Crime doesn’t pay.... or does it?

Crime doesn’t pay.... or does it?


Andy Coulson, the former editor of the News of the World, is never far from the headlines these days. As well as a turn at the Leveson enquiry and being subject to a criminal investigation he has won the right to appeal against a High Court ruling that News International does not need to pay his legal fees in relation to the phone-hacking scandal.

Mr Coulson signed a compromise agreement when he left the News of the World in 2007 in which News International promised to pay Mr Coulson’s legal fees “which arise from his having to defend, or appear in, any administrative, regulatory, judicial or quasi-judicial proceedings as a result of his having been Editor of the News of the World.”

In July 2011, Mr Coulson was arrested and interviewed by police for phone-hacking and sought to claim his legal fees from News International in defending the criminal allegations. Although initially News International paid his fees, it subsequently stopped and Mr Coulson sought action to force it to pay up.

Earlier this year the High Court ruled that the indemnity did not cover criminal allegations, but Mr Coulson has now persuaded the Court of Appeal that he should be allowed to appeal the decision.

Until we have a final verdict on the meaning of this indemnity, employers should be careful to expressly exclude criminal proceedings from any similar indemnity in any employment contract or compromise agreement. Especially if they want to keep themselves out of the headlines.