Here's a fascinating, albeit dense, article by two Harvard Olin fellows who have come up with what they think is the economically optimal liability rule for libel. The problem is how to structure liability such that the media a) are not chilled from putting out valuable news stories, but at the same time b) have a sufficient incentive to investigate the truth as opposed to putting out quickly-written stories that may turn out not to be true. The answer? You'll have to read the article.