LLondon, December 23, 1999

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By Tom Baldwin
Deputy Political Editor

FIGHTING funds of the kind used by Neil Hamilton in his failed libel case face being banned by the Government.

Ministers are ready to outlaw the use of anonymous donors to finance high-profile libel actions after it became clear that Mr Hamilton will be unable to pay the full costs of his attempt to clear his name.

Lord Irvine of Lairg, the Lord Chancellor, is planning to publish fresh proposals in the new year as part of a review of the system designed to end “abuses” in libel law. These are likely to include the way Mr Hamilton, the disgraced former Tory minister, raised money from secret donors to sue Mohamed Al Fayed, the owner of Harrods.

David Lock, a minister in the Lord Chancellor’s Department, told The Times yesterday: “We are concerned in general that people can help to fund a substantial libel action and then walk away if it fails, leaving costs unpaid.”

Lord Harris of High Cross, who administered the fighting fund for Mr Hamilton, said that it had reached £500,000 but acknowledged that this would not pay the estimated £2 million cost of the trial.

Tuesday’s verdict that Mr Hamilton had been corrupt during his time as a Conservative MP has left him facing bankruptcy after being ordered to meet not only his costs but also those of Mr Al Fayed, the victor in the case.

In what is thought to be an unprecedented ruling in a libel action, Mr Justice Morland ordered that the names of those who contributed more than £5,000 to Mr Hamilton’s fund should be disclosed so that they can be pursued by Mr Al Fayed’s lawyers.

Lord Harris said that he would prefer to go to jail rather than reveal the list of secret donors, thought to include a number of Tory MPs, who had helped Mr Hamilton.

The 75-year-old founding president of the free-market Institute of Economic Affairs said: “I am the guardian of the list and only I know the names. Hamilton never knew who contributed. I knew there was risk in what we did but I did it for reasons which I considered to be decent. If it was a question of going to jail for contempt of court then I suppose I would have to do it.”

The main financial backer was revealed as the Earl of Portsmouth, a rich landowner. Last night his wife Annabel confirmed the report.

Mr Lock said that he did not want to comment on the Hamilton case, but it is understood that ministers are determined to stop people washing their hands of responsibility of an expensive libel action when it is lost. The Government will have consultations before proceeding with legislation but Mr Lock said that if necessary, it was willing to step in to outlaw anonymous funding of such cases.

He believed the ruling on disclosure of donors was the first of its kind and that “we will be keeping a very close eye on what happens now”.

Sir Gordon Downey, the former Parliamentary Commissioner for Standards, said that he believed Mr Hamilton had brought the problems upon himself. “I’m pleased that my judgment was vindicated by the view of the jury in a court case,” he said.

Two years ago Sir Gordon’s investigation into the “cash for questions” affair concluded there was “compelling evidence” Mr Hamilton had accepted payments from Mr Al Fayed.

Other areas to be addressed by the review of libel law by the Lord Chancellor will include concerns that people without any funds can use the Internet to libel others, knowing that there is little danger of their being able to pay damages or costs.

Ministers are also concerned that the rich can use the threat of libel to suppress legitimate public comment. Mr Lock said: “It is said that the late Robert Maxwell used to issue writs as a way of preventing anyone else from commenting on the allegations, while having little intention of proceeding with the action.”

Notes: The “Lord Chancellor” is political head of the British judiciary, the closest that Britain comes to a Minister of Justice. He is an appointee of the prime minister Tony Blair. Under the U.K.’s new civil-procedure rules introduced by Lord Woolf on April 26, 1999 the old principle of “Loser Pays All” is no longer by any means absolute. The Judge, who in the forthcoming action is a lawyer of unusual probity and wisdom, now has greater discretion than before — he can now take into account (a) whether a party has partially succeeded in his case, and (b) how the parties have conducted themselves.

As is well known, David Irving has brought his family through the three year run-up to the impending Libel action against Professor Deborah Lipstadt solely thanks to this own private means and the world-wide fighting fund which he established. Over four thousand fighters for freedom of speech have at one time or another assisted Mr Irving with contributions ranging from words of encouragement and $2 to $50,000. He has now written to one concerned American contributor:

“Dear Jim — fear not, although I understand your fears (and strongly suspect that this ruling by the Establishment is an attempt to frighten off British citizens from helping me when the trial begins on [January] the 11th [, 2000]). Firstly, no court would order that contributors below the £5000 mark would be pursued. Secondly, no British court could enforce that order in the United States. Thirdly, British libel actions and their consequences have been notoriously unenforceable in US courts, as a result of your First Amendment. That is one reason why I had to go after Prof. Lipstadt in a UK court. Hope to see you at Cincinnati 2000. With all good wishes for Christmas and the coming Millennium, David Irving (now back in London with my family) “