Select Committee on Standards and Privileges First Report



The Reasons for the Collapse of the Libel Action

  528. Both Mr Al Fayed and The Guardian claimed that the sudden withdrawal by Mr Hamilton and Mr Greer from their libel action against the newspaper proved the plaintiffs' unwillingness to submit themselves either to detailed cross-examination or to the risk that further documents damaging to their case would emerge under the discovery process. Indeed, The Guardian claimed, the plaintiffs' position had already been undermined by the defendants' proposed amended defence, supported by witness statements.

  529. As the editor of The Guardian put it in his oral evidence:[242] "the decision to withdraw leads to an inescapable inference of [Mr Hamilton's] guilt unless you are fully satisfied that there was some overwhelming yet technical and anodyne reason for it".

  530. The explanation advanced by Mr Hamilton and Mr Greer for their decision to abandon the case was altogether different. In summary, I was informed by them that Mr Greer had been advised by the joint legal team that his prospects of success in the proceedings had fallen from "very good" to "almost nil" following the discovery amongst IGA's accounting papers of evidence that there had been more payments by IGA to Sir Michael Grylls than had been disclosed to the Select Committee on Members' Interests in 1990. Acting on that advice, Mr Greer decided to withdraw from the impending trial rather than suffer further harm to his reputation and to his finances.

  531. Mr Hamilton was extremely distressed by this turn of events and, at a conference with Counsel a few days before the trial was due to begin, told his lawyers he considered that he had been "betrayed" by Mr Greer. This falling out by the plaintiffs put the legal team in considerable difficulties. Both plaintiffs were then represented by the same firm of solicitors (Peter Carter-Ruck and Partners) and Counsel (Richard Ferguson QC and The Hon Victoria Sharpe) - so that, as a result of the conflict of interest which had arisen, they could not continue to act for either Mr Greer or Mr Hamilton. If Mr Hamilton was to press on alone, therefore, he would have to find, and fund, new solicitors and new Counsel, as well as seek an adjournment of the trial. Such a course was beyond Mr Hamilton's means.

  532. It seemed to me that this difference of view between the parties to the case about the reasons for its abrupt ending ought to be resolved, particularly as Mr Hamilton's explanation had not been accepted by The Guardian and issues of credibility arose for my inquiry.

  533. I therefore invited both Mr Greer and Mr Hamilton to waive legal professional privilege and to allow me to contact Peter Carter-Ruck and Partners, and Richard Ferguson QC. I subsequently received their written waivers.

  534. In addition, when Mr Hamilton appeared before me to give oral evidence, he was accompanied by his solicitor, Mr Rupert Grey of Crockers, who had represented Mr Hamilton after the conflict of interest referred to above had developed. Mr Grey read a statement into the record setting out his recollection of events.[243] In the course of his remarks Mr Grey summarised Mr Hamilton's difficulties, stressing that the decision to discontinue the libel proceedings was not based on any perceived weakness in Mr Hamilton's own case, but solely on the fact that Mr Greer's credibility was adversely affected. The resultant cost of continuing on his own with a new legal team was seen as prohibitive.

  535. Mr Grey's statement concluded as follows:

    "Neil Hamilton's case, as far as the evidence was concerned, was intact. It was, however, probable that the impact of Mr Greer's withdrawal on the jury's perception, which would be exploited to maximum effect by The Guardian in the course of the trial, would be damaging, and would reduce the prospect of victory against The Guardian. It was that, coupled with Mr Hamilton's position as a private individual with limited means, that led to his decision to withdraw, and was my recommendation accordingly".

  536. On 11 March 1997 I received a letter from Mr Andrew Stephenson, a senior partner with Peter Carter-Ruck and Partners. From this the following points can be extracted:

    -    on Thursday 26 September 1996 a conference was held with leading and junior Counsel, solicitors, and Mr Greer in which Mr Greer was advised that "in the absence of a satisfactory explanation" for the apparent inconsistency between the records of payments to Sir Michael Grylls and the evidence given to the Select Committee in 1990, Mr Greer's credibility would be so undermined "as to make it most unlikely that his case would succeed";

    -    that day, Mr Greer made the decision in principle to discontinue the libel proceedings;

    -    on the next day, the problems caused by Mr Greer's discontinuance of the libel proceedings were explained to Mr Hamilton and he was advised that there would be a "a serious adverse effect" on his own proceedings;

    -    during the consultation that day between leading and junior Counsel, the solicitors, and Mr Hamilton it became apparent that there was a conflict of interest between the two plaintiffs, so that the solicitors and Counsel could no longer act for either plaintiff, or give them further advice.

  537. In a letter dated 13 March 1997 Mr Richard Ferguson QC confirmed the account set out above in relation to Mr Hamilton, stating that both Mr and Mrs Hamilton were "outraged at what they regarded as a culpable lack of frankness by Mr Greer". Mr Ferguson's conclusion was that because of the strength of their feelings and the manner in which they had been expressed it was impossible for him, and junior Counsel, to continue to represent both clients. Accordingly, instructions were withdrawn.

  538. The position set out above was confirmed in a second letter from Mr Stephenson of Peter Carter-Ruck and Partners, dated 20 March 1997. Mr Stephenson emphasised that the advice given to Mr Greer on 26 September 1996 was solely based on the inconsistency in relation to the evidence to the Select Committee about the number of payments made by Mr Greer to Sir Michael Grylls. It was that unexplained, and apparently inexplicable, inconsistency which had then led to Mr Greer's discontinuation of the libel proceedings, and to the decision of the legal team (Mr Stephenson, Richard Ferguson QC, and The Hon Victoria Sharpe) to seek advice from their professional bodies and to conclude that they could no longer continue to act for Mr Hamilton. Mr Stephenson also stated that Mr Hamilton's decision to seek a settlement of the libel proceedings was based on advice received from the successor firm of solicitors (Crockers), whose position was as set out in the statement read into the record in the course of Mr Hamilton's oral evidence to me.[244]

242  Q 800. Back

243  Q 1872. Back

244  See paras 534-5. Back

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Prepared 8 July 1997