IT BEGAN with a blissful Caribbean holiday for Michael Douglas and his new wife, Catherine Zeta-Jones. They believed they had fended off the usual paparrazzi intrusion by selling the exclusive rights to the pictures of their wedding to a single magazine.

Two years later, after an epic legal battle, stressful court appearances and merciless mockery on both sides of the Atlantic, much of their privacy lies in ruins, their reputations have been dragged through the mud and their chosen magazine’s court case appears lost.

Hello! claimed victory yesterday in its costly battle with OK! after three judges set aside a £1 million damages award against it for publishing unauthorised pictures of the wedding. The Court of Appeal ruled that the magazine need not pay the damages or a similar sum in legal costs to its rival, despite “spoiling” OK!’s exclusive contract with the Hollywood couple to cover their wedding in 2000. The ruling is the latest in a series of drawn-out cases that have made Britain’s courts not only the chosen cockpit for celebrities hoping to win substantial damages in privacy cases and libel claims but also a high-risk arena where reputations, confidentiality and vast sums of money can be lost.

Yesterday’s ruling upheld the couple’s right to bring their original claim against Hello! for infringement of privacy and breach of confidence. But in almost the same breath it undercut a swath of publishing assumptions by saying that the exclusive deal with the Douglases did not give OK! any rights that it could enforce in law. As a result, OK!’s loss from lost sales, which the court said was Hello!’s responsibility, is irrecoverable. The couple will also hardly be pleased with the judges’ backhanded support.

The court, presided over by Lord Phillips of Worth Matravers, the Master of the Rolls, said the Douglases’ claim was so strong that the temporary injunction, which they and OK! magazine originally obtained in November 2000, should never have been discharged. They ruled that this injunction, and not the damages, was the couple’s remedy in law. But it was discharged, and the appeal court threw out the pair’s claim for higher damages along with an appeal by OK! claiming unlawful interference with its business. OK!’s lawyers announced that they would go all the way to the House of Lords, ensuring another throw of the dice in the interminable case.

Yesterday’s judgment has also appeared to leave the arguments over privacy as opaque as ever. OK!’s lawyer, Martin Kramer, said: “The decision will have serious ramifications for all publishers and means rivals will be free to run ‘spoilers’ with no redress in law.” Hello! saw it differently. It believed the magazine now had no liability at all to OK! “This was a spat between two rival publishers and not between Hello! and the Douglases,” insisted Chris Hutchings, a solicitor for Hello! He insisted that as a result, Richard Desmond — who owns Northern and Shell, the company that owns OK! — “will have to write a cheque to Hello! for a very large amount of money indeed”.

The epic case has created nothing but embarrassment for the actor and his wife. Ms Zeta-Jones famously said in evidence that £1 million was not very much money to her. The double-or-quits nature of British courts makes the gamble of pursuing damages claims all the riskier. But Hello! seems to have bounced back from its own embarrassment when it was forced to admit at the Court of Appeal hearing in December that its snatched pictures were indeed a spoiler.

Publishing spoilers is an old Fleet Street tradition, most viciously carried on by high-spending tabloids eager to sabotage any scoop by their rivals.The lengthy battle over such spoilers has certainly taken its toll on the couple. At the six-week High Court hearing in 2003, Ms Zeta-Jones said she felt “devastated, shocked and appalled” when she realised unauthorised photographers had gatecrashed her wedding.

She said she and her husband had signed the OK! deal after turning down a higher offer from Hello!. Mr Justice Lindsay ruled then that Hello! had breached the couple’s right of confidence, but awarded them a total of just £14,600. But OK! was awarded more than £1 million for what the judge said was commercial damages to its expected exclusive coverage.

If the Lords appeal goes ahead, there may yet be further twists. What is clear is that the cost of trying to shut out the paparrazzi has been extraordinarily high. Maybe the Douglases regret ever setting foot in a British court in the first place.

MAGAZINE BATTLE

OK! is published by Northern & Shell Plc, owned by Richard Desmond, who also owns Express Newspapers. Its circulation for the first half of 2004 was 553,777.

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