The News of the World has revealed that it made cash payouts to shamed royal reporter Clive Goodman and private investigator Glen Mulcaire, both jailed in 2007 for bugging mobile phones.
Executives have denied that the payments were to secure the silence of the pair about phone-bugging – saying that they were made to avoid costly employment tribunals.
In written evidence to the House of Commons culture committee’s investigation into press standards, News International‘s director of legal affairs Jon Chapman detailed how the payments came about.
Explaining how Goodman’s employment was terminated in February 2007 after his conviction, he said Goodman then retained a City law firm with a view to bringing tribunal proceedings.
His main claim was, Chapman said, that his employer “failed to follow the statutory dismissal and disciplinary procedure.”
Chapman said: “Failure to meet such requirements made a dismissal automatically unfair, entitling the affected employee to bring an unfair dismissal claim, with a potential compensatory award of (what was then) up to £60,600 (in addition to any contractual notice pay entitlement).”
Admitting that News Group had failed to follow the right procedure, Chapman explained that the decision was made to settle the case rather than fight it at a tribunal.
He said: “In all contentious employment cases in the News International group, a recommendation as to whether to defend or to try to settle is made by me to relevant senior management, based primarily on cost (to settle or legal and other costs to defend), the very significant internal time and resource required to deal with a defence, likelihood of success and publicity the matter may attract.
“I applied this analysis to the Goodman claim and recommended to Les Hinton, our then executive chairman, that we explore settlement on reasonable terms. After some discussion with Mr Goodman’s lawyers, a proposed settlement was reached which was approved by Les Hinton and Daniel Cloke, our director of human resources.”
Goodman was paid his notice, an agreed settlement amount and legal costs.
Responding to the implication made in reports by The Guardian that the payment was made to buy Goodman’s silence, Chapman said: “In my view, there was nothing at all underhand about this compromise agreementâ€¦It was entered into in July 2007, some time after Mr Goodman’s release from prison, and, in my view, far too late for any silence effectively to be ‘bought’ (which I know has been the suggestion from some quarters).”
Although private investigator Glenn Mulcaire was employed as a contractor by News International, he also instructed an employment lawyer when his contract was terminated.
Chapman said: “On consideration, we took the view that there was a significant risk a tribunal might find he had employment rights.”
He refuted the suggestion that there was anything underhand about the Mulcaire payment.