US author mounts 'libel tourism' challenge

by David Pallister

A ferocious attack on the "chilling effect" of the English law of libel and its use by wealthy "foreign tourists" will be mounted in a top US court today, with backing from organisations that represent a majority of the world's media.

The case is being brought in the New York state court of appeals by an American academic, Rachel Ehrenfeld, against one of the richest men in the world, the Saudi investment banker Khalid bin Mahfouz. Her lawyers describe it as the most important first amendment - free speech - case in the past 50 years.

Ehrenfeld's 2003 book, Funding Evil: How Terrorism Is Financed - and How to Stop it, alleged that Mahfouz and his two sons financed al-Qaida through the family's ownership of the National Commercial Bank of Saudi Arabia and through connections with Islamic charities. In 2004, Mahfouz won a default defamation judgment against her in the high court by the leading libel judge, Mr Justice Eady. He awarded damages and costs against her estimated at £110,000.

Since the September 11 2001 attacks, Mahfouz, with a fortune estimated by Forbes at $3bn (£1.45bn), has successfully used or threatened to use the English courts on 29 occasions against similar allegations. He insists that he abhors terrorism and has never knowingly provided money to al-Qaida.

Today's hearing in the state capital, Albany, is initially about whether the New York courts have jurisdiction over Mahfouz. Ehrenfeld wants declarations that under US law Mahfouz could not prevail in a claim of libel against her and that Eady's judgment is unenforceable there.

The possibility he might seek enforcement - a sword of Damocles, according to her lawyers - has stimulated a formidable array of journalistic support. In a consolidated amici curiae (friend of the court) brief - backed by every major newspaper group in the UK, including the Guardian - the court will be urged to recognise the "growing and dangerous threat of 'libel tourism' - the cynical and aggressive use of claimant-friendly libel laws in foreign jurisdictions..." which "has chilled and will continue to chill Dr Ehrenfeld's exercise of her free speech".

She claims that "Mahfouz's systematic course of aggressive litigation is really a form of intellectual terrorism, an extreme type of literary censorship". US publishers, she says, are wary of using her work.

Although the book sold only 23 copies in the UK at the time of the original trial in 2004, Mahfouz denies he is a libel tourist.

His lawyers say he has a substantial reputation in England, and that Ehrenfeld's claims about the impact of the English judgment are alarmist and untrue.

"To the contrary, she has used this case and her legal conflict with Mr bin Mahfouz to promote a new edition of her book as 'the book the Saudis don't want you to read', to present herself as a victim of repressive English law, and to further publicise her false claim that Mr bin Mahfouz is a supporter of terrorism," the lawyers said.

Originally published the Thursday November 15, 2007 Guardian Unlimited