Tuesday, 15 November 2011 (10.00 am) Housekeeping The message on Mr Sherborne's screen has been investigated. It was no more than the operation of anti-virus software that is a consequence of using a system that allows access to the Internet and permits use of removable media devices such as USB sticks. It does not mean that the Inquiry systems were accessed unlawfully but rather demonstrated the system was working as it should, and might mean no more than the presence of a corrupt file on the local machine. I'm very keen to make it clear that the only documents which will be on the system which can be accessed in court are those that are or will shortly become publicly available. Material that is confidential to the Inquiry is not held on the hearing room system but is only available through the government's secure intranet. I am grateful to Mr Sherborne for bringing this matter to my attention. The systems will be routinely scanned for potential threats, but in the meantime, if there are any concerns in the future, they should be brought to the attention of a member of the Inquiry team, who will immediately initiate appropriate investigations. Right. Mr Davies. Opening submissions by MR DAVIES Good morning, sir. At this Inquiry, I appear with Anthony White and Anna Boase instructed by Linklaters for NI Group Limited. The letters "NI" stand for News International, and that is what I am going to call it. News International is the company which owns News Group Newspapers Limited, which published the Sun newspaper and which used to publish the News of the World until that paper ceased publication on 10 July this year. News International also owns Times Newspapers Holdings Limited, which itself owns Times Newspapers Limited, which publishes the Times and the Sunday Times. News International welcomes this Inquiry. It intends to co-operate fully with the Inquiry and it looks forward to contributing to the debate on the future regulation of the press in the United Kingdom. It is right that at the formal opening of this Inquiry and in public, I should repeat on behalf of News International the apologies that have been made to all those whose phones were hacked or whose families, friends or associates' phones were hacked by or at the behest of staff working at the News of the World. That phone hacking was wrong. It was shameful. It should never have happened. News International apologises for it unreservedly. Nothing that it has said on its behalf during this Inquiry is intended to detract from or qualify that apology in any way. I must add that we accept that phone hacking at the News of the World was not the work of a single rogue reporter. We accept that there was no public interest justification for it and we further accept that it was not the subject of a proper and thorough investigation until the Metropolitan Police began Operation Weeting in January this year, following the supply of certain material to them by News International. In addition, we regard as wholly unacceptable the commissioning of a private investigator to carry out surveyance of lawyers acting for claimants or of Members of Parliament on the Select Committee. I should say that watching what people are getting up to is an old-fashioned and perfectly proper journalistic practice in many circumstances, but in this instance it wasn't journalism at all and it was unacceptable. The question of exactly who was involved and in what way at the News of the World is the subject of the continuing police investigation, and I cannot go into that whilst those investigations are continuing, although there is one point which I am going to refer to in a moment. Before I do that, I can and must say that not everyone who worked at the News of the World was involved. There were many fine reporters and staff who worked at that newspaper who had no involvement in phone hacking and who have suffered in the fallout through no fault of their own. In his opening address yesterday, Mr Jay referred frequently to News International. We make no complaint about that but it is necessary to bear in mind that News International has and had several horses in its stables, and each has or had a stable of its own. Yes, I think on one occasion I actually corrected him and said News of the World. Yes, sir, you did, and we were pleased to hear it. As you know, before the News of the World closed, there were four major titles: the Times, the Sunday Times, the Sun and the News of the World. At all times, each title has been run by its own editor, quite separately from its stable mates, and each paper has had, below its editor, its own editorial staff and its own journalists. There has been some sharing of support services but in journalistic terms they are separate and quite often competitive operations. As I have already mentioned, the Times and the Sunday Times are published by Times Newspapers Limited, while the Sun and formerly the News of the World are published by News Group Newspapers Limited. Despite or perhaps because they were published by the same company, the Sun and the News of the World not only operated separately; they positively competed against each other. Very recently, it had been intended that they should share a managing editor, but that arrangement had scarcely begun before the News of the World was shut. So it is perfectly correct to say that the four papers are or were under the same roof, but they are or were very different papers with, crucially, different editors and different staff. It is, therefore, necessary to be very careful before extrapolating from some people at the News of the World to everyone at the News of the World and necessary to be very careful again before extrapolating from the News of the World to other papers under the News International roof. If I now return specifically to the News of the World, just before lunch yesterday, Mr Jay reviewed in a numerical fashion the information to be derived from the Mulcaire notebooks. I must say immediately that we have never seen the whole set of Mulcaire notebooks. I believe the only people who have are the police. When summarising them, Mr Jay said that the notebooks showed 2,266 taskings, and he gave the number attributed via the corner names to each of four News of the World staff, to whom he referred by the cyphers A, B, C and D. The taskings attributed to these four added up to 2,143. Some arithmetic shows that that leaves 123 taskings not accounted for by those four individuals. Those 123 taskings must include Mr Goodman, who we know was at least reasonably active and who was not included in the four given the cyphers A, B and C and D. I should say that Mr Goodman's is the only name which I intend to use. The 123 must also include the corners marked "private", and it must also include those that are eligible. We don't know how many that leaves but it doesn't seem likely to be very many. However, Mr Jay also said that, ignoring the "private" corner name and the eligibles, we have at least 27 other News International employees. That is a quote from yesterday's transcript. This is a context where News International means the News of the World, but apart from that, the statement has occasioned some surprise on our side. As I have said, we do not have all the notebooks, but we knew that there were five legible corner names which could be correlated with names of News of the World journalists, those being Mr Goodman and A to D. We also know that the police believe that there are a number of others who can be correlated to News of the World journalists but we do not know the names and we are in no position to assess that one way or another, nor do we know how many, but our understanding is that it certainly does not add up to 27. Given the arithmetic which I went through just now, it does sound a little surprising if that rump of 123 taskings in fact contained at least another 21 News of the World journalists whom we are unable to identify. I don't want to present this as more important than it is. 2,266 taskings is 2,266 too many, five journalists known to have been commissioning them from the News of the World is five too many, and the corner names may not be the beginning and end of evidence of involvement. It may be possible to be involved without being a corner name at all. But nonetheless we think it is necessary to be accurate as far as possible and we would like to have this information rechecked. I'm sure that we can discuss with the Inquiry team and the police how that might be done. There is one other point I wish to mention, which concerns the Sun. Mr Jay also referred to a claim made by Mr Jude Law alleging phone hacking by or for the Sun. Mr Jay said that Mr Law alleges that his phone was hacked by the Sun and that part of the evidential matrix in support of his case is a corner name in the Mulcaire notebook which simply states "the Sun", without specifying the individual working there. As a result of Mr Law's claim, we do have the pages of Mr Mulcaire's notebook which we think are those referred to. We have them because Mr Law, as I understand it, obtained them from the police by a disclosure order and then disclosed them to us. But the reference to them came as a bit of a surprise, because we only have them under the terms of the strict confidentiality undertakings given to Mr Justice Vos. They are not, so far as we are aware, in the public domain. That gives rise to a difficulty, because it means that I cannot respond to what Mr Jay said without going further into material which is not in the public domain. All I can say is that it is quite true that Mr Law has made a claim in respect of hacking by the Sun. That claim is disputed, and we do not accept that the documents referred to by Mr Jay provide it with any cogent support. We will have a discussion with the Inquiry team as to how all concerned can avoid incremental disclosures of material which is not in the public domain through one party referring to it, another wanting to refer to a bit more to deal with the assertion and then perhaps the first party wanting to refer to a bit more again and so on. There is a risk of a spiral there, and we should and we will have a discussion as to how to avoid it. I must now turn to the steps which have been taken within News International to put matters right. First, in July this year the decision was taken to close the News of the World, and that newspaper published its last issue on Sunday, 10 July this year. Secondly, a management and standards committee was established in July 2011. The committee has an independent chairman, Lord Grabiner QC, and a reporting line which runs up to Mr Viet Dinh, an independent member of the main board of News Corporation and previously an assistant Attorney General of the United States. The terms of reference of the management and standards committee require it to ensure full co-operation with this Inquiry and with the police investigations and to carry out any necessary internal investigations. They further require it to review existing compliance systems within News International and to recommend and oversee the implementation of new policies, practices and systems to create an updated and robust governance and compliance structure for News International. The committee has appointed Linklaters, a leading firm of solicitors with wide experience of investigation work, to carry out a full internal investigation at News International and the newspapers. That investigation is being carried out under protocols agreed with the Metropolitan Police and relevant material is being passed to the police as and when required. The committee has also appointed Olswangs, a leading firm of media lawyers, to advise on best practice systems of governance. Thirdly, News International is not sitting still and waiting for the outcome of those reviews. A new chief executive, Mr Tom Mockridge, was appointed in July this year following the resignation of Rebekah Brooks. Mr Mockridge has previously worked in New Zealand, Australia, Hong Kong and Italy, but he has not been based in the UK before, so he is a fresh pair of hands. Under his guidance, close attention is being given to compliance matters. Amongst other things, a hard copy of News Corporations' standards of business conduct has been issued to all staff. That document has been provided to the Inquiry. It sets out the standards of ethical and lawful conduct expected of staff and includes a procedure for reporting breaches of those standards, if necessary anonymously. By reminding staff of those policies, by approving and implementing new policies on matters such as compliance with the Bribery Act and whistle-blowing, and by a process of training, steps are being taken to ensure that every member of staff at News International, including all staff of the three newspapers, understands that they are expected to abide by the law and by the highest ethical standards of professional conduct and with the Editors' Code of Practice published by the PCC. News International believes that the staff at the Times, the Sunday Times and the Sun do not require to be reminded of appropriate standards of lawful and ethical behaviour, but we wish to ensure that there can be no repetition of what occurred at the News of the World. The Inquiry will know that since 1981, the corporate governance structure of Times newspapers Holdings Limited has incorporated arrangements set out in the Articles of Association of the company which are designed to ensure the editorial independence of the Times and of the Sunday Times. Under these arrangements, Times newspapers Holdings Limited has six independent national directors. Amongst their functions is that of resolving any disputes between the editors and the company. The independent national directors remain in place, and their role is in no way diminished by the corporate governance improvements which are being made. Fourthly, civil claims for damages have been raised against News Group Newspapers in consequence of phone hacking. Some of these claims have resulted in proceedings being issued and the claims are being managed as a group by Mr Justice Vos in the High Court. We are trying to take a sensible and constructive approach to those claims, making admissions and concessions where appropriate, and a number of such claims have been settled either before or after proceedings have been begun. In addition, and in order to make it easier for people to obtain compensation for admitted claims, News Group has established a compensation scheme to pay out amounts determined by Sir Charles Gray, a former High Court judge, as being equal to what a court would award with 10 per cent added on top. By taking these steps, News International intends to ensure that what happened at the News of the World will not happen again, and that fair compensation will be paid to those who suffered from it. I am now going to turn from the past and indeed the present to the future. Just before you do, you've mentioned a number of steps that have been taken -- indeed, the independent directors have submitted a statement to the Inquiry, as you probably are aware. Yes. And you've mentioned the work being undertaken by Lord Grabiner with the assistance of two firms of solicitors. In the same way that I make it clear that I've told the industry as a whole that I would welcome any suggestions that can work for everyone, including the public -- and I have made similar comments during the course of the directions hearing -- I welcome Lord Grabiner's assistance to such extent as he is able to provide it, and I am very pleased to hear that he is tasked also to assist the Inquiry. This is a job which all of us have to do, whatever our backgrounds in connection with the issues that have given rise to it. Yes. We had noted what you had said previously and also what you said yesterday morning about welcoming assistance from the industry, and I know that that has been taken on board and I hope that it will prove fruitful. Indeed, I will say a little bit about that now. The position of News International is that it supports the principle of independent self-regulation for the press. It considers that the PCC can be improved, it will still not be perfect, but the alternatives are not perfectly either, and we would suggest suffer from much greater disadvantages. We have addressed this area in our written opening submissions, and I am not going to repeat now what is said there, but there are three points which I wish to highlight. First of all, as Mr Jay acknowledged yesterday, the press is not above the law. Like all other citizens, it's constrained by both the civil and the criminal law of the land, and over the last 15 years or so, the law of the land has developed to provide protection in many of the areas where there has been concern over press behaviour. We now have the Protection from Harassment Act 1997, which gives protection from harassment and makes it both a criminal offence and gives rise to a civil claim for damages. We have the Data Protection Act, which protects personal data and provides criminal offences obtaining or disclosing personal data without permission or justification, and we have the common law of privacy, developed by the courts since the Naomi Campbell case in 2004, which gives a right to sue for damages for invasions of privacy. The press is subject to all those laws and many more, as are all citizens. That the law applies to the press is easily enough seen from the phone hacking cases. Phone hacking is a criminal offence under the Regulation of Investigatory Powers Act 2000. I am not going to go into the interpretation of section 2 of that act, which was touched on yesterday, but the Inquiry will be aware that phone hacking is, of course, an offence also under the Data Protection Act. So even if there is any doubt about the offence under RIPA, there is undoubtedly one under the Data Protection Act. If there was any doubt in the popular mind, or indeed that of the press, that phone hacking was criminal, it was dispelled when Mr Mulcaire and Mr Goodman were arrested and pleaded guilty in 2006 and when they were both sentenced to terms of immediate imprisonment in February 2007. Those convictions and sentences do appear to have had a salutary effect. It was notable that when speaking at the Inquiry's seminar on 12 October this year, the current Information Commissioner, Christopher Graham, said that in his two and a half years as the Information Commissioner, he had not seen a single case of an offence under section 55 of the Data Protection Act which involved the press. That is the section which makes it a criminal offence to obtain or disclose personal data without consent or justification. I am not going to give any guarantees that there was no phone hacking by or for the News of the World after 2007. No doubt that will be explored during the evidence, and we noted that Mr Jay said the police thought the last instance was in 2009. Nonetheless, it does look as if lessons were learnt when Mr Goodman and Mr Mulcaire went to jail. If phone hacking continued after that, it was not, as it appears, what Mr Jay described as the thriving cottage industry which existed beforehand. The lessons for the Inquiry, we would suggest, are that the ordinary law of the land protects against phone hacking both by making it a criminal offence and by giving a civil claim. The Inquiry should, we suggest, be somewhat wary of making recommendations designed to fight the last war, rather than the next one. The second point I want to make concerns not, I hope, a battleground, but certainly the terrain the Inquiry needs to cover, and particularly the Internet or the web or the blogosphere or whatever you wish to call it. As I am speaking now, it is still just possible to identify fairly uncontroversially the constituents of the press. We can all reel off the names of the well-known national papers, most of us can probably also name our local regional papers and maybe some other regional papers, and most, if not all of them, are represented at this Inquiry. But if I were to list the papers by name, I would swiftly have to add the reference to their websites, because their websites have become part of the package and the speculation now is not as to whether one of the established papers will become an Internet-only publication; it is as to which will be the first to take that route, and by doing so, to join the influential news sites which already exist solely on the Internet. We are, therefore, already at the stage where the press cannot be sensibly defined without reference to the existence of titles which are or soon will be published solely on the Internet. What that means for this Inquiry is that any regulatory solution which it recommends must tackle the question of how to regulate publication on the Internet. That is a problem which makes herding cats look like a nursery school exercise, but it is a problem which cannot be simply ignored. It cannot be ignored because there can be no fairness, logic or coherence in a system which regulates a publisher or a journalist who publishes on paper, but shrugs its shoulders as soon as he or she chooses to publish on the Internet instead, and it cannot be ignored because the fragile economics of the printed press should not be disadvantaged by a regulatory cost which does not bear equally on its Internet competitors. That's an easy problem to state, Mr Davies, and if it matters, I entirely agree with you, but I'm listening very carefully to what you're just about to suggest. Well, I and my clients are very well aware that it is a much easier problem to state than it is to solve. Because it's not just a question of solving it in relation to, say, one of our local nationals, if you'll pardon that odd use of language, simply saying, "Right, we'll stop printing, we'll just go on the Internet", because the Internet provides access to news material which is published anywhere in the world. Absolutely. It is a daunting problem and I don't have a sparkling and brilliant solution to it in my pocket which I am about to pull out. I'm sure Lord Grabiner will provide us with one. I shall look forward to it. There are two things I would say about that. One is there is the related problem of cost. The Inquiry should, so far as at all possible, avoid imposing costs on the printed press which are not shared by its competitors which are not in print, because to do that risks achieving the destruction of the printed press which is sought to be regulated. The other point I would making is that it may be right that it is easier to regulate at least parts of the Internet through a self-regulatory system because you have to be much less precise in defining your terms with a self-regulatory system, and it is endlessly and swiftly adaptable. Once one passes a statute that says, "People with the following characteristics have to be regulated", then it is necessary to define somehow which parts of the Internet you are going to regulate and which are outside. You have to draw a line somewhere between a blogger and a professional journalist, a task which in itself is almost impossible. That's a line we're going to have to draw anyway, because one could talk about even journals such as the Huffington Post, but that creates different problems to those that might be created by a blogger such as Guido Fawkes, or a blogger who simply now can communicate with a much larger audience than previously was the case. Indeed so, and I'm afraid I'm simply stringing out problems, but one also has the case of a blog which is normally read by 25 people and then, for some reason or other, it catches the zeitgeist and it suddenly has hundreds of thousands of readers. How is one to treat that, inside the net or outside the net? These problems are, I'm afraid, very intractable. Yes. The third point I wanted to make is that the constitutional principle that the press should be free of government regulation is a very important one. Governments have a poor record of resisting temptation when it comes to regulating the press. As was pointed out at the seminars, one only has to go to Italy or Hungary now or less than 200 years back in our own history to see that. I think as a matter of history, after the massacre at Peterloo less than 200 years ago, the government introduced repressive measures applying to the press and there were a number of trials for seditious libel as well. I'm very grateful to you for taking me back to 1643 in your written submissions and I understand the lesson, but I am very keen to unpick one thing at some stage, Mr Davies, and that's what we mean by "regulation". It strikes me that at the moment, a lot of people are talking about statutory regulation as if it is binary. There is either statutory regulation on the one hand or self-regulation on the other, and I'm not sure that the boundary between the two isn't very, very much more blurred. Indeed, some of the commentary about systems which could be put in place might be assisted by the statutory, for example, recognition of a self-regulatory body, as happens in other industries. So I would be very keen to widen the debate from the binary discussion of "statutory regulation bad, self-regulation good" to understanding what is meant by "statutory regulation", whether everybody is talking about the same thing. Yes. I think the concern that we have is very much focused on anything which provides a mechanism for governmental control over the press. Well, subject to anything that anybody else may say, you're pushing, in that regard, at an absolutely open door. Of course, I'm only two days in -- that's not strictly true; I'm three months in -- but I think I said that right at the very beginning and I can't believe that anything will happen that will change my mind about that, but that's only half the issue, as I'm trying to investigate. Yes. As I said, we had noted the remarks you've made more than once now. Yes. Nobody seems to pay attention to them because they all think that I'm going to do something else. I think one should not conclude from the absence of a shining perfect solution in my pocket that people are not paying attention to remarks from yourself or from the Inquiry in general. Yes, well. As I said, and as I think we've agreed, it is a difficult problem and we haven't come up with a perfect solution yet. We will not hold back if we do. I'm very grateful for that indication. Yes. Despite the open door which has been helpfully mentioned, I should emphasise that we consider that the need for a free press now is as great, if not greater, than it has ever been. Yes. Don't let me in any sense, by anything I say, limit or cause you to not say something you want to say, for this reason: this is unlike any other judicial hearing. By the very fact of the way this Inquiry is being conducted, this is a debate which is going on in confines that are much broader than this room and with me, so I don't want, in any sense, people to limit what they want to say simply because they think it will irritate me because I've already said I agree with them. They can limit them a bit but not entirely. With both parts of that statement in mind, let me simply say that we consider that the need for a free press is very great at the moment. Not so long ago, spin doctors were unheard of. We now have an industry which exists to portray events in the manner desired by its clients, whether they are the government, business or pressure groups. Struggling to disentangle the facts from the spin and to explain the world to its readers is the job of the press, and it is a harder job now than it -- well, certainly no easier than it has ever been. The British press, including the Times, the Sunday Times and the Sun, have a long and fine record of reporting the news, of uncovering scandals and of entertaining their readers. Tragically, the News of the World managed to plumb both the depths and the heights. The depths, I need hardly say, are taken up by phone hacking. The heights are well illustrated by the remarkable piece of investigatory journalism which exposed very recently the willingness of certain international cricketers to take money to fix events in cricket matches and led to the convictions of three cricketers. That investigation was vital to the future integrity of professional cricket and to the trust of the tens of millions who follow the game. It was an investigation which no private citizen could have taken on and which no government organ or professional body showed any inclination to take on. Indeed, the police frankly said after the convictions that, understandably, they have higher priorities than cleaning up professional cricket and that had the case not been handed to them on a plate, they would not have pursued it. This was a scandal that would have run and run if the press, in the form of the News of the World, as it happens, had not intervened. There are many other notable examples of investigative journalism, from thalidomide to MPs' expenses and the link between Arthur Scargill and the Libyan regime which Mr Jay referred to yesterday as having been exposed by the Sunday Times and explained by Mr Witherow in his recent article. Despite those successes, the question that should perhaps be asked is that proposed by the editor of the Times, James Harding, in his statement to the Inquiry: not "why does the press know so much?" but "why does it know so little?" Why did it know so little about weapons of mass destruction or the lack of them in Iraq? Why did it not forewarn of the banking crisis? Why did it not fully appreciate the dysfunction between 10 and 11 Downing Street during the last government? Why did it not see the recent riots coming? It may be that what we need as citizens is for the press to have not less freedom but more. So our plea is for the press not to be over regulated. It's not a plea for it to be above the law. In the course of this Inquiry, we cannot and will not hide from the worst that has gone on in the past but we hope to be able to assist in plotting a course which will permit a free and vigorous press to flourish with integrity in the future. Now, that said, and as I have said I think twice now, I don't have a shining example of a perfect regulatory system in my pocket, but that is a matter which we are thinking about very hard, and we will do our best to assist the Inquiry in conjunction, I hope, with the rest of the industry in that respect. I'm very grateful. Of course, I've mentioned the binary between statutory regulation and self-regulation. There's another binary as well, and that is between what is frankly contrary to the criminal law -- Yes. -- and that which isn't contrary to the criminal law, but which, as you readily conceded, breaches fundamental ethical considerations of which the recent example last week is a good one. So one can't just leave it to the criminal law. No, indeed, and there is the civil law as well, and there are perhaps difficult issues as to how far surveyance transgresses that. I agree. That's the point. But you agreed that it's inappropriate. Yes. It's unethical, whatever words you want to use. Yes. Query whether it fits into some invasion of a civil law right, and on top of that, one has to graft the additional problem whether the mechanisms for seeking relief in civil justice today, with all the problems of access to justice about which everybody in this room will be extremely familiar, don't themselves cast a different light on what we have to do to provide a mechanism that is efficient, effective, fair and cheap, both to those who wish to complain and indeed the industry. I have said outside this room that ten, 15 years ago, the problems about libel were very much those of victims who could not get legal aid and therefore to take on the big beasts of the press was a difficult problem. Now it might be that the complaint has moved slightly differently because conditional fees have meant a complaint now from the press that they can't afford to contest litigation because the cost of doing so, once one adds up the consequence of conditional fee, itself becomes ruinous. I can't solve the problems of access to justice -- I have quite enough on my plate as it is -- but one of the issues might be some mechanism to permit a speedier, effective and sensible mechanism for all to use and for all to take the advantage of, which does not involve the panoply that otherwise exists in this building, available through the High Court and the traditional litigation route. I merely put it on the table, as I have done, because as you identify the problems, you might as well throw that one into the mix as well. Yes. That is also a problem which has crossed our minds, and I'm afraid it's also in the camp of problems to which I don't have a shining solution in my pocket, and we had noted with a degree of horror that I think one of the seminars was told by an ombudsman from the financial services ombudsman's brigade that their total budget was something over 100 million a year. As you know, the PCC's budget is, I think, just under 2. So there are enormous difficulties there. I understand the cost consequences, yes. There is also a philosophical and constitutional question, going back to the earlier problem, as to whether the press ought to be limited beyond the limits which apply to the ordinary citizen. If one does that, one is saying that freedom of the press is somehow narrower than freedom of speech and that is a question in itself. I take that point. So I apologise if I have done more to sketch the problems than to provide the solutions but -- Well, the problems are somewhat easier to state than the solutions to find. Having done that, unless there's anything else I can add -- No, Mr Davies, thank you very much. Thank you. Mr Caplan? Opening submissions by MR CAPLAN Good morning. May I just introduce the team that's representing Associated Newspapers. My name is Jonathan Caplan. I'm assisted by Sarah Palin as junior counsel and I have also sitting next to me Elizabeth Hartley, the head of editorial legal at Associated Newspapers Limited. We represent Associated Newspapers. Their principal publications, as you will know, are the Daily Mail, the Mail on Sunday, Mail Online and the Metro. At this stage, we would wish to make some rather broadbrush comments dealing with some of the issues raised by your terms of reference and raised by Mr Jay yesterday. We obviously hope, during the course of the Inquiry, to make more detailed submissions and to assist you as fully as we can in relation to the kind of issues which you have just been mentioning. We make perhaps no apologies for going back to the 17th century because the British newspaper industry has a proud history of some 350 years, going back to the first English newspaper in the form of the Oxford Gazette. Since then, there has been a rich and diverse array of publications, both nationally and regionally, usually offering a wide and stimulating range of perspectives, all deciding independently what to report, how to report it, according to differing social and political stances. They all aim to connect with and reflect their national or local readerships, which of course may be in millions, they may be in hundreds, and they all cater to vastly differing communities and lifestyles. Sir, your terms of reference are of fundamental importance not just to proprietors and journalists but obviously to our democratic way of life. No one involved in this Inquiry or outside of this room could sensibly doubt that a free press which is independent of government is essential to any democracy. But your terms of reference, if we may say so, raise broad and in some respects imprecise issues. For example, what is meant by "the culture of the press" and can you properly define that culture? We raise that as a question. How is it possible to determine what the practices of the press are -- or are we in this Inquiry, in truth, talking about "were" -- without conducting an extensive fact-finding exercise, which in part may be precluded by current police investigations? Even then, are we just talking about the practices of some journalists and one organisation? How do they translate to the practices of the press as a whole? The press is not a single homogenous body and obviously one will need to look carefully at the evidence that is called before you to examine that issue with care. Also, insofar as you are called upon to look, as you clearly are, at the issue of ethics, is that something that can be considered totally from an objective perspective or does it in part depend upon who you are and where you stand? Do you believe in a strict right to privacy? Do you regard public interest as an overworked escape clause for investigative journalists? If you choose to be in the public eye, then your answers to those questions may be very different to those of the readers of many newspapers. When your terms of reference seek "recommendations for a new, more effective policy and regulatory regime", that, of course, should not be taken as an indication that the existing model of the Press Complaints Commission is broken or that self-regulation is incapable of being beefed up in significant ways. This Inquiry is the fourth into the press since the Second World War. The first Royal Commission on the Press was appointed in 1947, as you know, in response to public and parliamentary criticism of declining press standards and fears of monopolies with regard to ownership. It recommended the establishment of the General Council of the Press, which was self-regulating. The second Royal Commission on the Press was chaired by Lord Shawcross and reported in 1962. It recommended a new constitution for the industry body, which changed its name to the Press Council. The third Royal Commission on the Press, under Lord MacGregor, reported in 1977 and made a detailed study of the Press Council, and one of its recommendations was that the council should publish a written code for journalists. Finally, in 1990, the report of the Committee on Privacy, chaired by David Calcutt, Queen's Counsel, recommended that the Press Council be disbanded and that a new authoritative, independent and impartial body be established, to be called the Press Complaints Commission. That potted history demonstrates that concerns about press standards and stories -- indeed, yesterday Mr Jay took us back to Warren and Brandeis in the Harvard Law Journal at the end of the last century -- You have to add Sir David Calcutt's second go at it. Indeed. He had two reports. But the second one suggested a different solution entire which wasn't adopted. No, it wasn't. He was in favour of abandoning self-regulation. But that potted history demonstrates that concerns about press standards and concerns about the kind of stories that the press wrote are nothing new, but on each occasion, with the exception of David Calcutt's second report, statutory regulation -- and by that I mean, obviously, the imposition of a government-appointed body -- has been seen as a step too far. We need, we would respectfully suggest, to be clearly aware as to how we have all arrived at this point in the history of the British press before yet another judicial Inquiry with the far-reaching powers which are given to you, sir. As the editor in-chief, Mr Paul Dacre, of the Daily Mail said a month ago at one of the Inquiry's seminars, the banks didn't collapse because of the News of the World and a nation didn't go to war. We are here because the employees or agents of News International have listened to the voicemail messages on other people's mobiles and may have paid serving police officers for information. That's a matter under investigation. The rumour mill is that other journalists working for other proprietors may also have acted unethically or illegally, and the flames have been fanned to some extent by politicians, perhaps because of their own agenda of holding the press to account for so comprehensively exposing the scandal of parliamentary expenses. We have still to see a large amount of the evidence, obviously, which has been given to this Inquiry, and we look forward to seeing it and to participating in the hearings and the debate which you have. Mr Caplan, I understand the point that had it not been for hacking, and particularly for what was revealed at the very end, this may never have happened. But it wouldn't be a fair characterisation of the position, would it, to suggest that hacking is alone in the issues that actually have generated public concern? No. I mean, we know that there has been a considerable amount of public concern in relation to the limits of the right to privacy and the issues of public interest and the press. The point we make is that we would not be here today but for the activities or alleged activities of the News of the World. Yes, that may be right, and I was present when Mr Dacre spoke so forcefully on this topic at the seminar. I'm equally conscious that, because of the police investigation, there are enormous limits on what I said, I think, quoted yesterday at the Society of Editors conference, about the cart being before the horse. I readily recognise the analogy, which is mine. But in one sense, that might help us all, because it means that we won't be focusing on the microscopic but can try and take a broader snapshot of what's going on, to try and make it work better for everyone. Yes. If it works better for the press, that's fine, but it has to be everyone, as I've said several times. Yes, and I'm going to come in a moment, sir, to -- I'm not trying to take you out of your line. The debate is a far-reaching one which your Inquiry is commencing, and we wish to participate fully in it, as I'm sure do other people in this room and outside of this room, and it is a debate that is demonstrably worth having and an important debate to all. I don't wish to, in any sense, detract from that. The point I was seeking to make is in relation to evidence of malpractice or potential evidence. We clearly are aware, all of us, of the activities of Mr Mulcaire, which, as far as we know, ended in the middle of 2006. I'm going to deal with Operation Motorman, which Mr Jay referred to yesterday, and the investigation in 2003. We obviously will have to see what evidence is placed before the Inquiry in relation to other matters of complaint. The point I simply make is that we need to be clearly aware that any recommendations or restrictions which come out of this Inquiry are not simply introduced on the basis of historic transgressions which no longer occur, and we will obviously consider the evidence which is placed before your Inquiry, and that there is some kind of systemic problem. Sir, can I just state the position as far as Associated Newspapers is concerned? Before you do that, let me just pick up on that which you've said. The analogy that Mr Jay mentioned yesterday of Dr Shipman is not utterly inapposite. Nobody at all suggests that there are lots of doctors going around doing what Dame Janet Smith found Dr Shipman had done, but the opportunity was taken to improve the system. Of course, one has to keep in mind what is vital, particularly in the context of this Inquiry, but to say that one has to look only to the future doesn't mean to say that one should not take advantage of where we are to try to improve for all, and that's really another way of saying what I just said a moment ago. Thank you. Can I just state quite clearly the position of my clients, Associated Newspapers, and it is this: it condemns the practice of phone hacking, and so far as it is aware, no journalist at Associated Newspapers has engaged in phone hacking. It does not bribe police officers, and in particular, it condemns the shameful practice of hacking the mobile phones of the victims of crime or of their families. Sir, the Inquiry is in progress, and as I've said, having regard to the improvements which you have just referred to, sir, which hopefully will come from this Inquiry, and the huge ramifications for our national press which are likely to result from your recommendations, Associated Newspapers is committed to assisting you as fully as it can, as a core participant. We will do all that we can in a constructive way. We look forward to participating in the debate which this Inquiry will stimulate. Associated Newspapers strongly believes in maintaining a strong, ethical -- and I stress that word -- and viable press which is equipped for the significant challenge of being both the eyes and ears of the public and ultimately its voice. Of course, there is always room for improvement and for better practices. We do wish, however, to stress that press standards have vastly improved over the last 20 years under the Press Complaints Commission and under the Editors' Code of Conduct. It's been mentioned before, but we do stress that most journalists are hard-working, conscientious and honest, and they passionately believe in what they do. We are anxious that the allegations of phone hacking should not be allowed to besmirch the profession as a whole. This point can be made in another way, and that is this: the Daily Mail and the Mail on Sunday are commercially successful, we submit, precisely because they connect with their readership and their values, and that readership will stop buying those newspapers if they feel that they cannot trust its integrity or accuracy. Newspapers are held to account every day by their readers, and it is their readership's taste and attitudes and whether they are met or not that determine the commercial viability of a newspaper. Having said that, of course, even in the middle market, newspapers at times need to be gossipy and sensational if they are to attract large circulations. Stories about celebrities and the course of human relationships are a part of that attraction and they do enable space to be provided elsewhere in the newspaper for more serious articles providing analysis and comment about perhaps more important issues of the day. But the aim is both to entertain and critically to engage. We must also remember that we live in a country which is one of the major centres of the arts and entertainment industry. Many people have become celebrities and gone from relative obscurity to international fame and wealth because of the vibrant press which we have here, which has been able to capture the imagination of its readership through stories about their personal lives which are usually informative as opposed to being intrusive, as well as stories about their artistic talent. With news and investigative journalism, those stories, of course, are not plucked full grown from the trees. They very often have somebody who is wealthy and powerful and does not want that story to be printed, and newspapers therefore require considerable resources and resourcefulness both to investigate and then to establish the truth and accuracy of what they have printed, and they need to be commercially successful to perform that role. As you've heard only moments ago, the press, of course, is increasingly having to compete with the Internet and with other digital news platforms which are often largely unregulated. The press is highly regulated, and you're well aware of the laws covering data protection, libel, the new Bribery Act, privacy, contempt of court, harassment, regulation of investigatory powers and official secrets. Therefore the press is only free, of course, to the extent that it is not already prescribed by law. Sir, can I turn to Operation Motorman, which we do regard as an important matter, because a certain amount of comment has been made following the police investigation in 2003 and the activities of the Inquiry agent Stephen Wittamore, and following the findings of the Information Commissioner in the two reports, "What price privacy?" published in May 2006 and "What price privacy now?" published in December of that year. The reports drew attention to the extensive use of enquiry agents to search for personal data by not just journalists but by organisations in many different areas of our society. The last few years since the publication of those reports have seen a growing awareness, we suggest, on the part of all sections of society -- government, business and the media -- regarding the importance of data protection. In fact, newspapers are by no means the worst offenders and no penalties have so far been awarded against newspapers under the Data Protection Act. Yesterday, Mr Jay referred to Operation Motorman, and we are keen to return to it because in our submission it is in no way to be compared to the conduct of phone hacking. It is especially important to draw a clear distinction between phone hacking, which is the illegal interception of private voicemails, and the kind of conduct which was the subject of the Information Commissioner's reports. The activity which Stephen Wittamore was hired to undertake almost a decade ago was primarily to obtain addresses and telephone numbers, most of which -- not all of which but most of which -- could legally have been obtained if the individual had had the time to research it. His assistance was required, as far as Associated journalists were concerned, to help trace people quickly, usually to verify facts or to comment on stories that were written or were in progress prior to publication. It should also be stressed that Mr Wittamore did not work simply for newspapers; he was hired by organisations such as banks, local authorities and firms of solicitors who similarly were seeking to locate people. Whilst Mr Wittamore was prosecuted, you will be aware, sir, that no journalist has ever been charged because there simply is no evidence that they ever asked Mr Wittamore to do anything illegal or that they knew he was or might be illegally accessing databases. Another key difference between phone hacking and the data provision provided by Mr Wittamore is that journalists using him were not engaged, we would respectfully suggest, in fishing expeditions. When the Commissioner's report was published in 2006, the editor in-chief of Associated Newspapers, Mr Dacre, took immediate action and banned from 2007 the use of all enquiry agents. It was made quite clear that Associated would not pay for them and that compliance with the Data Protection Act was to become and is a term of journalists' contracts with my clients. Sir, Associated Newspapers will seek to demonstrate in evidence to you that it operates its titles by respecting and observing the law and regulatory requirements and by applying the Editors' Code. It invests in the training of its reporters, requiring continuing professional development in significant changes in law, such as the new Bribery Act. All journalists employed by Associated are required to comply with the Editors' Code and to abide by the highest professional standards. Associated aims to set strong ethical culture within each title and it closely monitors payments to third parties for news and information. It has and is supported by a strong in-house legal team, and by specialist solicitors and counsel. That is not to say, of course, that Associated does not make mistakes of judgment or simply mistakes. Publishing to a deadline is a process that involves risk and it can be said that a newspaper that never sets out to expose itself to risk is not doing its job. The Editors' Code provides a very good set of binding professional standards and is a firm cornerstone of the system of self-regulation. It is intended to provide a clear view of what constitutes unacceptable press behaviour. Mr Dacre has been chairman of the code committee since 2008 and the code has evolved and been amended many times in the 20 years existence of the Press Complaints Commission. For example, it was amended to impose an express prohibition on hacking into the messages on mobile phones or emails and to make it clear that editors and publishers must ensure that its provisions are strictly observed by even those non-journalists and external contributors who may work on a story. Sir, the code is, of course, subject to the public interest exception but without it, many major stories of corruption and abuse of power could never have been written. I understand, of course, that that is an issue, the definition of "public interest", which obviously is likely to be an issue of some keen concern to you, sir, and the subject of submissions and inquiry before you. But the public interest factor is often seen as the press arrogating to itself a right to break the laws by which we all live for their own commercial profit. We suggest that that is completely to misunderstand the role of a free press, which, in the words of Lord Nicholls in the case of Reynolds v Times Newspapers, is -- the vital function is to act as a bloodhound as well as a watchdog. Ultimately, of course, if the judgment call is wrong of the journalist and the lawyers and the editor, then it is the editor and the journalist who may have to pay the price, possibly by even risking their personal liberty. Sometimes, as you know, it will be necessary to engage with whistle-blowers who may, in the process, reveal confidential or even secret information, or who may need financial payment to support themselves for the future and in consequence of their actions. The Official Secrets Act might make the communication of such information unlawful. The Bribery Act might prohibit payment. Sir, in a letter to the Media Lawyers Association in March of this year, the Lord Chancellor and Secretary of State for Justice said in the context of the new Bribery Act that he was confident that the Director of Public Prosecutions and the Director of the Serious Fraud Office "can take full account of the considerations which may apply to a case involving public interest reporting" when deciding, under the Code for Crown Prosecutors, whether or not to prosecute in a particular case. He added that he recognised: "... the extremely important role played by the media in our society and it is not the intention of the Act to restrict legitimate and responsible journalism. I hope you will be reassured that the public interest will remain a key consideration in any individual case." Has anybody taken that up with the director? I cannot comment about that, but we will provide copies of that correspondence to the Inquiry. Thank you. Sir, may I just turn to two short final topics? The first is the question of anonymity. May I just say a word about that. There may well be journalists or ex-journalists who are wishing to give evidence to you and who may be dissatisfied with their employers or former employers, and we understand from a previous Inquiry hearing that they may wish to do so from the position of anonymity and that it may be that neither their name nor the newspaper group for whom they work or worked will be made public. If they have important evidence to give, then we -- and I hope other newspaper publishers present -- would encourage that evidence to be given as openly as possible, and to be tested against the substantial body of evidence that the Inquiry is receiving. We have, however, expressed and continue to express the most profound concern about the Inquiry receiving evidence on the basis of anonymity, which, of course, is contrary to open justice. We remain keen to explore alternative avenues for meeting any concerns that may be expressed by potential witnesses from whatever publishing group they come and wish to stress that Associated Newspapers is very keen to explore those avenues, if they can be explored and met. Associate, so far as it knows, has nothing to hide and welcomes complete transparency, and of course, sir, we will respond to the draft anonymity protocol which has been distributed. It is a problem, and I understand your concern, and I understand the specific concern that an anonymous witness might besmirch a reputation which can't be answered without detail. I have recognised that such evidence in any event would inevitably carry far less weight, but we'll have to see how we progress on the specific examples. Yes. If there are any. If there are any. Sir, if there is any malpractice, far better that it's out in the open. We're all here to learn and improve and to deal with it. If anybody has any concerns, a working or former journalist, then we simply say that we should respectfully seek to explore other alternatives. It may be a contempt -- and I would respectfully suggest it is -- of your Inquiry if anybody was to take steps to penalise them for giving that evidence, and it may be possible to give undertakings -- I don't know, we'd need to explore that -- which would meet those concerns, but those are avenues which clearly could be explored. Yes. Finally this, please. The drafting of the Inquiry's terms of reference includes the critical issue of regulation. Of course the Press Complaints Commission can be made more effective. Our position is that we strongly advocate it does not need to be replaced; it needs to be and is capable of being beefed up. We do say that the virtue of the current system is that complaints by members of the public are generally heard and resolved quickly, free of charge and without the use of lawyers. Mr Dacre has already suggested at one of your seminars that, for example, improvements could be made by possibly introducing an industry ombudsman who could be called in by the Commission or work in tandem with it to investigate in serious cases, with the power to impose some form of financial penalty and costs orders. Clearly, there needs to be more thought given to corrections and better prominence. Associated Newspapers has already begun that process and has in fact instituted a system of giving speedy corrections and prominence and there is obviously the possibility of introducing lay participants onto the Editors' Code committee. We do say it is unacceptable that any newspaper owner should be permitted to opt out of self-regulation, and we suggest that a way may well need to be found to ensure that all owners participate and fund in that scheme. But once you say that, how do you achieve that laudable aim without somebody saying, "You have to." And somebody saying, "You have to", sounds to me very much to me like a law that says you have to. There are possibly other ways and obviously this is an issue -- Well, I'm all ears, Mr Caplan. We'll aim to provide some possible solutions. But, we are firmly behind the suggestion that all publishers or proprietors need to be involved in a self-regulating scheme. And a way that encourages Internet publishers of news to involve themselves in a mechanism that does allow some form of oversight or control, equally. Well, there it is. That's the mission. That's the mission. Sir, that is all we wish to say to you by way of opening. We'd like to thank you for the opportunity -- Thank you very much, Mr Caplan. I'm grateful to all those who have spoken and will continue to speak, I have no doubt, for the support that they'll give me. I think that's a convenient moment to give everybody a break, and then we'll carry on in about -- does that cause you inconvenience, Mr Millar? Not if we carry on after the break. I did want to mention the matter you mentioned yesterday. We're very, very welcome and we certainly are, but if you're all right for a few minutes, then I think we'll give the shorthand writer a break. Thank you very much. Can I just make one correction? If I said in relation to Motorman that the attempts to locate people was to check the accuracy of printed stories, I meant prepublication stories. I'm sorry if there was any confusion. (11.19 am) (A short break) (11.29 am) Mr Millar, I wouldn't want to make more of the point that I made yesterday than is there to be made, but I didn't want there to be a misunderstanding. Absolutely. We considered your comments yesterday afternoon about that sentence in paragraph 6 of our written submissions which quoted -- always a dangerous thing to do -- a part but only a part of a sentence -- It's not normally dangerous to quote what judges say themselves, is it? It is if you cut and paste it in that way. Take part of a judge's sentence out of context and you can get yourself into a mess, sometimes. What we've done is we've submitted a revised version of the written submissions which omits the entire sentence in our submission, and therefore the part of your sentence, and we're happy for that to be the published version of our written submissions. We hope that avoids any further consideration of the problem. Yes. But I'm sure you understand, from what you heard me say yesterday and what you've read that I've said that the fundamental principles are entirely clear to me, and I don't believe you take issue with them. Not at all, no. It's just a question of whether I've committed myself to something. Yes. I did, however, want to say this, hoping that the deletion does resolve the matter: please accept that we didn't intentionally spin part of your judgment. That makes us more devious and perhaps more clever than we are. We do understand that this was how it appeared to you and we do, of course, therefore, apologise for that, but it was inadvertent. Mr Millar, as I said right at the beginning, I don't want to make more of it than it is. Yes. I just wouldn't want the concept behind the thought to have gained currency. Absolutely. That was the point. There will be plenty of scope for us to adopt and we will adopt and make the submission that a regulatory system different to the one we have at the moment could -- that's the key word, "could" -- depending on its features, impact adversely on freedom of expression or have a chilling effect on responsible journalism. We will make our arguments to that end when the appropriate time comes but we don't want to suggest that that was a view that you'd formed. When one reads the judgment in context, it's quite clear that that wasn't a view that you -- I'm quite clear that it's easy to conceive of many regulatory systems that would undeniably adversely affect freedom of expression and provide a chilling effect on responsible journalism. I have no wish to go down that route. The trick is to find the right balance that does not have those adverse effects, but does provide the necessary protection that certainly it appears is required. It's the trick. Yes. That's a sentiment with which my clients would not disagree. Thank you very much indeed. Mr Jay, who is supposed to be speaking now? I think on the programme we now have a little gap until Mr Dingemans arrives at 3.15. Oh, is nobody else willing to step up to the plate? Apparently not, no. But tomorrow morning we have a relatively full programme. I don't know whether anybody has any point they wish to raise now, legal or other nature, which we could deal with on the hoof, or whether we just break now and come back at 3.15. I'm wondering when we're going to get the full set of statements for the first week of evidence, because we haven't had them yet. That's a good question. There's a fastball for you, Mr Jay. Some of them have been made available. I will make enquiry and give a timescale by 3.15 or at 3.15 for the remainder. Very good. Do we have a batting order? Yes, and that has been provided. That is for five working days commencing 21 November. The core participants have seen that. All right. Have you seen none of the statements, Mr Millar? I've seen a few of them, but I think for the majority of the listed witnesses for the first week we still haven't seen the statements. All right. We will check on that now. Is there anything else that anybody usefully can raise at this stage? I would not want it to be thought that once we get into hearing evidence I will be taking a relaxed line to the time that we sit, because we really do have to press on, but I do understand the particular problems this week and I won't press them. I know Mr Dingemans has a particular commitment which he could not avoid. All right. There it is. We'll resume at 3.15 pm, when Mr Dingemans will provide opening submissions on behalf of Northern & Shell, and then we'll deal with the other opening submissions tomorrow. Thank you very much. (11.35 am) (The luncheon adjournment)