UK

Phone hacking: Ex-editor Coulson sues newspaper group

Andy Coulson
Image caption After questioning by the Met police, Mr Coulson was released on bail until October

Former News of the World editor Andy Coulson is suing his ex-employer after it stopped paying his legal fees in relation to the phone-hacking scandal.

His lawyers have filed papers at the High Court against News International subsidiary News Group Newspapers.

Mr Coulson was arrested in July over NoW phone-hacking allegations. He denies knowledge of the practice.

It has emerged some UK victims of alleged hacking are considering US legal action against News Corporation.

US lawyers have been asked to explore the possibility of a case against Rupert Murdoch's media group.

Arrangement ended

Papers were filed at the High Court by Mr Coulson's lawyers on Thursday.

BBC political correspondent Robin Brant said: "Even though Andy Coulson hasn't worked for the publishers of the now-defunct News of the World for more than four years, the paper's owners were still paying his legal fees in relation to the hacking investigations.

"But following Rupert Murdoch's appearance at the Home Affairs Select Committee in July the arrangement ended."

Mr Coulson resigned as Prime Minister David Cameron's director of communications in January, saying that the ongoing coverage of the phone-hacking scandal was making it too difficult for him to do his job.

But he has always said he knew nothing about phone hacking under his editorship of the News of the World.

Met stories claim

Meanwhile, the Telegraph newspaper has claimed that News International paid Mr Coulson's former deputy, Neil Wallis, for stories when Mr Wallis was working for the Metropolitan Police.

Mr Wallis became executive editor of News of the World after Mr Coulson left. After Mr Wallis left the NoW he began to work as a PR consultant at Scotland Yard.

Image caption Neil Wallis worked for News of the World before working as a PR consultant for the Met

It is understood the contract involved him working two days a month at £1,000 a day, for Met Commissioner Sir Paul Stephenson and Assistant Commissioner John Yates. Mr Wallis was arrested in July and his arrest was followed by the resignations of those two senior officers.

The Telegraph claims that while Mr Wallis was on the payroll at Scotland Yard, he was paid more than £25,000 by News International to pass on information for stories. It alleges he was paid £10,000 for one story alone.

On Friday night, Mr Wallis's lawyer issued a statement alleging that Scotland Yard had leaked information about Mr Wallis.

Scotland Yard has confirmed it received a letter of complaint from the lawyer and says it is "being considered". It said Neil Wallis had signed a conflict of interest clause in his contract when he worked for them and also that he did not have access to the Met's IT systems.

In response to the claims surrounding Mr Wallis, a spokeswoman for News International said: "News International continues to co-operate fully with Metropolitan Police service in its investigation into phone hacking and police payments.

"We are eager to assist in any way possible to ensure that those responsible for criminal acts are brought to justice."

'Practises of control'

The allegations came on the same day it emerged News International had already agreed some settlements with UK victims of phone hacking.

Mark Lewis, a UK lawyer for a small group of alleged victims, told BBC News: "Although events might have happened in territories abroad, the American organisation can be responsible.

"News Corporation - although it's an American organisation, although these claimants are to large extent British and the events that might have happened in Britain, although some happened while people were away - they are meant to have some control under American law, have a great deal of control over what happens in foreign subsidiaries.

"We are looking at the practices of control effectively - of directors, and of knowledge of directors, and knowledge or what should have been knowledge of directors, of a large corporation based in America."

US lawyer Norman Siegel told BBC News he was at an "exploratory phase" of examining evidence that had emerged in the UK to see if US federal laws or New York state laws may have been violated.

When contacted on Friday, News Corporation declined to comment.

Payouts

The News of the World phone-hacking scandal led to the closure of the UK tabloid in July after 168 years in print.

A number of people have been arrested, including Mr Coulson, as part of Scotland Yard's investigation - Operation Weeting - into phone-hacking allegations.

Settlements already agreed by News International include: a reported £700,000 to Gordon Taylor of the Football Association; £100,000 in damages plus costs to actress Sienna Miller; £20,000 in damages to football pundit Andy Gray.

It is thought that a £2m settlement has been agreed with the family of murdered schoolgirl Milly Dowler, with Mr Murdoch also thought to be making a personal donation of £1m to charity as part of the deal.

The revelation that the voicemail of Milly's mobile phone had been hacked, when she was missing but before her body had been found, reignited the phone-hacking scandal in July.