Less than a year ago, News Corporation was maintaining that the telephone hacking and other misconduct at the British tabloid News of the World was the work of a single rogue reporter. Yesterday, the company settled claims from 37 high-profile claimants, with the massive damages being assessed on the basis that directors or senior employees knew about the wrongdoing, and sought to conceal it.

So is this an admission? According to the High Court judge hearing the case, Mr Justice Vos, it is. At least in part.

He told the court that he had seen evidence that raised “compelling questions about whether you concealed, told lies, actively tried to get off scot free”, and he described the settlement as “an admission of sorts” that there had been a deliberate cover-up. But News Corporation itself has issued a brief “clarification“, which reads:

“Today NGN [News Group Newspapers] agreed settlements in respect of a number of claims against the company. NGN made no admission as part of these settlements that directors or senior employees knew about the wrongdoing by NGN or sought to conceal it. However, for the purpose of reaching these settlements only, NGN agreed that the damages to be paid to claimants should be assessed as if this was the case.”

Meanwhile, the company has failed to prevent an order from Justice Vos that computers that might contain evidence of a cover-up be searched.

The “rogue reporter” claim never held water for anyone who knows anything about how newsrooms work. The first thing an editor asks when a reporter files a scoop are “how did we get this? Do we know it’s right?” If Rebekah Brooks was doing her job as an editor, then she MUST have known. And if she didn’t know then someone who was doing her job for her must have known.

So the only question is how far up the chain did the knowledge go, and was there a cover-up once things began to unravel?

Any hope that paying out big money will help end the trouble is surely misplaced. Leave aside the impact of the closure of News of the World on the industry overall, with the readers lost likely never to return to newspapers. Leave aside the paradigm shift in which it is now political death (rather than lifeblood) to be too close to News Corporation.

All that is damage enough, but there is more, much more, to come. All the evidence from civil and criminal proceedings will be sifted by the Leveson inquiry. This story surely has a long way to run. As The Guardian’s editorial puts it this morning:

“The most dominant newspaper company this country has ever known was, for a period, malignly and dangerously out of control — deceiving police, regulators, press, public and parliament — and was within days of doubling its size, revenues and influence. That’s why there’s a public inquiry. At nearly every turn in the phone-hacking saga the truth has turned out to be worse than anything initially alleged or imagined.”

In Britain, this story is, as Vos put it “in the highest national interest”. In Australia and elsewhere, it is of less immediate impact, but still vitally important.

The local implications are indirect. Late last year the inquiry into editorial expense accounts at the Australian branch of News Corporation gave the company a clean bill of health — as everyone expected. But the Australian media will not remain untouched.

It is now virtually certain that the next person to control News Corporation will not be a Murdoch. James Murdoch is unavoidably tainted by what happened on his watch. Meanwhile Rupert himself, humbled as he claimed to be last year, is using his new Twitter account this morning to comment on US politics, the SOPA legislation and Romney’s tax troubles. Then again, what can he say?

So who will control News Limited in the future? And will they share Rupert’s long-term emotional commitment to newspapers and journalism? Australia is one of the few countries where News Corporation is mainly about newspapers. Elsewhere, it is mostly an entertainment company. If future management decide that journalism is just too pesky, then the impact in Australia will be profound.

Peter Fray

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