Author: Richard Moorhead
11 Jul 2011 | 11:15
US scandals (Watergate, Savings and Loan, Enron and latterly Lehman) have tended to prompt the question: where were the lawyers? Indeed, Watergate is widely credited with being the first crisis to prompt a flourishing of legal ethics scholarship. Interestingly, this has not tended to happen in the UK. Solicitors have tended to avoid the controversy surrounding corporate scandals. The reasons for that are for another time but there is also a possibility that Hackgate might be about to change that. Certainly lawyers are being dragged in from the shadows and onto the stage of this particular story.
Firstly, the Press Gazette reports a Sunday Times story claiming:
"An internal report was commissioned by News International executives in 2007 which 'uncovered evidence indicating that hacking was more widespread than previously admitted and that money might have been paid by the paper's journalists to police'.
"A News International source told the paper that "we were sitting on a ticking timebomb", but the company's chairman James Murdoch was apparently not told about the report.
"The inquiry was launched after former royal editor Clive Goodman, who was jailed for four months for phone hacking in 2007, appealed against his dismissal by the company and claimed his colleagues were 'all aware of phone hacking'.
"The Times claimed that the inquiry was overseen by NoW editor Colin Myler.
"Today's report said: 'Myler and Tom Crone, head of legal affairs for the NoW, subsequently assured the culture, media and sport parliamentary select committee in 2009 that the investigation had not revealed any wrongdoing by other reporters'."
I have looked up the evidence given to the Select Committee by Mr Crone. Here is what looks like the crucial passage:
"In the aftermath of Clive Goodman and Mulcaire's arrest and subsequent conviction various internal investigations were conducted by us. This was against the background of a nine month massively intense police investigation prior to arrest and then a continuing investigation in the five months up until conviction. The police raided Mulcaire's premises; they raided Goodman's premises; and they raided the News of the World offices. They seized every available document; they searched all the computers, the files, the emails et cetera. Subsequent to the arrests they came to us, the News Group Newspapers Ltd, and made various requests to us to produce documents which they felt may be relevant. At no stage during their investigation or our investigation did any evidence arise that the problem of accessing by our reporters, or complicity of accessing by our reporters, went beyond the Goodman/Mulcaire situation. The first piece of evidence we saw of that, in terms of the management investigating, was in April 2008 when Mr Taylor's lawyers produced two documents: the first was a February 2005 holding contract and the second was the email that was discussed here last week."
Robert Peston on the BBC site has now indicated that a solicitors' firm conducted an investigation at the request, it seems, of News International into these matters in 2007. The crucial passages of Peston's story are as follows:
"In a letter presented to the Commons Culture, Media and Sport select committee, Harbottle & Lewis confirmed that it had been asked by News International to review whether the illegal actions of Clive Goodman - the News of the World's former royal editor, jailed in 2007 for phone hacking - were known to his News of the World colleagues.
"In this letter, dated 29 May 2007, and sent to Jon Chapman of News International, Lawrence Abramson of Harbottle & Lewis wrote that it had 'reviewed e-mails to which you have provided access from the accounts of Andy Coulson, Stuart Kuttner, Ian Edmondson, Clive Goodman, Neil Wallis, Jules Stenson'.
"Mr Abramson confirmed to Mr Chapman that it 'did not find anything in those e-mails which appeared to us to be reasonable evidence that Clive Goodman's illegal actions were known about and supported by both or either of Andy Coulson, the editor, and Neil Wallis, the deputy editor, and/or that Ian Edmondson, the news editor, and others were carrying out similar illegal procedures'.
"The letter from Mr Abramson to Mr Chapman makes no mention of whether the e-mails contain evidence of wrongdoing by journalists other than Mr Goodman.
"However, when William Lewis and his fellow News International executives re-acquired those e-mails from Harbottle & Lewis, they found what they perceived to be prima facie evidence that the illegal phone hacking went wider than just the activities of Mr Goodman and that there were potentially illegal payments to the police."
I have copied the text of the letter below from the Select Committee records.
Unsurprisingly, Peston does not offer an explanation as to how the solicitors' firm investigation came to such a different view from the one William Lewis came to. We might surmise that the context is somewhat different, and we do not know what information those solicitors were given during their investigation which may have affected how they read those emails. We also do not know how tightly the terms of remit were drawn in the investigation. One tactic that canny clients can use, when seeking to rely on professional reputation of their independent advisers conducting an investigation, is to draw the terms of remit of any investigation very tightly, and then have the lawyers' report (perfectly truthfully) against those. This is what seemed to happen in relation to Enron, for instance. It naturally raises the issue of whether a lawyer is wise to allow themselves to take such instructions from a client and it may even raise ethical issues. After all, whilst the solicitor owes duties to their clients, they also owe duties to remain independent and to protect the integrity of the profession. Moreover, the solicitor's duty to the public interest in the administration of justice trumps the duty to the client where these two duties come into conflict.
We do not yet know anywhere near enough to form a judgment here on the rights and the wrongs of the matter. I have not been able to find the letter to the Select Committee which may shed some light on what their terms of reference were. However, the difference between the solicitor's assessment and that of the News International Executive drafted in recently to look at matters afresh suggests it is something which would bears further investigation. Similarly, we do not know the basis on which Mr Crone made his statement to the Select Committee. It may be he as relying on solicitor's letter. That too, though, would merit investigation.
Postscript: I have found the text of the letter from Harbottle and Lewis' (then) managing partner:
Letter from Lawrence Abramson, Harbottle & Lewis LLP to Jon Chapman, News International Limited (dated 29 May 2007)
Re Clive Goodman
We have on your instructions reviewed the emails to which you have provided access from the accounts of:-
I can confirm that we did not find anything in those emails which appeared to us to be reasonable evidence that Clive Goodman's illegal actions were known about and supported by both or either of Andy Coulson, the Editor, and Neil Wallis, the Deputy Editor, and/or that Ian Edmondson, the News Editor, and others were carrying out similar illegal procedures.
Please let me know if we can be of any further assistance.
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