A law firm that is suing a former employee for slander successfully resisted a renewed effort to have the action struck out last week.

Howe & Co in London is suing Patricia Burden for making comments alleging that acts or omissions had regularly taken place in the firm with regard to public funding which were not only professionally improper but also tantamount to criminal offences.

Ms Burden claims that she was entrapped into making the comments by another employee, who initiated a taped telephone conversation.

The question of whether she acted with the firm's authority is one of the issues yet to be decided.

In a High Court appeal of a decision not to strike out the action, Mr Justice Eady held that a full trial would be needed to ascertain whether the comments were effectively made with the consent of the firm.

Ms Burden also claims that her comments, because they were made between two employees, were covered by qualified privilege.

But she does not claim justification - that the allegations were true - as a defence.

Counsel for Howe & Co claimed that the allegations were made with malice as he said Ms Burden had admitted in an earlier employment tribunal case that she had no evidence to support them.

There is no written transcript of that hearing.

The judge ordered a full hearing to settle the issues of malice, qualified privilege and consent, noting that the qualified privilege defence 'may ultimately prove viable'.

He dismissed an application to strike out the action for abuse of process, although he said that there were several grounds for suspecting that the court's process had been used in an oppressive and bullying way by the law firm to silence a vulnerable ex-employee, and that this would require careful scrutiny by the court.

The judge criticised what he said appeared to be a number of inflated costs applications by Howe & Co and a purported conditional fee arrangement involving the firm that had since been abandoned.

Howe & Co partner David Enright said: 'This firm has an excellent reputation for legal aid work and there have never been any allegations that it has been involved in anything untoward made by any agency.' He declined to comment further while the litigation was ongoing.

Ms Burden's solicitor, David Price of London-based David Price Solicitors & Advocates, declined to comment.

Rachel Rothwell