Murdoch cites ‘major mistake’ at legal adviser in culmination of a week of high drama

News Corporation head Rupert Murdoch has alleged that one of his group's legal advisers, Harbottle & Lewis, made "a major mistake" in its part in an internal investigation into phone-hacking at the media mogul's newspaper business.

Murdoch made the comments in an interview with The Wall Street Journal published today (15 July), citing "a major mistake" on the London law firm's part in an investigation carried out four years ago into the scale of phone-hacking at Murdoch's UK newspaper arm.

Murdoch was apparently criticising Harbottle for its role in reviewing a number of emails from staff at the Sunday tabloid the News of the World (NoW) in the wake of the criminal sentence handed out to its royal editor Clive Goodman in 2007.

The investigation was aimed at assessing whether phone-hacking extended beyond Goodman. News International concluded at the time that Goodman acted alone.

In a letter dated 29 May 2007, and sent to News International director of legal affairs Jon Chapman, Harbottle former managing partner Lawrence Abramson wrote that the firm 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."

Abramson confirmed to Chapman that they "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".

Murdoch's comments follow reports earlier this week by the BBC and a number of other news outlets raising questions about Harbottle's role in reviewing the documents. A number of press reports have indicated that News International executives concluded that a cache of internal emails reviewed earlier this year did indicate that phone-hacking activities went further than Goodman.

However, it is unclear whether Harbottle had reviewed all of these emails or what the terms of its remit were. Olswang is currently advising News International on the allegations facing the company and on drawing up a new code of conduct.

Harbottle was unavailable for comment today but the firm's managing partner Glen Atchison provided the following statement to the Wall Street Journal: "We are unable to comment substantively at this time as the matters raised are the subject of an ongoing investigation by the Metropolitan Police. Moreover, it is not our usual practice to comment on our clients' affairs or advice which we may or may not have provided."

The episode, which comes amid another week of dramatic developments in the phone-hacking scandal, is a highly unusual example of a major commercial client criticising the work of a legal adviser.

Further developments this week saw News International chief executive Rebekah Brooks today (15 July) announce her resignation after more than a week of calls for her to step down. Meanwhile on Wednesday (13 July) NewsCorp announced the abandonment of its bid for the remaining stake in BSkyB that it does not already own and the appointment by the UK Government of Court of Appeal judge Lord Justice Leveson to lead an inquiry into alleged wrong-doing at NoW and media regulation.

The same day, it emerged that Tom Crone, News International's well-regarded and long-standing legal manager, was leaving the company. The reasons for the departure are unclear.

The departure of Crone, who spoke before a Parliamentary select committee in 2009 into phone-hacking, comes after NewsCorp general counsel Lawrence Jacobs announced his departure last month.

Allen & Overy was also briefly drawn into the saga on Monday (11 July) after allegations emerged that the law firm had been tricked by a prominent newspaper into disclosing information about a flat acquired by former prime minister Gordon Brown in 1992.

Murdoch's media group has faced mounting controversy since last Monday (4 July), when The Guardian alleged that the NoW had hacked the phone of murdered school girl Milly Dowler. The scale of the drama, which within days resulted in the announced closure of the NoW, has led to claims that NewsCorp could face legal actions in the US.

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