Judge rejects £231m claim against 'FT'

The Financial Times last night threatened to counter-sue Collins Stewart after the broker accused the newspaper of a "Who cares if it's true" approach to journalism.

The development came after a judge ruled that Collins Stewart should not be allowed to claim £231m in special damages against the paper. The sum was based on the decline in its share price after the publication of an article in August last year, which reported allegations of wrongdoing at the broker made by a former employee in a lawsuit.

Had Collins Stewart been allowed to proceed with the claim, it would have set a precedent. However, the High Court threw it out as a "waste of time". The broker vowed to press ahead with its defamation case for other damages arising.

Andrew Gowers, the editor of the FT, said: "The basis for Collins Stewart's £230.5m damages claim was manifest nonsense and untenable in law. 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."

Collins Stewart will seek £40m for lost business as a result of the article plus an unspecified sum for damage to reputation.

After the ruling, Terry Smith put out a statement which the paper said was defamatory. It read: "To paraphrase Mr Gowers himself, it would indeed be a dark day for journalism and the free press if his 'Who cares if it's true or how we got it ... let's run it anyway' school of journalism were to win the approval of the courts. No sensible person would celebrate that."

The article reported allegations by James Middleweek, a former Collins Stewart employee, of insider dealing and other malpractices at the broker. The newspaper is not arguing that Mr Middleweek's allegations were true, just that it had the right to report them.