In July 2008, News International’s chief financial officer, Clive Milner, was asked to endorse a check for £725,000. He was not told what it was for — only that “the check is for James Murdoch,” according to a company official with direct knowledge of the matter and an account Mr. Milner has shared with friends.

The negotiations were so tightly held that only Mr. Crone, Mr. Myler and Mr. Murdoch knew about them, said two company officials. The officials said that even employees who were typically involved in legal decisions did not learn of the settlement until it leaked in a newspaper.

“I was gobsmacked” at the amount, said one of them.

Mr. Murdoch testified on Tuesday that the size of the settlement reflected a judgment “by distinguished outside counsel” that the company was going to lose the case and that potential damages that could run up to about $1.6 million at today’s rates.

But the $1.4 million settlement was a record amount for a privacy case. At the time, cases involving published stories shown to have violated the privacy of claimants were settling for $6,000 to $24,000, lawyers said. Another factor that made the Taylor settlement unusual was that The News of the World had only prepared, but not published, an article about Mr. Taylor.

On July 24, 2008, while the negotiations in the Taylor settlement case were drawing to a close, Max Mosley, a former auto racing executive, won a $120,000 judgment over a front-page article in The News of the World that falsely accused him of engaging in “sick Nazi orgies.” That settlement was considered a record at the time. In current hacking cases, News International itself has said any settlement beyond about $160,000 is unreasonable.