Many people are rightly concerned at an alarmist blogpost at Reuters entitled “Is Murdoch free to destroy tabloid’s records”?
In the post the Reuters writer attributes the following view to a named London lawyer:
Rupert Murdoch’s soon-to-be shuttered tabloid may not be obliged to retain documents that could be relevant to civil and criminal claims against the newspaper — even in cases that are already underway. That could mean that dozens of sports, media, and political celebrities who claim News of the World hacked into their telephone accounts won’t be able to find out exactly what the tabloid knew and how it got the information.
If News of the World is to be liquidated, says the lawyer it “is a stroke of genius — perhaps evil genius.
The Reuters writer adds:
Under British law, [the lawyer] explained, all of the assets of the shuttered newspaper, including its records, will be transferred to a professional liquidator (such as a global accounting firm). The liquidator’s obligation is to maximize the estate’s assets and minimize its liabilities. So the liquidator could be well within its discretion to decide News of the World would be best served by defaulting on pending claims rather than defending them. That way, the paper could simply destroy its documents to avoid the cost of warehousing them — and to preclude any other time bombs contained in News of the World‘s records from exploding.
The lawyer is then quoted again:
Why would the liquidator want to keep [the records]? Minimizing liability is the liquidator’s job. That’s a very different scenario, […] from what would happen if a newspaper in the U.S. went into bankruptcy. In the U.S., a plaintiff (or, for that matter, a criminal investigator) could obtain a court order barring that kind of document destruction. In the U.K., there’s no requirement that the estate retain its records, nor any law granting plaintiffs [sic, claimants] a right to stop the liquidator from getting rid of them.
The Reuters blogpost is, however, misleading. It may well be that the lawyer quoted was misquoted, or that the context of his answers has been misrepresented. But the blogpost is, in my view, flatly wrong and it is to the severe discredit of Reuters that it is even hosted on its site.
To begin with, the blogpost asks in its title whether Murdoch would be free to destroy records. It then goes onto discuss whether the liquidator – a person independent from and not controlled by Murdoch – would have the power to destroy records. The title does not make sense in terms of what follows.
As I explained yesterday, the closure of the News of the World means merely that one branded product will no longer be offered to the market place. Indeed, that is all the official statement from James Murdoch actually says: the News of the World will not be published after Sunday. There is no mention of the appointment of any liquidators.
On the information available, the News of the World is not itself a corporation. For example, civil litigation involving the News of the World – including the CTB case – is in the name of News Group Newspapers Ltd. The terms and conditions of the News of the World website are also in the name of News Group Newspapers Ltd. News Group Newspapers Ltd also publishes the Sun.
A better legal view is that the civil and criminal cases are entirely unaffected by the closure of the News of the World, as I said yesterday. All the relevant evidence for criminal and civil cases should still be preserved.
The conduct of those at News of the World was bad enough without creating scare stories based on nothing other than wild supposition.
So to put it plainly: there is no suggestion, other than on this Reuters blogpost, that News Group Newspapers Ltd is about to be liquidated.
Indeed, such a statement can be defamatory of a corporation, and actionable if it is untrue. Ask any media lawyer.
David Allen Green is legal correspondent of the New Statesman