The Penthouse
The Penthouse

The Mail on Sunday stands to lose £750,000 in a libel case for claiming that the owners of a West End nightspot were made to fear for their lives by a former director of the Royal Bank of Scotland.

In an unconventional move, Mail on Sunday publisher Associated Newspapers dropped its appeal bid against a libel ruling in the case brought by Irfan Qadir - a previous winner of the prestigious 'Star of Pakistan' business honour.

Lawyers estimate the media giant will have to pay £690,000 in costs and £60,000 in damages to the powerful Pakistani financier over two articles published in May and June 2011.

The Mail on Sunday falsely claimed that Qadir had mounted a campaign of threats to seize control of the Penthouse nightclub in Leicester Square. A High Court writ submitted by the owners alleged they feared for their families' lives, unless they gave Qadir their shares.

Then, a month later, the newspaper ran another story on Qadir, after he was named by the defence barrister in an unrelated trial as the kingpin in a £49m mortgage fraud. 

But the title failed to publish Qadir's side of the story in the first article. It was found to have acted maliciously by reporting that the mogul declined to comment on the case. In fact, he was unavailable. The choice of words made him look evasive, said his lawyer.

The Mail on Sunday reported the false allegation in its second article, but failed to mention that the judge in the case had refuted the claim as soon as it was made.

Qadir launched defamation proceedings in response to both articles, but Associated Newspapers claimed privilege and justification in each case.

Last October, the High Court found in partial favour of Qadir. In response, Associated Newspapers mounted an appeal, which it dropped today (January 31.)

Qadir's lawyer Christopher Hutchings told IBTimes: "It is not unheard of for newspapers to say sorry and pay damages, but Associated Newspapers is the most aggressive and they do fight things.

"We strongly believe in freedom of speech and privilege, but with that it's a requirement for responsibility that all media should consider if there are two sides."

Hutchings said the Mail on Sunday failed to report the case in accordance with objective journalistic standards.

"It shows the need to remember balance if there are two sides to a case, which the media should strive to convey.

"Privilege, freedom of speech and the public interest come with a need for responsibility and that did not happen in relation to the first article.

"The reporter had acted with malice. It was shown he didn't manage to get hold of him, but the story said he had declined to comment - which made him look evasive."

On the second story, Hutchings said: "Our client was named by a defence lawyer in a case he had no connection with. The judge immediately said there was no basis for that allegation.

"But the MoS carried the allegation but not the balance comment of the judge. Court reporting allows you to report anything, but you have to do so in a balanced manner."