Hacking scandal? Inside Prince Harry’s costly legal battle over privacy
The phone hacking scandal, which first emerged 15 years ago, has cost the owners of Britain’s most prominent newspapers over a billion pounds in legal damages, keeping law firms and the courts busy for more than a decade, writes Maria Ward-Brennan.
The phone hacking saga returned to the headlines in spectacular style this week after a group of high-profile figures, including Prince Harry, lost a lengthy legal battle against Associated Newspapers, the owners of the Daily Mail and Mail on Sunday. The judge rejected all of the claimants’ arguments and dismissed the case in its entirety.
Ahead of the trial, the High Court intervened to manage spiralling costs, approving legal budgets of about £4m per side for this phase of litigation alone. However, according to the owners of the Daily Mail, the case, which was in court for 11 weeks earlier this year, ultimately cost more than £50m.
Former Daily Mail editor Paul Dacre lambasted the case against Associated as “a conspiracy…to destroy a paper.”
With this victory, the publisher will now seek to recover its legal costs. According to the Association of Costs Lawyers (ACL), unless the parties settle on costs, the court will determine what the publisher can reclaim. “A party can argue before a specialist costs judge that they should receive more than the budgeted sum, but they will have to show a ‘good reason’ for this. It is a high bar.”
But as Andrew Fremlin-Key, Partner at law firm Withers, noted, despite the win for the publisher, “financially, there is no real winner in this trial”.
Over the past decade, the hacking scandal has played out in the High Court, with prominent figures such as actor Hugh Grant and Prince Harry undergoing multiple rounds of hearings against the publishers.
Owing to the high profile of Prince Harry’s barrister, David Sherborne of 5RB, the claimant law firms typically received less press attention. Firms such as Sheridans Solicitors, Thomson Heath Jenkins, and Addleshaw Goddard have represented over 2,000 claimants over the years, while the publishers relied on Clifford Chance, RPC, and Baker McKenzie for their defence.
But with Justice Nicklin dismissing the case against Associated Newspapers this week, it seems this long-running saga may finally be drawing to a close.
The unsuccessful case against Associated was the latest in a long-running legal affair dating back 15 years. The original ‘hacking scandal’ resulted in thousands of court documents, hundreds of hours in the High Court, an enormous public inquiry, prison sentences, the end of the News of the World, and astronomical bills. From rulings to settlements to legal fees, the total financial fallout for publishers has now exceeded a billion pounds.
News Group Newspapers (NGN), the UK publishing arm of Rupert Murdoch’s empire, and the former publisher of the News of the World, is facing the bulk of this bill. The scandal began at the now-defunct News of the World, although NGN continues to publish The Sun. As a result, the publisher has accrued over £1.2bn in legal damages since 2011, according to The Guardian’s analysis of NGN’s Companies House accounts.
Meanwhile, Mirror Group Newspapers (MGN), publisher of the Daily Mirror, Sunday Mirror, and Sunday People, was also deeply embroiled in litigation.
Between court victories for claimants and settlements out of court, plus a judge’s finding that MGN, owned by Reach plc, hacked Prince Harry’s phone, the publisher has paid out over £100m in costs. Prince Harry alone was awarded £140,600 in compensation in December 2023. He then settled the remainder of his claims against the group, securing an additional “substantial” payout and an interim payment of £400,000 to cover his legal bills.
Legal costs come as sector faces financial woes
These legal bills coincided with a time of profound disruption to media business models.
Associated Newspapers, owned by Lord Rothermere, saw a 1 per cent dip in year-on-year revenue to £1.09bn; however, operating profits dropped 25 per cent to £81.2m. Reach plc’s full-year print revenues stood at £388.1m, down nearly 5 per cent from the previous financial year. News UK recorded a significant revenue decline of nearly 12 per cent, with revenue standing at £641m, down from £727m in the previous cycle.
The financial strains caused by declining ad revenues, shifts in social media algorithms, and structural changes across the media industry have forced all major publishers to implement deep staff cuts, including Reach, which axed around 450 full-time jobs in late 2023.
The latest court ruling was undoubtedly a win for Associated, but overall the phone hacking saga has left a lasting mark on the British press and its finances.
As the legal battles subside, publishers are left to reckon with the costly legal bill of a scandal that shook the industry to its core.
Eyes on the Law is a weekly column online and in the newspaper focused on the legal sector.