Fayed fails to head off libel action

THE HARRODS owner Mohamed al-Fayed failed in a renewed court attempt to block a libel action launched against him by the former Tory MP Neil Hamilton in the wake of the cash-for-questions affair.

The Court of Appeal yesterday rejected argument by lawyers for Mr Fayed and Parliament itself that the suit was an abuse of the court process because it risked undermining the authority of Parliament, which had already inquired into the affair.

Lord Woolf, Master of the Rolls, said there was nothing to show Mr Hamilton intended to attack Parliament's procedures in contravention of the 1689 Bill of Rights, which barred courts from questioning its decisions.

"What he seeks is the resolution ... of his claim that he has been defamed," said the judge. The court, he said, had nothing to say about the merits or demerits of such a claim. For Mr Hamilton to be shut out from asserting it would require a clear demonstration of a threat to Parliament's authority, and this had not been shown.

Mr Fayed is being sued over allegations he made in a Channel 4 Despatches programme in 1997 that Mr Hamilton received from him cash, shopping, gift vouchers and a holiday in return for tabling parliamentary questions.

Mr Fayed was refused leave to appeal to the House of Lords against yesterday's ruling allowed the case to go ahead, although he can still apply to the law lords for leave.

Mr Hamilton was awarded his legal costs, amounting to pounds 208,000, against Mr Fayed.

Mr Hamilton's counsel, Desmond Browne QC, said that the former MP was unemployed, had big debts and that his assets were confined to his share in the family home. There was a very real risk that there would not be a trial of the libel action if his assets were further worn down "to the point of extinction" by a pre-trial "war of attrition" being waged by Mr Fayed.

George Carman QC, for Mr Fayed, said that litigants were entitled to exercise their legal rights. Mr Fayed was fully entitled to seek to take his case to the Lords. In his appeal Mr Fayed challenged a High Court ruling by Mr Justice Popplewell last July that the libel action could proceed.

Mr Justice Popplewell had said that, although the Select Committee on Standards and Privileges had found that the former MP for Tatton failed to register certain interests, it was doubtful whether he had been found guilty of receiving cash payments from Mr Fayed. Therefore the libel action was not seeking to impugn any decision of Parliament and was not an abuse of the legal process.