Bloomberg News

News Corp. Seeks to Limit Damages in Phone-Hacking Trial

September 25, 2012

News Corp. (NWSA:US)’s U.K. publishing unit asked a judge to block more than 150 victims of phone hacking by the News of the World from seeking additional damages designed to punish wrongdoers at a civil trial next year.

The evidence required to justify such damages would overlap with and possibly hinder related criminal cases against former employees at the now-defunct newspaper, News Corp. lawyer Dinah Rose said in a London court today. The first civil trial from the scandal is scheduled to begin as early as May.

“The question is whether the claim for exemplary damages has a real prospect of success,” Rose said at the hearing. The dispute involves a “completely futile set of allegations.”

News Corp., controlled by Rupert Murdoch, has paid out more than $315 million for legal fees, civil court settlements, and the cost of shutting the News of the World as a result of the phone-hacking scandal. It continues to be the subject of police probes into phone and computer hacking and bribery.

More than 80 people have been arrested, including the unit’s former chief executive officer, Rebekah Brooks, who is scheduled to enter a plea in a criminal case tomorrow.

Victims claim the extra damages are justified because New York-based News Corp.’s U.K. unit, News International, engaged in a high-level conspiracy to use the private information of celebrities and lawmakers -- gleaned from phone messages -- to write sensational stories, sell tabloids and boost profit.

Senior Level

Geoffrey Vos, the judge overseeing the matter, said he must determine if he can rule on exemplary damages “a few months or weeks before a major criminal trial that will cover the same issues.” The law around exemplary damages is still developing in Britain and the request “raises the issue of wrongdoing at the senior level,” he said.

Rose said the victims, including actor Jude Law, haven’t explained in court papers how company executives specifically sought to increase revenue by intercepting voice mail.

The victims “never allege the defendants calculated, for example, the profit to be gained from publishing an article about Jude Law, using information obtained from his telephone” or that the amount would exceed profit from using information obtained legally, Rose said.

Law was one of dozens of victims who sued in an earlier wave of litigation over the interception of voice mail by journalists. He settled in January for 130,000 pounds (211,000), while his ex-wife Sadie Frost received 50,000 pounds.

Rose also said the fight over exemplary damages may go to the Supreme Court, and that the issue will drive up costs in the case regardless of who wins.

155 Claims

At least 155 claims are included in the second wave of lawsuits, including filings two weeks ago by British actor Hugh Grant and the Duchess of York, Sarah Ferguson. Another 100 people are using an out-of-court settlement process set up by News International, Rose said.

At the beginning of today’s hearing, Vos told the lawyers one of the victims who sued recently, Major David Brooks, is married to his niece. Neither party objected to his continued handling of the case.

The civil lawsuits are being handled as a single case to establish a common set of claims and facts about the hacking conspiracy and set standards for monetary damages. A trial scheduled for February 2012 was canceled after victims were paid as much as 600,000 pounds each, including costs.

News Corp. asked Vos at a July 30 hearing to keep secret a series of new claims being made to justify the exemplary damages. The company wants details of the allegations kept from the public unless they are approved and added to the victims’ so-called generic claims for the trial.

To contact the reporter on this story: Erik Larson in London at elarson4@bloomberg.net

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


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