News of the World again | Employment Law Advocates London

Last week, the House of Commons Culture Media and Sport Committee heard further evidence in its investigation into phone hacking at the News of the World. Jonathan Chapman, a former director of legal affairs at News International, and Daniel Cloke, its former HR director, gave some remarkable evidence about the payments totalling £230,000 which were made to the jailed royal editor, Clive Goodman, following his dismissal, after a guilty plea to phone hacking charges.

Chapman had previously given written evidence to the committee in 2007, in which he had ducked the question of the size of the settlement. However, he strongly implied that it was less than the £60,600 maximum award for unfair dismissal claims and suggested that the claim for unfair dismissal would have succeeded because there was a failure to follow the disciplinary procedure, which was a statutory requirement at the time. This was a strange conclusion given that Goodman had admitted committing a criminal offence, which meant that the outcome of any investigation was inevitable. It would have been all but certain that no compensation would be awarded, despite the procedural failings.

It is now reported that the settlement was for £140,000, as well as £13,000 to represent Goodman’s legal costs. This is far more than the worst case scenario at the tribunal hearing, particularly in light of the fact that costs are awarded so rarely. Chapman now says that the settlement was a commercial one to prevent “stuff from being raked up”. While commercial settlements do occur, they rarely exceed the maximum that can possibly be awarded and the value placed on confidentilaity is low, usually no more than a few thousand pounds. Clearly, it was feared that what could be raked up was far more damaging than normal.

Most amazing is the suggestion by Chapman that he negotiated the settlement without accounting for a payment of £90,000 which had already been paid to Goodman on termination. Even if the £90,000 payment had not been his own idea, it is frankly unbelievable that he could have advised without taking it into account. If he had been settling on the basis of a possible High Court claim for notice pay, which is surprising in a clear case of gross misconduct in any event, it is obvious that a voluntary payment in lieu of notice could be set off against a claim. Reading his evidence as a whole, it is very unsatisfactory in the way that it seems to jump about, mentioning notice pay in some places and yet failing to acknowledge that a payment on termination makes a difference to the decision.

The payment to Clive Goodman is difficult to explain either by a conventional analysis of the merits of his claim or by usual pratice in making commercial settlements. It is hard to avoid to conclusion that something else was at stake.