The ruling does not have any impact on the size of the award
The European Court of Human Rights has upheld a complaint that a €1.25m libel award to PR consultant Monica Leech amounted to a violation of freedom of expression.
Media group Independent News & Media (INM) had taken a case, alleging the award paid amounted to a disproportionate interference with its freedom of expression.
The court upheld the complaint - saying the award amounted to a violation of Article 10 (freedom of expression) of the European Convention on Human Rights.
The ruling does not have any impact on the size of the award given to Ms Leech, but INM say it sends out "a clear message" on the need for Irish courts to rein in libel awards.
In its judgement, the court found that: "Unreasonably high damages for defamation claims can have a chilling effect on freedom of expression, and therefore there must be adequate domestic safeguards so as to avoid disproportionate awards being granted.
"The Court found that the safeguards had not proved effective in this case."
It says this was because domestic law prevented the judge from giving the jury sufficiently specific instructions about an appropriate amount of damages for the libel.
The court adds that even though the award had been overturned on appeal and replaced with a lower amount, the Supreme Court had not given sufficient explanations as to how the new amount had been calculated, and it had not addressed the domestic safeguard at first instance and, in that context, the strict limits on judicial guidance to juries.
Responding to the judgment, Justice Minister Charlie Flanagan said: "The Court upholds the choice of the use of juries to decide on damages in defamation cases, as fully compatible with the Convention.
"It finds that the judge should give directions to the jury to guide it in its assessment of damages and protect against disproportionate awards, and that an appeal court which is substituting a different amount for the jury award should give relevant and detailed reasons for the amount awarded, particularly when the award is a very large one.
"The judgment expressly notes and welcomes the fact that Irish law was subsequently changed, by section 31 of the Defamation Act 2009, which introduced a new provision for the High Court judge to give directions to the jury to guide it in assessing an appropriate amount of damages.
"The judgment is nevertheless, of course, a significant one, in light of the review of the Defamation Act 2009, and its operation in practice, which is currently under way in my Department. I and my officials are studying it carefully, and it will be taken fully into account in the review."
The challenge was based on the 'Leech v Independent Newspapers case', in which a High Court jury awarded Ms Leech damages of €1.8m against the newspaper group, for publishing a series of untrue and defamatory articles about her in 2004.
The Supreme Court noted, however, that the High Court award had been exceptionally high, and reduced the award of damages to €1.25m.