AN award of £515,000 to a firm of insurance brokers which claimed it was defamed by the Irish Brokers Association was excessive the Supreme Court ruled yesterday.

Mr Justice O'Flaherty ordered a retrial in the High Court to consider the question of damages only.

Defendants in defamation cases should never be regarded as the custodians of bottomless wells which were incapable of ever running dry, the judge said.

Last July, a High Court jury made the award to brothers Mr Albert Dawson (62), Knocknashee, Goatstown, Dublin, and his brother, Mr Dudley Dawson (58), Maywood Drive, Raheny, Dublin, trading as A E Dawson and Sons, Maywood Drive, Raheny.

The action arose out of a defamation claim made by the brothers against the IBA and concerned the issuing of a circular by the association to members stating that the firm was no longer a member.

Giving judgment yesterday Mr Justice O Flaherty said while he supported the decision of the High Court he had reached the clear conclusion that the award was so excessive as to call for the intervention of the court.

In the case before the court, said the judge, it was clear that there was no evidence that the brothers were shunned by any right thinking members of the community as a result of the IBA issuing a circular that they were being expelled from the association.

Mr Justice O'Flaherty said the impugned publication was sent to a fairly limited and quite sophisticated class of person and the brothers had demonstrated that they were well able to put their side of the case.

But, said the judge, even giving the case the most favourable construction and taking the question of damages for loss of reputation and so on at the high water mark, the award must be regarded as excessive and could not stand.

After a 12 day hearing in the High Court Mr Justice Barron ruled that the case was clearly one of defamation. The defendants, he said, could not claim qualified privilege in relation to the publication of a circular that the plaintiff's membership of the association had been terminated.

The judge added that the association did have qualified privilege but in this case had exceeded, if not abused and destroyed, any question of qualified privilege.

The IBA, he said, had failed to identify the alleged grounds and give ample opportunity for the person against whom the claims were made to state his case before making a decision on the matter.

The IBA, in its defence, had submitted that if the contents of the circular were untrue or unjustified, the occasion of publication was one of qualified privilege.

Mr Justice O'Flaherty upheld the finding in the High Court that there was no occasion of qualified privilege. It seemed clear, he said, that the association was in breach of its rules when it, in effect, expelled the firm from membership of the association.

He was also convinced that the association should have afforded the plaintiffs a hearing before deciding to expell them. Counsel for the IBA had submitted that a hearing would do no good because the brothers had adopted an entrenched position.

The labour relations field, said Mr Justice O'Flaherty, was certainly replete with examples of people who had taken entrenched positions; who would not change - but who after a process of discussion and mediation and so forth, miraculously, did come to a different point of view.

Mr Justice O'Haherty: "Often both parties to a dispute travel the road to Damascus, even if on opposite sides of that road."

Costs in both the High Court action and the Supreme Court appeal were awarded to the brothers, who represented themselves throughout.