The damages paid out by Mirror Group Newspapers to eight victims of phone-hacking were "out of all proportion" to the gravity of the harm done, the Court of Appeal has heard.
MGN is appealing against Mr Justice Mann's ruling, in May, which saw the payment of record compensation, totalling about £1.2m, as a result of the invasions of privacy concerned being "so serious and so prolonged".
All of the awards exceeded the previous highest sum given by a UK court in a privacy case – the £60,000 won by former Formula 1 boss Max Mosley, who successfully sued the now defunct News of the World in 2008 – and are expected to provide a framework for resolving similar civil actions in the pipeline.
Owner Trinity Mirror has said that MGN accepted it should pay appropriate compensation but believed that the basis used for calculating the damages was incorrect and the awards were excessive.
MGN's counsel, Lord Pannick QC, told Lady Justice Arden, Lady Justice Rafferty and Lord Justice Kitchin today: "The sums awarded in this case are out of all proportion to the gravity of the harm done, the damage caused, when consideration is given – as we say it must be – to the established scale of damages for personal injuries."
In May, actress and businesswoman Sadie Frost received the largest sum of £260,250, with ex-England footballer Paul Gascoigne getting £188,250.
The other payments were £85,000 to TV executive Alan Yentob, £117,500 and £157,250 respectively to actresses Shobna Gulati and Lucy Taggart, and £155,000 to soap star Shane Richie.
TV producer Robert Ashworth, who was married to actress Tracy Shaw, received £201,250, and flight attendant Lauren Alcorn, who had a relationship with footballer Rio Ferdinand, was awarded £72,500.
Lord Pannick said that another 70 cases had been launched against MGN, which had already incurred very substantial costs, with another 50 or so in the very early stages.
At the start of the two-day hearing in London, Lord Pannick told the judges that, even for such serious breaches of privacy rights, Mr Justice Mann "erred in law and principle" in fixing the sums as he did.
It was the claimants' case that MGN's activities were carried out deliberately for financial gain, there was criminal activity, and there was no public interest justification, he added.
"I should emphasise that the issue before the court is one of compensation for loss. Damages were not awarded to punish the defendant."
Lord Pannick said that, distressing though the experience had been for the claimants, none of them had suffered loss comparable to that caused by severe psychiatric damage or post-traumatic stress disorder, far less very serious physical injuries.
David Sherborne, for the claimants, said that Mr Justice Mann's ruling was a careful and detailed examination of the evidence he had heard – much of which was not challenged in any way, or was based upon the wide-ranging admissions which MGN made close to trial.
Not only was the judge uniquely placed to assess the evidence, but he was also managing the entire voicemail litigation.
Sherborne said that the Court of Appeal should be slow to interfere with the judgment, except where it was established that the judge was plainly wrong as a matter of principle which, added counsel, "he simply was not".
"The criticisms which are levelled at the judgment by MGN are either misplaced, not being borne out by a fair and proper reading of it, or are just wrong as a matter of law."
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