Shortly after the announcement by James Murdoch that Sunday was to be the last edition of News of the World, Reuters published an article entitled “Is Murdoch free to destroy tabloid’s records?” in which the claim was made that if News of the World were liquidated “the paper could simply destroy its documents to avoid the cost of warehousing them — and to preclude any other time bombs contained in News of the World’s records from exploding.”

That statement is based upon comments made by a “British media law star” who claims the strategy “is a stroke of genius — perhaps evil genius”.

But like most things in the article, the claim that the paper is to be put into liquidation for the purpose of enabling it to destroy its documents is almost certainly wrong.

First, there is nothing in the public record to suggest that there is to be any liquidation at all. James Murdoch’s announcement said simply that News of the World wouldn’t be published beyond Sunday. The company that publishes News of the World, is the same company that publishes the Sun.  So, without transferring the Sun-related assets to another company, News of the World could not be liquidated. In any event, liquidation would hardly make any sense strategically, as News International would then lose all control over the very records it is (according to the “evil genius” theory) attempting to hide.

Secondly, even making the assumption that the publisher is to be liquidated, so what?  It is an over-simplification of the law relating to liquidation of a company in the UK (as in Australia) to say the liquidator’s role is to maximise assets and minimise liabilities. While the liquidator is certainly entitled to disclaim so-called “onerous property”, any past conduct by NGN Ltd that could give rise to a claim for damages (whether or not that claim has yet been made) already gives rise to a liability for which the plaintiff (including potential plaintiffs who have not yet claimed) would be entitled to prove in the liquidation.

The liquidator is required to determine whether or not to admit that proof, and it could not do so without preserving for consideration the very records the “evil genius” theory postulates are to be destroyed.

Thirdly, it does not serve to “minimise liabilities” to destroy the company’s records. This is because if the documents were destroyed in the context of there being existing claims against the company, and further potential claims, the doctrine of spoliation of evidence may enable the court in existing claims to make adverse findings against the company in favour of the plaintiffs, thereby serving to increase the liabilities. Indeed, it might be a case ripe for the recognition in the courts of England of the tort of spoliation of evidence, in which plaintiffs may be entitled to damages against the liquidator personally because the documents were destroyed.

Fourthly, the destruction of documents known to be relevant or potentially relevant to existing proceedings would very likely amount to a most egregious contempt of court.

Fifthly, contrary to the Reuters article, there is in fact a well-recognised power vested in the courts, by making Anton Piller orders, where if there was a real suggestion that documents that might be used in evidence in existing or potential proceedings a party to those proceedings could ask the court for orders requiring their preservation.

Finally, given the current criminal investigation, no liquidator would destroy potentially relevant documents for fear of committing any number of criminal offences relating to interference with the due administration of justice, including most obviously perverting the course of justice.

For all of these reasons, and undoubtedly many more, the decision to close News of the World is far more likely to be a simply commercially driven, brand-protection exercise and not the “evil genius” claimed.