In a consultation paper earlier this month entitled 'Damages for personal injury', the Law Commission recommended that judges in defamation cases should draw jurors' attention to the levels of damages being awarded for non-pecuniary loss in personal injury cases (see [1995] Gazette, 10 January, 5).

The commission was delighted that just after the consultation paper went to press the Court of Appeal's decision in Elton John v Mirror Group Newspapers (MGN) Ltd [1995] The Times, 14 December supported its approach.Elton John is the most important development in the law of defamation since the Court of Appeal itself was given power to substitute its own award for the jury's in 1990.

The result is that counsel for either party in a defamation case, and the judge in the summing-up, may now suggest to the jury an appropriate figure for damages.

The jury may also be given information about the level of awards for general damages in personal injury cases and asked to bear those in mind when it comes to assess damages.In Elton John the Court of Appeal confirmed its decision in Rantzen v MGN Ltd [1993] 4 All ER 975 that juries may also be reminded of Court of Appeal decisions on damages in libel cases.

However, it has decided not to allow reference to previous jury awards, at least until an established body of precedent based on the new guidelines is built up.In giving judgment the court reduced from £75,000 to £25,000 an award of general damages made by a jury to Elton John following an article in the Sunday Mirror which had falsely claimed that he was suffering from eating disorders.

The article alleged that the pop star had attended a party -- which he had not in fact attended -- where he was observed spitting half-chewed shrimp into a napkin to avoid putting on weight.The court also reduced the jury's award of exemplary damages to £50,000.

The jury had awarded £275,000, no doubt influenced by the striking inadequacy of the Sunday Mirror's attempts to verify the story.

The court's decision that libel juries may now be given actual figures to guide them could hardly be more radical.

For years libel juries have battled to make sense of obscure directions.

Yet only two years ago, in Rantzen, the Court of Appeal itself 'felt bound' to reject the proposal that the jury should be referred to awards made in personal injury cases.

It said the jury should be invited to consider the purchasing power of any award which it made and should be asked to ensure that any award was proportional to the damage suffered.The court was prompted to reconsider by the fact that Court of Appeal decisions on damages have been so thin on the ground as to provide no meaningful guidance to juries, and the continuation since Rantzen of further apparently excessive awards.

The court was also influenced by a swing of opinion among Australian appellate judges in favour of references to personal injury awards in libel cases.

The court also had regard to the European Court's finding that the size of the £1.5 million award in the Tolstoy case (see [1995] The Times, 14 July) amounted to a violation of the defendant's rights.The most obvious effect of the Elton John judgment will be a levelling down of libel damages so that they accord more with what the court called 'the ordinary values of life'.

What jury, faced with the knowledge that you get £50,000 for losing a leg, is going to award 15 times that sum to a football manager accused of being beastly to his wife?The court has in effect decreed that £110,000 is the max imum for a serious -- and fully defended -- libel in a sensational tabloid, as in Rantzen, and that £25,000 is right for a 'false, offensive and distressing' article which nonetheless did not attack the plaintiff's personal integrity or damage his or her professional reputation, as in Elton John.

This means that it is now hard to contemplate a jury award of general damages greater than £150,000.

In David Ashby MP v The Sunday Times, the first jury direction given since Elton John, the judge advised the jury to confine its award within the £50,000 to £120,000 range.It should not, however, be thought that libel cases can now be settled for peanuts.

The effect of the court's decision is to inject reality and common sense into the situation by discouraging excessive awards; it is not to downgrade defamation to the status of a petty tort.Other changes may follow the decision but are harder to predict.

Possibly defendants may start to acknowledge their mistakes more readily, trusting the jury to make an award that reflects their early recognition of the damage they have done.

Possibly plaintiffs may choose to announce at the outset a figure they would be happy to accept.

If juries decide to award the plaintiff more, or less, than the judge recommends the court has made it clear that this should not be regarded as an automatic ground of appeal.

Some observers predict that the reduction of Elton John's exemplary damages will result in more bad behaviour by tabloid newspapers.

It is said that £50,000 is a drop in the bucket for large companies like MGN.

This is an understandable fear.

But the court has not said that £50,000 is the upper limit for exemplary damages.

Instead, it has said that before awarding any exemplary damages the jury must consider whether its compensatory award is itself sufficient to punish the defendant.

Despite the continuing risk of a large award of exemplary damages, it is not surprising that the court's decision has been welcomed by the media.

That said, there can be little doubt that MGN will be in no hurry to repeat the Elton John experience.

Legal costs remain a major deterrent to would-be libellers.

Yet as the likely gain for plaintiffs is reduced, so is the scale of risk increased.

It can cost £150,000 to take a libel case to trial.

Is it now going to be worth it?Those advising prospective libel plaintiffs might reflect that, according to The Times, Elton John's liability for costs is greater than the £75,000 damages he ended up with.

Mr John's solicitor said he was unable to comment when I asked him if that report was true.