In November last year, the 53-year-old businessman appealed a third court decision which found he had sexually harassed and defamed his former staffer, Rachel MacGregor.
In 2019, the High Court found Craig and MacGregor had defamed each other to a "limited extent", as MacGregor had suggested the former party leader was a bad employer. However, Justice Anne Hinton maintained the former politician had sexually harassed MacGregor, and had defamed her on most of the occasions she claimed. Hinton ruled that Craig's defamatory statements "were not protected by the qualified privilege applying to replies to attacks".
In its judgement on Tuesday morning, the Court of Appeal upheld the ruling and Craig's appeal was dismissed.
"[The] Court of Appeal upholds that Colin Craig sexually harassed Rachel MacGregor and that Colin Craig’s defamatory comments about Ms MacGregor in statements replying to attacks went too far meaning he lost the protection of qualified privilege," it wrote on its Twitter account.
Qualified privilege is a defence which can allow the defendant to escape liability for a defamatory statement if the comment was made in good faith. If it's found that the statement was made with malice or ill will towards the person, qualified privilege will not apply and the defendant could be liable for defamation.
"Reply to an attack is a recognised category of qualified privilege arising when a person has been attacked. This qualified privilege allows the person subjected to the attack to respond to the attack to the same audience that received the attack, provided that the response is relevant to the attack, does not go too far, and is not motivated by ill will. Further, if the attack is justified because it is true, the privilege is unavailable," the judge said.
However, Craig lost that privilege as the judge found he took "improper advantage of the occasion".
The Court of Appeal said the judge was correct to find Craig "went too far" in his statements against MacGregor.
"Mr Craig deliberately targeted Ms MacGregor in his replies as a (later disclosed) email to his lawyer shows. He treated her as a member of the attacking group and set about attempting to harm her reputation in a misguided attempt to restore his own. Mr Craig therefore took improper advantage of the occasion of privilege."
Craig's relationship with MacGregor was previously the subject of defamation proceedings in Craig v Slater. In the High Court in October 2018, Justice Kit Toogood concluded that Craig had participated in "moderately serious" sexual harassment of the former press secretary.
When Craig challenged that finding, the court said the businessman's "intentional" and "sexualised" conduct was directed at "a workplace subordinate" and the ruling was upheld.
"Although Ms MacGregor did not make it known that Mr Craig's advances were unwanted, the judge was perfectly entitled to find on the evidence before him that she did not do so because of her concerns over losing her job. Mr Craig was aware she was in some financial difficulty," the court said, noting the judge was right to acknowledge a "power imbalance" between the two.
Craig resigned as leader of the Conservative Party in 2015 after the allegations emerged. Although the businessman admitted to "inappropriate affection" towards MacGregor, he has continued to deny his behaviour amounted to sexual harassment.
In November, Craig's attorney Stephen Mills QC reiterated that Craig maintains he did not sexually harass MacGregor.
"What he said was, 'I have never sexually harassed Ms MacGregor'."