Rupert Murdoch’s British news arm faces a rush of fresh compensation claims and could be exposed to criminal prosecution after admitting its role in a long-running telephone hacking scandal, lawyers said on Saturday.
“There will be a massive flood of people contacting lawyers,” said lawyer Charlotte Harris of law firm Mishcon de Reya.
News International, parent company of Britain’s top-selling News of the World tabloid, said on Friday it would admit liability and pay compensation in eight cases — although many more people believe they were targeted.
The admission was an about-turn from the media group’s previous denial that it knew journalists were hacking the phones of the royal family, politicians, celebrities and sports stars, blaming a handful of “rogue reporters” for the scandal.
Those who will receive an “unreserved apology” from the group, part of Murdoch’s global media empire News Corp, include actress Sienna Miller and politician Tessa Jowell.
Miller’s lawyer, Mark Thomson, said she would continue with her action and had not accepted any offer of settlement.
“Her primary concern is to discover the whole truth and for all those responsible to be held to account,” he said.
Harris, acting for five of the 24 individuals with active court cases against the News of the World, said some of her clients had been contacted by News International and were considering their options.
“People [whose phones] have been intercepted, people who have had their privacy infringed, on a case by case basis must be given proper compensation,” Harris said.
Analysts said the media group’s move was an attempt to draw a line under the affair and limit financial costs as News Corp tries to push ahead with its planned US$14 billion purchase of British satellite pay-TV operator BSkyB.
Settling all the cases could cost the group as much as £40 million (US$66 million), said media lawyer Rod Dadak, a partner of law firm Lewis Silkin which represents a number of potential phone hacking litigants.
News International has declined to comment on media reports it has set aside half that amount, £20 million, for compensation payments.
“It’s a black hole. So £20 million may be substantially too little, it could be double that,” Dadak said, adding that the media group has already made individual settlements in the affair of up to £1 million each.
Dadak said News International was now itself at risk of corporate criminal prosecution, including for potential offenses under Britain’s Regulation of Investigatory Powers act, which covers illegal phone interception.
“This is Murdoch’s Watergate because the cat is out of the bag. Two or three people have taken the rap, but the powers that be must have known or turned a blind eye to what was going on. It couldn’t be more serious,” Dadak said.
Police have reopened an investigation into the hacking scandal and last week arrested two journalists, former senior News of the World editor Ian Edmondson and a man identified as the paper’s chief reporter Neville Thurlbeck.
Lawyer Mark Lewis of Taylor Hampton Solicitors, with four active court cases against the tabloid, said the current compensation claims were just the “tip of the iceberg.”
“Cases are coming forward all the time. My phone hasn’t stopped ringing from both journalists and potential clients,” he said.
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