US publishers might have to stop contentious books being sold on the internet in case they reach the “claimant-friendly” English courts.

The author Rachel Ehrenfeld is countersuing Khalid bin Mahfouz in New York, claiming that her rights to free speech under the American Constitution have been breached.

Sheikh bin Mahfouz has sued four times in London for statements concerning his alleged role in terrorism financing. He has never lost.

“Nobody is going to write about him any more,” Dr Ehrenfeld told The Times. “As an American and a writer, I think that it’s very important to defend my reputation.”

Dr Ehrenfeld has built a reputation as an expert on terrorism financing and political corruption. She coined the phrase “narco-terrorism” to describe how terror groups get money from the drugs trade. Her book, Funding Evil: How Terrorism is Financed — and How to Stop It, was published by Bonus Books of Chicago in 2003. It was published in the US.

Dr Ehrenfeld claims it was never promoted or distributed in print in the United Kingdom. A handful of copies crossed the Atlantic, possibly via internet booksellers. The first chapter was published on an international website.

Sheikh bin Mahfouz, a banker whose family wealth is estimated by Forbes magazine at $2.8 billion, was the subject of several passages in the book.

He and his two sons sued Dr Ehrenfeld in London, where libel actions can be brought provided an allegation has been “published” in England. Under English law, writers must prove that what they say about a subject is true. In the US, freedom of speech is guaranteed by the Constitution. The burden of proof is on libel plaintiffs to show that allegations are untrue and, furthermore, that the author has been malicious.

Dr Ehrenfeld boycotted the London hearings.

Mr Justice Eady said it was false to say that Sheikh bin Mahfouz: supported terrorism; contributed millions of dollars to al-Qaeda; deposited tens of millions of dollars into accounts held by terrorists implicated in the US embassy bombings in Kenya and Tanzania which killed 224; and sponsored Hamas and Hezbollah terrorist atrocities.

Dr Ehrenfeld and her publisher were ordered to pay each claimant £10,000 and to publish a correction and apology.She has no intention of complying.

Dr Ehrenfeld is suing the sheikh in Manhattan, asking a judge to rule that the allegations in her book can be published under US libel law. She also wants the judge to prevent the English court judgment being enforced in America. Her complaint says the sheikh “seriously chills legitimate and good-faith investigation into his behaviour. With the benefit of his vast financial resources, he has managed to silence his critics one at a time.”

She notes that he has been named as a defendant in US law suits arising from 9/11.

The sheikh is seeking to get the New York case struck out because the court has no jurisdiction over him and no power to rule on such issues. Freedom of the press and expression is guaranteed by the US Constitution’s First Amendment.

In his oral judgment, Mr Justice Eady disagreed with Dr Ehrenfeld’s claim that Sheikh bin Mahfouz was “forum shopping” or hiding behind English libel law to chill investigations.

He described this as “tendentious and a misrepresentation of the true position. The claimants are not hiding behind anything and are prepared to meet the defendants head on as to the merits of the claim.”

The sheikh’s lawyer, Laurence Harris, said: “Our clients have brought proceedings in England because they maintain residences, transact business and have reputations to protect in this jurisdiction.” Sheikh bin Mahfouz has no such connection with the US.

Mr Harris said Sheikh bin Mahfouz was “vigorously defending” the 9/11 proceedings in the US and has filed a motion to be dismissed from one of the actions. “More importantly, neither the United Nations, EU, US, UK nor any other government has ever indicated that our clients are involved in the supporting of terrorism on any report or list. My clients have always simply been concerned to ensure that the record has been set straight and that accusations which are wholly untrue are corrected.”

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