Coulson’s payoff – the questions that still need to be answered

With Andy Coulson and News International remaining tight-lipped about his severance package, Anya Palmer says now is the time to waive any confidentiality agreement

Andy Coulson
Andy Coulson

The BBC has reported that Andy Coulson received several hundred thousand pounds from News International after he started work for the Conservative Party in July 2007.  The payments were made under a compromise agreement whereby payments were made in instalments up to the end of 2007.

The story was taken by some to mean that Coulson ’had two masters’ and remained in the pay of Rupert Murdoch for the second half of 2007.  Plainly that confuses payment for services still being rendered with payment of monies owing under an agreement such as a compromise agreement.  The fact that Coulson agreed to staged payments does not mean he had to provide any further services. 

Nor is it tenable to suggest that in reaching this agreement Murdoch was somehow buying a key figure in David Cameron’s camp.  Coulson resigned in January 2007, two weeks before Clive Goodman and Glenn Mulcaire were sentenced to prison for their part in phone hacking at News of the World.  Coulson’s resignation was made public on 26 January 2007, the day of the sentencing.  Presumably any termination package had been agreed by then.  I doubt if anyone could have foreseen then that by 31 May 2007 Cameron would be naming Coulson as his director of communications.

I do not see how the severance package could be construed as a “donation to the Conservative party”, as Tom Watson MP suggests.  Coulson was the beneficiary.  Nor do I see why the Conservatives should have asked questions about the package in May 2007 – although clearly Coulson should have had full security vetting on his subsequent appointment to a government position in May 2010.

However, the latest disclosures do raise questions about the evidence Coulson gave in July 2009 to the House of Commons Culture, Media and Sport Committee.  During the session Watson asked Coulson whether he received a redundancy payment following his resignation.  Coulson replied: “I got what was contractually due to me. Obviously I did not work my notice so I received what was contractually due.”  

That would be nothing, wouldn’t it?  The contractual entitlements of an employee who resigns are extremely limited. 

The Guardian suggests that Coulson’s package was based on a clause in his contract whereby if he were dismissed ’without cause’ he would be entitled to two years’ pay.  But Coulson was not dismissed; he resigned.  It was presented to the world as an honourable resignation in which he took ultimate responsibility for illegal activity on his watch.

Could Coulson be relying on the implied term of trust and confidence?  If, say, he was required by the company to participate in or sanction criminal activity as part of his job, and was then obliged to resign and take ultimate responsibility for that criminal activity, arguably he could have claimed constructive dismissal.  But Coulson has always denied any knowledge of hacking on his part, so how would that work?  A Malik v BCCI style claim that an innocent Coulson was tainted by the conduct of his employer?  How convincing would that be?

Moreover, as the fact is that Coulson resigned, any dismissal without cause provision is not a contractual entitlement, but an argument that Coulson’s lawyers may have used in negotiations.  Absent an admission by News International, only a court could decide whether Coulson was constructively dismissed or not.  It never came to that because Coulson and News International did a deal.  An honest answer to Watson’s question would have been: “I got a severance package.”

Coulson’s package needs to be set against a backdrop whereby News International has now settled a series of claims at well above face value, such as Gordon Taylor’s privacy claim (settled for £700,000) and Clive Goodman’s unfair dismissal claims (settled for £243,500).

Coulson and News International continue to insist that the terms of Coulson’s severance package are a private matter.  In my view they should not be allowed to hide behind this. Both parties should now be asked to waive any confidentiality agreement between them and to provide full disclosure of both the employment contract and the compromise agreement.  Coulson needs to show he did not lie to MPs; News International needs to show that the real purpose of the severance package was not to buy Coulson’s silence. 

Anya Palmer is a barrister at Old Square Chambers specialising in employment law