The judgment handed down by Mr Justice Mann on 21 May 2015 in the Mirror Group quantum cases, Gulati and others v MGN ([2015] EWHC 1482 (Ch)), represents a turning point in the phone hacking litigation.
Although there have been several hundred claims against News Group Newspapers (in relation to the News of the World and the Sun) and Mirror Group Newspapers (in relation to the Daily Mirror, Sunday Mirror and People) this is the first time a Judge has made a public ruling and damages awards. The damages have been set at a level significantly higher than many previous settlements and awards.
In relation to the News of the World claims, apart from the litigation, many cases were dealt with under the Compensation Scheme set up and subsequently withdrawn by News International (now News UK).
Although it was intended that awards in the Compensation Scheme would be published, this never happened. The strategy of News International was and remains to keep settlements confidential, where possible, and to avoid cases going to court where there is a danger (as in the Mirror cases) of a Judge awarding significantly higher than what the newspaper group might have been prepared to agree.
It is worth remembering that as long ago as 2008 Michael Silverleaf QC, then acting for News International, advised the corporation that “there is a powerful case that there is (or was) a culture of illegal information access” used at NGN and “my view is that the court might award a sum at any level from £25,000 to £250,000 or possibly even more…”
This opinion, normally legally privileged and therefore secret, came into the public domain when its contents were revealed to the Culture, Media and Sports Committee in its consideration of the phone hacking scandal and in particular the NGN settlement with Gordon Taylor in 2009.
So whilst reports have suggested that the awards made today are astonishingly large, the size of the awards cannot be a complete surprise. They do after all reflect the advice which News International received many years ago, hence the tactics it applied to avoid cases coming to the Court. Mr Silverleaf’s opinion made the point that a Judge hearing the claim would be trying to reflect “both disapproval and deterrence”. These were after all criminal invasions of privacy and the court heard extensive evidence of the impact upon the personal and professional lives of the victims.
The previous ceiling for privacy awards was thought to be the Max Mosley Judgment where the Judge (after trial) awarded £60,000 for the very serious invasion of privacy in that case. There was however always a question mark as to whether a court hearing phone hacking claims would regard that as the upper limit, or whether the type of illegal information gathering employed by journalists in phone hacking cases would result in even higher awards, to deter similar conduct and reflect the impact on victims.
It was this uncertainty for several years which meant that (in the absence of any judicial tariff or even a tariff fixed by the Compensation Scheme) claims could be settled for more modest sums, because of the costs risk to the claimant of pursuing a case after a sensible offer to settle the claim had been made.
There was also doubt over whether the court would make an award of exemplary damages.
There are many more claims to come against both News Group and Mirror Group. Clearly Mirror Group will need to reassess its attitude to these claims and the provision it has made for meeting claims. It seems that provision has already been increased.
It remains to be seen whether any appeals against the damages awards will be successful, the Mirror having already indicated its intention to appeal.
Steven Heffer heads up the Defamation & Reputation Management Team at Collyer Bristow LLP
Very helpful analysis, Steven.