylor settlement prior to settling with Max Clifford? I do not know if Mrs Brooks was shown, or asked to be shown, Mr Silverleaf’s opinion.

14. Did the settlement with Max Clifford involve settling with any other connected parties at or around the same time, or subsequently? I do not know if the settlement involved any third party. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 259

15. To what extent was James Murdoch aware of the claims made by Max Clifford and of the details of the settlement with him?

I do not know whether Mr Murdoch was aware of the claims made by Mr Clifford or of the details of the settlement. As the Committee will know, Mr Murdoch told the Committee on 10 November 2011 that he was told by Mrs Brooks “in general terms” of the settlement, but “was not particularly briefed on the ins and outs”. 1 December 2011

Written evidence submitted by Julian Pike, Farrer & Co

Thank you for your letter of 16 November 2011. I set out below my response to the four questions set out in that letter.

1 and 2. Neither I nor anyone else at this firm have any information regarding, and had no involvement in, or knowledge of, any surveillance which may have been carried out on members of the Culture, Media and Sport Committee in 2009 (or at any other time) by or on behalf of News Group Newspapers Limited (NGN) or News International Limited (NI) (or any associated or related company).

3 and 4. My firm has recently received Notices from the Leveson Inquiry asking for information regarding this firm's involvement in, and knowledge of, any surveillance of Mr Lewis and Miss Harris, and a full response is being prepared in the form of a substantial witness statement. Rather than answering similar questions in different forms, I suggest that when that response is sent to the Leveson Inquiry, hopefully later this week, a copy is also provided simultaneously to your Committee. 28 November 2011

Letter from the Chair of the Culture, Media and Sport Committee to Julian Pike, Farrer & Co

I write in relation to the Committee’s work on phone-hacking. I enclose a copy of the transcript of the Committee’s evidence session with James Murdoch, which took place on 10 November 2011.

You will be aware of media reports that members of the Committee were put under surveillance by journalists and private investigators acting on behalf of the News of the World for a period of between three and ten days in 2009. In oral evidence on 10 November 2011, James Murdoch said that he was aware that Tom Watson MP had been put under surveillance by News International (Q 1656).

In oral evidence James Murdoch also stated that Tom Crone and one other person had authorised the surveillance of Mark Lewis, the solicitor acting on behalf of Graham Taylor against News Group Newspapers, and members of his family (Qq 1652–1655)

I would be grateful if you could supply answers to the following questions:

1. Please supply any information that you may have on the surveillance carried out on members of the Culture, Media and Sport Committee in 2009 by or on behalf of News Group Newspapers or News International.

2. Please declare any involvement that you may have had in commissioning the surveillance mentioned in Q1, above.

3. Please supply any information that you may have on the surveillance carried out on Mark Lewis and members of his family by or on behalf of News Group Newspapers or News International.

4. Please declare any involvement that you may have had in commissioning the surveillance mentioned in Q3, above.

The Committee would be grateful to receive your response by no later than noon on Monday 28 November. 16 November 2011 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Written evidence submitted by Neville Thurlbeck I am in receipt of your letter of November 22 requesting that I submit written evidence on the matters I discussed in my Press Gazette article of November 16 and I am happy to oblige. On July 8, 2009, my name became publicly linked to the Gordon Taylor privacy settlement and in a highly damaging way, to the interception of his voicemails. This was due to the existence of the “Transcript for Neville” email. On the morning of Saturday, 11 July, 2009 the legal manager Tom Crone informed me that the editor Colin Myler was going to ask me to resign on the basis of this email and that a generous settlement offer would be on the table if I held out. The meeting between Mr Myler, Mr Crone and myself, took place a few minutes later and lasted approximately one hour. During the meeting, I provided them with a substantial amount of evidence which satisfied them that I was not the guilty party. During my very limited two or three day involvement in the story, I informed them that I had been instructed by a news desk executive. I asked if Mr Myler and Mr Crone had spoken to that news desk executive. They informed me they had and that he had informed them he had not only no knowledge of any phone hacking, but had no knowledge of a Gordon Taylor investigation whatsoever. During my time as news editor (2001–03), I had started an archive system for old news lists. As a point of fact, the news list is the list of the main stories of the week which the news editor supported by his deputy news editor and his team are working on. This news list is presented at each morning conference and is handed out and discussed with the top editorial team, presided over by the editor. My former secretary was still on the news desk and I suspected she would still be diligently archiving them. I directed Mr Myler and Mr Crone to the archive. They found that the news desk executive who had denied any knowledge of the Gordon Taylor story, had in fact been billing it as the main story of the week on his news list. And he had been doing so for an entire week in 2005 in front of the then editor Andy Coulson. I also provided Mr Myler and Mr Crone with email correspondence between myself and the news desk executive in which we discussed the Taylor story extensively. I followed this up with a lengthy memo on Wednesday 15 July, 2009 and handed it to Mr Myler and Mr Crone. I kept my job and was not subjected to any disciplinary action. However, although the newsdesk executive in question was admonished for misleading and misinforming Mr Myler and Mr Crone he wasn’t disciplined and kept his job. On Sunday, 19 July, I was still focused on providing the company with as much information as possible surrounding the person responsible for and in charge of the Gordon Taylor story so that they could have complete peace of mind that the internal investigation into the matter was thorough, accurate and beyond repudiation. With this in mind, I tracked down Ross Hall in Peru, the reporter who had made the transcript in the “Transcript for Neville” email to try to discover who had handed him the tapes of the hacked voicemails and ordered him to transcribe them. This seemed to me to be an elementary and sensible first step in any investigation into the matter. I taped the call and it exonerated me and incriminated the executive. I immediately called Mr Crone to tell him this as it was final proof to News International, the police and Parliament, that I had not hacked Gordon Taylor’s phone. Up to this point, I thought Mr Myler and Mr Crone were on a genuine mission to find the proof that their chief reporter was innocent. He was unpleasant and extremely angry. He told me, “I have to go in front of the committee in a few days time and defend everybody. No I don’t want the bloody tape.” It was at this point when I realised there was no such mission to find the proof of my innocence. This was because the only proof available would lead to the sacking and possible prosecution of another top executive. This would fatally damage the “rogue reporter” defence which was being advanced at the time. This is when it appears to me that Mr Myler and Mr Crone formulated their policy of leaving me to dangle as a suspect for the next two years. It wasn’t ideal, but it was a more advantageous corporate strategy to have me as a suspect than one of their top executives as a convict. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 261

Mr Myler and Mr Crone appeared before the Culture, Media and Sports Select Committee on Tuesday, 21 July, 2009, two days after I tracked down Ross. They made no mention of Ross being tracked down and spoken to by me. Or of him volunteering information which vindicated me on the “Transcript for Neville” email matter and implicating another executive. They were in possession of all this knowledge and they failed to disclose it to the committee. In my intimate experience of the fall-out from the phone hacking scandal, there has been a pattern of News of the World executives withholding information from News International executives and to the CMS Committee. During December 2010 and January 2011, I was provided, on a highly confidential basis, with information about the industrial scale of hacking at the News of the World. On two occasions, I made an appointment to see Bill Akass, the managing editor. During these meetings, I informed him that I had information which had the potential for “catastrophic consequences” for the newspaper. And that the information was so sensitive, I needed to discuss it with the editor and with Rebekah Brooks. They failed twice to take me up on my offer. And I was denied access to Ms Brooks by Mr Akass. By February, 2011, I had had enough. For the first time in my career, I failed to turn up to work and drove north to see my family. I emailed Mr Myler that the hacking of Gordon Taylor’s phone and the Max Mosley “blackmail letters” had long been known by the News of the World to have been the work of a certain executive, who I shall not name here for legal reasons. And yet they had failed to mount any defence of me. His reply is very telling. It failed to correct this highly accusatory statement. He passed on his regards to my family and invited me to take off as much time as I needed, with his blessing. In April 2011, I obtained further evidence of my innocence in the Gordon Taylor affair in a taped call to another executive. The tape also incriminated the executive who had been admonished earlier for lying to Mr Myler and Mr Crone. I offered the tape to Mr Akass. He seemed to panic and refused to even take possession of it—even to simply hand it to the police. I made a further request for Rebekah Brooks to be informed of these developments. Again, this was denied by Mr Akass. It was of course, too late for the News of the World senior executives to pass my evidence up the line to Ms Brooks and James Murdoch. Much of the evidence had been in their possession for almost two years and some very harsh questions would have been asked of them. There was therefore a united effort at the top of the News of the World to deny me access to senior News International executives. And by December 2010 and January this year, the fear of their inertia and suppression of information being exposed to Mr Murdoch and Ms Brooks was so paralysing, they couldn’t face hearing the information which I warned them would have “catastrophic consequences” for the paper. The pattern of non-disclosure ultimately led to a critical state of paralysis at the very top of the News of the World. A condition which rendered News International ill-prepared to deal with the torrent of allegations this summer which had a catastrophic effect on the newspaper, all its employees, on News International, News Corporation and the Murdoch family themselves. When a false allegation against me was drawn to the attention of News International this summer, they dismissed me without telling me what that allegation was, citing legal reasons. However, the reason for my dismissal was later revealed to me by Scotland Yard and it is my profound belief that had News International not been deprived of my evidence by the News of the World executives, it would not have dismissed me as it shows I was plainly innocent of the alleged offence. It is against this backdrop of persistent non-disclosure that I must view Mr Myler and Mr Crone’s assertion that they disclosed the “Transcript for Neville” email to James Murdoch in 2008—and Mr Murdoch’s claim that they did not. During my meeting with Tom Watson MP at my home in October, I informed him of all the above. I also informed him that Mr Crone had explained to me that Mr Murdoch would have to see the email as this was the only reason for settling the Taylor litigation. And I informed him that Mr Crone had told me after the meeting that he had discussed the email with James Murdoch and that we were settling with Taylor. I have no way of telling if he did or did not. If he did not and had failed to disclose this vital evidence to Mr Murdoch, he would have been highly unlikely to confess this to me. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 262 Culture, Media and Sport Committee: Evidence

Ultimately, I can only judge whether he did or not on the balance of probabilities and from previous behaviour patterns.

If Mr Murdoch had been told of the existence of the email, he would have asked questions of me. He didn’t.

It is inconceivable to me that so soon after the Goodman/Mulcaire case which had rocked the company to its foundations, that he would not have initiated an internal inquiry. He didn’t.

It is inconceivable to me that upon deciding to pay record damages for invasion of privacy based upon telephone hacking that he would not have discussed the implications for the company and shareholders with other members of the board, who would in turn have advised holding an internal inquiry. They didn’t.

During the course of the internal debate on settling the Taylor case between Mr Myler, Mr Crone and Mr Murdoch, I would have expected an email trail which referenced phone hacking as this was central to the claim. Apparently, there isn’t.

After considering this, I am left trying to believe that, contrary to all previous and subsequent behaviour patterns, Mr Myler and Mr Crone decided on this occasion to bring to the attention of Mr Murdoch, evidence of a phone hacking culture in the News of the World.

It grieves me to say that I cannot.

It grieves me because I have known and respected Tom Crone for 20 years. I like him enormously. Colin Myler is also one of the most fair minded men I have worked for.

But their strategy—which I challenged on numerous occasions—was ill-conceived and had become irrevocably defined by the suppression of facts. And it caused me two and a half years of severe criticism in the press and in Parliament, my arrest, the loss of my job and contributed to the closure of the paper.

It is for this reason why I believe it is important for the CMS Committee to have my perspective on the events which destroyed so much and I am grateful for the opportunity to do so.

I have furnished Mr Watson with copies of most of the documentation which support my assertion of non- disclosure at the top of the News of the World. I understand he has handed this to the police. I have not done so.

The police seized the Ross Hall tape and several memos from myself to Mr Myler and Mr Crone from my home in April.

The remainder, together with all originals, are with my lawyers.

If I can be of any further assistance, please do not hesitate to contact me. 29 November 2011

Letter from the Chair of the Culture, Media and Sport Committee to Neville Thurlbeck

I write following the appearance of James Murdoch before the Committee on 10 November 2011. At that evidence session a conversation between you and Tom Watson was referred to.

During its inquiry into Press Standards, Privacy and Libel, our predecessor Committee asked you to appear as a witness. You responded that you would only wish to give evidence in private, which we found to be unsatisfactory.

You have recently made public statements, which suggests that you may have changed your view since we last corresponded. The Committee therefore requests that you submit written evidence on the matters that you discuss in your recent Press Gazette article. I would be grateful if you would do so by writing to the Clerk of the Committee, Emily Commander, at the address shown above, by no later than noon on Thursday 1 December. 22 November 2011 cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 263

Written evidence submitted by Linklaters, on behalf of the Management and Standards Committee

As you are aware, we represent News Corporation’s Management and Standards Committee (“MSC”).

Your letters of 16 and 22 November to James Murdoch have been passed to us as a number of your questions concern matters beyond the personal knowledge of Mr Murdoch or raise issues falling within the remit of the MSC. Mr Murdoch will answer the questions concerning his personal knowledge and involvement in a separate letter.

You have asked whether Mr Myler can be given access to documents. The MSC does not think it appropriate to give such access to Mr Myler. That is because the MSC is concerned that giving documents to Mr Myler may prejudice the criminal investigation. The MSC has discussed this with the Metropolitan Police Service who share this concern. The MSC has refused to grant such access to all former employees—the response to Mr Myler’s request is consistent with that approach. The MSC can confirm that it has reviewed all available documents likely to be relevant to Mr Myler’s request and is satisfied that none throw any further light on the events of May and June 2008. The MSC has seen nothing to suggest that there was a meeting between Mr Myler and Mr Murdoch on 27 May 2008.

You have asked about the admission of liability for the interception of emails in the Taylor, Miller and Clifford cases. The MSC understands that neither Mr Taylor nor Mr Clifford made allegations that there had been e-mail hacking. Ms Miller did make a late amendment to her claim to allege e-mail hacking. This is a technical legal matter but the MSC has been advised that the order recording the settlement and the statement made in open court did not include any admission in relation to that late amendment.

You have asked about the remarks made by Robert Jay QC at the Leveson enquiry concerning an alleged reference to the Sun in Mr Mulcaire’s papers. On the second day of the hearing Mr Rhodri Davies QC, counsel for News International, explained that the document in question was subject to a strict confidentiality order made by Mr Justice Vos and should not have been made public. The confidentiality order only allows certain named individuals to see the document in question—Mr Murdoch is not one of those named. The MSC considers that the order made by Mr Justice Vos prohibits further disclosure or discussion of the document.

You have asked for details of the settlement with Mr Clifford. The MSC understands that an agreement was negotiated by Rebekah Brooks. None of the enquiries undertaken by the MSC have identified any written agreement with Mr Clifford (other than an exchange of correspondence between solicitors confined to the question of legal costs). The MSC understands that the agreement between Mrs Brooks and Mr Clifford was concluded in early February 2010 and was to the effect that the commercial relationship between Mr Clifford and the company would recommence, that Mr Clifford would help with stories and would be paid a retainer of £200,000 per annum for two years. The company also paid Mr Clifford’s legal costs which amounted to £283,500 plus VAT. The MSC understands that Mrs Brooks was authorised to conclude this agreement by virtue of her position as Chief Executive of News International. The MSC has seen no information to suggest that this agreement was discussed by the Boards of News Group Newspapers, News International or News Corporation. The MSC can confirm that legal proceedings were commenced in July 2009 against NGN and Mr Mulcaire, a defence was filed on behalf of NGN in October 2009 and the case was discontinued in early 2010. The MSC is not aware of claims made by Mr Clifford against others. Michael Silverleaf QC was retained to advise on Mr Clifford’s claims. The case was discussed with Mr Silverleaf in a conference in early January 2010, but he did not deliver any formal written opinion. Mr Silverleaf did not advise on the terms of the agreement reached between Mrs Brooks and Mr Clifford. The MSC does not know whether Mrs Brooks was shown Mr Silverleaf’s opinion on the Taylor case. The MSC understands that Mr Chapman was involved in internal discussions concerning the Clifford case.

We have sought in this letter to provide you with an account of the agreement with Mr Clifford which we trust will be sufficient for the purposes of your investigation. We have agreed to provide all of the Clifford documents to the Metropolitan Police Service and, in those circumstances, do not think it appropriate to provide you with further details or documentation. We are concerned that further publicity at this stage may prejudice the police enquiries. We have discussed this with the Metropolitan Police Service who share our concern.

Finally, you have asked about the surveillance of members of the Committee and their friends and family. The MSC is currently looking into this matter and its enquiries are not yet complete. However, the MSC can confirm that there is information that Mr Watson was under surveillance by Mr Derek Webb between 28 September 2009 and 2 October 2009. The MSC’s present understanding is that three employees were involved in commissioning this surveillance. We do not think it appropriate to name the individuals involved given the ongoing police investigations. We have discussed this with the Metropolitan Police Service who share this view. The MSC has seen no information yet to suggest that any other member of the Committee (or their family or friends) was under surveillance. 1 December 2011 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 264 Culture, Media and Sport Committee: Evidence

Letter from the Chair of the Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation I write with further questions for written answer following your appearance before the Committee on 10 November 2011. I enclose a transcript of that evidence session for ease of reference. 1. Please could you provide a copy of your calendar for the period between 24 May and 17 June 2008 (Q 1603). 2. Please investigate whether or not you can give Colin Myler access to relevant documents. If you can, please supply them to him. If you cannot, please explain why not (Q 1604). 3. Did News Group Newspapers admit liability to interception of e-mails during the settled civil cases with Taylor, Miller and/or Clifford? (Qq 1670–1671) 4. You told the Committee that you were unaware that the words “The Sun” appeared in the evidence file of Glenn Mulcaire (Q 1690). As part of the Leveson inquiry, on Monday 14 November, Robert Jay QC confirmed that the words “The Sun” do appear in Glenn Mulcaire’s notebooks. Please confirm when and how you became aware of this information. Do you have any further information on this matter that you can share with the Committee? 5. Having sought the necessary advice about confidentiality, please supply details about the settlement with Mr Clifford (Qq 1702–1713) 6. The Committee has received allegations that all Members serving on the Committee in 2009 were put under surveillance by News of the World journalists and by private investigators commissioned by the News of the World, for a period of between three and 10 days. The same allegations have been aired in the media. Please could you supply information to the Committee on behalf of News International in relation to the following points: (a) Who on the Committee was put under surveillance in 2009; (b) Who carried out the surveillance on behalf of the Company; (c) The precise dates on which the surveillance took place; (d) Who ordered the surveillance on behalf of the Company (at Q1653 you state that Mr Crone ordered the surveillance, but you also mention one “other person”); (e) Who at the Company knew about the surveillance; and (f) Whether any family or friends of Committee Members were also subject to surveillance in 2009. The Committee would be grateful to receive your response by no later than noon on Monday 28 November. 16 November 2011

Letter from the Chair of the Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation Further to my letter of 16 November 2011, the Committee has agreed that it would like to ask you for more specific detail on the settlement with Max Clifford. I would be grateful, therefore, if you could provide answers to the following questions: 1. Please confirm who authorised the settlement with Max Clifford and when. 2. Please supply the date on which the settlement was concluded. 3. Were details of the settlement, or the proposal to settle, discussed by the boards of News Group Newspapers (NGN), News International (NI) or News Corporation? If not, please explain why not. 4. What role did you play in the authorisation of the settlement and agreement of its terms? 5. Was the authorisation of the Chairman of NI (or NGN) necessary under the company’s procedures, or was authority delegated to the Chief Executive, Rebekah Brooks, at the time? If so, when was authority delegated, why and by whom? 6. Did Max Clifford serve a claim—either formally, or in draft form, with or without full particulars— against the News of the World (NotW), NGN, NI, any named employee of the group, Glenn Mulcaire or any further agent, consultant, adviser or sub-contractor of the newspaper or group? 7. Was any defence made or attempted against Max Clifford’s action or threatened action? 8. Did Mr Clifford’s claim or allegations implicate any other employee, agent, consultant, adviser, sub- contractor or person connected to NotW, NGN, NI, News Corp or any other group publications? 9. Did you know or ask who Max Clifford’s claim or allegations implicated? If so, what response did you receive? If not, why not? 10. Was a legal opinion from Counsel or any other legal source commissioned prior to the settlement with Max Clifford, as it was in the Taylor case? If so, who provided the opinion? If an opinion was not commissioned, please explain why the process differed from that employed in the Taylor case? cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 265

11. If there is a legal opinion from Counsel or any other legal source, please provide a copy or summary of that advice, as Farrer & Co has done in the Taylor case (suitably redacted, where necessary, to protect Mr Clifford’s privacy). 12. Please state whether or not you are prepared to waive legal privilege regarding the settlement with Max Clifford and, if not, please explain why not in the light of your decision to do so in relation to the Taylor case. 13. To your knowledge, was Rebekah Brooks shown—or did she ask to be shown—the legal advice received in the Taylor settlement prior to settling with Max Clifford? 14. Did the settlement with Max Clifford involve settling with any other connected parties at or around the same time, or subsequently? 15. What role, if any, did Jonathan Chapman, play in the settlement of the Clifford case? Were you briefed by him on the case, or did you ask what the in-house or external legal advice was regarding the settlement? We have also today written to Max Clifford to ask whether he would be able to assist the Committee regarding the settlement, with appropriate safeguards to protect his privacy. The Committee would be grateful to receive your response as soon as possible, but in any case by no later than noon on Thursday 1 December. 22 November 2011

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation Thank you for your letters of 16 and 22 November 2011. As most of the questions you ask raise issues which fall within the remit of the Management and Standards Committee (“MSC”), the independent body in charge of these issues, the MSC has answered those questions, and I enclose a copy of its response. I address below those questions or matters about which I have personal knowledge.

1. (16 November 2011 letter) Please could you provide a copy of your calendar for the period between 24 May and 17 June 2008 (Q 1603) I am writing to the Clerk of the Committee on this issue, and will provide information which shows a record of only one meeting (on 10 June 2008) on the subject of the Gordon Taylor proceedings, and also shows that during the period in question I was largely focused on the restructuring of News International, a range of News Corporation matters and my role as the Chairman of BSkyB. During that time, I travelled on business to India, Hong Kong and within the UK.

4. (16 November 2011 letter) You told the Committee that you were unaware that the words “The Sun” appeared in the evidence file of Glenn Mulcaire (Q 1690). As part of the Leveson inquiry, on Monday 14 November 2011, Robert Jay QC confirmed that the words “The Sun” do appear in Glenn Mulcaire’s notebooks. Please confirm when and how you became aware of this information. Do you have any further information on this matter that you can share with the Committee? I only became aware of the alleged reference to “The Sun” when it was reported in the media following the first day of the Leveson hearing. I do not have any further information on this matter, and refer you to the MSC’s response to this question.

5. (16 November 2011 letter) Having sought the necessary advice about confidentiality, please supply details about the settlement with Mr Clifford (Qq 1702–1713) I testified on 10 November to the Committee about the extent of my knowledge of, and involvement in, the agreement with Mr Clifford, and I refer you to the MSC’s response which provides further details on this issue. Mrs Brooks did mention the agreement with Mr Clifford to me but she did not seek any authorisation from me, and nor did she discuss its terms with me.

9. (22 November 2011 letter) Did you know or ask who Max Clifford’s claim or allegations implicated? If so, what response did you receive? If not, why not? I did not discuss this point with anyone.

15. (22 November 2011 letter) Were you briefed by [Jonathan Chapman] on the case, or did you ask what the in-house or external legal advice was regarding the settlement? I have no recollection of asking Mr Chapman about it or him raising it with me. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 266 Culture, Media and Sport Committee: Evidence

6(d). (16 November 2011 letter) Who ordered the surveillance on behalf of the Company (at Q 1653 you state the Mr Crone ordered the surveillance, but you also mention one “other person”)

Insofar as my comment on 10 November in relation to Mr Crone and the “other person” is concerned, and as the transcript makes clear, this comment was only in relation to the engagement of private investigators to investigate lawyers of claimants. I only became aware of this information shortly before the hearing on 10 November. In light of the on-going criminal investigations, I am advised that it is not appropriate to say anything more at this time for obvious reasons.

I hope this answers the questions you have raised. 1 December 2011

Written evidence submitted by Rebekah Brooks, former CEO, News International

Thank you for your letter of 22 November 2011, in which you have sought further detail concerning the settlement with Max Clifford and the alleged surveillance of select committee members and complainants’ lawyers.

You gave me a deadline of today by which to provide a response. The terms of this reply may disappoint you, but I am writing nevertheless to explain why I am unable to provide you with a substantive response.

As you know, I am keen to co-operate as fully as possible with the committee. You will recall that I gave evidence at some length on 19 July, despite having been arrested and questioned less than 48 hours earlier concerning the issues that you have been investigating. Necessarily, therefore, there were constraints on what I could say, but at the conclusion of my evidence I asked that when I was free from those constraints I could come back and provide evidence to address fully all the matters of concern to you.

Unfortunately, I am still bound by the same restrictions because, as you know, I am still under investigation by the police. One of the matters being investigated is the circumstances surrounding the Max Clifford settlement and I was questioned by the police on this issue in July. Perhaps you were not aware of this, and I mention it now only because your request places me in the impossible position that you are asking me to deal with issues that directly impact on the police investigation. In turn, this directly affects the fairness of the investigative process to which I am subject. The problem will be made worse if, as I anticipate, any substantive response from me is made public by you.

Indeed, this is the second occasion this week in which I have found that an investigation can impact on the criminal process. On Tuesday, at the Leveson Inquiry, I was subjected to totally unsubstantiated allegations by a witness which, I am advised, is bound to prejudice the police investigation against me. This evidence attracted widespread publicity, and my lawyers wrote yesterday to express their concern about the way in which this evidence emerged and the prejudice to my case that it has caused.

I also face more practical difficulties. I have no access to any of my records. In the light of your request, I asked both News International and the police for access. I heard from the police today that they have refused permission for News International’s lawyers to release any material to me or my lawyers. I therefore do not have any material on which to draw to refresh my memory and to check the accuracy of what I might say on both the issues that you have raised.

In these circumstances, I hope you will understand that I am most reluctant to attempt a response which inevitably would be incomplete, potentially inaccurate, and which, I am also advised, would almost certainly be prejudicial to the criminal investigation.

In saying this, I am also aware that there are others who are free from these constraints. It is not for me of course to suggest what alternative course you might consider, but I do respectfully point out that News International is much better placed to answer your questions since individuals there are freely able to answer them and have the material available to them to do so accurately.

I should be most grateful therefore if you would reconsider the request that you have made of me. You must understand that, despite my abiding wish to defend my name and my reputation, other considerations must, for the time being, take priority. 1 December 2011 cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 267

Letter from the Chair of the Culture, Media and Sport Committee to Rebekah Brooks, former CEO, News International

I write following James Murdoch’s appearance before the Committee on 10 November 2011 (transcript enclosed). At that session, James Murdoch was asked questions about the terms of the settlement made to Max Clifford by News International and about the alleged surveillance of select committee members conducted by or on behalf of the News of the World.

The Committee has agreed that it would like to seek further detail on both these matters. In evidence, James Murdoch stated that the settlement with Max Clifford was authorised by you as Chief Executive of News International. I would be grateful, therefore, if you could provide answers to the following questions: 1. Please confirm who authorised the settlement with Max Clifford and when. 2. Please supply the date on which the settlement was concluded. 3. Were details of the settlement, or the proposal to settle, discussed by the boards of News Group Newspapers (NGN), News International (NI) or News Corporation? If not, please explain why not. 4. What role did you play in the authorisation of the settlement and agreement of its terms? 5. Was the authorisation of the Chairman of NI (or NGN) necessary under the company’s procedures, or was authority delegated to you at the time? If so, when was authority delegated, why and by whom? 6. Did Max Clifford serve a claim—either formally, or in draft form, with or without full particulars— against the News of the World (NotW), NGN, NI, any named employee of the group, Glenn Mulcaire or any further agent, consultant, adviser or sub-contractor of the newspaper or group? 7. Was any defence made or attempted against Max Clifford’s action or threatened action? 8. Did Mr Clifford’s claim or allegations implicate any other employee, agent, consultant, adviser, sub- contractor or person other than connected to NotW, NGN, NI, News Corp or any other group publications? 9. Was a legal opinion from Counsel or any other legal source commissioned prior to the settlement with Max Clifford, as it was in the Taylor case? If so, who provided the opinion? If an opinion was not commissioned, please explain why the process differed from that employed in the Taylor case? 10. If there is a legal opinion from Counsel or any other legal source, please summarise that advice. 11. Were you aware of the legal advice received in relation to the Taylor case, either from external Counsel or solicitors or from Tom Crone, prior or subsequent to settling with Max Clifford? If so, who made you aware of that advice? 12. Did you ask for any of the legal advice received in connection with the Taylor case prior to settling with Max Clifford? If not, why not? 13. Did the settlement with Max Clifford involve settling with any other connected parties at or around the same time, or subsequently? 14. What role, if any, did Tom Crone, Colin Myler, Jonathan Chapman or James Murdoch play in the settlement of the Clifford case?

The Committee has written on similar terms to James Murdoch. It has also written to Max Clifford to ask whether he would be able to assist the Committee regarding his settlement with News International, with appropriate safeguards to protect his privacy.

The Committee takes very seriously allegations of covert surveillance of complainants’ lawyers and members of the Committee. I would be grateful, therefore, if you could also provide answers to the following questions on that matter:

15. Please supply any information that you have on the surveillance allegedly carried out on members of the Committee in 2009, or at any other time, by or on behalf of the NotW, NGN or NI.

16. Please supply any information that you have on the surveillance carried out on claimants’ lawyers, including Mark Lewis and Charlotte Harris and members of their families, by or on behalf of NotW, NGN or NI.

17.` Please declare any involvement you had in commissioning or approving any such surveillance; details of who else was aware of such surveillance; and details of who commissioned or approved it.

The Committee would be grateful to receive your response as soon as possible, but in any case by no later than noon on Thursday 1 December. 22 November 2011 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 268 Culture, Media and Sport Committee: Evidence

Written evidence submitted by Tom Crone Thank you for your letters of November 16 and November 21. As you know from my letter of 5 November, I have had no access to files or contemporaneous records of any kind relating to the issues raised in your letters since early July and even before July may not have looked at the relevant records for months or even years. Where I can give answers below, they are my best recollection which, judging by recent experience, may be fallible. In relation to your letter of November 16: 1. (a) In fact, I always thought my “sign-off” authority in requisitioning cheques, for whatever purpose, was £5,000. Any payment made by the legal department above that figure needed a counter-signature from my line manager at senior management level of News International. Counter-signatures required a “requisition” memo to my line manager setting out brief details of the case and the justification for the settlement. I cannot recall ever having such a requisition memo refused. In practice, I have been settling cases at above £10,000 with great regularity since joining the company in January 1985. Throughout that period the editor of the relevant title would know about the litigation his/her title faced and would be briefed by me or one of my legal department colleagues about the progress of cases and the need, if and when it occurred, to negotiate settlements. Senior management would also know of the caseload from regular case lists I sent them which included current financial provisions allocated to each case and from regular meetings with my line manager in which I would highlight and explain the more important pieces of litigation and answer any questions. Before agreeing settlements with Claimant lawyers I would specifically brief the relevant editor and obtain his/her agreement to the proposed settlement terms. Occasionally, where the damages were high, editors have sought approval from the chief executive either by telephone or through a meeting. 1. (b) I have very little specific recollection of exactly when the offers of £50,000 and £150,000 were made but they seem to have been in the aftermath of the “for Neville” email being disclosed to us by Mr Taylor’s solicitors. These figures would have been put forward after discussions between Julian Pike of Farrer & Co and myself (and probably discussions between Mr Pike and counsel). Given Mr Taylor’s earlier demand for £250,000, made when his case was not supported by direct evidence, both Mr Pike and I had little doubt that the offers would be rejected, but agreed that it was important to make them in order to draw out Mr Taylor’s current damages demand and to then move towards ascertaining his “bottom-line” figure. On 3 July 2008, leading counsel’s written opinion was received suggesting that our existing Part 36 offer of £150,000 “probably should” be increased to the £250,000 Mr Taylor originally demanded. Mr Pike and I had further discussions in which we agreed that to achieve a settlement we needed to pitch our next Part 36 offer at a figure which would lead Mr Taylor’s lawyers to advise him that he would be incurring a substantial costs risk if he chose to fight on. We decided that the appropriate figure was £350,000. The proposed Part 36 offer of £350,000 was discussed with Mr Myler and he agreed, in the light of counsel’s opinion and the reasoning set out in the paragraph above, that it should be made. I cannot recall whether, after our discussion, he told me that he had then discussed the new offer with Mr Murdoch but the two of them had obviously discussed the case on 27 May and when we all met on 10 June, Mr Murdoch did not express any surprise when it was explained our current offer was £350,000. 1. (c) Please see (b) above. 2. I did not “commission private investigators to carry out surveillance”. (a) In civil litigation there are very strict rules of court and professional standards covering the permissible uses which can be made of documents or confidential information which come into the hands of litigants and their lawyers through the Disclosure process. This regime can become even tighter if confidentiality undertakings form part of the terms under which cases are settled. As I understand them, broadly the rules are that such documents and information cannot be publicised except through the proper course of the specific litigation in which they are disclosed and they cannot be deployed in other litigation except through a fresh Disclosure process in that case or with the authority of the owner of the document/information or because they have legitimately entered the public domain. In July 2009 the Gordon Taylor settlement was widely publicised as a direct result of confidential documents and information being improperly leaked to The Guardian. There were very few possible sources for this leak. Mr Pike and I eventually agreed the obvious source was Mark Lewis. There were a number of reasons for this. Access to the documents and information was almost non-existent at the News Group end and disclosure was very damaging to the company. It was also entirely contrary to the interests of Mr Taylor himself—and we understood that he was furious over the leak. We learned that at around the time of the leak Mr Lewis had fallen out with his partners at George Davies and Co. We were also told that he seemed to be experiencing problems in his domestic life. Because of the wide range of cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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documents and information in The Guardian’s hands it seemed to us that Mr Lewis was the only possible source. Mr Pike and I discussed the possibility of making a complaint of professional misconduct against Mr Lewis but decided not to do so in the absence of direct admissible evidence. In the following months various phone-hacking cases were brought against News Group. Mr Lewis acted for some of the litigants, Ms Charlotte Harris acted for others and a small group of other solicitors’ firms were also involved. Without reference to the paperwork I cannot remember the specific details, but Mr Pike referred me to various instances where it looked like information disclosed to Mr Lewis in one of his cases (including the Taylor case) was being deployed by Ms Harris in one of her cases and possibly vice versa. Mr Pike’s view, which I shared, was that this information-sharing was occurring in breach of professional conduct rules and/or rules of court. Mr Lewis and Ms Harris had previously worked together at George Davies. We had also heard from two separate sources that Mr Lewis and Ms Harris had had or were having a romantic relationship. It seemed that any sort of evidence that they had such a relationship or evidence of transient or longer term co-habitation could be relevant circumstantially to a complaint of professional misconduct. I raised the matter with the head of the News of the World’s news desk with a view to seeing whether it was practicable or possible for him to assign one of his journalists to ascertaining the nature of the relationship. He said he could get Derek Webb to have a look at Mr Lewis and Ms Harris in this context and I agreed with that course. There was never any suggestion that Mr Webb might also look at the families of either person. My understanding was that Mr Webb had worked for the News of the World regularly as an accredited freelance journalist and not as a “private investigator”. To the best of my recollection I heard nothing back from the news desk executive for about three weeks and this was because Mr Webb had been busy for a while on other matters. He then produced a number of photographs which had apparently come back from Mr Webb. There were no pictures of either Mr Lewis or of Ms Harris. There were a number of pictures of a woman shopping at a garden centre. Since the woman was clearly not Ms Harris I pointed out to the news desk executive that there seemed to be have been a case of mistaken identity. Either then or very shortly afterwards, the executive asked if I thought he should send Mr Webb back for another try and I told him not to bother doing so. Apart from the above I played no part in, nor was I aware of any surveillance of lawyers, Committee members, claimants or anyone else connected to the phone-hacking cases or inquiries. I do not accept that I gave incorrect answers to Mr Watson in this area. There is a very clear difference between asking the newspaper’s news desk for help in gathering facts and commissioning private detectives. In Q1029 to Q1033 I made the distinction between a private investigator and freelance journalists and told the Committee that I had seen something about the private lives of two of the lawyers. The use of private detectives by our journalists (including news desk executives) was banned in early 2007. For what it is worth, I also do not accept that what I saw could properly be called a “dossier”. (b) Please see a) above. I have no knowledge of that apart from what I have seen in media reports— which is very little. 3. I have nothing to change or add to what I have told the Committee on this subject. In relation to your letter of November 22: 1. I am fairly certain that I provided Mr Myler with a copy of Mr Silverleaf’s opinion as soon as it reached me which I think was the afternoon of Tuesday 3 June, 2008. Since getting the written opinion was virtually the last thing we discussed before I left for a week’s holiday on Saturday, 24 May and the first thing he asked me about on the morning of my return to the office on Tuesday 3 June, I was keenly aware that he wished to see it. I note from the documents supplied to the Committee that I also pointed out Mr Myler’s keenness on getting counsel’s opinion in my last email to Mr Pike before going on holiday and that “wait for silk’s view” was part of what Mr Myler told Mr Pike on 27 May about his meeting/conversation with Mr Murdoch earlier that day. 2. I cannot remember whether I handed a copy of counsel’s opinion to Mr Murdoch when Mr Myler and I met him on June 10 or whether we simply briefed him on its contents. I suspect the latter, given the length of our meeting. I certainly went to the meeting with a spare copy of the written opinion for Mr Murdoch and would have offered it to him. If he was not given the copy it was because he asked to be briefed rather than reading it himself. 3. Unless NGN and Mr Clifford have agreed to waive legal professional privilege I am unable to answer most of the questions set out in points 3 to 15 of your letter. All I can say is that, to the best of my recollection, Mr Clifford did serve a Claim Form and Particulars and that I cannot remember whether NGN served a Defence. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 270 Culture, Media and Sport Committee: Evidence

1 December 2011

Letter from the Chair of the Culture, Media and Sport Committee to Tom Crone On 10 November 2011 James Murdoch gave evidence to the Committee in relation to its work on phone- hacking. His evidence gave rise to further questions that the Committee would like you to answer in writing. 1. Mr Murdoch said that, at the time of the Gordon Taylor settlement, you were only authorised to settle cases up to £10,000 [Q1582]. He then said: “it appears that Mr Crone took it upon himself to authorise a settlement of £50,000, and then £150,000. I certainly did not authorise that, nor the increase to £350,000 that came later” [Q1583]. Mr Murdoch then stated that “presumably, he [you], Mr Myler and Mr Pike had discussed those things, but they did not come to me until 10 June” [Q 1584]. (a) Is Mr Murdoch correct in his assertion that you only had the authority to sign-off settlement payments up to £10,000? (b) Whose decision was it to increase the settlement offer up to £50,000, £150,000 and £350,000? (c) On whose authority were offers of £50,000, £150,000 and £350,000 made? 2. When you gave evidence to the Committee on 6 September 2011 you said that you had never commissioned private investigators to carry out surveillance [Q883]. On 10 November 2011 James Murdoch said “Mr Crone and another News of the World employee at the time did engage certain private investigators [...] to surveil plaintiff’s lawyers” [Q1652]. There have subsequently been reports that all Members serving on the Committee in 2009 were put under surveillance by News of the World journalists and by private investigators commissioned by the News of the World. (a) In the context of the evidence that you gave to the Committee on 6 September 2011, how would you explain Mr Murdoch’s statement of 10 November 2011? (b) Please state all knowledge that you have of the surveillance of members of the Committee by News of the World journalists and private investigators commissioned by the News of the World. 3. James Murdoch said that he thought your evidence and that of Colin Myler evidence to the Committee was misleading and he refuted it [Q1508]. Would you like to change anything or add anything to the evidence that you have already given to the Committee? The transcript of the evidence session on 10 November is enclosed for your convenience. It is also on the Committee’s website along with transcripts of all previous evidence sessions and all of the written evidence that we have received. The Committee has written in similar terms to Colin Myler. I would be grateful if you could send your response to the Clerk of the Committee at the above address by no later than noon on Monday 28 November. 16 November 2011

Letter from the Chair of the Culture, Media and Sport Committee to Tom Crone

Further to my letter of 16 November 2011, the Committee has agreed that it would like to ask you further questions on phone-hacking, specifically in relation to the advice provided by Michael Silverleaf QC and on the settlement with Max Clifford. In answer to Q1525 of the transcript (enclosed with my letter of 16 November), James Murdoch stated that “I did not receive Mr Silverleaf’s opinion. Mr Crone and Mr Pike had received Mr Silverleaf’s opinion and I don’t know what they discussed about it with Mr Myler”. I would be grateful, therefore, if you could respond to the following questions: 1. Did you, or anyone at Farrer & Co provide a copy of Michael Silverleaf QC’s opinion to Colin Myler, or make him aware of its content? 2. Was James Murdoch given a copy of Michael Silverleaf QC’s opinion, or was he made aware of its content? If so, by whom? In relation to the settlement made by News International with Max Clifford (see Qq 1702–1714 of the transcript), I would be grateful if you could answer the following questions: 3. Please confirm who authorised the settlement with Max Clifford and when. 4. Please supply the date on which the settlement was concluded. 5. Were details of the settlement, or the proposal to settle, discussed by the boards of News Group Newspapers (NGN), News International (NI) or News Corporation? If not, please explain why not. 6. What role did you play in the authorisation of the settlement and agreement of its terms? cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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7. Was the authorisation of the Chairman of NI (or NGN) necessary under the company’s procedures, or was authority delegated to the Chief Executive, Rebekah Brooks, at the time? 8. Did Max Clifford serve a claim—either formally, or in draft form, with or without full particulars— against the News of the World (NotW), NGN, NI, any named employee of the group? 9. Was any defence made or attempted against Max Clifford’s action or threatened action? 10. Did Mr Clifford’s claim or allegations implicate any other employee, agent, consultant, adviser, sub- contractor or person connected to NotW, NGN, NI, News Corp or any other group publications? 11. Was a legal opinion from Counsel or any other legal source commissioned prior to the settlement with Max Clifford, as it was in the Taylor case? If so, who provided the opinion? If an opinion was not commissioned, please explain why the process differed from that employed in the Taylor case? 12. What role, if any, did Jonathan Chapman play in the settlement of the Clifford case? 13. To your knowledge, was Rebekah Brooks shown—or did she ask to be shown—the legal advice received in the Taylor settlement prior to settling with Max Clifford? 14. Did the settlement with Max Clifford involve settling with any other connected parties at or around the same time, or subsequently? 15. To what extent was James Murdoch aware of the claims made by Max Clifford and of the details of the settlement with him? The Committee has written on similar terms to James Murdoch and Colin Myler. It has also written to Max Clifford to ask whether he would be able to assist the Committee regarding his settlement with News International, with appropriate safeguards to protect his privacy. The Committee would be grateful to receive your response as soon as possible, but in any case by no later than noon on Thursday 1 December. 22 November 2011

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee We write on behalf of the Management and Standards Committee (“MSC”). The purpose of this letter is to supplement our letter of 1 December 2011. In that letter we said that the MSC was not aware of any documents which were likely to be relevant to Mr Myler’s request which threw any further light on the events of May and June 2008. However, as part of a substantial and continuing investigation, in which this firm has reviewed and continues to review many hundreds of thousands of documents, we recently became aware of an email exchange between Mr Myler and Mr James Murdoch dated 7 June 2008 (a copy of which is enclosed) which is relevant to that question. The email was provided to Mr James Murdoch on 7 December 2011. Redactions have been made in the light of the on going police investigation and to protect the privacy of Mr Taylor and third parties. We can confirm that, although our investigation is not complete and our inquiries continue, we have to date found no further material which might be relevant to the exchanges between Mr Myler and Mr Murdoch in May and June 2008. 12 December 2011 Strictly Private & Confidential

Myler, Colin From: JRM Sent: 7 June 2008 14:34 To: Colin Myler Subject: Re: Strictly Private & Confidential and subject to legal professional privilege No worries. I am in during the afternoon. If you want to talk before I’ll be home tonight after seven and most of the day tomorrow. From: Colin Myler To: JRM Sent: Sat 7 Jun 2008 14:31:41 Subject: FW: Strictly Private & Confidential and subject to legal professional privilege James Update on the Gordon Taylor (Professional Football Association) case. Unfortunately it is as bad as we feared. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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The note from Julian Pike of Farrer’s is extremely telling regarding Taylor’s vindictiveness. It would be helpful if Tom Crone and I could have five minutes with you on Tuesday. Colin From: Tom Crone Sent: 7 June 2008 12:30 To: Colin Myler Subject: FW: Strictly Private & Confidential and subject to legal professional privilege. Colin, Mark Lewis, Taylor’s lawyer, came back late yesterday with his client’s position (see … it confirms our expectations of Mr Taylor … I told Julian to get us, if possible, a few more days for service of the Amended Defence which is currently due to be served on Monday at the latest. It would help to get Mulcaire (the Second Defendant) to look at our draft Amended Defence before it’s served just in case. His own position will be that he’ll simply submit to judgement without putting in any pleading. My guess is that our Defence will have to go in ie we won’t settle this first … Broadly our Defence will accept that we knew of and made use of the voicemail information Mulcaire acquiresd between Feb and July 2005. In relation to the later period, ie July 2005 until May 2006 we plead that “… it is not within the First Defendant’s knowledge as to whether any of its employees was on notice of or acted in concert with …” Mulcaire. In relation to Taylor’s pleased allegation re the tape of Mulcaire instructing someone on how to get into Taylor’s voicemail, I have now listened to that tape … he is talking to someone he addresses as “Rial” (however it might be spelt). He definitely says “Rial” and not Ryan … the voice is also definitely not [REDACTED]. We have never, to my knowledge had any reporter called Rial … and the voice was not anyone I or Ian Edmondson (I asked him to listen) recognise. This can only be helpful. In terms of doing a deal with Taylor, I think the best course is to counter-offer at the figure we discussed earlier this week plus costs that would amount to £700K. BUT there is a further nightmare scenario in this, which is that several of those voicemails on the Ross Hindley email were taken from the Joanne Armstrong’s [REDACTED] phone. She was at the time, and still is, the in- house lawyer at the PFA. [REDACTED]. We can also assume she will have seen this evidence and is waiting to see how Taylor’s case concludes before intimating her own claim. Such a claim is not time-barred until six years after the “event”. As you know, we have put in a Part 36 offer at £350K, which should give us good protection in terms of what a judge might eventually award … if we can’t settle with T we can sit on this offer in the reasonable expectation that costs from here on will have to be paid by him (ie the PFA). It’s not what we want but it’s the only weapon we have. Tom From: Julian Pike Sent: 6 June 2008 17:18 To: Tom Crone Subject: Strictly Private & Confidential Tom Just confirm my without prejudice conversation with Mark Lewis, Taylor’s lawyer: — Taylor’s attitude is that he wishes to be “vindicated or made rich”. — He wishes to see NGN suffer: one way or another he wants his to hurt NGN. — He wants to demonstrate that what happened to him is/was rife throughout the organisation. He wants to correct the paper telling Parliamentary enquiries that this was not happening when it was [NGN’s line having been there was a rogue trader in CG]. While Lewis had not taken instructions on exactly how much Taylor now wanted following the Part 36 350k offer of Tuesday, he said Taylor had previous made clear that what he wanted if he were to keep the matter confidential was seven-figures plus indemnity costs. Lewis said that his costs were about 200k. If NGN agreed to pay £1.2 million he was sure the case would settle and Taylor would agree to confidentiality. I said that it was all very well wanting to make NGN suffer—that motivation was plain—but we failed to see what benefit Taylor gained from proceeding to trial, being awarded 50k and then having to pay NGN’s costs. Lewis said that he had advised Taylor that he was now at risk on costs. However, Taylor said he wanted to carry on because of the issue of NGN conduct. He would rather have to pay some of NGN’s costs and have NGN publicity hung out to dry than settle for a sum, in his view, which was too low. The defence is due on Monday and we are moving forward with it. I suggested it might be helpful if we did not have to serve the defence on Monday although we were prepared to do so. He said he would take instructions. I cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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suspect it might be helpful if I could go back and say you’re taking instructions on the counter offer, so could we have until the end of next week. It will give me more time to get Mulcaire to come in to look at the draft defence to avoid (as much as possible) hostages to fortune. It will be a without prejudice meeting rather than an open meeting.

Julian

Julian Pike Partner Farrer & Co

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

I refer to the letter written on behalf of the Management and Standards Committee (“MSC”) of today’s date, and the email chain dated 7 June 2008 that accompanies it. I only became aware of the email on Wednesday, 7 December 2011 when it was passed to me by the MSC. Hence, it was not available to me prior to my testimony before your Committee and I could not have disclosed it earlier.

It now appears that Mr Myler sent an email to me on Saturday afternoon, 7 June 2008, in order to request a short meeting the following Tuesday (10 June 2008) for an “update on the Gordon Taylor (Professional Football Association) case”. Given the timing of my response, just over two minutes after Mr Myler had sent his email to me, and the fact that I typically received emails on my BlackBerry on weekends, I am confident that I did not review the full email chain at the time or afterwards, nor do I recall a conversation with Mr Myler over that weekend. Instead, having agreed to meet the following Tuesday, I would have relied on the oral briefing on 10 June 2008 that I have previously described in my testimony before the Committee.

I would also like to take this opportunity to reaffirm my past testimony that I was not aware of evidence that either pointed to widespread wrongdoing or indicated that further investigation was necessary.

I apologise this has only now come to light and that it is being brought to the Committee at this late stage of your enquiry. Please write to me if the Committee has further questions arising from the disclosure of this email chain and I will endeavour to answer them as quickly as possible. 12 December 2011

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee

Further to our letter of 12 December 2011, we enclose two further emails which came to our attention on Friday 16 December 2011 following further inquiries in light of the discovery of the e-mail of 7 June 2008. Redactions have been made to protect the privacy of third parties.

The MSC’s review of data held by News International is an on-going piece of work. This investigation is wide ranging and goes back to the early part of the last decade. It involves the identification and review of extensive electronic data bases (holding many millions of e-mails) and thousands of boxes and crates of hard copy documents. There have been issues concerning the changes in systems and procedures over the years as well as the absence of consistent journaling and archiving processes. Hardware has also been changed and technological corruptions of the data base have resulted in some data being lost on some parts of the systems. PricewaterhouseCoopers (“PwC”) and Stroz Friedberg LLC (“Stroz”) have been assisting the MSC with electronic extraction of data and searching of the extracted data as well as forensic analaysis. We, PwC and Stroz have worked hard to identify and restore this lost data. This has not been a simple matter of interrogating a comprehensive single database and producing the responsive e-mails. It has been a much more complex and challenging exercise. The process is still continuing and the MSC has not made any public comment on when the review of evidence will be complete.

The Select Committee should also note that the MSC wished to conduct its own data review exercise. Mr James Murdoch has acted throughout in accordance with the wishes of the MSC in this regard and neither he nor his legal advisers commissioned a search of the data, but were instead provided by the MSC with the relevant material. The MSC has designed, planned and managed the data review process and is responsible for it. Mr James Murdoch has cooperated fully with the MSC and has readily given or authorised access to everything we have asked for. 20 December 2011 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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From: JRM Sent: 27 May 2008 09.34 To: [Secretary] Subject: Re: MESSAGE OK From: [Secretary] To: JRM Sent: Tue 27 May 2008 09:25:21 Subject: MESSAGE Colin Myler would like 10 minutes with you today. From: Colin Myler Sent: 18 June 2008 17:14 To: JRM; Subject: FW: Fyi From: Tom Crone Sent: 18 June 2008 17:08 To: Colin Myler Subject: Colin … here’s Julian’s msg back from Taylor lawyer … the conversation was yest’y evening.

Tom Mark Lewis called me back. I said to him the Editor was interested in meeting Taylor on a one-to-one basis, confidentially and without prejudice and was willing to travel if needed. ML said his client was likely to be very voluble and have plenty to say. I said the Editor would be able to look after himself and said it may be cathartic for GT as much as anything else. ML said he’d get back to me. I dropped in the fact that the amended defence made it clear that not all of their inferences stood up. ML said the amended defence had made GT angry: difficult to justify that really, unless he expected “trousers down”. Julian

Written evidence submitted by Surrey Police Thank you for your letter dated 20 December 2011. Further to my previous correspondence, please accept this letter as Surrey Police’s substantive response. The redactions to the text below have been made at the request of the MPS.

Question 1 In answer to your Question 1, I have set out below an overview based on that which Surrey Police submitted to the Leveson Inquiry on 17 January 2012. Although this response ranges more broadly than may be strictly necessary to answer Question 1, in my view I can best assist the Committee by placing the relevant events into some context and presenting them chronologically. This response has been disclosed to the MPS who have made redactions (which appear as blacked out text) to avoid any prejudice to Operation Weeting’s investigations. Redactions that appear as [REDACTION] have been made by Surrey Police to protect the details of third parties. The following four points should be noted: (i) The chronology below is based on Surrey Police documents from 2002 which have been submitted by Surrey Police to the Leveson Inquiry. (ii) This is a summary of Surrey Police’s present understanding. It must be emphasised that Surrey Police’s internal investigation into its response to information that Milly Dowler’s mobile phone voicemail had been accessed by the News of the World in 2002 is not yet complete. (iii) This document does not purport to contain an entire account of Surrey Police’s actions during the investigation into Milly Dowler’s disappearance, kidnap and murder, nor of Surrey Police’s contact with the media or sections of the media during the currency of that investigation. (iv) An analysis of Surrey Police’s response to the information it received from the News of the World in April 2002 is not rehearsed here. It will be addressed in a statement from a senior Surrey Police officer to the Leveson Inquiry, where Surrey Police will be publically accountable. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Background 1. As relevant background, it is important to note that in any police missing person investigation the use of the media is an essential tool to generate hopefully helpful publicity about the missing person. The aim is “jog memories” that may result in fruitful investigative leads. In many cases, considerable effort is required on the part of the police to interest the media in a missing person story, though this was not Surrey Police’s experience in relation to the disappearance of Milly Dowler. The media’s interest was significant almost from the outset. 2. The constant demand for information about the police investigation by the media meant that police officers and police press officers had to maintain frequent contact with journalists and their editors to ensure the message that the media was projecting to the public was accurate, thereby maximising the potential for assistance from the public. 3. On 21 March 2002 at 1912 hours Milly Dowler was reported missing to Surrey Police by her parents. Surrey Police immediately commenced an investigation into her disappearance, “Operation Ruby”. For the reasons stated above, there was regular contact between Surrey Police and the media, including the News of the World [“NOTW”]. However, it was not until 13 April 2002 that there was any mention by the NOTW (or any other media organisation) of Milly Dowler’s voicemail or its contents. 4. The following chronology is based on other contemporaneous police records and a log of contact with the media kept by the Surrey Police press officer.

26 March 2002 5. On 26 March 2002 Surrey Police performed a download of the voicemail messages on Milly’s mobile phone pursuant to a Production Order obtained from Guildford Crown Court under the Police and Criminal Evidence Act 1984. Only one message was downloaded (Surrey Police, the MPS and Milly Dowler’s mobile phone provider have submitted a note to the Leveson Inquiry dealing with this in detail [“The Joint Note”]).

1157 on 13 April 2002 6. At 1157 on 13 April 2002 West Mercia Police contacted Surrey Police to advise them that a recruitment agency in [REDACTED] had received two telephone calls on 12 April 2002 from a woman claiming to be Amanda Dowler’s mother asking whether Milly was working for them. The member of staff at the recruitment agency had given no information to the caller. Members of staff had arrived at work on 13 April 2002 “to find hordes of reporters from the News of the World waiting for their arrival as they had been given the same info”. West Mercia Police said that they would provide further details to Surrey Police.

1210 on 13 April 2002 7. At 1210 on 13 April 2002 [REDACTED], the co-owner of [REDACTED] recruitment agency contacted Surrey Police by telephone, stating “We have had a News of the World reporter, [REDACTED], harassing us today. He says that our agency has recruited Milly as an employee, demanding to know what we know and saying he is working in full cooperation with the police. Why in (sic) he here”. [It should be noted that the NOTW reporter’s assertion that he was working with the police was untrue].

1215 on 13 April 2002 8. At 1215 on 13 April 2002 the Major Incident Room at Surrey Police informed the Surrey Police press officer that [REDACTED] of the NOTW was hassling [REDACTED] recruitment agency. The press officer spoke to [REDACTED] at the NOTW), who stated that he was not aware of any developments on Surrey Police’s investigation in the area of the UK where the recruitment agency was located.

1511 on 13 April 2002 9. At 1511 on 13 April 2002 [REDACTED] at the NOTW) called the Surrey police Major Incident Room and asked to be put in touch with a senior police officer. [REDACTED] said that he had what could be significant information and left his contact details. [REDACTED] declined to speak to a press officer.

1640 on 13 April 2002 10. At 1640 on 13 April 2002 [REDACTED] called the Surrey Police press officer stating that [REDACTED] wanted to speak to a senior police officer working on the Milly Dowler case. 11. This information was passed on to a police officer who tried to call [REDACTED] but was unable to reach him as his phone was constantly engaged.

1720 on 13 April 2002 12. At 1720 on 13 April 2002 the police officer was able to reach [REDACTED]. [REDACTED] said that he had information which may assist the inquiry into the disappearance of Milly Dowler. [REDACTED] said that an apparent approach for work had been made to a recruitment agency [NAME AND LOCATION cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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REDACTED] by a woman purporting to be Milly Dowler on 27 March 2002. A woman named [REDACTED] from the recruitment agency had telephoned the mobile phone number of Milly Dowler [and left a voicemail message] with an offer of work for a company named [REDACTED] and invited Milly Dowler for an interview. 13. [REDACTED] said that the NOTW was in possession of a recording of the voicemail message. 14. The police officer asked [REDACTED] for the number of the mobile phone upon which the messages were recorded, which [REDACTED] gave as [REDACTED]. The police officer did not confirm that the number was Milly Dowler’s [which it was] but asked [REDACTED] to verify why he believed that it was Milly’s mobile phone number. 15. [REDACTED] said that the NOTW had confirmed with Milly’s school friends that this was her mobile phone number. 16. The police officer consulted the press officer and then told [REDACTED] that the investigation into Milly Dowler’s disappearance had been dogged by a professional hoaxer purporting to be Milly who was very capable of carrying out this type of deception. [REDACTED] said that he would check the information and call back. 17. Surrey Police took immediate steps to contact the recruitment agency to confirm the information given by the NOTW, but those attempts were unsuccessful. 18. [It should be noted that on 13 April 2002 Surrey Police suspected that the message left on Milly’s voicemail from the recruitment agency had been left as the result of a hoaxer signing on at the agency in Milly’s name. A known hoaxer had been impersonating Milly Dowler at that time (for instance on 26 March 2002; 28 March 2002; and 13 April 2002: See also. That hoaxer was arrested on 23 April 2002; charged; and, on 1 April 2003, imprisoned for five months].

Later on 13 April 2002 19. Later on 13 April 2002 the same police officer received a call from [REDACTED] of the NOTW.He said that the NOTW was confident of its sources and was intending to print the information it had relayed to Surrey Police as a news story. 20. [REDACTED] 21. [REDACTED] recounted that at 1013 on 27 March 2002 the following message was recorded on Milly Dowler’s voicemail: “Hello Mandy. This is [REDACTED] from [REDACTED] Recruitment Agency. We are ringing because we are starting interviewing today at [REDACTED]. Call back on [REDACTED] Thanks, bye bye”. 22. [REDACTED] disclosed that an undercover reporter purporting to be a friend of Milly Dowler had spoken to [REDACTED] of the recruitment agency. [REDACTED] said that the recruitment agency had confirmed that “Amanda Dowler” was registered with the agency, but the agency declined to confirm whether she had received any offer of employment [Note that there is no evidence that the recruitment agency had confirmed that “Amanda Dowler” was on the agency’s books, the contrary is the case]. 23. [REDACTED] said that he had subsequently spoken to [REDACTED] at the recruitment agency who said that they had not received any enquiry from Surrey Police. [REDACTED] asked the police officer to confirm that Surrey Police would investigate the new line of enquiry identified by the NOTW which he said had met “the reasonable burden of proof” (sic) to publish the story. 24. [REDACTED] said that there were other voicemail messages from (i) a tearful relative; (ii) a young boy; and (iii) someone saying “It’s America, take it or leave it”. 25. The police officer re-iterated to [REDACTED] his view that the NOTW was being subjected to a hoax. He agreed to provide the NOTW with an official response from Surrey Police within the hour.

Later on 13 April 2002 26. Later on 13 April 2002 the press officer spoke to [REDACTED] and asked him why he was so convinced that the message on Milly’s voicemail was not the work of a hoaxer. [REDACTED] response was that the NOTW had got Milly’s mobile phone number and PIN from school children. 27. [REDACTED] said that the NOTW was in possession of taped messages from Milly’s mobile phone. [REDACTED] stated that a message left on 27 March 2002 at 1013 am stated “Hello Mandy. This is [REDACTED] from (REDACTED] Recruitment Agency. We are ringing because we have interviews starting today at [REDACTED] Call back on [REDACTED]. Thanks, bye bye”. 28. [REDACTED] stated that he had spoken to the member of staff from the recruitment agency on 12 April 2002 who had confirmed that “Mandy D” had registered with the agency but could not confirm whether Mandy D had got a job because that would contravene data protection. [REDACTED] said that the NOTW had five reporters working on this story. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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1930 on 13 April 2002 29. At 1930 on 13 April 2002 the Surrey Police press officer spoke again to [REDACTED] who said that the NOTW had two versions of the story [for the 14 April 2002 edition of the NOTW ready to go. One story was that the police were treating the recruitment agency voicemail message on Milly’s phone as a hoax, the other that the police were treating it as a new line of enquiry. The press officer said that she would need to get back to [REDACTED] with Surrey Police’s response.

2010 on 13 April 2002 30. At 20.10 on 13 April 2002, [REDACTED] called the Surrey Police press officer again and said that the NOTW was going to run a story ascribing the following line to Surrey Police “we are intrigued, but believe the message may have been left by a deranged woman hoaxer thought to have hampered other police inquiries”. 31. The press officer stated that this wording was too strong to use and asked for a couple of minutes to get back to [REDACTED] with an alternative. [REDACTED] responded that it was too late as the first edition had already gone to print. The press officer told [REDACTED] that she would get back to him immediately with Surrey Police’s official line.

Later on 13 April 2002 32. After agreeing it with a police officer, the press officer called [REDACTED] back and gave him Surrey Police’s official line: “We are evaluating the claim that Amanda may have registered with a recruitment agency. At this stage there is the possibility that a hoaxer may be involved in generating this story”. 33. [REDACTED] stated that this line would be used in all five editions of the NOTW on 14 April 2002 save for the first edition (circulated in the north of the UK) which would carry the line that he had informed the press officer of at 2010. 34. The press officer advised [REDACTED] and [REDACTED] that in future the NOTW should speak to a Surrey Police press officer and not a police officer. In the initial contact on 13 April 2002 with the Surrey Police, [REDACTED] had been insistent on speaking to a senior police officer. The press officer said that where the Surrey Police press office could, it would offer off-the-record guidance.

14 April 2002 35. On 14 April 2002, a Surrey Police officer faxed West Mercia Police and asked them to call on the recruitment agency and show them a picture of Milly to establish the true identity of the girl giving the details of Milly Dowler. The officer also made attempts to contact a member of staff at the recruitment agency but was only able to reach an answerphone. 36. Surrey Police’s on-going internal investigation has discovered no evidence to suggest that Surrey Police made any contact with the NOTW on 14 April 2002 in relation to the contents of 14 April 2002 edition of the NOTW.

1100 on 14 April 2002 37. At 1100 on 14 April 2002 the SIO of Operation Ruby approved the following line to be used if questions were asked by the media: “We are evaluating a claim by the News of the World that Amanda may have registered with a recruitment agency. At this stage there is a possibility that a hoaxer may be involved in generating the story”. 38. The following off-the-record guidance to be given to the media was also approved by the SIO “At this stage we are confident that this woman attending the recruitment agency is the hoaxer and not Milly. This woman is older than Milly and hence would be able to register at a recruitment agency (would question how a 13 year old would be able to register for a job).”

1630 on 15 April 2002 39. At 1630 on 15 April 2002 West Mercia Police contacted Surrey Police with the result of investigations they had undertaken on Surrey Police’s behalf with the recruitment agency. The member of staff at the agency stated that they had nobody called Amanda Dowler (or anyone with the name of the hoaxer) on their books. The member of staff at the recruitment agency said that she had never interviewed a girl called Amanda Dowler for employment at the agency, nor, to her knowledge, had she ever spoken to a reporter from the NOTW.

17 April 2002 40. On 17 April 2002 Surrey Police performed a second download of the voicemail messages on Milly’s mobile phone pursuant to a further Production Order obtained from Guildford Crown Court under the Police and Criminal Evidence Act 1984 (see the Joint Note). One of the number of messages that Surrey Police downloaded was a message left at 1013 on 27 March 2002 by the recruitment agency for “Nana” ie. the cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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message that [REDACTED] had played to the police officer and the press officer over the telephone on 13 April 2002.

18 April 2002 41. The next documented conversation between Surrey Police and anyone at the NOTW touching on subject of information obtained through accessing Milly’s voicemail was on 18 April 2002. The press officer was speaking to [REDACTED] about another matter in relation to the Milly Dowler investigation and stated that she would get back to him to clarify the situation with regards to the “hoax woman”. [REDACTED] said that he was convinced that Milly had run away to the North of England and was seeking a job there.

19 April 2002 42. On 19 April 2002 a Surrey Police officer listened to a police recording of the message downloaded from Milly’s voicemail which had been left by the recruitment agency on 27 March 2002. The police officer formed the view that the name of the person for who the message was being left sounded like “Nana” [rather than “Mandy”). The officer telephoned a member of staff at the recruitment agency who explained that at the present time they had a lot of ladies from Ghana on their books and “Nana” was a popular Ghanaian name. 43. Later on 19 April 2002 the member of staff at the recruitment agency called the police officer and told her that there was a Ghanaian lady named Nana who had been registered with the agency approximately 12 months previously. On 26 March 2002 Nana had contacted the agency to advise them of her new mobile phone number. The phone number that was recorded in the agency’s file was [REDACTED], which was Milly’s phone number. There was an entry on Nana’s file stating that the agency had contacted her on 27 March 2002 and left a message on her mobile phone voicemail regarding interviews at [REDACTED]. The member of staff at the recruitment agency did not know whether the mobile phone number was written down incorrectly by the agency or whether the wrong number was supplied by Nana. 44. Contrary to Surrey Police’s initial suspicion, the message left on Milly’s mobile phone voicemail on 27 March 2002 by the recruitment agency was not the work of a hoaxer but a pure co-incidence. It was in any event of no evidential value in the investigation into Milly’s disappearance.

0946 on 20 April 2002 45. The next documented contact between Surrey Police or anyone at the NOTW on the subject of information obtained through accessing Milly’s voicemail was on 20 April 2002. 46. At 0946 on 20 April 2002, [REDACTED] sent an email to the Surrey Police press officer. [REDACTED] stated inter alia as follows: “As you are aware, last Saturday evening (13 April) the News of the World contacted the Dowler Squad with information we had received. In the course of a conversation with [a police officer] we passed on information about messages left on Amanda Dowler’s mobile phone [REDACTED]. In particular, we referred to a message from [REDACTED] Recruitment Agency at [REDACTED] apparently left on Amanda’s phone on the morning of March 27. In addition, we advised of other messages left on this number and we offered a copy of a tape recording of messages and other assistance. In response, we were advised by [the police officer] that the messages could (a) not have been left on Amanda’s mobile phone and (b) that the ‘chances were extremely high’ that any such messages were the work of a professional hoaxer, well known to the police. As a consequence, we took immediate steps to radically and substantially amended the article that had been prepared for publication.” [REDACTED] went on to ask for clarification and further information about a number of matters as “a matter of urgency”.

Later on 20 April 2002 47. The Surrey Police press officer prepared a “script” for a conversation with the NOTW in response to [REDACTED] email. That script was sent to a police officer who approved it.

1515 on 20 April 2002 48. At 1515 on 20 April 2002 the Surrey Police press officer spoke to [REDACTED] about the “hoaxer” and provided him with Surrey Police’s official line about the “hoaxer” which was: “Surrey Police, Crimewatch, Missing Persons Helpline and other police forces have received calls for a hoaxer pretending to be Amanda. These calls are not helpful to the investigation of missing schoolgirl Amanda Dowler. We are liaising with other police forces to consider what action to take.” 49. The Surrey Police press officer also gave [REDACTED] the following guidance in relation to the message on Milly’s voicemail by the recruitment agency: “When we were alerted to the story last week—at that time we believed the hoaxer was involved. Since then the recruitment agency has thoroughly checked all their records of people who have enrolled with the same or similar telephone numbers to that of Amanda’s mobile number. A female with a similar name to Amanda is on the books of the agency. The recruitment agency contacted this woman regarding a job at [REDACTED]. We believe either the agency incorrectly wrote down the mobile phone number of Amanda’s or the woman seeking employment accidently gave her mobile number as that of Amanda’s. We have listened to a recording of message and it does not actually say ‘Mandy’, We do cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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not believe that the hoax woman was involved in this incident. No one has enrolled with the agency using the name Amanda Dowler”. 50. [REDACTED] played the Surrey Police press officer a recording of the message left by the recruitment agency on Milly’s voicemail. The press officer stated that the name of the person seeking employment was “Nana”. The press officer said that there were a number of women on the recruitment agency’s books from Ghana and that the call from the recruitment agency was intended for one of them. 51. [REDACTED] responded by saying that what the Surrey Police press officer was telling him was not true and was inconceivable. [REDACTED] said that there were other messages on MiIly Dowler’s phone (eg. a message stating: “it is America, take it or leave it”). [REDACTED] said that the NOTW was moving its investigation to the North of England, that Milly have been there in person and that she had applied for a job in a factory. [REDACTED] said that the NOTW “know this 110%. We are absolutely certain”. [REDACTED] said that the NOTW was not going to run this as a story. 52. Surrey Police believes that that the Surrey Police press officer emailed the NOTW on 20 April 2002 sometime between 1400 and 1830. That email contained the first paragraph (only) of the document quoted at paragraph 37 above. Surrey Police’s on-going internal investigation has not discovered a copy of this email. News International might be able to supply a copy to the Inquiry.

16 July 2002 53. The next contact between Surrey Police and anyone at the NOTW potentially touching on the subject of information obtained through accessing Milly’s voicemail was at 0930 16 July 2002. A meeting took place between the Surrey Police press officer, a senior police officer and [REDACTED] and [REDACTED] of the NOTW at Surrey Police Headquarters. Surrey Police’s on-going internal investigation is still trying to establish what was discussed at this meeting. It is not known whether information obtained from accessing Milly’s voicemail was discussed. It is likely that the meeting was convened because the NOTW had not been present at an “off-the-record” briefing given to members of the Crime Reporters’ Association, of which the NOTW was not a member. 54. Surrey Police’s on-going internal investigation has, to date, discovered no documentation of communication between officers or members of staff in Surrey Police and employees of the NOTW on the subject of information obtained through accessing Milly’s voicemail beyond 16 July 2002.

Date on which NOTW first accessed Milly’s voicemail 55. The only information in Surrey Police’s possession that could assist in establishing when the NOTW first accessed the message left on Milly Dowler’s voicemail on 27 March 2002 before reporting its contents to Surrey Police on 13 April 2002 is: (a) [REDACTED] disclosure to the Surrey Police press officer that he had spoken to a member of staff from the recruitment agency on 12 April 2002; and (b) the report by the recruitment agency of telephone calls on 12 April 2002 from a woman claiming to be Milly Dowler’s mother. 56. When and the extent to which Milly’s mobile phone voicemail was unlawfully accessed (and whether any messages were deleted) are matters which form part of the MPS’ on-going investigation.

Postscript 57. Surrey Police’s intense investigation into Milly Dowler’s disappearance continued. On 18 September 2002 a body was found, which was identified on 21 September 2002 as the body of Milly Dowler. Operation Ruby then became a murder investigation. 58. Surrey Police did not arrest or charge anyone in relation accessing Milly Dowler’s voicemail. 59. On 23 June 2011 Levi Bellfield was found guilty of Milly Dowler’s murder. He was sentenced to life imprisonment the following day.

Question 2 60. The MPS has asked that Surrey Police does not answer Question 2, because to do so might prejudice Operation Weeting’s investigations.

Evidence given to the Cultuure Media and Sport Committee by Tom Crone on 6 September 2011 61. On 6 September 2011, the Culture, Media and Sport Committee heard evidence from Torn Crone (transcript pp 65–67). Mr Crone said that he had no recollection of being involved in events at the NOTW in relation to the Milly Dowler story on 13/14 April 2002. He speculated, however: (i) that the police may have obtained the message from the recruitment agency by accessing Milly Dowler’s voicemail and then provided the contents of the message to the NOTW; and cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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(ii) that after seeing or becoming aware of the story in the first edition of the NOTW on 14 April 2002, Surrey Police may have contacted the NOTW to say that the story was not what they had intended and that it must be removed from subsequent editions.

62. Neither of Mr Crone’s speculations are correct.

63. As to point (i), the information about the contents of Milly Dowler’s voicemail and the message from the recruitment agency left on 27 March 2002 was not provided to the NOTW by Surrey Police. The NOTW obtained that information by accessing Milly Dowler’s voicemail. The message from the recruitment agency was left after Surrey Police had last accessed Milly Dowler’s voicemail (for investigative purposes and pursuant to a court order) on 26 March 2002. Surrey Police was not aware of the message from the recruitment agency until the NOTW revealed their knowledge of its contents on 13 April 2002. The only information provided by Surrey Police to the NOTW prior to the NOTW going to press on 14 April 2002 was that the message from the recruitment agency was likely to be the work of a hoaxer.

64. As to point (ii), the actual course of events, as set out above, is that [REDACTED] of the NOTW called Surrey Police at 2010 hours on 13 April 2002 with a line that the NOTW intended to impute to Surrey Police in its 14 April 2002 edition which had already gone to print (before asking Surrey Police’s permission). The Surrey Police press officer responded with an official Surrey Police line which [REDACTED] said that the NOTW would run in its five subsequent 14 April 2002 editions.

65. The only input Surrey Police had in relation to any of the 14 April 2002 NOTW editions was to provide an official line from Surrey Police. Surrey Police’s internal investigation has found no evidence to suggest that Surrey Police was shown the content of the story to be run on 14 April 2002 by the NOTW. The evidence suggests that [REDACTED] simply provided the quote to be imputed to Surrey Police over the telephone at 2010 hours on 13 April 2002. Any other changes that were made by the NOTW to the content of the story were not made at the request of Surrey Police.

In conclusion, I wish to reassert that my internal investigation is not yet complete. Should you wish to discuss any of the content of this letter further please do not hesitate to contact me. 17 January 2012

Letter from Chair, Culture, Media and Sport Committee to Surrey Police

As I am sure you are aware, the Culture, Media and Sport Select Committee is investigating whether it, or one of its predecessor Committees, has been misled on the subject of phone-hacking.

During the course of its investigation, the Committee has asked questions about the alleged hacking of Milly Dowler’s mobile telephone. In connection with this, the Committee agreed that it would write to you to seek answers on the following points: (1) Please could you provide details of any conversations held between officers in the Surrey police force and employees of the News of the World on the subject of information obtained through voicemail interception. (2) Please could you provide details of all conversations held between officers in the Surrey police force and Neville Thurlbeck on 13 and 14 April 2002 in relation to a story published about Milly Dowler on 14 April 2002.

I would be very grateful to receive your response by no later than 1200 noon on Monday 9 January 2012. 20 December 2011

Written evidence submitted by Linklaters, on behalf of the Management and Standards Committee

We write on behalf of the Management and Standards Committee. Your letter of 12 January 2012 to James Murdoch has been passed to us as your questions concern matters prior to Mr James Murdoch joining News Corporation at the end of 2007 and are beyond his personal knowledge.

Turning to your questions and adopting your numbering: 1. The payment of £90,502.08 to Clive Goodman was a gross payment. 2. The payment was subject to PAYE. 3. Individuals involved in processing the payment were Lesley Ginn (Senior Payroll Administrator), David Stratton (Payroll Manager) and Mark Lovejoy (UK Treasury Manager) in Treasury. They had reporting lines into Michael Gill (Financial Accounting Controller) who reported to Stephen Daintith (Chief Financial Officer). From Human Resources, Ann Paul, cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Director of Human Resources for News Group Newspapers Limited was aware of the payment. She reported to Daniel Cloke, Group Human Resources Director. 4. The same individuals from Payroll and Treasury in 3 above were involved in processing the compensation payment of £153,000. Jon Chapman, Director of Legal Affairs, was aware of the payment. He reported to Stephen Daintith. 18 January 2012

Letter from the Chair, Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

At its meeting today, the Committee agreed to ask you some further questions about the settlement made by News International with Clive Goodman in 2007: (1) On 8 February 2007, Clive Goodman was paid one year’s salary: £90,502.08. Please specify whether this was gross or net. (2) Please specify whether or not the 8 February 2007 payment was made by PAYE. (3) If the 8 February 2007 payment was made by PAYE, please specify who at the company would have been involved in processing the payment and to which senior executive in the company they reported. (4) Please specify which of any employees that you name in response to question (3) would have been involved in processing—or would otherwise have been aware of—the compensation payment of £153,000 subsequently made to Clive Goodman between October and December 2007.

I would be very grateful to receive your response by no later than noon on Wednesday 18 January 2012. I apologise for the short time being made available to you. As you will appreciate, the Committee is keen to bring its work on this matter to a conclusion. 12 January 2012

Written evidence submitted by the Metropolitan Police

Re: Letter to DAC Akers dated 19 January 2012

Further to the meeting DAC Akers had with Mr Paul Farrelly MP on 18 January 2012, I understand that she had requested any questions the Committee may have in relation to the ongoing investigation (Operation Weeting) should be directed in writing to her.

Accordingly, you wrote on 19 January 2012 asking for the following information: 1. The names of all MPs and Peers whose voicemail the Metropolitan Police know to have been illegally assessed; and 2. The names of all MPs and Peers whose names appear in Glenn Mulcaire’s files.

DAC Akers is currently on leave and therefore I am responding on her behalf. Unfortunately I do not think we can assist on this occasion. To disclose the names of such individuals would require us to disclose private information concerning third parties without their consent.

Those that have been identified to date from the material in police possession are in the process of being contacted by the enquiry team and it may be that you will be able to obtain the names through your own internal procedures.

Be assured that, wherever possible, it is our desire to provide you and your Committee with updates as to the progress of the investigations as appropriate but we do not feel we are able to do so on this occasion given the reason set out above. 25 January 2012 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Letter from the Chair, Culture, Media and Sport Committee to the Metropolitan Police

I write in connection with the Committee’s work on phone-hacking. The Committee would be very grateful if you could provide the following information: (1) the names of all MPs and Peers whose voicemail the Metropolitan Police know to have been illegally accessed; and (2) the names of all MPs and Peers whose names appear in Glenn Mulcaire’s files. I would be very grateful if you could send me the information by no later than noon on Wednesday 25 January 2012. 19 January 2012

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee

Thank you for your letter of 19 January 2012. The answers to your questions are as follows. A hard copy of the email was discovered in a storage crate at the old News International site in Wapping as part of a search undertaken by Linklaters and PwC. The crate had been moved from a storage room at Thomas More Square to Wapping as part of an exercise to secure the contents of the News of the World offices when the paper was closed. The crate had a sticker on it which suggested that the contents were originally held in Mr Myler’s office. The crate included a large number of documents which are unrelated to the matters in question.

The email was first seen by one of two junior Linklaters’ reviewers on or about 18 November 2011. We cannot be sure about which of the two reviewers first discovered it or about the precise date of discovery. The email was flagged as being potentially privileged and was passed to a manager at PwC for processing and scanning onto a central data system. This was all in accordance with procedures agreed with the Metropolitan Police Service. I do accept that the significance of this email ought to have been appreciated upon discovery by the Linklaters’ reviewer and that it should have been drawn to the immediate attention of a partner in this firm.

The email was then seen by a second reviewer from Linklaters—a senior associate—on 7 December 2011. It was brought to my attention that day. I gave instructions that it be passed forthwith to the Management and Standards Committee and to Jeremy Sandelson of Clifford Chance, who is the lawyer acting for Mr James Murdoch. I also gave instructions that one of my colleagues should telephone the secretary to your Committee that day to inform you that further information had come to light. That was done during the afternoon of 7 December 2011. We are aware of no evidence to suggest that anyone (save for the Linklaters and PwC staff we have mentioned) was aware of the existence of the email before we began to inform those mentioned above on the 7 December 2011. No further hard copies have been discovered.

PwC were then asked to conduct further investigations to determine whether there were any electronic copies of this email still in existence. PwC have confirmed that NI’s historic and current email systems and associated email archives, all of which were the subject of earlier email searches for the Committee hearings, do not contain a copy of this email. We understand from PwC’s forensic IT team that Mr Myler’s copy of the email was lost from the email archive system in a hardware failure which occurred on 18 March 2010. The email archive system was subject to many such incidents and has subsequently been replaced as part of an email stabilisation and modernisation programme. Mr James Murdoch’s copy of the email was deleted from his mailbox by a member of NI’s IT department on 15 January 2011 as part of the same email stabilisation and modernisation programme which saw a number of users’ accounts being prepared for the migration to a new email system. Electronic copies of the email have been found on two laptops used by Mr James Murdoch (one in current use and one which Mr Murdoch stopped using in October 2010 when it was returned to NI IT) and a desktop computer used by one of Mr James Murdoch’s Personal Assistants. The copies made by these devices were created by the automatic synchronisation of the devices with the email servers. These copies were not affected by the technical failure or the migration exercise to which we have referred. The existence of these copies was revealed by forensic analysis of these devices. These devices were not searched during the original investigation because it was understood that the email systems were designed to store data on the email servers rather than on individual physical devices. A search of all physical devices was not, therefore, thought to be a reasonable or proportionate exercise in light of the many demands for searches (civil proceedings, criminal matters and the Leveson Inquiry) and the time available for the exercise. 25 January 2012 cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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Letter from the Chair, Culture, Media and Sport Committee to Linklaters LLP, on behalf of the Management and Standards Committee

I write with reference to your letter of 12 December 2011.

The Committee would like further details about the discovery of the e-mail dated 7 June 2008 that is referred to in that letter. In particular it would like to know: — Where the e-mail was discovered. — In what form the e-mail was discovered (electronic/hard copy). — By whom the e-mail was discovered. — To whom the e-mail was referred once it was discovered, and whether anyone else was informed. — When the e-mail was discovered. — Whether any additional electronic or hard copies of the e-mail have been discovered in any other location.

As you will be aware, the Committee is under considerable time pressure. I would, therefore, be grateful for a response by no later than noon on Wednesday 25 January 2012. 19 January 2012

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

Thank you for your letter of 19 January 2012. I set out below the answers to the two questions you have asked, and also address an additional matter which has recently received media attention. (1) I am informed by the Management and Standards Committee that no further information on this matter has come to light since my letter of 1 December 2011. (2) The meeting I believe you are referring to was titled “Privacy Lawsuits”, and appears in my diary for 13 June 2008, from 1200–1300.

In addition to me, the invited participants were: — John Witherow, the editor of The Sunday Times; — James Harding, the editor of The Times; — Rebekah Brooks, the then editor of The Sun; — Colin Myler, the then editor of the News of the World (Tom Crone may also have attended at the suggestion of Mr Myler); and — Matthew Anderson, the Group Director: Strategy & Corporate Affairs at News Corporation.

The meeting was arranged by my office, and the calendar invitation was sent on 5 June 2008 at 1435, while I was overseas.

I do not recall the meeting in detail, but believe that it involved a broad discussion of privacy issues facing the business as a whole. Both the News of the World (in the proceedings by Mr Mosley) and The Sun were facing privacy claims and the Court of Appeal had, in May 2008, handed down a judgment in favour of J K Rowling, who had made a claim on behalf of her son against the Sunday Express and a picture agency, over a photograph of her son which had been taken in a public street. This was a development that had the potential of affect all of the newspaper industry, including News International’s titles. As all four of the company’s editors attended the meeting, I do not believe the Taylor proceedings were discussed; it would not have been appropriate to do so.

You have asked for confirmation that my answer to Question 2 can be published, and I confirm that it can.

I trust that the information above answers the questions in your letter.

The other matter I would like to address relates to some of the newspaper articles that were written last week relating to the settlement of a number of claims against News Group Newspapers. This litigation is being handled by the Management and Standards Committee and not by me: I have no involvement in the conduct of the various cases. I wish to confirm again that I was not aware of evidence of widespread wrongdoing and did not seek to conceal it, as I have made clear in my previous testimony to the Committee. 26 January 2012 cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 284 Culture, Media and Sport Committee: Evidence

Letter from the Chair, Culture, Media and Sport Committee to James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

At its meeting today, the Committee agreed to ask you some further questions in relation to its work on phone-hacking. (1) You undertook to keep the Committee updated about the outcome of your investigation into the alleged surveillance of members of the Committee in 2009. Please supply us with any information relating to this matter that has come to light since you wrote to the Committee on 1 December 2011. (2) In December you allowed the Committee to have confidential sight of your calendar for a period of time in 2008. When the Committee examined the calendar it noted a meeting that took place on 12 June 2008 to discuss “privacy”. Please inform the Committee who attended the meeting; who arranged the meeting; when it was arranged; and what formed the substance of that meeting.

The Committee requests that you allow your answer to question (2) to be published. It accepts that you may not be content for this to happen. If you wish any of the matters covered in your answer to be treated in confidence, the Committee will, of course, redact this letter before publishing it.

The Committee would be grateful for a response by no later than noon on Wednesday 25 January 2012. 19 January 2012

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee

Thank you for your letter of 31 January 2012. The answers to your questions are as follows:

1. The only information which has come to the Management and Standards Committee’s attention concerning the alleged surveillance of Committee members relates to surveillance of Mr Watson by Mr Derek Webb between 28 September 2009 and 2 October 2009 as set out in our letter dated 1 December 2011. For the reasons set out in our 1 December 2011 letter we do not think it is appropriate to name the individuals involved.

2. We have carried out electronic searches of hundreds of thousands of emails. Our search terms have included the names of all current and previous members of the Committee from the 2008–09 session up until today. A team of five Linklaters employees was involved in this exercise which took approximately two weeks to complete. This exercise produced a small number of emails which enabled us to make the disclosure to you in our letter of 1 December 2011.

3. We have conducted interviews with: — Mr James Mellor, News Editor of the News of the World from 2007 until January 2011 and then Head of News until the paper’s closure on 10 July 2011; — Mr Bill Akass, Managing Editor from August 2009 until the paper’s closure on 10 July 2011; and — Mr Tom Crone, News Group Newspapers Limited’s Legal Manager until 13 July 2011. 6 February 2012

Letter from the Chair of the Culture, Media and Sport Committee to Linklaters LLP, on behalf of the Management and Standards Committee

I write with reference to James Murdoch’s letter to the Committee of 25 January 2012, now published on the Committee’s website (www.parliament.uk/cmscom).

In the letter, James Murdoch states that he has been informed by the Management and Standards Committee that no further information has come to light on the alleged surveillance of members of the Culture, Media and Sport Select Committee in 2009.

I would be grateful if you could answer the following questions in respect of this statement: 1. Please provide all information that has come to your attention in relation to the alleged surveillance of members of the Committee in 2009. 2. Please describe your investigation into this matter, stating how many people have been tasked with investigating it, for how long, and with what resource. 3. Please list all current and former employees of News International whom you have spoken to in connection with this investigation. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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I would be grateful to receive a response by no later than noon on Monday 6 February 2012. 31 January 2012

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer and Chairman and CEO, International, News Corporation

When I gave evidence to the Committee on 10 November 2011, Dr Coffey asked me a question at Q1699 about financial governance, and I said that I would be happy to send the Committee details of the policies and guidelines that had changed in this area.

In fact, a number of other policies have also changed or been created, and I am therefore writing to set out the processes and updates which have taken place since August 2011 (when I last wrote to the Committee on this issue) and which are ongoing in relation to corporate governance within News International. — The role of Chief Compliance Officer was created in September 2011, and filled by external legal counsel on an interim basis. A permanent CCO will start at the end of March 2012. One of the continuing responsibilities of the CCO will be to undertake an annual review of all policies. — The News Corporation Standards of Business Conduct (enclosed with my letter of 11 August 2011) was distributed to all News International employees in hard copy in September 2011. At the time of my letter of August 2011, employees had received an email version of the recently updated Standards. The Standards cover areas including non-discrimination and harassment, avoiding conflicts of interest and avoiding corruption and bribery. — All journalists and editorial staff in the UK have been issued with a hard copy of the Editors’ Code of Practice. — Employment contracts for new employees will include a requirement that the employee complies with News International’s policies, News Corporation’s Standards of Business Conduct and, if applicable, the Editors’ Code of Practice. A review is also under way to ensure that the employment contracts of all existing journalists include a requirement that they comply with the Editors’ Code of Practice. — As part of the anti-bribery measures being implemented across the business, a letter has been prepared emphasising News International’s commitment to ethical behaviour and its expectations of similar behaviour from business partners. The company is in the process of sending this letter to News International’s top 150 suppliers by spend, and further communications will be sent to other service providers and business partners in due course. — A new process has been put in place requiring the editor of a title seeking to engage a private investigator to seek the prior approval of the Chief Executive Officer. — As the Committee is aware, News Corporation established the independent Management and Standards Committee (“MSC”) in July 2011. The MSC is responsible for dealing with the Leveson inquiry, conducting the civil litigation and liaising with the police and other authorities. I have no oversight of, or involvement in, the work of the MSC. — An internal review of all News international policies has taken place. During the review process, some areas were identified as needing updating. The Chief Executive Officer sent an email to all employees announcing the policy review, and pointing out where the policies could be found on News International’s intranet. New or revised policies which have been circulated to all employees as part of this process include: — The Whistleblowing Policy, published on. 28 October 2011. This policy provides guidance on how employees can raise concerns about suspected wrongdoing within News international and reassurance about what will happen if they do raise genuine concerns. It supplements at a UK level the existing global procedures put in place by News Corporation (an anonymous whistleblower’s hotline and website). — The Workplace Conduct Policy, published on 28 October 2011. This policy addresses equal opportunities, non-discrimination, bullying and harassment in the workplace. It makes clear that News International will not tolerate any form of unlawful discrimination, bullying or harassment and offers guidance for employees on what to do if they feel they have been subject to any such treatment. — The Data Protection Policy, published on 11 November 2011. This policy, together with a series of sub-policies on Editorial Data Protection, Marketing, Data Collection and Data Subject Access Requests, sets out a clear framework for compliance with data protection legislation across the business. In accordance with the new policy, we are in the process of appointing a network of Data Protection Representatives within each department who will be given additional data protection training and who will assist the Data Protection and Compliance Officer in monitoring compliance, identifying issues, and disseminating guidance and training. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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— The News International Anti-Bribery Policy, published on 18 November 2011. This policy supplements the News Corporation Global Anti-Bribery and Anti-Corruption policy (which was updated and circulated to all staff in October 2011). It explains how News International and its employees are bound by the Bribery Act 2010 in respect of conduct both at home and abroad, and contains specific guidance on how anti-bribery laws may impact different areas of employees’ work, including the giving and accepting of gifts and hospitality, making facilitation payments, and dealing with business partners. — The Payment Policy, published in December 2011. This policy sets out how News International’s journalists and editors may make payments for information in connection with stories in the light of the Bribery Act 2010. — The company is currently reviewing and updating the policies governing record retention and management, and information security, to ensure that they are sufficiently clear, comprehensive and robust. — Training for staff is being provided on anti-bribery and corruption legislation and data protection, and the company organises a training programme for journalists and editors. So far, 330 people have received training on anti-bribery and corruption legislation and the requirements of the News International Anti-Bribery Policy, including the News international Executive Committee, the senior leadership teams who report to the members of the News International Executive Committee, staff from across The Sun, the Times and the Sunday Times, and members of the Corporate Legal, Finance, Marketing, Commercial, Operational, Business Development and Technology teams. Online training modules for both data protection and anti-bribery will be circulated to staff in the coming weeks. Additional topics for recent editorial training sessions have included privacy, libel and contempt of court. — The company has also made improvements in the communication of policies, with links to the policies being placed in a prominent position on the intranet site. A policy overview document currently being prepared will be an easily accessible guide for all staff. New or updated policies published over the last few months have been emailed to all employees with a cover email providing a short summary of the key points of the policy and how it affects employees.

As I said in my evidence, the company’s work in this area is not yet complete, but I thought the Committee might be assisted by the information set out above. 20 February 2012

Written evidence submitted by Metropolitan Police

You wrote to me on 19 January seeking the names of MPs and Peers that may have appeared within the Mulcaire notes and my office replied that we were unable to furnish your committee with that information.

Following on from our response, Tom Watson emailed me on 1 February 2012 to clarify the information your committee was seeking namely;

How many a) MPs and b) Peers were listed in the Mulcaire evidence.

I can confirm that there are 10 peers and 44 ex and current MPs that have been identified in the material analysed to date. Of this group, four peers and 14 MPs and ex-MPs are likely victims of phone hacking. All these individuals have been informed by Operation Weeting.

As you will appreciate, our enquiries continue and there is a possibility that further MPs and Peers may yet be identified and contacted. It is important, therefore, not to regard this information as definitive. 16 February 2012

Letter from the Chair, Culture, Media and Sport Committee to the Metropolitan Police

I write in connection with the Committee’s work on phone-hacking.

The Committee would be very grateful if you could provide the following information: 1) The names of all MPs and Peers whose voicemail the Metropolitan Police know to have been illegally accessed; and 2) The names of all MPs and Peers whose names appear in Glenn Mulcaire’s files. cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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I would be very grateful if you could send me the information by no later than noon on Wednesday 25 January 2012. 19 January 2012

Written evidence submitted by James Murdoch, Deputy Chief Operating Officer, and Chairman and CEO, International, News Corporation

Following recent reporting and commentary on my relocation to New York, I would like to affirm strongly to your Committee that I remain committed to assisting all relevant inquiries and investigations, including your deliberations, the Leveson Inquiry, the three separate police investigations and any other inquiries affecting News International, to the fullest extent of my abilities.

It has been suggested that my decision to resign my role at News International reflected past knowledge of voicemail interception or other alleged criminal wrongdoing at News International. This is untrue. I take my share of responsibility for not uncovering wrongdoing earlier. However, I have not misled Parliament. I did not know about, nor did I try to hide, wrongdoing. I do not believe the evidence before you supports any other conclusion.

I gave up the role of Executive Chairman of News International in order to devote myself fully to my existing roles of Deputy Chief Operating Officer and Chairman and Chief Executive Officer, International, of News Corporation, based at the company’s headquarters in New York. This move allows me to focus on the further development of News Corporation’s international television businesses, which has been my primary focus over the years, and to continue to strengthen the operational performance and risk management processes in our companies around the world. The timing of the announcement related entirely to the completion of my move and follows the successful launch of a Sunday edition of The Sun and significant progress and governance reforms at News International.

Your Committee will soon report on whether it was misled during its previous inquiry in 2009. You are presumably still considering all the testimony and material put before you from various witnesses, including extensive evidence submitted by me in oral sessions on 19 July and 10 November 2011 and in written answers to numerous questions submitted by the Committee subsequently.

As Chair of the Committee, you will be keen to ensure that principles of fairness govern the Committee’s deliberations and its ultimate report and that my involvement is considered solely according to the evidence that the Committee has received, and in respect of which I have had an opportunity to respond. In my evidence submitted to the Committee I expressed my shock and anger at the widespread wrongdoing that has emerged and my frustration that I was not made aware of it sooner, all of which is a matter of great and real regret to me.

With the benefit of hindsight, I acknowledge, as I did to you in my oral evidence, that it would have been better if I had asked more questions, requested more documents and scrutinised them carefully. It would have been better if I had not relied on the people who had assured me that thorough investigations had been carried out and that further investigations were unnecessary, and the statements made by the police to the same effect.

In running a large organisation, it is reasonable, necessary and indeed appropriate to rely on experienced senior executives, who have direct responsibility for certain matters, to handle those matters and to tell their bosses what they need to know. This is what I did. It has been said that I did not ask enough questions. However, the truth is that incomplete answers and what now appear to be false assurances were given to the questions that I asked. As I have said to you before, the Committee was given answers in 2009 which were the same as the answers given to me. The evidence given by Messrs Crone and Myler, in particular, displays inconsistencies on this subject, while my evidence has always been consistent.

Outside your Committee, there has been extensive commentary on my involvement, including a wide range of allegations about my actions. Any reasonable person would agree that the volume of this has been unusually large, sometimes to the detriment of accurate or dispassionate analysis. Forty years of our company’s involvement and investment in the UK, which from time to time has been seen as controversial, is plenty of time to make both contributions and mistakes, to win some allies and to have detractors. The challenge for everyone seeking to draw enduring lessons and conclusions is to do so with impartiality that restores balance and objectivity, especially as we wait for the fullness of the various civil, public and criminal procedures to move forward. As you can imagine, this has been an area of acute and deep reflection for me.

In this context, and given the wide range of discussions, comment and conjecture, the breadth of the evidence, and a number of incorrect assertions about the evidence I have given and the role I have played, it is important for me, at this final stage, to highlight again the critical evidence as I know it, and to summarise for you and your colleagues the basic facts surrounding my involvement in these affairs. I hope this is helpful to you. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 288 Culture, Media and Sport Committee: Evidence

My Role in the Business I started my career with News Corporation in New York in 1997 working in various corporate capacities, and became the Chief Executive Officer of STAR TV in Asia. In 2003 I joined BSkyB, a publicly listed entity in the UK, as its Chief Executive Officer. In December 2007, I rejoined News Corporation as Chief Executive Officer for Europe and Asia. I oversaw subsidiaries, affiliates and joint ventures including Sky Italia, Sky Deutschland, STAR TV, Fox Turkey, a range of Eastern European ventures, joint ventures in Asia and the Middle East and News International. My role was a regional one, overseeing a range of businesses. My primary focus has been television and digital businesses. In 2011 I was appointed Deputy Chief Operating Officer of News Corporation and Chairman and Chief Executive Officer, International, of News Corporation. Additionally, I became Executive Chairman of News International in December 2007 when I took over the role from Les Hinton, who had been Chief Executive Officer and Chairman for 12 years, and who relocated to New York when News Corporation bought Dow Jones & Company. From the time I was appointed, it was always the intention to find a replacement Chief Executive Officer for Mr Hinton, to look after the company’s day to day affairs on a full-time basis. It was thought that Rebekah Brooks would take over this role and this occurred in June 2009. In the meantime, reporting to me at News International were the four editors, a newly elevated Chief Operating Officer and a Chief Financial Officer, who were primarily running the day to day operations. As I said in my evidence in July 2011, I was never intimately involved with the workings of the News of the World (see my response to Q367), or any of the other newspapers within News International. It was my belief that a newsroom should be run by the editor. Generally, my focus was on the development of corporate structures, budgets, the development of digital products, commercial initiatives and related strategies. The amount of time I spent on News International matters as a percentage of my overall time from December 2007 onwards was necessarily limited. During this time, as well as being in Wapping and at BSkyB’s headquarters in Hounslow, I travelled extensively, often spending much of the time outside the UK. When I took over the role at News International, I was only aware of the voicemail interception issue because it had been reported publicly. However, it was not something that I had focused on during my time at BSkyB, when it occurred. I did not follow the details of the arrests in August 2006 or the subsequent court proceedings, and my understanding when I took over in December 2007 was that this was a historic, isolated issue that had resulted in two people going to jail, and the editor at the time resigning. I had no reason to believe it was anything other than a settled matter as a result of the prosecutions and one from which the company had moved on, having put a new editor at the helm.

The Gordon Taylor Case As indicated in my evidence to the Committee in July 2011, the settlement of the Gordon Taylor case was my first direct involvement with these issues. Prior to 2008 Mr Hinton was in charge, and after summer 2009 Mrs Brooks took responsibility for running News International. In terms of the detail of the case, I learned in 2011 that Mr Taylor’s solicitors first wrote to the company in December 2006 in respect of his claim, and issued proceedings in March 2007. Those proceedings were initially defended by the company. In April 2008, Mr Taylor’s solicitors disclosed material obtained from the police and the Information Commissioner, which led the company, in conjunction with its legal advisers, to try to settle the claim. I understand that an initial offer of £50,000 was made by the company on 2 May 2008 and a second offer of £150,000 on 9 May 2008. Had either of these offers been accepted, I do not believe that I would have been told about the Taylor claim at all. A third offer of £350,000 was made on 3 June 2008. Like the first two, it was made without my prior approval, and the evidence presented last year to the Committee shows that each of these amounts was above the relevant authority limits. As I have testified, the only substantive meeting on the Taylor case was on 10 June 2008 in my office with Mr Myler and Mr Crone, at which I was asked to agree to increase the offer made to Mr Taylor. Prior to that meeting, there was an email dated 27 May 2008 in which my PA notified me that Mr Myler wished to speak to me that day. There is also a file note made by Julian Pike, a solicitor at the company’s lawyers, Farrer & Co, which records a telephone call that Mr Pike had with Mr Myler on 27 May 2008, in which Mr Pike records Mr Myler mentioning having spoken to me about the Taylor litigation. The note included the following important words: “Les no longer here—James wld say get rid of them—cut out cancer” [sic] As I told the Committee, when I saw the note of the call for the first time in October 2011, I was interested to read the statement Mr Myler apparently made to Mr Pike, to the effect that I would have said “get rid of them” and “cut out the cancer”. I interpreted this to mean that had I been given a full picture of the facts I would have insisted that people suspected of wrongdoing were held accountable (Q1519). I believe this may be why I was given a narrower set of facts than I should have been given at the 10 June 2008 meeting. The note of 27 May 2008 refers to the opinion of a Queen’s Counsel being sought. As the evidence shows, this had in fact been set in train prior to 27 May 2008, at the request of Mr Crone. I understand that Michael Silverleaf QC sent Mr Pike his opinion on 3 June 2008, and Mr Pike forwarded it to Mr Crone. Although I cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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knew the opinion had been obtained, I never saw the opinion and nor, most importantly, was I aware of Mr Silverleaf QC’s comments about widespread wrongdoing. As far as I was aware, Mr Silverleaf QC had only been asked to opine on the question of damages. Had Messrs Crone or Myler told me what the opinion said in detail, I would have acted differently.

The 7 June 2008 Email Chain On 12 December 2011, lawyers for the Management and Standards Committee sent the Committee a copy of an email dated 7 June 2008 from Mr Myler to me in which Mr Myler requested a meeting on 10 June 2008 and forwarded below an email from Mr Pike to Mr Crone dated 6 June 2008 and an email from Mr Crone to Mr Myler dated 7 June 2008 which forwarded Mr Pike’s email. I wrote to the Committee on 12 December 2011, confirming that I had not recalled the existence of the email chain prior to giving evidence to the Committee and, more importantly, stating that I was confident that I only read the request for a meeting and did not read the full email chain. This was because it was received on a Saturday afternoon when I was likely alone with my two young children. My response to Mr Myler, sent from my BlackBerry just over two minutes after he had sent his email, confirmed that I was available on 10 June 2008 for a meeting, and said that I was home that evening (ie 7 June) if he wished to speak before then. I have no record, nor recollection, of his calling that weekend. As I have said, I relied solely on the briefing given to me by Messrs Crone and Myler at our subsequent meeting on 10 June 2008. In the context of the surrounding evidence, it is clear to me that the email chain has been widely misreported and misunderstood, as it was not, in any way, a warning by Mr Myler or Mr Crone that voicemail interception was widespread. Rather, the email was specifically about the claim brought by Mr Taylor, which Messrs Crone and Myler were both, as I have written above, very keen to try to settle. Mr Myler’s statement that “unfortunately it is as bad as we feared” relates to the likely amount of money it would take to settle the Taylor case, and not to voicemail interception generally—ie attempts had been made to settle it, those had not been successful and Mr Taylor continued to demand a great deal of money from the company. The “nightmare scenario” mentioned by Mr Crone was not a warning that others were involved in voicemail interception, but a reference to the fact that there could be an additional potential claim by Joanne Armstrong, an associate of Mr Taylor. In fact, the email from Mr Crone actually rebuts a significant piece of evidence supporting the allegations raised in the first email by Mr Taylor’s solicitor. According to Mr Crone, the key piece of evidence, a recording of a journalist who was not Mr Goodman talking with Mr Mulcaire, the private investigator, is “not one of ours”—ie not a News of the World journalist. In fact I now understand that the journalist was at the time working for Associated Newspapers. As I told the Committee in my evidence, I was told at the meeting on 10 June 2008 that we would lose the case, and that it could cost between £500,000 and £1 million (excluding News International’s own costs). In light of these figures, it was a reasonable decision to follow the unequivocal advice that had been received and settle. Had Messrs Crone and Myler wanted to warn me that voicemail interception was more widespread, they could have come to me in April 2008 when the letter was received from Mr Taylor’s lawyers. They could have sent me the opinion by Mr Silverleaf QC, or a summary of it, or told me about the allegations made by Mr Goodman at the time of his dismissal that other journalists were involved in voicemail interception. Instead, they chose to address the issue in a short meeting on 10 June 2008 in the context of their fourth attempt to settle the case, giving me enough information to authorise a settlement as a rational business decision. They said nothing that led me to believe a further investigation was necessary.

The “For Neville” Email An email was obtained by Mr Taylor’s solicitors from the police and formed part of the disclosure made to the company’s lawyers that was passed to Mr Crone in April 2008. This is now referred to as the “For Neville” email but I was not shown a copy of the email at any time in 2008. The email, I now understand, was sent by a News of the World employee to an email address used by Glenn Mulcaire. It contained transcripts of a number of voicemail messages and the words “Hello. This is the transcript for Neville”. As we now know, that was a reference to the News of the Worlds Chief Reporter, Neville Thuribeck. As I explained to the Committee, there are two relevant aspects to that email, only one of which I was made aware of at any time in 2008. (1) It was evidence that Mr Mulcaire’s interception of Mr Taylor’s voicemail messages was connected to the News of the World. This is what I was told at the meeting on 10 June 2008. (2) It suggested the involvement of at least one other journalist (besides Clive Goodman) at the News of the World in voicemail interception, because the transcript was intended “For Neville”. That aspect of the email was not explained to me by Messrs Crone and Myler. Although the email is now described as the “For Neville” email, there was no mention of Neville to me at the time, and nor was I shown the email. I note that the evidence given by both Mr Crone and Mr Myler on this point is inconsistent. Your Committee will now know that a confidentiality agreement meant that the email could not be shown to anyone who was not a signatory to the agreement. Messrs Crone and Myler were signatories to that agreement. I was not. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

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I approved the settlement because I was told that the interception which had taken place by Mr Mulcaire was linked to the News of the World. I was not told of widespread wrongdoing. Because the Gordon Taylor case has taken on such significance, it is unsurprising that the nature of this brief meeting is overlooked. Mr Myler was an experienced editor and Mr Crone had been the legal manager for over 20 years. I had every reason to rely on them without reviewing the underlying documents. A year later, in the summer of 2009, the company formally confirmed the plans for Mrs Brooks, formerly the editor of the News of the World from 2000 to 2003, and the editor of The Sun from 2003 to 2009, to become Chief Executive Officer. Mrs Brooks handled the company’s response to this issue thereafter.

The Guardian Article of 2009 and the Committee’s Subsequent Investigation On 8 July 2009, the Guardian published an article about the Taylor settlement, which asserted that voicemail interception had been more widespread at the News of the World. I was overseas at the time, and a copy of the article was emailed to me. I was assured by News of the World executives that the matter had been investigated in the past by a firm of outside lawyers and that no evidence had been found. Messrs Crone and Myler gave the same assurances to the Committee in 2009 (Questions 1397, 1405). In addition, within 24 hours after publication of the Guardian’s story, the Metropolitan Police issued a statement saying that the original case had been “the subject of the most careful investigation by very experienced detectives”, that no additional evidence had come to light and that no further investigation was required. As I explained to the Committee in July, I believe that it was reasonable to rely on the statement made by the police as well as the statements by executives in the business. Since I arrived in the UK, and indeed for years before that, the Guardian, a commercial competitor, had adopted a highly pejorative tone about many of our activities, investments and executives—the paper had been aggressive in its coverage of News Corporation’s various businesses and hence was assumed to be a lesser authority than the police themselves, who were in sole possession, all along, of the complete set of files from their investigation. Nonetheless, in November 2011, I told the Committee of my regret that the company was too quick and too aggressive in its response to the Guardian. This applies equally to News International’s reaction to the report published by the Committee in February 2010. Knowing what I now know, I am sorry that the company did not conduct a full investigation into the facts in response to the Committee’s report. I have tried to make clear that I am not someone who tolerates wrongdoing and, as I said to you in my evidence in July 2011, illegal behaviour has no place in the company. For example, last October, in my role as Chairman and Chief Executive Officer, International, I tasked some of our senior executives responsible for overseeing Europe and Asia to update, refresh and systematise the approach to risk management, anti-bribery and governance across all international units I directly oversee. I wrote to the Committee on 20 February 2012 with details of the improvements in corporate governance at News International that have been made over recent months, and the company is now in a better position. I played a central role in recruiting Tom Mockridge as News International’s new Chief Executive Officer in July 2011. I helped to engage an outside chairman of the independent Management and Standards Committee. I have always endorsed its separate existence and independence, reporting to Joel Klein and Viet Dinh, both former Assistant Attorneys General of the United States and members of the News Corporation Board, and I have been fully recused from its work. Committee members will have seen its commitment to reform through actions that are taking place. These include the ongoing co-operation with the police investigations, investigations at the other three titles, full disclosure in the civil proceedings and evidence given to the Leveson Inquiry. When I came before you, I vowed that progress would be made and it has been. The company has also made significant efforts to settle civil cases by apologising to victims and compensating them. Fifty-eight cases have now been settled. I reiterate my personal apology to those who had their privacy invaded. Clearly, with the benefit of hindsight, I acknowledge that wrongdoing should have been uncovered earlier. I could have asked more questions, requested more documents and taken a more challenging and sceptical view of what I was told, and I will do so in the future. I have sought to explain, however, that it was reasonable for me to rely on my senior executives to inform me of what I needed to know. In this case, the approach fell short. But it is important to note that I did not turn a blind eye: I was given very strong assurances about investigations recently done, and these assurances were echoed by the Metropolitan Police. However, as I have said, I did not know about, nor did I try to hide, wrongdoing. Whilst I accept my share of responsibility for not uncovering wrongdoing sooner, I did not mislead Parliament and the evidence does not support any other conclusion. I hope this letter is helpful and I know that, as your Committee prepares its final report, you will consider the facts before you, the questions you have asked, and the diligent and transparent approach I have tried to take with you and your colleagues. 12 March 2012 cobber Pack: U PL: CWE1 [O] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Culture, Media and Sport Committee: Evidence Ev 291

Written evidence submitted by Linklaters LLP, on behalf of the Management and Standards Committee Thank you for your letter of 6 March 2012. Please find enclosed: (1) The Admission of Facts dated 13 December 2011 made by News Group Newspapers (“NGN”) in the civil claims. (2) The Statement in Open Court in the Sienna Miller claim. (3) The Defence to the Generic Particulars of Claim dated 30 January 2012. (4) The Statements in Open Court made by NGN in the civil claims. (5) NGN’s Notice to Admit Facts and the Admission of Facts made by the Claimants in the civil claims. Please note that in accordance with the Civil Procedure Rules Part 32.18(3) NGN’s admissions may be used against NGN only in the proceedings in which the notice to admit is served and by the party who served the notice (ie the Claimants in the voicemail interception litigation). The Admissions should not be taken to be acceptance that any conduct relating to the admissions can be proven to a criminal standard. It should also be noted that although some of the admissions relate to the Second Defendant, Mr Glenn Mulcaire, NGN’s admissions were made without recourse to Mr Mulcaire and he has not made admissions. We have provided the Admission of Facts in the version made available to the media by Mr Justice Vos on 27 February 2012 (“the public version”), following an application by Guardian News and Media Ltd. It contains a number of redactions requested by Mr Mulcaire, which were upheld by the court on the basis that public disclosure of this information might prejudice his ongoing criminal investigation. NGN did not request any redactions to the Admission of Facts, The public version of the Admission of Facts does not include two schedules which were appended to the original version. These were (1) a schedule identifying the persons who are referred to anonymously in the Admission of Facts and (2) a schedule of payments made by NGN to Mr Mulcaire. At a hearing on 20 May 2011 it was agreed that confidential information in the documents on the court record should be placed in confidential schedules, in order to avoid prejudice to individuals who might be implicated in ongoing criminal investigations. Guardian News and Media did not seek to challenge this practice and did not apply for either of the schedules appended to the original version of the Admission of Facts. In relation to Ms Miller’s claim, it should be noted that NGN made admissions in June 2011 only in relation to the amended Particulars of Claim. Accordingly, the statement in open court relates solely to that admission. Ms Miller did make a late amendment to her claim to allege e-mail hacking. As previously stated in our letter dated 1 December 2011, the statement made in open court did not include any admission in relation to that late amendment. Also as requested in your letter, we also enclose copies of each of the Statements in Open Court to which NGN has agreed.36 Finally, we enclose for completeness the admissions made by Claimants in the civil claims.37 12 March 2012

Letter from the Chair, Culture, Media and Sport Committee to Linklaters LLP, on behalf of the Management and Standards Committee Thank you for your co-operation with the Committee’s inquiry so far and I hope that we are not too far away now from completing our Report. Clearly, it was not possible to do this before the resolution of the first tranche of civil claims, the last of which—involving Charlotte Church and her family—was settled on 27 February 2012. During the progress of the civil claims, we are aware that News Group Newspapers has at several stages made certain “Admissions of Facts” in addition to agreed statements in court in individual cases. None of these has so far been volunteered to us, however, by the company. Conscious of the need to consider all available facts for our Report, the purpose of this letter is to ask you to provide the following to us, to bring us fully up to date: (1) The Admissions of Facts made by NGN so far in the civil claims, including those in the Sienna Miller case and on 13 December, 2011 in the outstanding civil cases. (2) Copies of each of the Statements in Open Court to which NGN has agreed in the civil claims which it has settled to date over phone hacking. 36 Ev not printed. 37 Ev not printed. cobber Pack: U PL: CWE1 [E] Processed: [26-04-2012 10:39] Job: 012695 Unit: PG07

Ev 292 Culture, Media and Sport Committee: Evidence

We would be very grateful if you would arrange for delivery of these as soon as possible so that Members of the Committee can consider them as we progress with our draft Report. 6 March 2012

Written evidence submitted by Mark Thomson, Atkins Thomson I act for Sienna Miller. It has recently come to my attention that Messrs Linklaters wrote to you on 12 March 2012 about the Sienna Miller case. Within this letter, they have asserted that the allegation made by my client over email hacking was not admitted. This is not correct, no doubt because Messrs Linklaters were not at the time solicitors on the record in this matter. In any event, we attach a copy of the Order of 27 May 201138 recording the Judgment made by the Court. This Judgment was expressly based on the admissions made by Michael Silverleaf QC for Newsgroup Newspapers Limited on 12 May 2011 (see the second page of the attached Order39) when he said: MR. SILVERLEAF: There are two things that are very important. MR. JUSTICE VOS: Yes. MR. SILVERLEAF: One is that we admit liability unconditionally. MR. JUSTICE VOS: What does that mean? MR. SILVERLEAF: It means we admit liability for all the torts and wrongs that are alleged. We are not suggesting that any of them remain in issue. MR. JUSTICE VOS: Does that mean you admit every paragraph of the points of claim? MR. SILVERLEAF: It means that we admit that we are liable for all the wrongs that are alleged to have been acted. It actually does not matter whether we admit all the facts. The Judgment of 27 May 2012 and the Statement in Open Court (which you have been sent) are expressly based on the admissions made on 12 May 2011, which included “all the wrongs that are alleged to have been acted”. Accordingly, Newsgroup did admit the pleaded allegation of wrongdoing in relation to our client’s emails, which was pleaded in the Re-Amended Particulars of Claim. 19 April 2012

38 Not printed. 39 Not printed.

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