LET'S GO: LIBEL.(legal battle between journalist author Rachel Ehrenfeld and Saudi banker Khalid bin Mahfouz)(Interview)

When the first plane crashed into the World Trade Center, Rachel Ehrenfeld was sitting at her desk in her apartment in midtown. "I was on the phone with my editor in Brussels, finishing an op-ed about terror financing for the European edition of the Wall Street Journal," she said the other day. "I ran up to the roof to see what was going on, then I came back downstairs and did a new lead. It ran the next day."

An Israeli-born American citizen, Ehrenfeld has been writing about terror in its various forms for about twenty years. She developed a special expertise in tracing the money behind terrorist organizations, and after 9/11 she wrote a book called "Funding Evil," largely about the financing of Al Qaeda. Like other authors, Ehrenfeld drew passing attention to the role of Khalid bin Mahfouz, a member of a prominent Saudi banking family, who was, she wrote, allegedly involved "in the funding of terrorism."

Bin Mahfouz was also, it turned out, one of London's most prominent "libel tourists," the term for those non-Britons who try to take advantage of the country's pro-plaintiff libel laws. Those laws not only make it easy for plaintiffs to win damage awards but also allow American publications with small circulations in the U.K. to be sued in the London courts. The best-known recent libel tourist is Roman Polanski, who last month won a judgment against Vanity Fair, which is owned by the same company as this magazine; Polanski was not even required to travel to England to bring his case.

Shortly after the publication of "Funding Evil," Ehrenfeld began receiving demands for retractions from British lawyers for the bin Mahfouz family. She refused to give in, so in 2004 she was sued before the same London judge who decided the Polanski case. "My book wasn't even published in England," Ehrenfeld says. "But they said that because someone bought twenty-three copies there online, that was enough for me to be sued there."

Ultimately, Ehrenfeld decided not to go to England and contest the suit. "There was no way to win," she said. "Under English law, it wasn't enough that I could prove that I had written what my sources told me, but I would have had to prove the underlying truth of the ...