Leading Article: A libel case from which only lawyers profit

THE settlement announced yesterday of the libel action by the Prime Minister and Clare Latimer, a caterer, against the New Statesman magazine proves only that in such cases it is generally solely the lawyers who win. Notoriously, there have been some exceptions from which litigants have made a killing: for example, the pounds 1m out-of-court settlement between Elton John and the Sun; the pounds 600,000 awarded to Sonia Sutcliffe against Private Eye, later reduced on appeal; Jeffrey Archer's pounds 500,000 from the Daily Star, and Koo Stark's pounds 300,000 from the Sunday People.

In most cases, however, libel actions cause great pain to litigant and defendant alike. Where sexual allegations are involved, the defendant's counsel will generally attempt to blacken the moral character of the litigant to prove that the alleged libel was justified. His or her marital and/or extramarital life is likely to be exposed to prurient public gaze. This process of character assassination by cross-examination is likely to spread over several days. It may be entertaining for newspaper readers, but it is liable to be excruciating for litigants.

Even if they win heavy damages, their reputations may emerge more dented than cleared. The outcome is, furthermore, unpredictable. In some cases, the jury seems uninterested in the real damage inflicted on the complainant, but determined to dispense harsh justice to the tabloid press for all its sins. In others, it may show more awareness that its award should not be too grotesquely out of line with sums compensating for serious personal injury.

No one emerges with credit from the New Statesman case. The magazine was not just stupid but somewhat contemptible in running the story in the way that it did. To give currency to rumours of an affair, and then to claim that it never intended 'to assert that an affair, let alone an adulterous relationship', had ever taken place, was weaselish, and a betrayal of the magazine's earlier, distinguished history. If it really believed there had been an affair, it should have produced evidence. Or it should have left the rumours to circulate unassisted. As it is, both its reputation and its finances have been damaged, fortunately not terminally: it would have been regrettable if it had been forced to close.

On the other side, Mr Major and Miss Latimer appear to have been ill-advised to initiate the action, especially if they had little appetite for letting the case come to court. Even the most stainless characters would hesitate to expose themselves to the ordeal of the witness box. Furthermore there was little likelihood that the action would be, on balance, to their overall benefit. Arguably, too, a Prime Minister should not stoop to suing rumour-mongers.

The case will have done some good if it reinforces prime ministerial support for reforms of the libel laws backed by the Lord Chancellor. These would enable newspapers that innocently publish a libel to offer a correction and apology, and agree to let a judge fix damages. The present law is, in a literal sense, a lottery: a few hit the jackpot, but most lose, and only those who operate the rules - the lawyers - can be sure to win.