Show Hide image

News Corp reaches $139m settlement

Brings hacking scandal cost to £500m.

News Corp's total costs arising from the hacking scandal mushroomed yesterday to nearly $500m as it reached a $139m settlement with rebel US shareholders.

The claim was filed in September 2011 when shareholders accused News Corp chairman Rupert Murdoch of using the company as his "personal fiefdom" - despite the fact that he is a minority shareholder.
The legal claim was brought by a group of US shareholders including the Amalgamated Bank, the Central Labourer's Pension Fund and the City of New Orleans Employees' Retirement System.
It was prompted by News Corp's decision to pay £615m for Elisabeth Murdoch's TV production company Shine in March of that year - but it also made wide-ranging allegations of wrongdoing by Rupert Murdoch and the News Corp board culminating with the phone-hacking scandal.
The action stated that the News Corp board "has not lifted a finger to engage in any oversight of Murdoch's role...even when it was presented with clear and unmistakable warnings that News Corp's business practices were not only unethical but also illegal..."
It also said Rupert Murdoch has been allowed to "siphon value away from News Corp and its shareholders for the benefit of Murdoch, his family and his friends".
As part of the settlement,  News Corp is understood to have agreed to tighten oversight and set up an anonymous hotline for whistleblowers to report misconduct. The settlement is understood to be covered by insurance.
It follows news last week that Neil and Christine Hamilton and former TV presenter John Leslie had all received susbtantial damages and costs after having their phones hacked by the News of the World.
Political adviser Matthew Doyle also received a sum in damages, his legal costs and an apology and the High Court heard that the estate of the late Jade Goody, the reality TV star who died of cancer in 2009, and TV producer Nigel Lythgoe had also settled their hacking claims.
Some 149 out of 167 phone-hacking legal claims lodged in court have now been settled, with a further eight more set to be added.
In February, News Corp reevealed that costs to that date incurred by the hacking scandal at the News of the World had reached more than $340m.
This story first appeared on Press Gazette


Getty Images.
Show Hide image

Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.