The Financial Times is facing potentially the most expensive libel action in British legal history.
But the ?gure of £128m, which has been touted by the alleged injured party, has been downplayed by independent legal experts.
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The complaint is being brought by one of the City’s biggest stockbroking ?rms, Collins Stewart Tullett. It concerns a report in the FT on 27 August about a claim for unfair dismissal ?led in the High Court by former Collins Stewart analyst James Middleweek.
FT reporter Terry Smith repeated claims made by Middleweek which were highly critical of the way the company was run. The claims were contained in a document lodged with the High Court as part of the unfair dismissal ?ling.
Following the FT story, Collins Stewart shares dropped by 15 per cent and this is the basis for its huge damages claim.
The FT has two possible defences: it may be able to argue that the document on which its story was based was covered by privilege because it had been lodged with the court. Or it may be able to use the Reynolds defence of 1999. This provides a newspaper with the defence of quali?ed privilege if the story is a matter of public interest and the journalist has “exercised the necessary standard of care”.
As Press Gazette went to press, Collins Stewart had yet to ?le a formal libel writ against the FT.
Its lawyers, Shillings, sent a 13-page letter to the paper on Sunday detailing complaints about the story and giving it one day to respond. The FT has written back asking for more time. The original allegations against Collins Stewart were made in The Mail on Sunday – but the stockbroker is suing the FT because of its status as the City’s journal of record.
Media lawyer Maddie Mogford, from Reynolds Porter Chamberlain, said the huge damages being sought by Collins Stewart were unlikely to be achieved.
She said: “The highest general damages awarded by a jury in recent years was £200,000 for two nursery workers accused of systematic child abuse. In that case the individuals were greatly distressed as a result of serious allegations being made during a six-month trial.
“As this is just a company suing, the damages shouldn’t be as high as that. “However, if a company can show it suffered special damages, losses caused as a result of the article, it can claim an unlimited amount. “The share prices fell but seem to have gone up again pretty rapidly. It will have to show the article caused actual loss.
“I do not know how they have calculated the losses at a reported £128m based on a short-term fall in the company’s share prices.”
By Dominic Ponsford