Elton libel defeat opens way for US-style parody defence, says expert

John failed in a bid to sue The Guardian over a spoof diary which suggested that the staging of his annual White Tie and Tiara party used up much of the money supposedly raised by the event for charity.

The High Court said that the article was clearly not a serious news story and would not lead people to believe that information in it was literally true.

Libel expert Damian Crosse of Pinsent Masons, the law firm behind OUT-LAW.COM, said that the ruling opens the way for a limited version of the US's right of parody.

"The judgment probably takes us closer towards the US style of libel law where effectively humour and satire are more frequently and more commonly used in newspapers and it is very, very difficult and only in very, very exceptional circumstances can libel complaints be substantiated," he told technology law podcast OUT-LAW Radio.

"This case is groundbreaking and it will offer editors of newspapers a considerable amount of comfort when they are considering publishing this kind of material," said Crosse.

John sued The Guardian over a spoof diary which was bylined as being "seen by" a Guardian journalist, Marina Hyde.

The fake diary discussed John's annual party in relation to its function as a fundraiser for his Aids research charity.

"Naturally, everyone could afford just to hand over the money if they gave that much of a toss about Aids research – as could the sponsors," said the story. "But we like to give guests a preposterously lavish evening, because they're the kind of people who wouldn't turn up for anything less."

"They fork out small fortunes for new dresses and so on, the sponsors blow hundreds of thousands on creating what convention demands we call a 'magical world', and everyone wears immensely smug 'My diamonds are by Chopard' grins in the newspapers and OK. Once we've subtracted all these costs, the leftovers go to my foundation. I call this care-o-nomics," it said.

The article appeared in the Weekend magazine of the newspaper, a fact which the Mr Justice Tugendhat in the High Court said was relevant to how the words would be read.

"While different types of speech can appear in any of these sections, the designation of the section assists in understanding the extent to which particular speech is to be understood as factual or not. 'Weekend' is not the news section of the paper," he said.

"The words complained of are obviously words written by the journalist, who has attributed them to [John] as a literary device," said the ruling. "The attribution is literally false, but no reasonable reader could be misled by it."

Crosse warned, though, that the ruling was case-specific and that editors should not consider it a licence to fabricate insulting celebrity stories.

"If you poke fun and tease in such a way that effectively you are libelling an individual and you are you are libelling them in such a way that the comments are untrue then you would still subject yourself to a serious libel risk," he said.

"So this is not an excuse for editors to recklessly endorse journalists going out and inventing satire and irony at the expense of celebrities," said Crosse.