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News Corp pays out over hacking claims

By Georgina Prodhan and Kate Holton

LONDON (Reuters) - The British newspaper arm of Rupert Murdoch's News Corp settled a string of legal claims over phone hacking on Thursday, and said this was not an admission that management had known about the practice or tried to cover it up.

Murdoch's News International had claimed for years that the hacking of voicemails to generate stories was the work of a single "rogue" reporter who went to jail for the crime in 2007.

However, under a wave of damning evidence last year it finally admitted that the problem was widespread, sparking a scandal that has rocked the company, the British press, police and the political establishment.

On Thursday, lawyers for victims who had reached settlements said their agreements were based on News Group Newspapers (NGN), publisher of some of News International's titles, acknowledging that senior management were at fault.

They said the company was now seeking to settle all the claims. "News Group has agreed to compensation being assessed on the basis that senior employees and directors of NGN knew about the wrongdoing and sought to conceal it by deliberately deceiving investigators and destroying evidence," the lawyers said in a statement.

But News International said in a "clarification" late on Thursday that despite agreeing the settlements it was not making any admission that senior staff or directors at NGN had known about the wrongdoing or tried 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," News International said.

In a London court packed with journalists and lawyers, Judge Geoffrey Vos went through each case and heard the grounds for the settlement. At the end of each statement a lawyer for News Corp confirmed the details and offered "sincere apologies."

Settlements announced in court generally ranged from around 30,000 pounds ($46,000) to 60,000 pounds, while some were not revealed. Actor Jude Law accepted 130,000 pounds after he was physically followed abroad as well as in Britain.

"It is clear that I, along with many others, was kept under constant surveillance for a number of years," Law said in a statement. "No aspect of my private life was safe from intrusion by News Group newspapers, including the lives of my children.

"I believe in a free press but what News Group did was an abuse of its freedoms. They were prepared to do anything to sell their newspapers and to make money."

The settlements may lift some immediate pressure off the group, as it will prevent lawyers from poring over further details in open court, and it could result in all cases eventually settling as the size of the payouts set a precedent.

But it could also lead to increased scrutiny of the role played by James Murdoch.

Rupert Murdoch's son James was placed in charge of News International only after the hacking, but has been accused of leading a cover-up. He has denied all knowledge of the scale of the problem and blamed many of those around him for the failings.

PAY-OUT TIME

The court was told that 36 claimants were now ready to settle, including Law, former deputy Prime Minister John Prescott, politician Chris Bryant and other celebrities, while 10 cases were ready to go to court.

News Corp has already received 60 claims and police say there are almost 6,000 potential victims. The legal costs to be paid by News International will also vary hugely, lawyers said.

Lawyers for the victims said they had obtained documents from News International that revealed the scale of the malpractice, partly thanks to the fact that the 12 solicitors' firms involved had joined forces to work together.

"As a result, documents relating to the nature and scale of the conspiracy, a cover-up and the destruction of evidence/email archives by News Group have now been disclosed to the claimants," their statement said.

The long-running case blew up in July when it emerged that the voicemail of missing schoolgirl Milly Dowler, later found murdered, had been hacked into by the News of the World.

News Corp took the drastic step of shutting down the 168-year-old tabloid and pulled its plan to take full control of Britain's highly profitable satellite broadcaster BSkyB.

The scandal had already forced the resignation of Prime Minister David Cameron's spokesman, a former News of the World editor, and later prompted the resignations of senior police officials who were accused of failing to properly investigate the affair.

Three criminal investigations are under way while a judge-led inquiry into Britain's press ethics sits most days, bringing yet more attention to the conduct of the media as it seeks to draw up new regulations.

"I'm grateful to News Group for finally acknowledging, admitting and apologizing for their unlawful voicemail interception," Graham Shear, a lawyer representing victims who also had his own phone hacked, told Reuters.

"But I'm a bit frustrated that they didn't find a way to do this earlier, having previously strenuously defended my own claim and the claims on which I'm acting."

(Additional reporting by Tim Castle; Editing by Peter Graff)

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