Bloomberg News

News Corp. Ordered to Pay Coulson’s Phone-Hacking Legal Fees

November 28, 2012

Andy Coulson, the former press chief to U.K. Prime Minister David Cameron, won an appeal forcing News Corp. (NWSA:US) to pay his legal fees in phone-hacking and bribery cases linked to his editorship at the News of the World tabloid.

Coulson’s 2007 termination contract, which had provisions for covering future legal expenses, requires News Corp.’s U.K. publisher to cover his costs linked to criminal charges because the allegations relate to his past duties at the title, the Court of Appeal ruled in London today. The accord was signed a month after two of the tabloid’s employees were sentenced to prison for phone-hacking offenses related to the royal family.

“A defense to criminal charges cannot have been outside the contemplation of the parties” because the contract was signed with an editor “on whose watch interception of communications offenses had been carried out,” a panel of three judges said in the ruling. Refusing to pay such fees would “deprive the indemnity of all practical use.”

Coulson, 44, was charged in July with conspiring between 2000 and 2006 to intercept the mobile-phone messages of more than 600 people, including U.S. actors Brad Pitt and Angelina Jolie. He was charged Nov. 20 with bribing public officials for stories. Rebekah Brooks, who stepped down as chief executive officer of the U.K. unit two days before her arrest last year, was also charged in the cases.

Coulson’s lawyer, Jo Rickards of DLA Piper, declined to comment on the judgment. Daisy Dunlop, a spokeswoman for News Corp.’s U.K. unit, News International, didn’t return a call for comment.

Hacking Scandal

The ruling comes one day before a judge-led inquiry into press ethics that was triggered by the hacking scandal will issue a report on the U.K. media’s relationship with the public, police and politicians.

News Corp. Chairman Rupert Murdoch closed the News of the World in July 2011 in response to public anger over revelations that journalists accessed messages on a murdered schoolgirl’s mobile phone nearly a decade earlier. The investigation spawned parallel probes of computer hacking and bribery and led to the arrests of more than 80 people, including the unit’s former head of security and its top lawyer.

Coulson started incurring costs in January 2011, when the Metropolitan Police Service opened a new probe into phone hacking in response to evidence the earlier case failed to uncover everyone involved. While News International initially paid Coulson’s legal costs, it refused shortly after his arrest in July last year.

A lower court ruled in December 2011, before Coulson was charged, that News Corp. wasn’t required to pay his legal fees and ordered him to pay the company’s legal costs in the case.

Coulson resigned from News International in 2007, after Mulcaire and the tabloid’s Royal Family reporter Clive Goodman were jailed for phone hacking. The ex-editor quit as Coulson’s aide last year when he was implicated in the new probe.

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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