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Victims of phone hacking will now be able to apply to the compensation scheme set up by News International in April.

Applications to the fund will be arbitrated by former high court judge Sir Charles Gray, who will assess the payout based on estimated damages in a civil case.

As an incentive to join the scheme rather than pursue a case through the courts, News International will award uplift whatever amount is decided by Gray by 10 per cent.

Applicants will also have "reasonable" legal costs paid, and be granted confidentiality.

A dedicated part of the News International site was made live today for those who wish to apply to the publisher.

Gray said: "I am confident the scheme, which is now operational, will provide a fair, effective, and speedy means for determining compensation in these cases.

"It should provide very significant benefits to applicants such as avoiding the enormous expense of court proceedings. I look forward to adjudicating awards under the scheme, at all times safeguarding the fairness of the process and the rights of applicants."

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