FT celebrates as judge rules out £230m damages claim

Gowers : “We had a right to report on the a llegations”

Financial Times’ editor Andrew Gowers said a “dark day for journalism” has been avoided by a judge’s decision to strike out a record £230.5 million damages claim.

Share broking company Collins Stewart was trying to claim special damages for a drop in its share price following an FT story detailing allegations about the company made by a former analyst.

Mr Justice Tugendhat said this would be “untriable” and “a waste of the resources of the court”.

He said that Collins Stewart’s claim that the figures on which this claim were based represented the “best available reflection of the loss” and was “a proposition which the court is invited to take on trust”. He added: “No indication is given that there will be any evidence or authority to establish it.”

And he said: “It follows that in my judgment, the suggested measure of damages is far too uncertain to be acceptable as a legal basis for assessing damages.”

The bank’s libel claim against the bank will proceed and will be heard in a split trial. Liability will be decided by a jury and, if the bank is successful, a judge will set the damages at a further hearing, Mr Justice Tugendhat ruled.

Gowers said: “It would be a very dark day for journalism and for a free press if publishers were to be held liable for a drop in share price following publication of an article reporting on company events.

“We will of course continue to defend the Collins Stewart libel claim robustly and vigorously, and believe we had a right to report on the allegations made by Mr Middleweek last year in a fair and balanced way. Indeed, we were not the only national newspaper to report these allegations.”

Collins Stewart said it will still be seeking special damages as part of the April libel trial and these could still be as much as £37 million.

A libel lawyer, independent of the case, welcomed the decision as good news for the media.

Caroline Kean, from Wiggin and Co, said: “Had the judge ruled the other way it would have opened the flood gates to massive claims brought by corporations and would have totally overshadowed any reward of libel damages in the past. It would have been a field day for lawyers and accountants.”

Terry Smith, from Collins Stewart, said: “It has incorrectly been argued that our claim is somehow the ‘thin end of the wedge’…with the media in general threatened by this specific action against the FT.

That’s nonsense. Our claim is against the FT for specific inaccurate reporting, not any other newspaper”

By Roger Pearson and Dominic Ponsford

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