Welcome to Prospect’s “Weekly Constitutional”, where a judgment or other formal document is used as a starting point for an exploration of power relationships in the United Kingdom or elsewhere, as well as an examination of how law and policy works (and does not work) in practice.
This week the formal text is the apology provided by News Group Newspapers (NGN) to Prince Harry (under his title of Duke of Sussex) and Labour peer Tom Watson. This apology marked the sudden end of the case brought by the prince, Watson and many other claimants against the publisher, on the eve of a trial which was about to commence at the High Court in London.
And the key power relationship is that of a major media entity seeking to minimise and eliminate the risk of legal liability for alleged wrongdoings, and how it took a member of the royal family and a member of the House of Lords, despite many obstacles, to force that publisher to admit wrongdoing.
When the news came that the case had come to such an abrupt, dramatic end, some commentators took the view that the claimants had been defeated by the cost risks: “In the end even he could not defy the financial risks,” wrote one major pundit; “even princes have to settle” was the title of another leading analysis piece.
This was perhaps a reasonable supposition to make: after all, scores of the other claims against NGN had settled for financial reasons, including the costs risks of proceeding.
NGN was systemically buying the claims off using a combination of its financial might and by imposing immense financial risks, where claimants would likely be disadvantaged if they continued. The actor Hugh Grant, for example, had to involuntarily settle his claim on such a basis. It was therefore a quick and easy assumption to make that Harry and Watson also had to follow suit.
But, on this occasion, there were problems with this assumption. There was no direct evidence to support it, the theory did not make sense in terms of timing, and there was perhaps a better explanation for why the case had ended in the curious manner it did: a possible explanation that has been missed by most other commentary.
Neither the apology—a document agreed between the parties—nor the statements by the prince’s lawyer, David Sherborne, and Watson outside the court expressly supported the notion that costs risks had been decisive for how this case settled.
The crucial paragraphs are the first two. They are an open and unqualified admission of illegal conduct by NGN
And the financial predicament for the two claimants was pretty much the same last week or last month. There is no particular reason why the risk would especially bite the claimants on the eve of trial. Indeed, at the start of the case claimants are in the stronger position, as it is their side of the case which is presented first.
So what actually happened? The main clue is maybe in the apology, which is set out below, with paragraph numbers added in brackets for convenience:
“[1] NGN offers a full and unequivocal apology to the Duke of Sussex for the serious intrusion by The Sun between 1996 and 2011 into his private life, including incidents of unlawful activities carried out by private investigators working for The Sun.
[2] NGN also offers a full and unequivocal apology to the Duke of Sussex for the phone hacking, surveillance and misuse of private information by journalists and private investigators instructed by them at the News of the World.
[3] NGN further apologises to the Duke for the impact on him of the extensive coverage and serious intrusion into his private life as well as the private life of Diana, Princess of Wales, his late mother, in particular during his younger years.
[4] We acknowledge and apologise for the distress caused to the Duke, and the damage inflicted on relationships, friendships and family, and have agreed to pay him substantial damages.
[5] It is also acknowledged, without any admission of illegality, that NGN's response to the 2006 arrests and subsequent actions were regrettable.
[6] NGN also offers a full and unequivocal apology to Lord Watson for the unwarranted intrusion carried out into his private life during his time in Government by the News of the World during the period 2009- 2011.
[7] This includes him being placed under surveillance in 2009 by journalists at the News of the World and those instructed by them. NGN also acknowledges and apologises for the adverse impact this had on Lord Watson's family and has agreed to pay him substantial damages.
[8] In addition, in 2011 News International received information that information was being passed covertly to Lord Watson from within News International. We now understand that this information was false, and Lord Watson was not in receipt of any such confidential information. NGN apologises fully and unequivocally for this.”
This apology was an agreed document between the parties, and no doubt it was also a negotiated document. It also shows signs of having being finalised in haste: paragraph eight, for example, seems to apologise to Watson for him not being given confidential information, rather than apologising for the publication of an allegation that he had received such confidential information.
But the crucial paragraphs are the first two. They are an open and unqualified admission of illegal conduct by NGN. Contrast these paragraphs with paragraph five, where the publisher is careful to say that what is mentioned in that paragraph is “without any admission of illegality”. But this qualification in paragraph five is limited to what is mentioned in that paragraph, not the unlawful behaviour listed in paragraphs one and two.
Some have noted the words “working for” in paragraph one and have wondered if this is an attempt at distancing the publisher from the unlawful acts. This distinction, however, is legally unimportant. The publisher would have liability whether the unlawful acts were carried out by its own employees or by contractors on its behalf. As the judge managing the cases said in a related case:
“The fact that the voicemail interception itself may have been done by a PI [private investigator] rather than a journalist adds nothing to the essentials of the pleaded phone-hacking claim, which is that it was done by persons acting on behalf of NGN. The identity of the individual who did the hacking and whether they were an employee or a third person acting on instructions are non-essential facts.”
The same point holds for other unlawful activity such as surveillance and misuse of private information, rather than phone hacking. Whether the unlawful activity was done by a director, or by an employee or by a contractor acting on instructions, it was still the legal responsibility of the publisher. The distinction, in the words of the judge, was “non-essential”. It did not matter who did it, the liability for NGN would be the same.
Now, why would NGN volunteer these admissions? This was the first puzzling aspect of the statement (the other was the eve-of-trial timing). When NGN settled its claim against Grant in respect of his similar claim for wrongs other than phone hacking, it said: “A judge recently ruled that parts of Mr Grant’s claim were out of time and we have reached agreement to settle the remainder of the case. This has been done without admission of liability.”
Why did the publisher not just say the same thing this time? What was different? What made NGN admit to unlawful activity this time when it had avoided doing so on each and every previous occasion?
The best explanation is perhaps not that the prince and Watson had finally buckled to costs risk; it instead looks like a desperate last-minute move by a publisher anxious to avoid a public trial of the claims.
It appears from the evidence available that NGN signalled that it would actually accept liability. If so, this would change everything. If NGN accepted it was liable for at least the main part of the claims, there would be no need for a full trial—for there would be nothing to be tried. The prince and the politician would not now be able to force a full trial even if they had wanted to do.
For a defendant to admit liability is an unusual, if not unique litigation ploy. Normally a litigation strategy is for a party to avoid liability. But here, it seems NGN’s litigation strategy seemed subject to a higher media-political objective of not having a public hearing, with documents put in evidence (and thereby the public domain) and witness evidence being put forward and challenged.
It looks like a desperate last-minute move by a publisher anxious to avoid a public trial of the claims
The prince and Watson withstood a sequence of highly powerful challenges in the pre-trial stages of the case. They had survived a strike-out of the case on what lawyers call “limitation”—that the claim had been brought too late (though that strike-out application got rid of the phone hacking allegation) and they had been forced to reformulate their particulars of claim. NGN tried and failed to get the outstanding claims dealt with as preliminary issues.
Most of all, NGN had relied on a ferocious costs man-trap, where it would be impossible for the surviving claimants not to lose financially even if they won at trial. By using the “Part 36” procedure, NGN appears to have offered an amount in “compromise” which the claimants could not possibly have “beaten” at trial, which would mean that regardless of the outcome, the claimants would pay “indemnity” costs to the publisher. If you won, you still lost. This is the reason why Grant and others had to settle before trial.
But none of these tactics worked on the prince and Watson. The surviving two claimants still pressed on to a public trial. For what it was worth, NGN still had a good arguable defence on limitation, but that would have to be dealt with at trial. And if that were to occur, it would be far too late to avoid the hearing.
And so, on the eve of the hearing, it seems NGN decided to do what it had always avoided doing in this litigation to date, the only thing it had left. NGN seems to have informed the claimants that they would now accept liability.
By indicating that they would admit liability, a full trial would be avoided, evidence would not go into the public domain, witnesses would not be examined and cross-examined. To adapt the old adage, it became necessary to destroy the case, so as to protect something perhaps far more important. Their litigation strategy, which had been so successful so far, had ultimately failed, and now something drastic was needed.
This explanation for the sudden halt in turn covers all the surrounding facts. The settlement was not obviously done on the basis of Part 36 but, as the court heard, a so-called “Tomlin Order”. There was no application for a statement to be read in open court, which is only possible within the Part 36 process. And there was no curt “no liability is accepted” statement like when the Grant case ended.
The theory also explains the timing of the surrender. That it was the eve-of-trial made no real difference to the position of the claimants. But it made a huge difference to the defendant. Once a trial begins, all sorts of documents and evidence can enter the public domain. The timing pressure was on the publisher, and not the prince and the politician.
But most of all the theory above explains why NGN volunteered those admissions in the first two paragraphs of the apology. There is no other obvious or feasible explanation for these admissions other than that NGN was now prepared to admit liability and so render any full trial redundant. Of course, the claimants could have insisted on every outstanding issue being litigated, but NGN accepting liability on the substantive claim meant any outstanding issues became almost academic. It would still be NGN that was liable for the unlawful activity that had occurred, whoever was shown to have done it and directed it.
A party that admits liability on the first day of what would otherwise be a lengthy trial is usually hammered badly on costs on a so-called indemnity basis. And this consequence also accords with what is reported to have happened—NGN has accepted that bringing the case to an end on this basis means that they should and will pay pretty much all the claimants’ costs in the case. They had no other realistic choice if they wanted to avoid a public trial.
The evidence of the text of the apology and the circumstances of how this case came to an end therefore do not point to Prince Harry and Tom Watson being finally defeated by any costs risks. It instead points to the case ending because NGN accepted liability.
Accordingly, it seems that it was not the financial might of NGN that defeated the claimants, but the readiness of the defendant to admit to unlawful activity rather than suffer a full trial (which, on limitation, the defendant actually had a fair chance of winning). The case came to an end because the claimants had pressed on despite the most formidable costs threats. The man-trap set against the prince and Watson failed—and NGN was caught in another litigation trap instead.
