News Corp. Should Waive Law Firm Privilege, Lawmakers Say

U.K. lawmakers called on News Corp. (NWSA) to allow its former criminal defense firm to reveal details on a 2006 internal probe into phone-hacking at the company’s now- defunct News of the World tabloid.

News Corp.’s “legal privilege” with BCL Burton Copeland should be waived so the London-based law firm can defend claims it helped with a cover-up, the House of Commons Culture Committee said today. News Corp. Chairman Rupert Murdoch told an ethics inquiry last week that lawyers and lower-ranking executives at its News International unit are to blame for his ignorance about the extent of phone hacking until late 2010.

Murdoch’s claim “that a cover-up has taken place at the company may mean that the investigations conducted by Burton Copeland have been used by people at News International to perpetrate a falsehood,” lawmakers said in a report about the scandal. “We believe there is a strong argument that the company has no right to restrain disclosure of the file.”

The committee, investigating the scandal for the second time in six years, said the tabloid’s former editor Colin Myler and legal manager Tom Crone misled Parliament and found Murdoch is “not a fit person” to lead a major international company. Police investigating hacking and bribery at News Corp.’s U.K. titles have made 45 arrests, while Britain’s media watchdog is probing whether the company should retain its stake in pay- television provider British Sky Broadcasting Group Plc. (BSY)

Leveson Inquiry

Legal privilege prevents law firms from sharing notes, e- mails, reports and other documents related to its work without permission from the client. Judge Brian Leveson, who is overseeing the independent media-ethics inquiry triggered by the scandal, raised the issue of privilege preventing some remaining questions from being answered, such as how much information executives had about the scandal, and when they had it.

Messages left at Burton Copeland and News International seeking comment on the privilege issue weren’t returned.

While keeping the waiver in place is understandable, it would be a “fair conclusion” for the public to decide News Corp. still has something to hide, said Niri Shan, a media lawyer at Taylor Wessing LLP who isn’t involved in the matter.

“It is difficult for them to draw a line under this and say they’ve disclosed everything if they don’t waive privilege,” Shan said in a phone interview. The company may want to “take the flack that they get for not waiving privilege because the story will die down.”

Revisit Conclusions

The proposed waiver may affect the report’s conclusion that there isn’t enough evidence to determine whether Murdoch’s son, News Corp. Deputy Chief Operating Officer James Murdoch, lied about being unaware of internal e-mails that suggested phone- hacking was widespread.

“We may well revisit our conclusions in this report if more information, currently subject to criminal proceedings or subject to legal privilege which has not been waived, is disclosed,” lawmakers said in a unanimous section of the report.

Burton Copeland was hired by News International to conduct a probe after the News of the World royal reporter Clive Goodman was arrested more than five years ago. News Corp. claimed the firm’s investigation, where it reviewed e-mails and financial records, found no evidence of widespread phone hacking.

Burton Copeland parted ways with News Corp. last year and said in September its role was limited to providing documents to the police and that it wasn’t asked to carry out a full probe.

Harbottle & Lewis

Harbottle & Lewis LLP, another law firm that worked for News International, denied claims made by Rupert Murdoch to the committee last year that it gave the company a clean bill of health after reviewing the matter. The law firm wrote to lawmakers saying Murdoch was “confused or misled” in his testimony.

Rupert Murdoch told lawmakers last year he “rested” on findings from the two law firms, as well as from police, that phone hacking had been limited to a single “rogue” reporter. He told the ethics inquiry last week he should have taken matters into his own hands.

“I should have gone down there and thrown all the damn lawyers out of the place,” Murdoch testified, saying he should have interviewed Goodman after he was convicted of intercepting messages of members of the British Royal Family.

The suggestion that law firms helped prevent the scandal from coming to light is part of a pattern of Rupert Murdoch and other executives blaming lawyers, said David Allen Green, head of media law at Preiskel & Co. LLP.

“James and Rupert Murdoch have appeared very ready to place blame on their legal advisers,” Green said. “This approach can backfire, for if the lawyers are released from any obligation of confidentiality and privilege, their criticism can be quite powerful.”

To contact the reporters on this story: Erik Larson in London at elarson4@bloomberg.net; Jonathan Browning in London at jbrowning9@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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