Yesterday’s ruling by the law lords, upholding the right of a newspaper to publish an article in the public interest even if the truth could not be proved, is an important victory not only for the British press but for the vital democratic principle of free expression. It reaffirms the defence of “qualified privilege” that was intended to give the media greater freedom to investigate, in a responsible manner, issues at the heart of public debate — a principle that has been eroded by recent libel judgments. And it also sends out a signal that Britain’s notoriously strict libel laws must not be used for “forum shopping” by those hoping to win a libel suit here that would not succeed in America or elsewhere.

At issue is an article published by The Wall Street Journal Europe which said that the Saudi monetary authorities, at the request of the American Treasury, were monitoring the bank accounts of several prominent Saudi businessmen to see whether, wittingly or unwittingly, money was going to terrorist organisations. Mohammed Jameel, head of one company named, insisted that his company had not been monitored and sued. He won his case, and also won in the appeal court. But the House of Lords overturned his victory on the grounds that the newspaper, in the wake of 9/11, had raised an issue of public importance, made a serious attempt to investigate and had showed judgment and balance in its reporting — even if it could not prove that his account had been monitored.

The ruling is extremely important for press freedom. It reaffirms principles enunciated by the Lords in an earlier libel case brought by Albert Reynolds, the former Irish Prime Minister — namely, that newspapers cannot be expected to have to prove every statement made about a politician as this would make it almost impossible to report any hard-hitting public debate without the threat of a libel suit. The Reynolds case, however, did lay down guidelines: on the severity of the allegations, whether these were put to the person concerned, the tone of the piece, the reliability of the sources and so on. Unfortunately, subsequent High Court judges have tended to see these guidelines as hurdles, all of which must be cleared before the defence of qualified privilege could be invoked. And yesterday Lord Hoffmann resoundingly rejected the idea that the press had to satisfy a long list of conditions before running a story on a matter of real public importance.

The irony of this case is that Mr Jameel is a philanthropist who had hugely benefited this country and has worked hard at combating the association of terrorism with Islam. Among his donations was a £5.4 million gift that allowed the Victoria and Albert Museum to refurbish its Islamic galleries. He insists that he wanted only to clear his name. Other far less worthy people have won libel cases in which the qualified privilege defence failed. He now has large costs to pay. What matters more, however, is that the Lords has upheld a vital principle of press freedom: the public interest lies at the heart of a free society and a healthy democracy. It must be served.