A judge has dismissed a £230.5 million claim for special damages by British investment bank Collins Stewart against the Financial Times newspaper.
The Financial Times, which is being sued for libel by Collins Stewart, had applied to have the special damages claim thrown out. High Court judge Mr Justice Tugendhat said in his ruling if the special damages claim were allowed, the case "would be untriable and a waste of the resources of the court."
Collins Stewart is still pursuing its libel action against the Financial Times, which is not expected to come to court until April next year.
The newspaper had asked the High Court in London to dismiss the £230.5 million damages claim, which was based on the impact on Collins Stewart's shares of allegations against the bank by former Collins Stewart investment analyst Mr James Middleweek reported in the Financial Timeslast August.
Collins Stewart is suing the Financial Times, owned by media company Pearson, for its coverage of Mr Middleweek's allegations of regulatory breaches by the bank in a document he sent to the British Financial Services Authority last year.
The FSA conducted an investigation, which closed in August with the regulator saying it would take no further action.
Mr Andrew Gowers, editor of the Financial Times, said in a statement: "It would be a very dark day for journalism and for a free press if publishers were to be held liable for a drop in share price following publication of an article reporting on company events."
Aside from the special damages, Collins Stewart is also seeking general damages on the £37 million pounds worth of business it says it lost following the Financial Times reports.
A Collins Stewart spokesman earlier reiterated the firm's intention to pursue its defamation action against the newspaper. "Whatever is decided this morning, there remains the general damages claim for £37 million, which represents the quantifiable amount of lost business and profits we suffered as a result," the spokesman said.
If Collins Stewart is successful in its libel action there would then be a court hearing for the damages based on business allegedly lost as a result of the FTcoverage.
The Financial Timessaid it had no plans to open settlement talks with Collins Stewart. Last week, Middleweek resolved his dispute with Collins Stewart and dropped claims against the firm which included wrongful dismissal. In a joint statement, Middleweek and Collins Stewart said they had reached an agreement and no payment was involved in the settlement of the dispute.