updated 8/18/2011 7:27:22 AM ET 2011-08-18T11:27:22

British police made their 13th arrest Thursday in the country's tabloid phone hacking scandal, and a private investigator at the center of the crisis sued Rupert Murdoch's media empire for breach of contract.

Britain's phone hacking scandal — where journalists broke into the voice mails of royals, movie stars, top athletes, politicians and even teenage murder victims — has shaken Rupert Murdoch's News Corp. and forced the resignations of top people in Britain's government, police and media. It also prompted Murdoch to shut down the 168-year-old U.K. tabloid, News of the World.

Police confirmed a 38-year-old man, who they declined to name, was arrested at a London police station after arriving voluntarily Thursday. He was later released on bail.

Britain's Guardian newspaper reported the man was James Desborough, formerly the Los Angeles-based U.S. editor for the News of the World and the 2009 winner of the British Press Award for show business reporter of the year. The newspaper claimed his arrest was related to activities that took place before he moved to the United States in 2009.

Desborough built his career with salacious scoops, including outing a popular TV host, Fern Britton's, gastric-band surgery and chronicling the messy divorce of Paul McCartney and Heather Mills, who herself has claimed her voicemails were hacked by a journalist.

Both London police and News International, the British division of Murdoch's News Corp. empire that owned the tabloid, declined to confirm that Desborough was the suspect being questioned.

"We are fully cooperating with the police investigation and we are unable to comment further on matters due to ongoing police investigations," News International said.

However, News International confirmed it has been sued by private investigator Glenn Mulcaire, who was jailed in 2007 along with a reporter at the News of the World for hacking into the voicemail messages of royal staff.

Last month, News Corp. stopped making legal payments to Mulcaire, a day after Murdoch told lawmakers in a special parliamentary hearing that he would try to find a way to stop the payments.

News International spokeswoman Daisy Dunlop confirmed the Mulcaire lawsuit on Thursday but declined to comment on its contents, adding only that "the claim will be vigorously contested."

A person familiar with the case, who spoke on condition of anonymity because of the sensitivity of the case, said it alleged a breach of contract in respect to Mulcaire's legal costs.

In a separate development, lawyers for British television actress Leslie Ash and former soccer player Lee Chapman confirmed they had resolved their legal action against the News of The World.

The tabloid's parent company had "agreed to pay our family an appropriate sum by way of compensation and costs and it has apologized for the harm and distress it has caused us," the couple said in a statement.

But they indicated they now plan to sue other British newspapers over allegations that their phone messages — and those of their children — may have been illegally accessed.

"We remain concerned that the practices complained of against NGN (News Group Newspapers) are likely to have been prevalent within a number of other media publishers, and we will be instructing our lawyer ... to take action against other newspapers," they said.

Ash and Chapman had been the subject of frequent tabloid stories after the actress suffered health problems and won a then-record 5 million pounds ($8.25 million) compensation payment from a London hospital after contracting an infection during treatment there.

The couple believe their messages were intercepted in 2004 while Ash was recovering in the hospital.

News International said it would not comment on the settlement.

The disclosure this week of new documents in the phone hacking case has piled the pressure on Murdoch's media empire.

Story: Report: Hacking reporter claims cover-up at News International paper

Correspondence published Tuesday by British lawmakers investigating the scandal suggested that one of his closest executives was warned more than four years ago that phone hacking was endemic at the News of the World. The company had previously insisted the practice was not widespread.

The charges were made in a 2007 letter written by Clive Goodman, a former journalist with the now-defunct tabloid whose jailing in 2007 on phone hacking charges first brought the practice into the spotlight.

Then-News International Ltd. Executive Chairman Les Hinton had fired Goodman as a result of his conviction. In his response, Goodman insisted that his activities had been carried out with the support of other members of staff and alleged that phone hacking had been routinely discussed at the paper.

However, in a 2007 appearance before the House of Commons media committee, Hinton assured parliamentarians that no one else at the paper had been engaged in phone hacking.

Hinton, who worked for Murdoch for more than five decades, announced his resignation July 15 as publisher of The Wall Street Journal. He is News Corp.'s first U.S. executive to lose his job in the phone hacking scandal.

Hinton was appointed earlier this year to The Associated Press board of directors. AP spokesman Paul Colford says Hinton has not attended any AP board meetings but has not offered his resignation.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Reporter: Hacking ‘widely discussed’ at tabloid

  1. Closed captioning of: Reporter: Hacking ‘widely discussed’ at tabloid

    >> tied to the british phone hacking scandal. new evidence suggests senior editors at the "news of the world" knew that illegal eavesdropping was wide spread at that tabloid. nbc's michelle kosinksi is in london. michelle , good morning to you.

    >> reporter: hi, matt. rupert murdoch and his son told lawmakers they had no indication hacking could have been wide spread at "the news of the world." nobody told them, they say, even though out comes an old letter from a former reporter saying hacking was common knowledge , discussed as part of daily meetings.

    >> the most humble day of my life.

    >> reporter: rupert murdoch and son james denied knowing anything at the top about phone hacking practices at "news of the world," allegedly celebrities, royal, murder victims, despite private investigators being on the payroll, despite paying out huge settlements to people suing over it. whatever they knew or didn't, a letter has now surfaced from their former royal reporter to the company's hr department. clyde goodman who spent months in pri or for the hacking, released in 2007 that hacking was widely discussed in the daily editorial conference. he told them editor andy colton who has since been arrested banned mentioning it. that it had the full knowledge and support of senior staff and that the editor promised on many occasions that i could come back to a job at the newspaper if i didn't implicate the paper or any of its staff. that editor told parliament this two years ago.

    >> i never condoned the phone hacking nor do i have any recollection of where phone hacking took place.

    >> deliberate decision by the company to mislead parliament, then the substantial question has to be asked, that sounds like a deliberate cover-up.

    >> reporter: and now there's talk of calling james murdoch back to parliament. he explained why his company didn't push further in internal investigation.

    >> opinion based upon that review with issues with the company with respected law firm and the opinion was clear, and the company rested on that.

    >> reporter: well, that law firm is calling james' testimony inaccurate, misleading, and self-serving. the company's response? that it understands how important this all is and will continue to cooperate. the murdochs say, look, both police and law firm told us there was no reason to believe this was anything bigger, although the lawyers say, wait a minute, what we asked to look at was very, very limited. so is there any evidence that the murdochs knew that hacking could have been extensive? no. and the investigation goes on. matt?

    >> michelle kosinksi in london this morning. thank you.

    >>> it's 18 after the hour.

Data: Who's who in the UK phone hacking scandal

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