There was "nothing exotic, unusual or improper" in an arrangement in which News Group Newspapers would pay private investigator Glenn Mulcaire's legal fees, a judge heard today.
ulcaire, who was jailed for six months in 2007 for intercepting messages on royal aides' phones, was not at London's High Court for the launch of his breach of contract action against News International subsidiary NGN.
He wants the Chancellor of the High Court, Sir Andrew Morritt, to grant a declaration that NGN had no right to terminate an alleged indemnity in respect of his costs or damages incurred or ordered to be paid by him in connection with the hacking scandal.
Setting the scene for the two-day contested case, his counsel Ben Wiliams said hacking was wrong because it was illegal but also in the wider sense that there was a loss of inhibition and moral sense in some parts of the media.
He said that Mulcaire did not have the means to fund his legal defence or pay successful claimants in the civil litigation - due to start in January - although he had secured counsel to represent him in today's hearing and last month's appeal over self-incrimination through conditional fee arrangments.
Such arrangements depended on there being at least a reasonable likelihood of success in the proceedings, and it was not thought there was any likelihood of Mulcaire being awarded his costs in the January hearing before Mr Justice Vos.
Mr Williams said it was a matter of public record that NGN did pay Mulcaire's legal costs until July 19 when Rupert and James Murdoch were questioned by a Commons select committee and challenged about the payment.
"Glenn Mulcaire's case is that the defendant did agree to pay his costs, the agreement is enforceable and the defendant did not have the right to terminate it."
He said that despite the rhetoric employed by MPs at the committee, there was nothing "exotic, unusual or improper" in the arrangement contended for by Mulcaire.
"Where an employer and an employee have each acted unlawfully and the employer is liable to pay damages and costs resulting from one or both, it is not remarkable to find the employer paying an employee's legal costs and involving itself closely in his defence of civil proceedings."
Equally, where there was joint liability and one party had substantial means while the other did not, it was not surprising for them to reach an agreement between themselves as to how it would be funded.
He said the first manifestation of an indemnity arrangement between Mulcaire and NGN, in respect of both damages and costs, was in June 2008 in proceedings brought by Gordon Taylor, chief executive of the Professional Footballers' Association.
During this morning's hearing Mr Williams said that Mulcaire had told News of the World lawyer Tom Crone in 2007 he was not just acting for the paper's royal editor Clive Goodman.
Goodman was sacked in February 2007 after being jailed along with Mulcaire for intercepting voicemail messages left on royal aides' phones.
In the wake of the prosecution, the newspaper insisted the hacking was the work of one rogue reporter.
But Mr Williams told the court that Mulcaire "told Tom Crone in 2007 that it was not just Clive Goodman but Ian Edmondson who had been tasking him with interception".
Edmondson, the paper's former news editor, is one of several people who have been questioned by Scotland Yard detectives following the launch of a new probe into phone hacking.