Mirror titles could face huge bill if phone hacking is proven

Latest police
investigation could involve hundreds of alleged victims and officers are looking at more than one newspaper

Phone hacking claims against the Mirror Group newspapers could involve hundreds of victims and if proven will leave the publisher facing a bill similar to the £300m run up by Rupert Murdoch’s News International, according to leading lawyers involved in the illegal newsgathering scandal.

Trinity Mirror today confirmed it is the second British newspaper company to be placed under formal police investigation over the alleged interception of voicemails after it announced to the Stock Exchange that it is the subject of a Scotland Yard inquiry to establish whether the PLC and its senior directors may be held “criminally liable” for phone hacking.

The alleged internal conspiracy, which has already led to former senior journalists and editors being arrested on suspicion of hacking-related offences,  was announced in line with the publicly-listed company’s obligation to inform shareholders of any development that could have a material impact on its stock.

Although Trinity shares quickly dropped 6 per cent after the announcement, there was a partial recovery later.

The company said that the police investigation was “at a very early stage” of examining if MGN, the subsidiary that publishes the Mirror’s national daily and Sunday titles, were criminally liable for “alleged unlawful conduct by previous employees in relation to phone hacking at the Sunday Mirror.”

The company statement added: “The group does not accept wrongdoing within its business and takes these allegations seriously.”

MGN has been under pressure in recent month to release details to lawyers of victims who claim the scale of the Mirror’s hacking operation, if proved, could match the revelations at the News of the World which eventually led News UK, formerly News International, to close the leading title.

One specialist law firm estimates that around 50 victims are currently seeking initial information and basic disclosure from MGN over alleged hacking and the time period currently under investigation by police could uncover several hundred potential victims.

Others told The Independent that the cross-over among staff who switched between leading tabloid titles. One souce said:  “Dark arts practices were not restricted to just one title, or one group of journalists.”

Former England manager Sven Goran Eriksson is among four people, including the former nanny of David and Victoria Beckham, to have filed damages claims against Mirror titles alleging phone hacking. A hearing for the cases to be struck out brought on behalf of the papers is due to be heard before the High Court next month.

Senior Mirror executives who gave evidence to the Leveson Inquiry into press standards maintained last year that a tight compliance regime inside Trinity Mirror ensured no hacking had taken place, and that no evidence was uncovered to suggest any illegal phone interception had been practiced.

One former Mirror journalist however told Lord Justice Leveson that  hacking inside the company was regarded as a “bog-standard journalistic tool”.

Although MGN maintain that only the Sunday Mirror is being investigated, The Independent has learned that the Met investigation is looking at more than one MGN title, and covers a specific timeline from 2000 to 2005.

Scotland Yard has refused to comment on the focus of their investigation.

Earlier this month, Dan Evans, a former Sunday Mirror reporter, became the first journalist to be charged with a hacking-related conspiracy while working for the Mirror title.

One charge against Evans states that he “conspired with others”.

Two of the four counts Evans was charged with related to part of the period 2002 to 2004 when he was employed at the Sunday Mirror. One of those charges alleges that he “conspired with others” to intercept voicemails. He later moved to the News of the World in early 2005 and faces further charges in connection with his time on the now defunct Sunday tabloid.

In March this year four former Sunday Mirror journalists, including the title’s long-serving editor, Tina Weaver, were arrested on suspicion of being involved in an alleged phone-hacking conspiracy between 2003 and 2005.

The other three ex-Sunday Mirror  journalists were the former Sunday People editor, James Scott, his deputy, Nick Buckley, and Mark Thomas, another People editor.

The formal Stock Exchange statement by Trinity confirmed existence of a formal Met investigation that has been evolving since last year.

The Mirror probe has a specific name, Operation Golding, and is operating under the authority of the Met’s specialist hacking investigation, Operation Weeting. In addition to those charged and arrested, Met detectives have also spoken to other senior company editors and executives.

It has been estimated that the total bill for settlement payments and the extensive legal operation News UK has mounted to defend itself against hundreds of hacking claims, is currently beyond £300 million and still rising.

Trinity Mirror’s insistence that there was no “wrongdoing within its business” indicates that the company are prepared to mount an expensive legal operation to challenge claimants who allege they were victims of hacking by journalists employed at Mirror titles.”

The current market capitalisation of Trinity Mirror – effectively the total value of the company – stands at around £340 million. A recent focus on reducing costs has pushed the company’s recent profit levels up.

However if Trinity is forced into a lengthy legal fight over hacking, and it is found that hacking did take place the final bill could destroy the publisher.

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