Murdoch hacking scandal set to drag into next year

Reuters News
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Posted: Apr 15, 2011 11:17 AM

* Judge to decide on how to manage claims

* Scandal casts shadow over News Corp pay-TV deal

* Judge says first test cases could be heard end of 2011

By Georgina Prodhan

LONDON (Reuters) - A public apology from Rupert Murdoch's UK newspaper arm, designed to contain an escalating phone-hacking scandal, looked to have failed after a judge said civil cases against the firm could run into next year at least.

At a case-management conference called to decide how best to manage a potential flood of lawsuits, the presiding judge on Friday proposed testing four lead cases, including that of actress Sienna Miller, and said they could be ready around the end of the year.

So far, 24 public figures who believe their voicemail messages were intercepted by journalists at the popular News of the World tabloid are suing News International, the UK newspaper arm of News Corp.

Many more are expected to come forward after News International apologized to eight victims last week and said it would set up a compensation scheme.

Last week News Corp deputy chief operating officer James Murdoch, the son of the company patriarch, said the company had managed to "put this problem into a box" but Judge Geoffrey Vos made clear that was not the case.

"The show ain't over. That's pretty obvious," Vos told a packed London courtroom.

An investigation into newsgathering practices at the News of the World has so far touched celebrities and politicians up to British Prime Minister David Cameron and repeatedly made headline news in rival publications.

It has clouded a planned deal by parent company News Corp

for a $14 billion buyout of British pay-TV group BSkyB, with critics saying the government should put it on hold until the hacking investigation is over.

Vos proposed trying as test cases those brought by Miller, sports agent Skylet Andrew, ex-sports pundit Andy Gray and interior designer Kelly Hoppen because they encompassed a wide range of issues and were closest to being ready for trial.

"It's hard to imagine there would be generic questions that would not be raised by those cases," Vos said. He said they could be ready for trial by the end of the year or early next.

Police are also carrying out a criminal investigation. They have arrested three senior News of the World journalists so far this year, including one on Thursday.

Lawyers acting for the hacking victims and for News International said they were broadly supportive of test cases.

News International's News of the World sells almost 3 million copies every Sunday -- more than any of its rivals -- fueled by front-page tales of celebrity scandal.

But a week ago the company admitted that some of those stories may have come from hacking private phone messages and it accepted liability for the first time. News International apologized to eight people including Miller and British politician Tessa Jowell who are suing the company.

REPORTERS ARRESTED

A senior media lawyer who asked not to be named told Reuters the case would continue to play out in the press as both the criminal investigation and civil cases run on.

"News International are hoping to neutralize this by settling with people," he said. "But as long as there are sufficient claimants who haven't been bought off, then it will continue and litigation is a slow process.

"This is personal and about the principle and so those claimants may well decide to push on," he said, adding that they would have to weigh up the risk of incurring costs.

For years, News International maintained that phone hacking at the tabloid was limited to a few rogue individuals, a stance seen as a bid to protect the reputations of those at the top.

Its royal editor and a private investigator were jailed in 2007 for hacking into voicemail messages of aides to Britain's royal family. Editor Andy Coulson resigned, saying he took ultimate responsibility but had not known about the practice.

Coulson later became the prime minister's spokesman, but resigned from that position in January as a new police investigation gathered steam.

Law firm Mishcon de Reya, which is acting for several of the claimants, says it has received an unprecedented number of enquiries since News International published its statement, and estimates there could be more than 6,000 potential claimants.

The case has also clouded the BSkyB deal, which critics fear would increase News Corp's influence over British media by adding 24-hour TV news channel Sky News to a stable that includes the Times of London and third-party radio news.

News Corp has undertaken to spin off Sky News if the deal, which would be its biggest ever, goes ahead.

The government is expected to approve the deal in the coming weeks. It has said this should be decided on grounds of media plurality and not be linked to the phone-hacking scandal.

(Writing by Georgina Prodhan and Kate Holton; Editing by Chris Wickham and Mark Heinrich)