Lord Justice Russell said Mrs Gorman, MP for Billericay, Essex, was not entitled to be presented to the jury as a 'vulnerable or sensitive woman, deeply wounded by a mock press release'.
Mrs Gorman had been awarded the pounds 150,000 last year after she sued Anthony Mudd, a wealthy Essex businessman, over a leaflet he distributed which she said branded her a vain woman, opposed to him out of personal spite.
Yesterday, while rejecting Mr Mudd's argument that the libel trial judge, Mr Justice Drake, had wrongly directed the jury, the appeal judges allowed his appeal against the size of the award.
Mr Mudd, who has already paid pounds 50,000 (the balance of pounds 100,000 was suspended pending appeal), said afterwards that he was 'delighted'. The case had been a storm in a teacup.
The Court of Appeal ruling was the first under new procedures allowing judges to change libel damages instead of ordering a retrial of the issues.
The only previous reduction, in which a pounds 600,000 award to Sonia Sutcliffe, the Yorkshire Ripper's wife, against Private Eye was cut to pounds 60,000, was by agreement of the parties.
There has long been concern that libel damages are arbitrary and absurdly high in comparison to awards for personal injury or death. However, lawyers remain sceptical that the Court of Appeal damages awards will form 'guidelines' for juries.
Juries will not remember libel awards and are still prevented from being given specific examples or parameters by the trial judge. Desmond Browne QC, a libel expert, said: 'The rules should be further changed so that libel juries can be given direct guidance. Such a system works perfectly well in other countries, like Australia.'
Mrs Gorman who was not in court last night declined to comment.Reuse content