Will Saddam be a witness?

As George Galloway and The Daily Telegraph head for the libel courts, Robert Verkaik explains how their lawyers will prepare for the case and what they will each need to prove in order to win

The discovery of a box of documents in a burnt-out ministry in Baghdad has sparked an international hunt for evidence which will either destroy the reputation of a controversial Labour MP or end with large dollops of egg on the face of the editor of a famous broadsheet newspaper. So much is at stake that George Galloway and The Daily Telegraph will already have ordered their lawyers to leave no stone unturned in the search for the killer fact that will lead one of them to victory in a libel court in London.

All will be conscious of the defamation action brought by the former Conservative cabinet minister Jonathan Aitken against The Guardian newspaper, which spectacularly collapsed after the paper uncovered evidence of the existence of a single airline ticket. In the same way that The Guardian had to prove the truth of its allegations, The Daily Telegraph will have to support all its claims against Mr Galloway. If it can't, the paper will still be able to fall back on the defence of qualified privilege, providing it can show that there was a strong public interest in publishing a story that was based on what appeared to be genuine documents.

The initial focus of the Telegraph's inquiries will be Mr Galloway's financial dealings, and particularly the accounts of the Mariam Appeal, the fund frequently referred to in the alleged Iraqi intelligence documents. Under the civil procedure rules of disclosure Mr Galloway will be under a duty to reveal any financial information which could help or harm his case. If he has been hiding any financial transactions with the Iraqi government, then the paper should know about them before it goes to trial.

But what of the legal position of the Mariam Appeal, the fund that is alleged to have been used as a front for the transfer of money between the Iraqis and Mr Galloway? This is not so clear. The MP says that the fund has been wound up and that he handed over control of the organisation to his friend, Fawaz Abdullah Zureikat, a Jordanian businessman and a key figure in the alleged negotiations between the Iraqi regime and the MP.

If the Telegraph's lawyers can't prove that Mr Galloway had direct control over the Mariam Appeal then they will need to show that there are in existence financial documents relating to the fund which can help prove their case. The newspaper can then ask a High Court judge for a specific disclosure order of the relevant documents. What they will not be allowed to do is conduct a fishing expedition in the hope of uncovering useful evidence.

The inquiries may also extend to the business affairs of Mr Zureikat in the hope of proving that he is the "middle man" linking the Iraqis to the MP. Central to Mr Galloway's case will be the status of the documents said to have been found in the foreign ministry building that are now in the possession of The Daily Telegraph. On the basis of those documents, the paper claims that the MP received money or commercial benefits worth at least £375,000 via his contacts with the Iraqi regime.

Under court rules, Mr Galloway's legal team at the London law firm Davenport Lyons will be able to inspect the original documents and any others which the Telegraph intends to rely on. But even if Mr Galloway shows that he has never received a cent from the Iraqi regime and that the key intelligence documents are all false he could still end up losing the case. Once the newspaper has lost the defence of justification – that the allegations are true – it can still argue that that it was acting in the public interest and that it believed the documents to be genuine.

In 1999, the House of Lords laid down important tests for defendants who rely on this defence when they are accused of defaming public figures. The Sunday Times claimed that it had the right to publish a critical article about the former Irish prime minister Albert Reynolds on the grounds that it was covered by qualified privilege because it was in the public interest. Although the law lords ruled 3-2 against such a defence in that case, they established a set of tests that defendants must now meet if they wish to qualify for protection. They included the seriousness of the allegation, the nature of the information and the extent to which it was a matter of public concern, and the sources of the information, including whether the informant had direct knowledge of the event, had an axe to grind or was being paid. Other factors include the steps taken to verify the information, the urgency of the matter, whether comment was sought from the subject of the report, whether the report gave his side of the story, the tone of the article and the circumstances of publication, including the timing.

The Telegraph meets many of these tests, but a possible chink in its defence is the speed with which it published allegations based on documents that it may not have had time to verify properly. No doubt Mr Galloway's lawyers will make much of the fact that little effort has been made to identify the Iraqi agent who signs himself the chief of the Iraqi intelligence service. His evidence will be crucial because it is his memo to the office of Saddam Hussein on 3 January 2000 upon which the allegations hang.

The Telegraph says that his signature is illegible, but even in the aftermath of a war it must be possible to identify the name of the chief of the Iraqi intelligence service. Making contact with this official after the collapse of the Iraqi regime may prove difficult. Should this intelligence officer resurface, perhaps after being captured by coalition forces, he would almost certainly be served with a witness summons, making an appearance as a star witness in a High Court libel trial. But for which side? That will depend on whether his evidence supports the allegations contained in the documents found at the foreign ministry.

A more mouth-watering prospect is a courtroom appearance by Tariq Aziz, the former Iraqi deputy prime minister with whom Mr Galloway is alleged to have done a secret deal in respect of the oil-for-food programme. Mr Aziz gave himself up to the Americans on Thursday. He was a central figure named in the documents allegedly unearthed by The Daily Telegraph.

And it is not beyond the bounds of possibility that the libel case could be won or lost on the testimony of Saddam Hussein, who, the Telegraph alleged yesterday, wrote a memo rejecting Mr Galloway's demand for more money. A lesser, but no less crucial, witness is the Iraqi agent who is alleged to have met Mr Galloway in Baghdad on Boxing Day 1999.

Neither side will want the other to get to any of these witnesses first and both teams will have taken steps to dispatch lawyers to the Middle East. The legal costs for the first few days' work will already be into the tens of thousands of pounds. By the time the case reaches court, the total cost will be approaching £1m, a figure greater than any damages award that Mr Galloway can expect even if he defeats the Telegraph on all the allegations.

But this case is not about money; it's about the integrity of a left-wing politician and a right-wing newspaper that both regard their reputations as priceless.