The verdict in the Colin Craig case has yielded the highest damages ever awarded in a New Zealand defamation case and some commentators say it could have a ripple effect on media organisations
The former Conservative Party leader was found guilty by a jury yesterday of defamation and ordered to pay Jordan Williams $1.27 million in damages, which has raised eyebrows.
Mr Williams had accused Mr Craig of defaming him in comments made at a news conference and in the leaflet distributed to 1.6 million households around the country in July last year.
Gavin Ellis, who is a senior lecturer in media at Auckland University, said the record pay out would certainly give the media food for thought when contemplating the risk of litigation.
But he said news outlets should not be too concerned, provided they were doing their jobs right.
"It's only natural that at least in the short-term there will be some chilling effect. But of course journalists should always have the truth and facts on their side anyway. What it may do is persuade journalists to fact check more than they might otherwise do."
Gavin Ellis said the fact the damages were set by a jury, rather than a judge, may have inflated the amount, and it would not surprise him if they were reduced on appeal.
Mr Craig's lawyer has asked Justice Katz to set aside the verdict and damages and Mr Craig said if she did not, an appeal was likely.
A law expert said media access and the high damages awarded in American court cases, could help explain the amount.
Canterbury University professor Ursula Cheer said the last time a settlement came even close was in 2000, in the case of musician Ray Colombus.
He was awarded $675,000 in damages plus costs.
She said the sharp rise between that settlement and Mr Williams' sum could be due to jurors' attitudes and more exposure to cases.
"Up to before the trial and when the pamphlets went out ...it received a lot more coverage at the time.
Ursula Cheer said jurors would also be aware of the multi-million-dollar damages awarded in the United States.
"It may be that they're also picking up on how litigious and high jury awards are in America for example, and they're conscious of that."
She said there had a been a number of out of court settlements made over the years where rumours had circulated about how much was awarded.
"I've heard of at least one case, which actually involved a loss of a business to a very important industry, and the award there was rumoured to be $19m. So your losses can be very high where you can show you've actually lost, what we call, special amounts of damages. Special awards are made because you've lost revenue, you've lost business or whatever."
A prominent Wellington barrister suspected Mr Craig would at least appeal against the amount he has been ordered to pay.
The barrister Graeme Edgeler said the pay-out seemed rather large.
"There are so few of these that we don't have a sense of what will actually happen in the end. I suspect the end result might be that the pay-out is less. I suspect even if Colin Craig doesn't appeal overall I suspect it would be highly likely that he would appeal the amount of the damages."