BBC faces pounds 1.5m bill after libel case: Drug company wins damages over claims in TV programme. Celia Hall reports

THE BBC is facing a pounds 1.5m bill after losing one of the longest and most costly libel cases in British history. The multi-party action over the sleeping pill Halcion took 65 days and is estimated to have generated total costs of pounds 4m. Last week one of the law chambers involved had to call in removal men to clear part of the paperwork.

The case involved the American drug company Upjohn; the BBC Panorama programme and its reporter Tom Mangold; Professor Ian Oswald, a retired Edinburgh psychiatrist, and Dr Royston Drucker, an Upjohn physician.

Halcion, once the world's most popular sleeping pill, was banned in Britain in 1991 on advice from the Government's drug safety advisers. New data was submitted on psychiatric side-effects and there was a storm of controversy - particularly in the United States - over claims about the drug's side- effects, including that it could make some patients violent with long-term use.

During the hearing, Upjohn claimed it was defamed by the BBC, which accused it of keeping silent about alleged side-effects.

Yesterday, in a 295-page written judgment, Mr Justice Sir Anthony May awarded Upjohn damages of pounds 60,000 against the BBC and Mr Mangold following claims made in a Panorama programme entitled 'The Halcion Nightmare'.

Sir Anthony awarded Upjohn damages of pounds 25,000 against Professor Oswald following statements he made in an article in the New York Times. Professor Oswald also had damages of pounds 75,000 awarded against him in a related libel claim brought by Dr Drucker.

But in a counter-claim against Upjohn, the drug company was ordered to pay Professor Oswald damages of pounds 50,000. A spokesman for Upjohn said that costs, yet to be finalised, would follow the judgments in each of the claims. Sir Anthony said the BBC and Professor Oswald were wrong to accuse Upjohn of deliberately misleading regulators about possible side-effects of Halcion during the Panorama programme. 'The seriousness of the libels against Upjohn is in my judgement obvious and great,' he said.

A spokeswoman for Panorama said last night an appeal was being considered. 'This is a major blow for investigative journalism.'

David Hooper, a partner with Biddle & Company, Professor Oswald's solicitors, said: 'The central issue here is that Professor Oswald has been awarded twice what Upjohn was awarded against him. Professor Oswald's reputation has been vindicated.'

He said that in the judgment Sir Anthony described Upjohn's behaviour in a press release the company issued after the New York Times article as malicious and with a reckless disregard for the truth.

Mr Hooper said the judgment reflected the fact that the New York Times sold only '99 copies daily in this country'. The amount of damages awarded against Professor Oswald was affected by the 'tiny' extent of the publication of his views within the UK, via the New York Times. Such republication as there was within the jurisdiction was balanced.

'Upjohn knew perfectly well that the case that he was making was one which had to be considered seriously,' Sir Anthony stated. It is understood that the Medical Defence Union will pay Professor Oswald's costs.

Ley Smith, Upjohn's president and chief operating officer, said: 'We are very pleased with the verdict. It's a vindication for the company and its employees . . ' He added that the damages would be divided equally between Save the Children and Help the Aged.