Mirror Hacking Payouts Could Be Fatal

Mr Justice Mann has made his decision: the compensation that Trinity Mirror must pay to eight victims of phone hacking runs to £1.2 million. And that is before costs - that is, both the paper’s costs, and those of the victims - is added. The publishers of the Daily Mirror, Sunday Mirror and Sunday People are already significantly out of pocket, and the precedent set this morning does not bode well for their finances.

Why should that be? Ah well. As the Guardian has told, “Trinity Mirror is facing a soaring legal bill after dozens more alleged phone-hacking victims, including senior Labour party figures, scores of TV stars and David Beckham’s father, prepare to sue the Daily Mirror publisher … More than 100 alleged victims are believed to be preparing to launch claims once a compensation precedent has been set”. It’s now been set.

Do the math, as they say: the Guardian notes that, for those whose compensation has just been announced, “the overall bill could reach £10m once costs are included, according to one senior legal source”. If, let us say in way of illustration, every ten victims in future means a total bill, in compensation and legal fees, of £10 million, that means the publishers would be looking at another £100 million, with the possibility of more to come.

And there are some significant names ready to sue: apart from Beckham père, there are “The Coronation Street actor Claire King, and Tim Horlick, the ex-husband of high-profile fund manager Nicola Horlick … The actors Hugh Grant and Elizabeth Hurley, and television personalities including Amanda Holden, Denise Van Outen and Rhys Ifans … George Best’s former agent Phil Hughes and Gascoigne’s close friend Jimmy Gardner”.

There’s more: “Kelly Hoppen, former motorsport team boss and BBC presenter Eddie Jordan, Holby City actor Tina Hobley, Torchwood star Caroline Chikezie and Jeff Brazier, the TV personality and former partner of reality star Jade Goody”. That suggests there will be more significant compensation awards. Trinity Mirror’s pre-tax profit for the last year was just over £102 million. That’s the grim reality, right there.

There could be a way out: as Evan Harris has outlined to the BBC, were Trinity Mirror to join a press self-regulator recognised under the Royal Charter, they could use the provisions of the relevant legislation to shelter from more expensive upcoming claims. Impress, founded by Jonathan Heawood and with Harold Evans as its patron, is to seek recognition later this year. The door is open to Trinity Mirror.

Of course, the Mirror titles rushed to join sham “regulator” IPSO, which offers them no such protection. They have now, at the Eleventh Hour, realised the consequences. It is instructive, if predictably so, that a look down the gun barrel is required for wiser counsels to prevail. The Mirror titles have a proud place in UK journalism. But they do not have the resources of the Murdoch empire. That’s why phone hacking could prove fatal to them.

Push has now come to shove. Trinity Mirror should consider its next move carefully.