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Libel laws vary a bit around the world. But the general theme is this. If a person can prove that your book in some measurable way impacted their mental health or economy then you can be held liable. The number of people who buy your book is a factor. If it's not a block buster you hardly need to worry. The fines for this are always low anyway. Unless you reveal some deep dark secret about this person that severely damage this persons life.
Assuming you made it up, as soon as anybody is famous, its super easy to claim that the damage they suffered came from another source than you. The onus is on them to prove it can be pinned on you.
Even if you do get sued, you have little to fear. But it is always a risk.
Nigel, I do believe newspapers have another type of circulation and therefore need to worry about this in a way novel writers don't.
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