The Daily Mail has complained that a £130,000 legal bill over a £15,000 libel settlement with actor Neil Morrissey is evidence of abuse of the Conditional Fee Agreement system.
The Mail makes the claim in new evidence to the Leveson Inquiry responding to further questions raised by the actor about the way it dealt with his complaint to the paper.
In March 2011 the Mail reported that Morrissey was banned from a bar near his French home beause his rowdy and drunken behaviour had alienated locals.
Morrissey complained and a month later the Mail rejected his complaint saying that the story was true.
It was only after proceedings for libel were issued on 21 June 2011 that the Mail said it realised it was "impossible to stand the story up" and made an 'offer of amends'.
According to the Mail the wording of an apology could not be agreed because Morrissey wanted a 160-word statement carrying the headline "Mail behaving badly". After negotations, Morrissey accepted a damages offer of £15,000.
The Mail said in its statement to Leveson: "This case is a good example of the abuse of CFAs. NM's lawyers (Stitt & Co and Harvey Starte) are claiming costs of £130,000 which includes success fees of £34,000 for his solicitors and £17,000 for his barrister (excluding VAT).
"The sum of £130,000 is a remarkable level of costs in a case in which the defendant admitted liability within a few weeks of proceedings being issued, but is typical of the excessive costs charged by CFA-assisted lawyers in cases against newspapers."
Although the Mail went to Morrissey in advance of publication, it did not include his side of the story.
Explaining why, it said this was because "he had provided false information (untrue statements that (a) he had never visited the bar and (b) had an unpaid bar bill). Initially NM's agent said the story was 'fucking shit'; later she conceded he had visited the bar three times and, as the proprietors told the Mail's reporter, had once left without paying for his drinks.
"His PR advisers made a number of statements which they later retracted or amended but the allegation was never denied and they expressly declined to provide an on-the-record denial or other response or comment for publication.
"NM's solicitors said the day before publication that NM 'had no means of knowing whether the allegation [ that he had been banned from the bar] is true'. There was no denial."