FT tells court of threat to journalism

Allowing the investment bank Collins Stewart to recover libel damages for the decline in its stock price "will have not so much a chilling effect as a positively freezing effect on financial journalism", lawyers for the Financial Times argued yesterday in the High Court.

Allowing the investment bank Collins Stewart to recover libel damages for the decline in its stock price "will have not so much a chilling effect as a positively freezing effect on financial journalism", lawyers for the Financial Times argued yesterday in the High Court.

The newspaper is trying to strike out a claim for a record £230.5m in special damages. Collins Stewart issued proceedings against the FT after the paper wrote an article detailing allegations by a former investment analyst, James Middleweek, of insider dealing at the brokerage. Collins Stewart is also seeking general damages of £37m for business it claims it lost after the FT's report.

The judge presiding over the hearing, Mr Justice Tugendhat, deferred judgment on the application to strike out the claim for special damages, which is linked to a decline in the stock market value of Collins Stewart after the FT article was published and the subsequent performance of Collins Stewart's shares compared with its rivals.

Lawyers for the FT said they wanted to know which other journalists may have seen a complaint by Mr Middleweek, which included a copy of his submission to the FSA which formed the basis of the FT story. The FT hopes that by showing other journalists accessed the documents, it can prove they were in the public domain. The hearing continues.

Meanwhile, the FSA said it had finished its investigations into Mr Middleweek's dossier, and would not be bringing any charges. Collins Stewart has since been cleared of the charges by the FSA.