James Cusick: For those yet to settle, this will be a game-changer

News Corp shareholders may soon be alerted to the legal reality that the damages fund of £20m is woefully short
Click to follow
The Independent Online

The scale of the settlement deal between News International and the Dowler family can be described as game-changing.

NI has previously used its substantial financial muscle to secure confidentiality agreements and out-of-court deals, especially in the private phase of the phone-hacking scandal, when the company was effectively hiding the illegal practices in its newsroom.

Lawyers representing the current queue of civil litigants, now standing at around 30, were not using the earlier NI payments to Gordon Taylor, Sienna Miller and Leslie Ash – all victims of News of the World phone hacking – as the benchmark for what the Murdoch empire was prepared to pay them in settlement.

Most were instead looking to the hearings scheduled for January next year at the Royal Courts of Justice.

Mr Justice Vos has been managing the group of six civil litigants who were expected to be the test cases determining the damages settlements for other victims.

The cases include the actor Jude Law, the Labour MP Chris Bryant, the designer Kelly Hoppen, the former England footballer Paul Gascoigne, the football agent Sky Andrew, and Sheila Henry, whose 26-year-old son died in the 7/7 terrorist attacks in London.

For those whose names were simply found in the archive of Glenn Mulcaire, the private investigator employed by NOTW, lawyers were expecting nothing like the scale of earlier settlements. The lack of evidence, at least so far, that NOTW used all the numbers, may have contributed to lowering expectations.

News International itself, while expecting the Dowler settlement to be large, had set aside £20m to cover the total costs of damages that were still in the legal pipeline. However the £3m settlement for the Dowler family, which dwarfs earlier deals, sends a powerful signal to those still in the queue. As Tom Watson points out, News Corp shareholders may soon be alerted to the legal reality that the damages fund of £20m is woefully short.

When Mr Justice Vos begins in January, it may not be wrong to assume that NI will have reduced the number of test cases before him. Lawyers for the victims of phone hacking want compensation. In or out of court, it doesn't matter.

Paying seven-figure sums to one family, and seven figures to their designated charities, means that News International may have finally realised that its once-powerful defences are no longer as strong or as sustainable. The flood gates may just have opened.