Mulcaire and confidentiality

What impact will the withdraw of litigation funding have?

Since the revelations in the New York Times revived the phone hacking scandal back in September 2010, one of the most puzzling aspects has been the "settlement" agreement that News International had entered into with Glenn Mulcaire. In particular, as was pointed out at Jack of Kent, a conventional settlement agreement made no sense if Mulcaire was not actually an employee to begin with.

Since then, it has become clear that the agreement had two key terms in addition to any cash payment for Mulcaire to compromise all and any legal claims against News International, if he ever had any such claims at all.

First, there was an obligation of confidentiality on Mulcaire. This is standard in such agreements, though in this case it was clearly convenient to News International. A cynic may even suggest that was the whole point.

Second, there appears to have been an indemnity for the payment of Mulcaire's legal fees for defences to civil claims. This may have been tied into a further right of News International to conduct his defence. This would have been sensible from a strategic point of view, as it appears News International was facing a number of actions as co-defendant with Mulcaire.

However, after pressure at yesterday's select committee hearing, it has been announced that this funding of legal costs has been withdrawn. Apart from the direct financial detriment this will have on Mulcaire, it is not clear what impact this will have on either the confidentiality provision or any right of News International to conduct his defence on his behalf. If the agreement is sophisticated and well-drafted, it may be that the indemnity can be dropped without any effect on whether other obligations can be enforced.

In any case, it would now seem that Mulcaire has no direct interest in co-ordinating any defence to the civil claims with News International. He may well feel at least morally released from any obligation of confidentiality. The withdraw of funding his defence may have a significant impact on the course of the outstanding civil claims. In this way, as in many others, the events of this week mean that News International cannot carry on as before.

David Allen Green is legal correspondent of the New Statesman. He is the author of the Jack of Kent blog and can be followed on Twitter and on Facebook.

David Allen Green is legal correspondent of the New Statesman and author of the Jack of Kent blog.

His legal journalism has included popularising the Simon Singh libel case and discrediting the Julian Assange myths about his extradition case.  His uncovering of the Nightjack email hack by the Times was described as "masterly analysis" by Lord Justice Leveson.

David is also a solicitor and was successful in the "Twitterjoketrial" appeal at the High Court.

(Nothing on this blog constitutes legal advice.)

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Stability is essential to solve the pension problem

The new chancellor must ensure we have a period of stability for pension policymaking in order for everyone to acclimatise to a new era of personal responsibility in retirement, says 

There was a time when retirement seemed to take care of itself. It was normal to work, retire and then receive the state pension plus a company final salary pension, often a fairly generous figure, which also paid out to a spouse or partner on death.

That normality simply doesn’t exist for most people in 2016. There is much less certainty on what retirement looks like. The genesis of these experiences also starts much earlier. As final salary schemes fall out of favour, the UK is reaching a tipping point where savings in ‘defined contribution’ pension schemes become the most prevalent form of traditional retirement saving.

Saving for a ‘pension’ can mean a multitude of different things and the way your savings are organised can make a big difference to whether or not you are able to do what you planned in your later life – and also how your money is treated once you die.

George Osborne established a place for himself in the canon of personal savings policy through the introduction of ‘freedom and choice’ in pensions in 2015. This changed the rules dramatically, and gave pension income a level of public interest it had never seen before. Effectively the policymakers changed the rules, left the ring and took the ropes with them as we entered a new era of personal responsibility in retirement.

But what difference has that made? Have people changed their plans as a result, and what does 'normal' for retirement income look like now?

Old Mutual Wealth has just released. with YouGov, its third detailed survey of how people in the UK are planning their income needs in retirement. What is becoming clear is that 'normal' looks nothing like it did before. People have adjusted and are operating according to a new normal.

In the new normal, people are reliant on multiple sources of income in retirement, including actively using their home, as more people anticipate downsizing to provide some income. 24 per cent of future retirees have said they would consider releasing value from their home in one way or another.

In the new normal, working beyond your state pension age is no longer seen as drudgery. With increasing longevity, the appeal of keeping busy with work has grown. Almost one-third of future retirees are expecting work to provide some of their income in retirement, with just under half suggesting one of the reasons for doing so would be to maintain social interaction.

The new normal means less binary decision-making. Each choice an individual makes along the way becomes critical, and the answers themselves are less obvious. How do you best invest your savings? Where is the best place for a rainy day fund? How do you want to take income in the future and what happens to your assets when you die?

 An abundance of choices to provide answers to the above questions is good, but too much choice can paralyse decision-making. The new normal requires a plan earlier in life.

All the while, policymakers have continued to give people plenty of things to think about. In the past 12 months alone, the previous chancellor deliberated over whether – and how – to cut pension tax relief for higher earners. The ‘pensions-ISA’ system was mooted as the culmination of a project to hand savers complete control over their retirement savings, while also providing a welcome boost to Treasury coffers in the short term.

During her time as pensions minister, Baroness Altmann voiced her support for the current system of taxing pension income, rather than contributions, indicating a split between the DWP and HM Treasury on the matter. Baroness Altmann’s replacement at the DWP is Richard Harrington. It remains to be seen how much influence he will have and on what side of the camp he sits regarding taxing pensions.

Meanwhile, Philip Hammond has entered the Treasury while our new Prime Minister calls for greater unity. Following a tumultuous time for pensions, a change in tone towards greater unity and cross-department collaboration would be very welcome.

In order for everyone to acclimatise properly to the new normal, the new chancellor should commit to a return to a longer-term, strategic approach to pensions policymaking, enabling all parties, from regulators and providers to customers, to make decisions with confidence that the landscape will not continue to shift as fundamentally as it has in recent times.

Steven Levin is CEO of investment platforms at Old Mutual Wealth.

To view all of Old Mutual Wealth’s retirement reports, visit: products-and-investments/ pensions/pensions2015/