The Old Bailey heard allegations that Rebekah Brooks and Piers Morgan exchanged banter at a dinner party about phone hacking.
American media lawyer Ambi Sitham said she overheard the conversation at a steak restaurant in 2003 where some 20 media professionals were celebrating Andy Coulson's birthday.
Speaking by videolink from the United States, Ms Sitham told the court that Brooks had asked Morgan if he had been "hacking into her phone again".
Brooks denies all of the charges against her. The trial continues.
More top news
The Queen and Prince Harry have responded to a 'game on' from Michelle and Barack Obama in competitive Invictus Games videos on Twitter.
British astronaut Tim Peake takes part in a test to see how a Mars rover handles when it's controlled from further away.
Claudio Ranieri has called on his Leicester City players to finish the job of winning the Premier League.