Thursday, January 19, 2012

News Corp. Settles With Victims Over Hacking Scandal

Jude Law, one of those who were victims of the hacking scandal, apparently settled with News Corporation for roughly $200,000:
The actor Jude Law received the highest disclosed payout of £130,000 damages plus costs as payments totalling £640,000 were made in 15 cases where the amount of amounts were made public.

The former deputy prime minister, John Prescott, received £40,000, Labour MP Chris Bryant received £30,000; Sadie Frost, Jude Law's former wife, received £50,000; and Gavin Henson, the Welsh rugby international £40,000. However, with damages from the other settlements and costs factored in, lawyers estimated that News International's bill could hit £10m.

That's an appallingly low sum considering what was going on here. It should also be sufficient to get further criminal charges going against all those involved in the scandal, particularly in the way some of the admissions were made.

Then again, the News Corp lawyers did their job too:
NGN made no admission as part of these settlements that directors or senior employees knew about the wrongdoing by NGN or sought to conceal it. However, for the purpose of reaching these settlements only, NGN agreed that the damages to be paid to claimants should be assessed as if this was the case."
They made sure that they limited liability and somehow managed to insulate key executives, made no further admissions, etc., but those admissions already made are pretty damning as it is.

Still, there are compelling reasons for a settlement by both sides. It would have been extremely costly and time consuming to the victims to pursue this in court while the bad press of delaying tactics would have harmed News Corp. Even if you're Jude Law, you don't have infinitely deep pockets to sustain a fight of this kind, despite the possibility of a jackpot verdict. News Corporation had every reason to delay and deny, but after a while that works against the company and they too want to limit the damage and potential of a massive verdict. It just came down to how much the sides were willing to forgo.

For News Corporation, it shows that they'll consider this as a cost of doing business and I wouldn't be surprised to see them engage in similarly disgusting behavior down the road. Heck, some of those involved in the scandal have ended up on their feet; one editor of News of the World landed on his feet at the New York Daily News as its editor-in-chief.

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