During the questioning of the Murdoch’s by the House of Commons Select Committee yesterday, much time was spent on the issue of the size of the out-of-court settlement to Gordon Taylor (believed to be in the region of £700,000) and whether this was linked to a confidentiality clause – in effect buying his silence in order to preserve the credibility of the argument that phone hacking was restricted to one instance of a rogue reporter.
James Murdoch’s oft repeated response was that confidentiality agreements are not unusual in these circumstances (true) and that the size of the payment was calculated based on an assessment of likely damages to be paid if the case went to court and was lost (£250,000), plus associated legal costs. But why would a company make an out of court settlement of more than the amount the individual might expect to get in damages? Murdoch junior is asking us to believe that News International effectively went to Gordon Taylor and said “if you win your case against us, you might be expected to get £250k – so, if you agree to drop the case we will pay you that £250k. But on top of that we will also throw in an extra £450k that represents the amount we might of also have to have spent on legal costs – just because we are such nice guys.”
Is that credible? That extra £450k was there for a reason – and that reason was that it represented the price of Gordon Taylor’s silence. It had nothing to do with the potential costs to News International of fighting and losing the case, as James Murdoch would have us believe. Clearly making an assessment of all of these costs was necessary for News International in order to make a decision about whether to fight or settle the case. However, it would have no significant bearing on the negotiations about the size of settlement – something else must have been in play in order to drive the size of payment so much higher that the potential damages payment. It is a shame that the Committee just bought James Murdoch’s answer and didn’t push him further on that point. I would imagine Murdoch himself is pretty surprised that he got away with it.
But it is a really important point. It is not possible to sustain the argument that you didn’t know or suspect that phone hacking was widespread whilst also then paying large sums of money to try and hush-up those instances of it that threatened to become public.
As an aside, as a former PR with considerable experience in coaching organisations to handle difficult questions, I was very impressed with James Murdoch’s performance. He got the tone spot on, contrite and respectful, and was able to weave a huge amount of irrelevant detail into his answers in order to create the impression of giving a full response. His approach clearly subdued the Committee and thus dissuaded them from interrogating his answers sufficiently. He will also have kept his lawyers happy but without creating the sort of PR disaster that usually happens when you let lawyers write your public responses. You also never saw the fear in his eyes in the way that even Tony Blair displayed at the start of his Chillcott interogation last year. A chillingly smooth performance.