This is a reposting of an analysis first appeared on The International Forum for Responsible Media Blog at this url
Money is at the heart of many invasion of privacy claims, but this an area neglected by press regulation. While Clause 16 of the Editors’ Code of Practice prohibits payment to criminals and their associates, it has no provision for other types of stories.
That presents a regulatory and legal conundrum. As Geoffrey Robertson QC and Andrew Nicol QC point out in their book Media Law (p.790, 5th edition):
“It is ironic that the people who would be prosecuted for the serious crime of blackmail if they threatened their victim with public exposure unless they were paid a sum of money can now obtain that sum quite legally by taking their story direct to a newspaper.”
While the latter is legally permitted, judges have applied the word “blackmail” in injunction application cases where defendants ask for money from the claimant in exchange for keeping quiet:
“The majority of cases over the last few years, in which the courts have had to apply those [privacy]principles, would appear to be of the so called “kiss and tell” variety and they not infrequently involve blackmailing threats,” said Eady J in CTB v News Group Newspapers Ltd & Anor  EWHC 1232 (QB).
As Inforrm’s privacy injunction table shows, “blackmail” is cited by judges in a number of recent civil cases; a separate complaint to the police may also be made by the claimant.
Despite the financial aspect of many of these cases, little is known about the detail of potential or past payments. Newspapers are predictably reluctant to reveal what they pay for their kiss and tells. To disclose such deals would affect their future negotiations, their bargaining position and the inter-title bidding battles.
However plausible you find News International executives’ “collective amnesia” when answering questions about the phone hacking scandal, it does indicate a shroud of secrecy and lack of transparency around newspaper payments to outside sources.
“It has been suggested that newspapers that purchase sensational stories of this sort should be required to disclose the amount of the payment on publication,“
Robertson and Nicol describe in their book (p. 790).
“this would serve to alert their readers to the possibility that the sensation in the story may be related to the sensation of receiving a large amount of money for telling it.”
That is something for the Leveson Inquiry to consider. But any debate on payments to sources for privacy-intrusion stories would need to be informed by some actual numbers.
There appears to be little hard evidence. Every so often, exact figures are exposed during the course of litigation. For example, Ferdinand v MGN Ltd  EWHC 2454 (QB) revealed that Carly Storey was paid £16,000 by the defendant, Mirror Group Newspapers. But the judgment does not report how much her agent, Max Clifford, was paid on top of that.
When former Metropolitan Police deputy assistant commissioner, Brian Paddick, won damages and an apology from Associated Newspapers, it was reported that his former partner and ex-fiancee were paid £100,000 and £6,000 respectively by the Mail on Sunday for their stories. The newspaper also put up the former partner in a Vienna luxury hotel for a week while he was being interviewed.
Journalist and media researcher Nicholas Jones estimates Clifford gets 20% in “any deal he makes”; another lawyer cites an example where Clifford took a quarter of the final payment. A civil dispute in 2001 revealed that Clifford had negotiated “a commission of 20% on earnings from contracts arranged by him” with Mandy Allwood, a woman pregnant with octuplets (Allwood v Clifford & MCA Ltd (2001) LTL 2/7/2001:  EMLR 3).
Of the media lawyers and journalists I have talked to, the general view is that prices have been coming down. One lawyer tells me that whereas £50 – £75,000 was standard for a good middle of the road kiss and tell story, the figure is now more like £20,000.
But papers pay different amounts. “The Mail” titles are thought to have much bigger budgets than the Mirror and Express titles, for example.
One lawyer speculates that the Sun or News of the World would pay something like £10,000 for a simple story, but up to £250,000 for a front page splash that would really increase circulation. Media reports put the Rebecca Loos deal with News of the World at £300,000 – but we don’t know what cut her negotiator, Max Clifford, took.
Richard Peppiatt, the former Daily Star reporter, says that people would ring up his former employer expecting tens of thousands of pounds, but the reality was the “low thousands” for a kiss and tell, depending on the fame of the person and the evidence. Additionally, it would often be the newspaper approaching the subject rather than the other way around.
Final payments would often be much lower than those initially negotiated. Only in exceptional circumstance would the newspaper pay cash up front, reducing the kiss-and-teller’s “bargaining chips” once the story was published, says Peppiatt.
This is a tactic that was exposed in Mosley v News Group Newspapers Ltd  EWHC 1777 (QB): the figure offered by News of the World to ‘Woman E‘ was £25,000 but she only received £12,000 after she delivered the video material. The judgment explains:
“…the editor gave the reason that they like to renegotiate downwards, when in a strong bargaining position. They were affected by the credit crunch like everyone else.“
In light of the information gaps identified in this piece, Lord Justice Leveson might consider finding out
- Figures for how much was offered and how much was eventually paid in various privacy intrusion stories over the past decade.
- How much of this money goes to the “agent” (and whether these “agency payments” are disclosed to the “teller”).
- How the payment sums are arrived at within newspapers and how negotiations are conducted.
- How payments are monitored within newspapers
This basic data would inform the wider debate about press standards and freedom as well as the regulatory and legal implications.