The transcripts of the official inquiry into the culture, practices and ethics of the press. More…

  • Good morning, sir. At this Inquiry, I appear with Anthony White and Anna Boase instructed by Linklaters for NI Group Limited. The letters "NI" stand for News International, and that is what I am going to call it.

    News International is the company which owns News Group Newspapers Limited, which published the Sun newspaper and which used to publish the News of the World until that paper ceased publication on 10 July this year. News International also owns Times Newspapers Holdings Limited, which itself owns Times Newspapers Limited, which publishes the Times and the Sunday Times.

    News International welcomes this Inquiry. It intends to co-operate fully with the Inquiry and it looks forward to contributing to the debate on the future regulation of the press in the United Kingdom. It is right that at the formal opening of this Inquiry and in public, I should repeat on behalf of News International the apologies that have been made to all those whose phones were hacked or whose families, friends or associates' phones were hacked by or at the behest of staff working at the News of the World.

    That phone hacking was wrong. It was shameful. It should never have happened. News International apologises for it unreservedly. Nothing that it has said on its behalf during this Inquiry is intended to detract from or qualify that apology in any way.

    I must add that we accept that phone hacking at the News of the World was not the work of a single rogue reporter. We accept that there was no public interest justification for it and we further accept that it was not the subject of a proper and thorough investigation until the Metropolitan Police began Operation Weeting in January this year, following the supply of certain material to them by News International.

    In addition, we regard as wholly unacceptable the commissioning of a private investigator to carry out surveyance of lawyers acting for claimants or of Members of Parliament on the Select Committee. I should say that watching what people are getting up to is an old-fashioned and perfectly proper journalistic practice in many circumstances, but in this instance it wasn't journalism at all and it was unacceptable.

    The question of exactly who was involved and in what way at the News of the World is the subject of the continuing police investigation, and I cannot go into that whilst those investigations are continuing, although there is one point which I am going to refer to in a moment.

    Before I do that, I can and must say that not everyone who worked at the News of the World was involved. There were many fine reporters and staff who worked at that newspaper who had no involvement in phone hacking and who have suffered in the fallout through no fault of their own.

    In his opening address yesterday, Mr Jay referred frequently to News International. We make no complaint about that but it is necessary to bear in mind that News International has and had several horses in its stables, and each has or had a stable of its own.

  • Yes, I think on one occasion I actually corrected him and said News of the World.

  • Yes, sir, you did, and we were pleased to hear it.

    As you know, before the News of the World closed, there were four major titles: the Times, the Sunday Times, the Sun and the News of the World. At all times, each title has been run by its own editor, quite separately from its stable mates, and each paper has had, below its editor, its own editorial staff and its own journalists. There has been some sharing of support services but in journalistic terms they are separate and quite often competitive operations.

    As I have already mentioned, the Times and the Sunday Times are published by Times Newspapers Limited, while the Sun and formerly the News of the World are published by News Group Newspapers Limited. Despite or perhaps because they were published by the same company, the Sun and the News of the World not only operated separately; they positively competed against each other. Very recently, it had been intended that they should share a managing editor, but that arrangement had scarcely begun before the News of the World was shut.

    So it is perfectly correct to say that the four papers are or were under the same roof, but they are or were very different papers with, crucially, different editors and different staff. It is, therefore, necessary to be very careful before extrapolating from some people at the News of the World to everyone at the News of the World and necessary to be very careful again before extrapolating from the News of the World to other papers under the News International roof.

    If I now return specifically to the News of the World, just before lunch yesterday, Mr Jay reviewed in a numerical fashion the information to be derived from the Mulcaire notebooks. I must say immediately that we have never seen the whole set of Mulcaire notebooks. I believe the only people who have are the police.

    When summarising them, Mr Jay said that the notebooks showed 2,266 taskings, and he gave the number attributed via the corner names to each of four News of the World staff, to whom he referred by the cyphers A, B, C and D. The taskings attributed to these four added up to 2,143. Some arithmetic shows that that leaves 123 taskings not accounted for by those four individuals. Those 123 taskings must include Mr Goodman, who we know was at least reasonably active and who was not included in the four given the cyphers A, B and C and D. I should say that Mr Goodman's is the only name which I intend to use.

    The 123 must also include the corners marked "private", and it must also include those that are eligible. We don't know how many that leaves but it doesn't seem likely to be very many.

    However, Mr Jay also said that, ignoring the "private" corner name and the eligibles, we have at least 27 other News International employees. That is a quote from yesterday's transcript. This is a context where News International means the News of the World, but apart from that, the statement has occasioned some surprise on our side. As I have said, we do not have all the notebooks, but we knew that there were five legible corner names which could be correlated with names of News of the World journalists, those being Mr Goodman and A to D. We also know that the police believe that there are a number of others who can be correlated to News of the World journalists but we do not know the names and we are in no position to assess that one way or another, nor do we know how many, but our understanding is that it certainly does not add up to 27. Given the arithmetic which I went through just now, it does sound a little surprising if that rump of 123 taskings in fact contained at least another 21 News of the World journalists whom we are unable to identify.

    I don't want to present this as more important than it is. 2,266 taskings is 2,266 too many, five journalists known to have been commissioning them from the News of the World is five too many, and the corner names may not be the beginning and end of evidence of involvement. It may be possible to be involved without being a corner name at all. But nonetheless we think it is necessary to be accurate as far as possible and we would like to have this information rechecked. I'm sure that we can discuss with the Inquiry team and the police how that might be done.

    There is one other point I wish to mention, which concerns the Sun. Mr Jay also referred to a claim made by Mr Jude Law alleging phone hacking by or for the Sun. Mr Jay said that Mr Law alleges that his phone was hacked by the Sun and that part of the evidential matrix in support of his case is a corner name in the Mulcaire notebook which simply states "the Sun", without specifying the individual working there.

    As a result of Mr Law's claim, we do have the pages of Mr Mulcaire's notebook which we think are those referred to. We have them because Mr Law, as I understand it, obtained them from the police by a disclosure order and then disclosed them to us.

    But the reference to them came as a bit of a surprise, because we only have them under the terms of the strict confidentiality undertakings given to Mr Justice Vos. They are not, so far as we are aware, in the public domain.

    That gives rise to a difficulty, because it means that I cannot respond to what Mr Jay said without going further into material which is not in the public domain. All I can say is that it is quite true that Mr Law has made a claim in respect of hacking by the Sun. That claim is disputed, and we do not accept that the documents referred to by Mr Jay provide it with any cogent support.

    We will have a discussion with the Inquiry team as to how all concerned can avoid incremental disclosures of material which is not in the public domain through one party referring to it, another wanting to refer to a bit more to deal with the assertion and then perhaps the first party wanting to refer to a bit more again and so on. There is a risk of a spiral there, and we should and we will have a discussion as to how to avoid it.

    I must now turn to the steps which have been taken within News International to put matters right. First, in July this year the decision was taken to close the News of the World, and that newspaper published its last issue on Sunday, 10 July this year.

    Secondly, a management and standards committee was established in July 2011. The committee has an independent chairman, Lord Grabiner QC, and a reporting line which runs up to Mr Viet Dinh, an independent member of the main board of News Corporation and previously an assistant Attorney General of the United States. The terms of reference of the management and standards committee require it to ensure full co-operation with this Inquiry and with the police investigations and to carry out any necessary internal investigations. They further require it to review existing compliance systems within News International and to recommend and oversee the implementation of new policies, practices and systems to create an updated and robust governance and compliance structure for News International.

    The committee has appointed Linklaters, a leading firm of solicitors with wide experience of investigation work, to carry out a full internal investigation at News International and the newspapers. That investigation is being carried out under protocols agreed with the Metropolitan Police and relevant material is being passed to the police as and when required. The committee has also appointed Olswangs, a leading firm of media lawyers, to advise on best practice systems of governance.

    Thirdly, News International is not sitting still and waiting for the outcome of those reviews. A new chief executive, Mr Tom Mockridge, was appointed in July this year following the resignation of Rebekah Brooks. Mr Mockridge has previously worked in New Zealand, Australia, Hong Kong and Italy, but he has not been based in the UK before, so he is a fresh pair of hands. Under his guidance, close attention is being given to compliance matters. Amongst other things, a hard copy of News Corporations' standards of business conduct has been issued to all staff.

    That document has been provided to the Inquiry. It sets out the standards of ethical and lawful conduct expected of staff and includes a procedure for reporting breaches of those standards, if necessary anonymously. By reminding staff of those policies, by approving and implementing new policies on matters such as compliance with the Bribery Act and whistle-blowing, and by a process of training, steps are being taken to ensure that every member of staff at News International, including all staff of the three newspapers, understands that they are expected to abide by the law and by the highest ethical standards of professional conduct and with the Editors' Code of Practice published by the PCC.

    News International believes that the staff at the Times, the Sunday Times and the Sun do not require to be reminded of appropriate standards of lawful and ethical behaviour, but we wish to ensure that there can be no repetition of what occurred at the News of the World. The Inquiry will know that since 1981, the corporate governance structure of Times newspapers Holdings Limited has incorporated arrangements set out in the Articles of Association of the company which are designed to ensure the editorial independence of the Times and of the Sunday Times. Under these arrangements, Times newspapers Holdings Limited has six independent national directors. Amongst their functions is that of resolving any disputes between the editors and the company. The independent national directors remain in place, and their role is in no way diminished by the corporate governance improvements which are being made.

    Fourthly, civil claims for damages have been raised against News Group Newspapers in consequence of phone hacking. Some of these claims have resulted in proceedings being issued and the claims are being managed as a group by Mr Justice Vos in the High Court. We are trying to take a sensible and constructive approach to those claims, making admissions and concessions where appropriate, and a number of such claims have been settled either before or after proceedings have been begun.

    In addition, and in order to make it easier for people to obtain compensation for admitted claims, News Group has established a compensation scheme to pay out amounts determined by Sir Charles Gray, a former High Court judge, as being equal to what a court would award with 10 per cent added on top.

    By taking these steps, News International intends to ensure that what happened at the News of the World will not happen again, and that fair compensation will be paid to those who suffered from it.

    I am now going to turn from the past and indeed the present to the future.

  • Just before you do, you've mentioned a number of steps that have been taken -- indeed, the independent directors have submitted a statement to the Inquiry, as you probably are aware.

  • And you've mentioned the work being undertaken by Lord Grabiner with the assistance of two firms of solicitors. In the same way that I make it clear that I've told the industry as a whole that I would welcome any suggestions that can work for everyone, including the public -- and I have made similar comments during the course of the directions hearing -- I welcome Lord Grabiner's assistance to such extent as he is able to provide it, and I am very pleased to hear that he is tasked also to assist the Inquiry. This is a job which all of us have to do, whatever our backgrounds in connection with the issues that have given rise to it.

  • Yes. We had noted what you had said previously and also what you said yesterday morning about welcoming assistance from the industry, and I know that that has been taken on board and I hope that it will prove fruitful. Indeed, I will say a little bit about that now.

    The position of News International is that it supports the principle of independent self-regulation for the press. It considers that the PCC can be improved, it will still not be perfect, but the alternatives are not perfectly either, and we would suggest suffer from much greater disadvantages. We have addressed this area in our written opening submissions, and I am not going to repeat now what is said there, but there are three points which I wish to highlight.

    First of all, as Mr Jay acknowledged yesterday, the press is not above the law. Like all other citizens, it's constrained by both the civil and the criminal law of the land, and over the last 15 years or so, the law of the land has developed to provide protection in many of the areas where there has been concern over press behaviour.

    We now have the Protection from Harassment Act 1997, which gives protection from harassment and makes it both a criminal offence and gives rise to a civil claim for damages. We have the Data Protection Act, which protects personal data and provides criminal offences obtaining or disclosing personal data without permission or justification, and we have the common law of privacy, developed by the courts since the Naomi Campbell case in 2004, which gives a right to sue for damages for invasions of privacy. The press is subject to all those laws and many more, as are all citizens.

    That the law applies to the press is easily enough seen from the phone hacking cases. Phone hacking is a criminal offence under the Regulation of Investigatory Powers Act 2000. I am not going to go into the interpretation of section 2 of that act, which was touched on yesterday, but the Inquiry will be aware that phone hacking is, of course, an offence also under the Data Protection Act. So even if there is any doubt about the offence under RIPA, there is undoubtedly one under the Data Protection Act.

    If there was any doubt in the popular mind, or indeed that of the press, that phone hacking was criminal, it was dispelled when Mr Mulcaire and Mr Goodman were arrested and pleaded guilty in 2006 and when they were both sentenced to terms of immediate imprisonment in February 2007. Those convictions and sentences do appear to have had a salutary effect. It was notable that when speaking at the Inquiry's seminar on 12 October this year, the current Information Commissioner, Christopher Graham, said that in his two and a half years as the Information Commissioner, he had not seen a single case of an offence under section 55 of the Data Protection Act which involved the press. That is the section which makes it a criminal offence to obtain or disclose personal data without consent or justification.

    I am not going to give any guarantees that there was no phone hacking by or for the News of the World after 2007. No doubt that will be explored during the evidence, and we noted that Mr Jay said the police thought the last instance was in 2009. Nonetheless, it does look as if lessons were learnt when Mr Goodman and Mr Mulcaire went to jail. If phone hacking continued after that, it was not, as it appears, what Mr Jay described as the thriving cottage industry which existed beforehand.

    The lessons for the Inquiry, we would suggest, are that the ordinary law of the land protects against phone hacking both by making it a criminal offence and by giving a civil claim. The Inquiry should, we suggest, be somewhat wary of making recommendations designed to fight the last war, rather than the next one.

    The second point I want to make concerns not, I hope, a battleground, but certainly the terrain the Inquiry needs to cover, and particularly the Internet or the web or the blogosphere or whatever you wish to call it.

    As I am speaking now, it is still just possible to identify fairly uncontroversially the constituents of the press. We can all reel off the names of the well-known national papers, most of us can probably also name our local regional papers and maybe some other regional papers, and most, if not all of them, are represented at this Inquiry.

    But if I were to list the papers by name, I would swiftly have to add the reference to their websites, because their websites have become part of the package and the speculation now is not as to whether one of the established papers will become an Internet-only publication; it is as to which will be the first to take that route, and by doing so, to join the influential news sites which already exist solely on the Internet. We are, therefore, already at the stage where the press cannot be sensibly defined without reference to the existence of titles which are or soon will be published solely on the Internet.

    What that means for this Inquiry is that any regulatory solution which it recommends must tackle the question of how to regulate publication on the Internet. That is a problem which makes herding cats look like a nursery school exercise, but it is a problem which cannot be simply ignored. It cannot be ignored because there can be no fairness, logic or coherence in a system which regulates a publisher or a journalist who publishes on paper, but shrugs its shoulders as soon as he or she chooses to publish on the Internet instead, and it cannot be ignored because the fragile economics of the printed press should not be disadvantaged by a regulatory cost which does not bear equally on its Internet competitors.

  • That's an easy problem to state, Mr Davies, and if it matters, I entirely agree with you, but I'm listening very carefully to what you're just about to suggest.

  • Well, I and my clients are very well aware that it is a much easier problem to state than it is to solve.

  • Because it's not just a question of solving it in relation to, say, one of our local nationals, if you'll pardon that odd use of language, simply saying, "Right, we'll stop printing, we'll just go on the Internet", because the Internet provides access to news material which is published anywhere in the world.

  • Absolutely. It is a daunting problem and I don't have a sparkling and brilliant solution to it in my pocket which I am about to pull out.

  • I'm sure Lord Grabiner will provide us with one.

  • I shall look forward to it.

    There are two things I would say about that. One is there is the related problem of cost. The Inquiry should, so far as at all possible, avoid imposing costs on the printed press which are not shared by its competitors which are not in print, because to do that risks achieving the destruction of the printed press which is sought to be regulated.

    The other point I would making is that it may be right that it is easier to regulate at least parts of the Internet through a self-regulatory system because you have to be much less precise in defining your terms with a self-regulatory system, and it is endlessly and swiftly adaptable. Once one passes a statute that says, "People with the following characteristics have to be regulated", then it is necessary to define somehow which parts of the Internet you are going to regulate and which are outside. You have to draw a line somewhere between a blogger and a professional journalist, a task which in itself is almost impossible.

  • That's a line we're going to have to draw anyway, because one could talk about even journals such as the Huffington Post, but that creates different problems to those that might be created by a blogger such as Guido Fawkes, or a blogger who simply now can communicate with a much larger audience than previously was the case.

  • Indeed so, and I'm afraid I'm simply stringing out problems, but one also has the case of a blog which is normally read by 25 people and then, for some reason or other, it catches the zeitgeist and it suddenly has hundreds of thousands of readers. How is one to treat that, inside the net or outside the net? These problems are, I'm afraid, very intractable.

  • The third point I wanted to make is that the constitutional principle that the press should be free of government regulation is a very important one. Governments have a poor record of resisting temptation when it comes to regulating the press. As was pointed out at the seminars, one only has to go to Italy or Hungary now or less than 200 years back in our own history to see that. I think as a matter of history, after the massacre at Peterloo less than 200 years ago, the government introduced repressive measures applying to the press and there were a number of trials for seditious libel as well.

  • I'm very grateful to you for taking me back to 1643 in your written submissions and I understand the lesson, but I am very keen to unpick one thing at some stage, Mr Davies, and that's what we mean by "regulation". It strikes me that at the moment, a lot of people are talking about statutory regulation as if it is binary. There is either statutory regulation on the one hand or self-regulation on the other, and I'm not sure that the boundary between the two isn't very, very much more blurred. Indeed, some of the commentary about systems which could be put in place might be assisted by the statutory, for example, recognition of a self-regulatory body, as happens in other industries.

    So I would be very keen to widen the debate from the binary discussion of "statutory regulation bad, self-regulation good" to understanding what is meant by "statutory regulation", whether everybody is talking about the same thing.

  • Yes. I think the concern that we have is very much focused on anything which provides a mechanism for governmental control over the press.

  • Well, subject to anything that anybody else may say, you're pushing, in that regard, at an absolutely open door. Of course, I'm only two days in -- that's not strictly true; I'm three months in -- but I think I said that right at the very beginning and I can't believe that anything will happen that will change my mind about that, but that's only half the issue, as I'm trying to investigate.

  • Yes. As I said, we had noted the remarks you've made more than once now.

  • Yes. Nobody seems to pay attention to them because they all think that I'm going to do something else.

  • I think one should not conclude from the absence of a shining perfect solution in my pocket that people are not paying attention to remarks from yourself or from the Inquiry in general.

  • As I said, and as I think we've agreed, it is a difficult problem and we haven't come up with a perfect solution yet. We will not hold back if we do.

  • I'm very grateful for that indication.

  • Yes.

    Despite the open door which has been helpfully mentioned, I should emphasise that we consider that the need for a free press now is as great, if not greater, than it has ever been.

  • Yes. Don't let me in any sense, by anything I say, limit or cause you to not say something you want to say, for this reason: this is unlike any other judicial hearing. By the very fact of the way this Inquiry is being conducted, this is a debate which is going on in confines that are much broader than this room and with me, so I don't want, in any sense, people to limit what they want to say simply because they think it will irritate me because I've already said I agree with them. They can limit them a bit but not entirely.

  • With both parts of that statement in mind, let me simply say that we consider that the need for a free press is very great at the moment. Not so long ago, spin doctors were unheard of. We now have an industry which exists to portray events in the manner desired by its clients, whether they are the government, business or pressure groups. Struggling to disentangle the facts from the spin and to explain the world to its readers is the job of the press, and it is a harder job now than it -- well, certainly no easier than it has ever been.

    The British press, including the Times, the Sunday Times and the Sun, have a long and fine record of reporting the news, of uncovering scandals and of entertaining their readers. Tragically, the News of the World managed to plumb both the depths and the heights. The depths, I need hardly say, are taken up by phone hacking. The heights are well illustrated by the remarkable piece of investigatory journalism which exposed very recently the willingness of certain international cricketers to take money to fix events in cricket matches and led to the convictions of three cricketers. That investigation was vital to the future integrity of professional cricket and to the trust of the tens of millions who follow the game. It was an investigation which no private citizen could have taken on and which no government organ or professional body showed any inclination to take on. Indeed, the police frankly said after the convictions that, understandably, they have higher priorities than cleaning up professional cricket and that had the case not been handed to them on a plate, they would not have pursued it. This was a scandal that would have run and run if the press, in the form of the News of the World, as it happens, had not intervened.

    There are many other notable examples of investigative journalism, from thalidomide to MPs' expenses and the link between Arthur Scargill and the Libyan regime which Mr Jay referred to yesterday as having been exposed by the Sunday Times and explained by Mr Witherow in his recent article. Despite those successes, the question that should perhaps be asked is that proposed by the editor of the Times, James Harding, in his statement to the Inquiry: not "why does the press know so much?" but "why does it know so little?"

    Why did it know so little about weapons of mass destruction or the lack of them in Iraq? Why did it not forewarn of the banking crisis? Why did it not fully appreciate the dysfunction between 10 and 11 Downing Street during the last government? Why did it not see the recent riots coming? It may be that what we need as citizens is for the press to have not less freedom but more. So our plea is for the press not to be over regulated. It's not a plea for it to be above the law.

    In the course of this Inquiry, we cannot and will not hide from the worst that has gone on in the past but we hope to be able to assist in plotting a course which will permit a free and vigorous press to flourish with integrity in the future.

    Now, that said, and as I have said I think twice now, I don't have a shining example of a perfect regulatory system in my pocket, but that is a matter which we are thinking about very hard, and we will do our best to assist the Inquiry in conjunction, I hope, with the rest of the industry in that respect.

  • I'm very grateful. Of course, I've mentioned the binary between statutory regulation and self-regulation. There's another binary as well, and that is between what is frankly contrary to the criminal law --

  • -- and that which isn't contrary to the criminal law, but which, as you readily conceded, breaches fundamental ethical considerations of which the recent example last week is a good one. So one can't just leave it to the criminal law.

  • No, indeed, and there is the civil law as well, and there are perhaps difficult issues as to how far surveyance transgresses that.

  • I agree. That's the point. But you agreed that it's inappropriate.

  • It's unethical, whatever words you want to use.

  • Query whether it fits into some invasion of a civil law right, and on top of that, one has to graft the additional problem whether the mechanisms for seeking relief in civil justice today, with all the problems of access to justice about which everybody in this room will be extremely familiar, don't themselves cast a different light on what we have to do to provide a mechanism that is efficient, effective, fair and cheap, both to those who wish to complain and indeed the industry.

    I have said outside this room that ten, 15 years ago, the problems about libel were very much those of victims who could not get legal aid and therefore to take on the big beasts of the press was a difficult problem. Now it might be that the complaint has moved slightly differently because conditional fees have meant a complaint now from the press that they can't afford to contest litigation because the cost of doing so, once one adds up the consequence of conditional fee, itself becomes ruinous.

    I can't solve the problems of access to justice -- I have quite enough on my plate as it is -- but one of the issues might be some mechanism to permit a speedier, effective and sensible mechanism for all to use and for all to take the advantage of, which does not involve the panoply that otherwise exists in this building, available through the High Court and the traditional litigation route.

    I merely put it on the table, as I have done, because as you identify the problems, you might as well throw that one into the mix as well.

  • Yes. That is also a problem which has crossed our minds, and I'm afraid it's also in the camp of problems to which I don't have a shining solution in my pocket, and we had noted with a degree of horror that I think one of the seminars was told by an ombudsman from the financial services ombudsman's brigade that their total budget was something over 100 million a year. As you know, the PCC's budget is, I think, just under 2. So there are enormous difficulties there.

  • I understand the cost consequences, yes.

  • There is also a philosophical and constitutional question, going back to the earlier problem, as to whether the press ought to be limited beyond the limits which apply to the ordinary citizen. If one does that, one is saying that freedom of the press is somehow narrower than freedom of speech and that is a question in itself.

  • So I apologise if I have done more to sketch the problems than to provide the solutions but --

  • Well, the problems are somewhat easier to state than the solutions to find.

  • Having done that, unless there's anything else I can add --

  • No, Mr Davies, thank you very much. Thank you.

    Mr Caplan?