The only reasonable response when watching clips of Trinity Mirror’s former boss, Sly Bailey, telling the Leveson inquiry that her team had seen no evidence of hacking by its journalists is to wonder at her naivety. Let’s get one thing straight. There was no cover-up at Trinity Mirror. Its board did not know hacking had occurred. Its culpability was in refusing to hold a robust investigation into allegations that it preferred to ignore by dismissing them as “unsubstantiated”.
When Simon Fox replaced Sly Bailey as chief executive he adopted a similar stance until a former Sunday Mirror reporter, Dan Evans, blew the whistle by providing unequivocal proof that hacking had taken place on a regular basis for many years. Then, belatedly but with admirable forensic intensity, Fox oversaw an internal inquiry, in collaboration with the police, that left him in no doubt that Evans was telling the truth.
Now his company is paying the price. It is an understatement to say that the damages awards by Mr Justice Mann, giving just eight people a total of £1.2m, came as a shock to Trinity Mirror. The company has been forced to increase its provision for dealing with the legal drama to £28m and even that may not prove enough. So what should Fox do now?
One major concern is to retain the support of nervous shareholders and he knows that they want both clarity about the costs involved and certainty about the matter being concluded. At present, he cannot give them assurances about either. His first difficult decision is whether or not to launch an appeal against the size of the awards and, possibly, the judge’s methodology in apportioning the damages.
Fox knows that an appeal could drag the matter out for longer, could prove costly and that the outcome is uncertain. If the ruling stands, then Trinity might be forced to use Mann’s “tariff” to settle other claims out of court.
Not only will that be expensive, it may well be an impossible exercise because – in many instances – there is no provable link between hacking and published articles. What can be done in those cases? Lawyers say there are 70 outstanding claimants in the pipeline, though some of them believe there could be more than 100 with yet more waiting to take action.
It is no comfort to Fox to reflect on the way in which Rupert Murdoch’s organisation managed to limit payouts to claimants against the News of the World by settling claims out of court. Aside from the enormous, and initially secret, payments to Gordon Taylor and Max Clifford, the News UK hacking victims got far less than the Trinity Mirror victims. Then again, the major price paid by Murdoch was closing the News of the World, and the Sunday Mirror’s existence is not under threat. A reader or advertiser revolt is out of the question.
Indeed, it is also the case that more than three years on from the scandal breaking in July 2011, and following the lengthy Leveson inquiry, the public clamour about the iniquities of phone hacking has subsided. MPs have not made a song and dance about Trinity Mirror in the way they did about Murdoch and his company. The statement issued by the press victims’ organisation, Hacked Off about Trinity Mirror’s sins got little traction. Nor will the matter have any impact on the continuing, but low profile, debate about the future of press regulation. As the Tories won the election, there will be no parliamentary action and, given the Mirror titles’ political sympathies, no pressure for retribution from Labour.
In contrast to Murdoch, the absence of public debate gives Fox time and space to think. But there are other clouds on his horizon. Firstly, it is possible that the police could launch a corporate prosecution. Secondly, it appears likely that former senior editorial executives could be charged. The former would result in more costs and more bad publicity. The latter would ensure negative headlines. The fact that there could be more bad news down the line is bound to affect decisions by investors who were already wondering about the efficacy of Fox’s group-wide digital strategy.
On a wider front, questions are now being raised about whether hacking took place at other newspaper groups. Maybe it did, but unless someone dares to blow the whistle - and surely they would have done so by now - further revelations elsewhere appear unlikely.
Fox is therefore alone in this fight. He knows the Daily Mirror savaged Murdoch when the scandal first broke and he cannot therefore expect sympathy from his major rival. In a dog-eat-dog world, other papers will seek to take advantage of his plight, even while decrying the judge’s decision.
