James Murdoch grilled about 'over the odds' settlement

The former chairman of News International, James Murdoch, has rejected claims that he deliberately paid "over the odds" to settle an early phone hacking case to attempt to avoid further reputational damage to the company and further details of the hacking scandal coming out.

Giving evidence at the Leveson inquiry today, Murdoch was asked why News International "paid by a factor of 10 or 20 over the odds" to get rid of the case brought by football chief Gordon Taylor, who accepted an out-of-court settlement believed to be in the region of £700,000 in 2008.

Murdoch said he had been given "strong advice" to settle the case and told the inquiry: "Part of that message about paying over the odds was not communicated to me."

Counsel to the inquiry Robert Jay QC described the settlement as "hush money" - and suggested that it was significantly higher because Taylor's litigation "would create the probability of fresh reputational damage to the company because it involved others at News International".

He also suggested that Taylor was seeking a higher sum because he was aware that the "reputational harm for the company would be so great that a vast over-value of the claim has to be made to get rid of it".

"Here was an issue from a couple of years - we don't want to have to go through it again"

The inquiry heard that News International's leading counsel said it was "extremely unlikely" that Taylor would be awarded more than £250,000 if the case went to court.

Murdoch said: "I got strong advice on that subject and I followed that advice.

"It was referred to that it would be in the best interests of business not to have this matter from the past dug up again and dragged through the court. Here was an issue from a couple of years - we don't want to have to go through it again."

Jay also told the inquiry that the evidence suggested that News of the World editor Colin Myler "was getting extremely hacked off by this - he felt that he and the company were at the wrong end of the litigation, which was amounting to blackmail".

Jay asked: "Didn't you think that was an extraordinary amount for this allegation, even if proved?"

Murdoch said: "I was told sufficient information to authorise them to go and negotiate at a higher level. I was not told sufficient information to turn over a load of stones that I was told had already been turned over."

The Leveson inquiry heard about the details of a 10 June 2008 meeting in which Murdoch discussed the Taylor issue with News of the World editor Colin Myler and legal manager Tom Crone.

Murdoch said he had no recollection of seeing the so-called "For Neville" email, which he said highlighted "a direct link between the News of the World and [investigator Glen] Mulcaire's activities."

He also said the wider significance of the email - that it potentially linked other News of the World journalists to the hacking scandal - "was not imparted to me that day".

Jay suggested to Murdoch that Myler and Crone were "very keen that you settle and to transmit the message to you that if you didn't there were serious reputational risks to the company and I would suggest that the reputational damage was inextricably linked to the fact that this was not old news, but something new".

Asked by Lord Justice Leveson what his attitude was to "buying off reputational risk than with more money than would have been justified", Murdoch replied: "I don't think you would want to do that."

"I was assured that from the standpoint of journalistic ethics, that extensive training had gone on and continued to go on"

Murdoch said that when he arrived at News International in 2007, "I was assured that from the standpoint of journalistic ethics, that extensive training had gone on and continued to go on. I was given strong assurances that had happened.

He added: "It was clear to me that in the newsroom in the past it had not been tight enough and that's why a new editor was appointed and the new editor was there and had spent time to improve those systems of governance. The newsroom governance was really an issue for the editor and the legal manager."

Murdoch also expressed "huge regret" about the News of the World's "cavalier" approach in 2006. He also said the company was too quick to rubbish the Guardian's July 2009 story on phone hacking - saying the company had learnt that it needed to be more "dispassionate and forensic" when looking at allegations of wrongdoing.

On the company's rapid denial of the Guardian's 2009 phone hacking claims, Murdoch acknowledged: "No matter where something comes from, whether it's a commercial or political rival, being more dispassionate, forensic and understanding is very important."

He added: "Knowing what we know now about the culture at the News of the World in 2006, for example, and the alleged widespread nature of these poor practices, it must be cavalier and that's a matter of huge regret."

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