Bloomberg News

Queen’s Law Firm Knew of News Corp. Hacking Lie to Lawmakers

October 20, 2011

(Updates with further Murdoch meeting on phone hacking in second paragraph.)

Oct. 19 (Bloomberg) -- Farrer & Co., the law firm whose clients include Queen Elizabeth II, knew News Corp.’s U.K. unit lied to Parliament in 2009 about the extent of phone hacking at its British tabloid and didn’t take action.

News Corp. had evidence hacking was widespread when it told Parliament two years ago that a “rogue” reporter at the News of the World was to blame, Farrer & Co. lawyer Julian Pike told lawmakers today. He also revealed a previously undisclosed May 2008 meeting at which he said James Murdoch was told about phone-hacking at the paper, in addition to the June 2008 meeting about which other company executives had testified.

The situation was “not ideal,” Pike said when asked by lawmakers whether the queen’s law firm should let other clients lie to Parliament. “I don’t think it caused me any professional embarrassment. I do behave with integrity.”

The firm, which negotiated the company’s first settlement with a hacking victim in 2008, was dropped by News Corp. two days ago after it said it needed to consolidate its legal representation in dozens of lawsuits.

The evidence centered around an e-mail produced by police during settlement talks with hacking victim Gordon Taylor, the head of the Professional Footballers’ Association, which showed transcripts of hacked voice mails had been passed around the News of the World newsroom. The e-mail showed wrongdoing went beyond the tabloid’s royal reporter Clive Goodman and private investigator Glenn Mulcaire, who were both jailed in 2007.

Three More

Farrer & Co., which saw the internal e-mail in April 2008, concluded it incriminated three more reporters. Still, it didn’t advise New York-based News Corp. against misleading Parliament when executives from the company gave written and oral testimony the next year, Pike said. The police already had the evidence and Farrer & Co. is “not party to any cover-up,” he said.

“It’s a disgrace,” Labour lawmaker Paul Farrelly said after the hearing. “If I were the queen, I’d be looking for a firm with a great deal more integrity than Farrer’s.”

Pike wrote in a 2008 letter to Tom Crone, the newspaper’s lawyer until July, that “there was a powerful case to support a culture of illegal accessing of information in order to obtain stories,” he said today.

The law firm advised News International to pay 425,000 ($673,000) pounds to Taylor, even though other disputes over privacy violations might garner about 30,000 pounds, Pike said. Mark Lewis, who represented Taylor in the 2008 settlement, told the committee the size of the payment showed the company wanted to keep the extent of the newspaper’s hacking quiet.

‘No Way’

“There was no way the case was worth that amount,” Lewis said.

James Murdoch, 38, and his father Rupert, 80, were questioned by the parliamentary committee July 19. The lawmakers have recalled the younger Murdoch, News Corp.’s deputy chief operating officer, to give more testimony after his statements were challenged by Crone and Colin Myler, the newspaper’s former editor. The panel also asked Les Hinton, the former chairman of the News International unit, to testify on Oct. 24.

“James Murdoch would like to give the impression to you that he’s mildly incompetent, rather than thoroughly dishonest,” Lewis, who now represents dozens of phone-hacking victims, said to lawmakers today.

Lewis had asked for as much as 1 million pounds for Taylor in the 2008 settlement after the evidence was disclosed.

Chief Reporter

Crone and Myler disputed James Murdoch’s statement that he wasn’t told about the incriminating e-mail when he approved the Taylor settlement. The document, a transcript of voice mails typed by a reporter at the newspaper and marked “for Neville,” were understood to be a reference to Neville Thurlbeck, the paper’s chief reporter who was later fired.

Crone and Myler said they discussed the e-mail with Murdoch at a meeting on June 10, 2008, as it was the reason for settling the case.

Pike contradicted James Murdoch’s written and oral testimony to the committee by saying Murdoch was told about the Taylor case at a previously undisclosed meeting with Myler, on May 27, 2008. He said Crone had prepared a briefing note for Myler, copied to Pike, which discussed the e-mail.

The News of the World was shut in July after evidence emerged that reporters hacked into the voice mail of a murdered schoolgirl, hampering a police search. About 60 lawsuits by celebrities and other victims are under way, while investigations into the hacking have resulted in at least 16 people being arrested, including Thurlbeck and former News International Chief Executive Officer Rebekah Brooks.

--Editors: Christopher Scinta, Eddie Buckle

To contact the reporters on this story: Erik Larson in London at elarson4@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.


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