High Court Asked To Reject Collins Stewart Libel Claim Against FT

by Robin Pilgrim, LawAndTax-News.com, London

14 October 2004

The Financial Times has asked the UK's High Court to reject the £230 million damages claim being made by brokerage Collins Stewart Tullet against the FT over allegedly libellous material published by the business daily.

Collins Stewart argues that an article which detailed the accusations of a former employee of the brokerage regarding insider trading and dealing activities which allegedly took place at the firm was libellous, and that by reporting and giving credibility to the accusations, the FT was instrumental in significantly reducing the brokerage's share price.

The controversy began in 2003 when, in a 32-page report submitted to the UK's Financial Services Authority (FSA), former Collins Stewart employee James Middleweek alleged that pressure was exerted on analysts to force them to support the firm's corporate finance business by issuing favourable analyses of share issues of sometimes dubious quality.

The Financial Times has argued that it was within its rights to publish Mr Middleweek's allegations, as they were contained in a document which was in the public domain.

Suggesting that Collins Stewart is trying "to get into the Guinness Book of Records" by making such a large claim, barrister Desmond Browne, speaking on behalf of the Financial Times, argued that the case should go ahead on the basis of the alleged damage to the firm's reputation rather than its share price, and that any damages should be capped at £200,000.

The High Court is expected to decide on the matter in the next two weeks.

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