By Mark Hosenball
LONDON (Reuters) - Like all good tabloid tales, the News of the World saga is a scandal that keeps on giving.
British investigators have spent months sharing thousands of pages of seized evidence with hundreds of suspected targets of alleged phone hacking by the now-defunct newspaper.
The problem for Rupert Murdoch's UK-based News International, which published the newspaper, is that each session with probable victims could trigger new revelations and new lawsuits, including possible litigation in U.S. courts.
"Most of the people who are informed by police that their phones have been hacked will sue for invasion of their privacy," said Geoffrey Robertson, one of Britain's most prominent human rights lawyers. "Some celebrities are upset that they're not on the list so far and are waiting with impatience to be informed by Scotland Yard."
The main evidence, say victims of the hacking and lawyers representing them, consists of 11,000 pages of handwritten notes made by a private detective who was paid an annual retainer by the shuttered tabloid. The notes, several people who have seen the evidence said, contain names of suspected hacking targets, phone numbers with which they were associated and names of possible associates of the targets.
So far, about 65 hacking victims have filed lawsuits against News International. But as of early October, police had contacted just 450 or so of the 6,000 suspected targets and associates named in the private detective's notes, according to lawyers involved in the process. The company has settled some of the most high-profile ones, including cases involving actress Sienna Miller and the head of the British soccer-players' union.
News International also faces three police investigations, as well as a judge-led public inquiry which is examining reporting practices across the British media and the relationships between the media, police and political figures.
News International says it has set aside a fund of 20 million pounds sterling ($31.6 million) to compensate phone hacking victims. But lawyers and other people in contact with police about hacking evidence say that they suspect News International will pay a lot more when legal costs are included.
"The losses caused by this are going to be over 100 million pounds (sterling)," said Mark Lewis, a lawyer who represents several suspected or confirmed phone hacking targets, including the family of Millie Dowler, a murdered British schoolgirl.
Two other people involved in phone hacking claims or inquiries put the company's potential financial exposure even higher, at up to 300 million pounds.
In response to a detailed email query from Reuters, a News International spokeswoman declined to comment.
Reuters is a competitor of Dow Jones Newswires, the financial news agency that News Corp , Murdoch's main company, acquired along with the Wall Street Journal in 2007.
News Corp's annual general meeting is scheduled to be held in Los Angles on Friday.
TROUBLE IN THE UNITED STATES?
One source who has seen the evidence said some of the notes suggest that at least one phone target had their voice mail hacked while they were in the United States. The source said that this could give the target grounds for a legal claim against News Corp in U.S. courts.
U.S. authorities have been conducting an investigation of allegations by the Daily Mirror, a British rival to Murdoch's Sun newspaper, that Murdoch journalists sought to hack phones of some victims of the September 11 2001 attacks on New York and Washington D.C., or victims' relatives. But a U.S. government source said this investigation had not been particularly active in recent weeks.
As well as the notes, investigators have shown some suspected UK hacking targets typewritten transcripts of voice mail messages which allegedly were hacked by operatives for the newspaper. Other evidence collected by the police is said to include thousands, if not millions, of emails from inside News International, Murdoch's UK newspaper publishing company.
Some hacking victims, who have been named "core participants" by the judge overseeing the public inquiry, have been advised they will be given wide access to evidence assembled by the inquiry.
It will take months, if not years, before investigators contact and notify all the people named in the investigators notes. As a consequence, it is also likely to take years for all potential hacking claims against Murdoch's company to surface, several people directly involved in phone hacking-related inquiries and litigation said.
News International's exposure to legal fees and costs is in part a consequence of quirks in the English legal system, under which losers in certain types of lawsuits -- including lawsuits for defamation and invasion of privacy -- are required to pay the legal bills of the winners in the litigation.
In some of the phone hacking cases, people involved in the litigation said, News International has subjected itself to what are called "after event insurance" arrangements. This means that if the company loses, it has to pay an insurance premium to cover appropriate legal costs.
Premiums escalate depending upon how far the case proceeds. If a case is settled early in pre-trial litigation, the premium paid would be modest. But if a case goes to trial and the company loses, it could be liable to pay a premium of as high as 80,000-100,000 pounds per case.
According to estimates assembled by a source who is closely involved in several phone hacking cases, News International has so far settled just over half a dozen cases for sums ranging from 3 million pounds (paid, in the form of 2 million pounds in damages and a 1 million pound charitable contribution, in the case of Millie Dowler, the murdered schoolgirl) to a mere 20,000 pounds (to an English soccer commentator).
When the Dowler payout is included, settlements paid out to date total around 4.2 million pounds, the source said. But the source also estimated that the company had paid out another 1.5 million pounds in legal fees and costs while conducting the preliminary litigation which led to the settlements.
A London judge has scheduled a trial early next year for a representative sampling of the claims.
British police have so far notified targets of hacking mentioned in seized evidence of the possibility that they were hacked and offered them an opportunity to examine some of the evidence.
Possible victims who have met with the police said the evidence they were shown consisted of pages from notebooks complied by Glenn Mulcaire, a private eye who in 2007 was sent to jail for six months after he pleaded guilty to charges of hacking into voice messages left for members of the entourage of Britain's Royal family.
Conspicuously deleted from copies of notebook pages which have been shown to hacking targets are the names of News of the World journalists who apparently commissioned specific hacking assignments from Mulcaire. ($1 = 0.632 British Pounds)
(Created by Simon Robinson)