Hamiltons: Another epic libel battle now looms

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Police drop Hamiltons investigation

A fantasist, a publicist and the couple who refused to keep their counsel

Victims or opportunists?

Neil and Christine Hamilton's determination to clear their names of allegations of sexual impropriety is destined to lead to another epic battle in the High Court.

Bolstered by the police's decision to drop the criminal case they can now plough ahead with their own civil court action for defamation against the woman whose evidence sparked the investigation two weeks ago.

But any money they may win in damages will have to be paid to Neil Hamilton's trustee in bankruptcy, who will use it to help cover the the £2.2m he still owes Mohamed Al Fayed after his last brush with the courts.

Libel lawyers warned on Tuesday that just because the police had dropped their case it did not mean that Nadine Milroy-Sloan had lied. The Hamiltons would still need to prove their case which will hinge on the full facts behind the events which took place in a flat in Ilford at about 5pm on 5 May.

The police said there was no evidence to link the Hamiltons to the allegations and they were releasing the couple from their bail conditions.

But Korieh Duodu, a barrister and defamation specialist at David Price & Co, said the standard of proof in a criminal case was beyond reasonable doubt while a libel action can be won on the balance of probabilities. It was open to Ms Milroy-Sloan to pursue a civil action against the Hamiltons for assault.

This case has been marked by the way the allegations have been played out in the public arena and the use of the tabloid press and the publicist Max Clifford. But when the Hamiltons issued their libel proceedings they only named Ms Milroy-Sloan as a defendant. Lawyers said they may now wish to sue the News of the World which published Ms Milroy-Sloan's interview with the police.

Mark Stephens and Amber Melville-Brown, defamation experts at the London law firm Finers Stephens Innocent, said the allegations made in the interview ceased to be protected from legal action as soon as Ms Milroy-Sloan repeated them in the paper. As the paper published them they too could be held liable in defamation.

The Hamiltons, who continued their criticism of the way the police have handled the inquiry, could also bring a claim for wrongful arrest and false imprisonment against the Metropolitan Police.

The couple's lawyer, Michael Coleman, who has also acted for Jonathan Aitken and James Hewitt, complained yesterday of how slow the police were to carry out their investigation and follow up the Hamiltons' alibi.

Mr Hamilton added: "My reaction is that yes, I am glad the police have decided not to take any further action, but they should never have started it."