Last month, in a landmark case in Saskatoon, Canada, Queen's Bench Justice George Baynton upheld a charge against three individuals for malicious prosecution of 12 adults accused of satanic ritual abuse of three children. Those charged were a police officer, a crown prosecutor, and a therapist.

The original charges against the 12 alleged child abusers, laid in 1990, were stayed by the court, because it was considered the children were too traumatised to testify further, although it subsequently became clear the children were fabricating their stories.

Nevertheless, the accused adults were clearly stigmatised by the accusations, and one of them, in particular, had lobbied tirelessly to have his name cleared, along with the names of the other accused. For these people - normal citizens of a normal provincial town - the ruling is a significant victory.

Justice Baynton also noted that the children themselves were significantly harmed by the actions of the police, social welfare workers, and therapists.

The original case shares several features with that of the Christchurch Civic Creche, which resulted in the conviction of Peter Ellis on charges of the sexual abuse of children. Both took place in the early 1990s when hysteria over satanic ritual abuse was at its peak; both involved the zealous efforts of a police officer bent on exposing such abuse; and in both cases a mental health professional was critically involved.

In both cases the evidence of abuse was based almost exclusively on "disclosures" of abuse from the children, and was followed by later retractions.

In both cases only one person of those initially charged was convicted and sentenced, although the circumstances were rather different. In Christchurch the charges against the civic workers were eventually reduced to restricted charges against Peter Ellis, while in Saskatoon the father of one of the accused foster parents pleaded guilty to one charge against each of the children as part of a plea bargain.

There were, of course, other differences between the two cases. In the Christchurch case, the alleged victims were presumably normal children attending a childcare facility. In the Saskatoon case the children were from a dysfunctional family and were fostered in other homes.

It became clear that the main perpetrator of sexual abuse was one of the children, and the stories were fabricated by this child and his sisters in an attempt to have him taken from one foster home and reunited with his sisters in another.

The stories were amplified by these and other children into tales of satanic ritual abuse, involving the killing of babies and animals, and the ingestion of human flesh and bodily products. It is probable that such stories were implanted in the minds of the children during the long and repeated attempts to extract disclosures of abuse, and it is a measure of the hysteria of the time that the stories were widely believed.

The Christchurch case included similar elements. Yet in the Saskatoon case it should have been evident from the beginning that the children were not reliable witnesses. It was well-known that all three children had what was euphemistically referred to as a "touching problem", yet the policeman and the therapist nevertheless persisted in extracting "disclosures" about abuse, and in believing the children rather than the adults.

The therapist appears to have adopted the extraordinary attitude that the disclosures were critical regardless of whether or not they were true. When they were revealed as lies, she showed no signs of remorse and offered no apology for the distress and stigma suffered by the accused.

The attitude of the therapist may well be described as malicious, although in legal terms "malice" has a definition that is at once broader and more specific. A prosecution is considered malicious if it was carried out in the absence of reasonable and probable cause, and for a primary purpose other than carrying the law into effect.

The prosecution must also have been initiated by those accused of the malicious prosecution, and the proceedings must have been terminated in favour of the plaintiffs. Justice Baynton found that all these conditions were fulfilled.

My guess is that the missionary zeal of the prosecutors was based more on ideological conviction than on personal malice, although the one may well breed the other.

In a recent dialogue article, Emma Davies rightly noted that the questioning of children in court must be handled with extreme care and sensitivity, especially in cases involving alleged sexual abuse, and that it was of paramount importance to discover the truth of what actually happened.

She also suggested there was an imbalance in the way information was obtained from children. Referring to a study in which she was involved, she wrote: "We found that child interviewers responsible for taking videotaped statements were sensitive and careful when interviewing children. Defence lawyers were not."

This may not always be the case. In the Ellis trial, one of the psychologists who gave evidence said, "I was actually very impressed with what's-his-name [the defence lawyer]. I thought he'd be a real shit to those kids but in fact he was very engaging. He was quite gentle and sensitive".

Even the children were impressed after a day in court. One of them told his mother that Ellis' lawyer was kind to him.

In the Saskatoon case, too, Justice Baynton wrote that the defence counsel were polite and considerate toward the children. Further, every care was taken to ensure that the courtroom provided a sympathetic environment.

The accused adults were hidden by a screen so the children would never have to look at them, and the public and media were excluded when the children testified. The judges doffed their gowns and wore suits to create a less intimidating atmosphere.

Dismissing suggestions that the children were suffering from fear, trauma or exhaustion in court, Justice Baynton wrote: "It should have been obvious that the poor performance of the children was caused primarily by their inability to accurately relate the fabrications they had previously made, and their inability to weave new fabrications consistent with those they had previously made."

He also remarked that the intense pressure on the children to make "disclosures" of abuse was "far more traumatic than any court proceedings could have been". Any trauma they may have experienced in court came about when it was made plain to all, through glaring inconsistencies in their stories, that they were lying.

To their credit, the children, now in their 20s, later retracted.

This case should not, of course, be taken to imply that children always lie, or that those accused of abuse are generally innocent. Rather, it raises two important points.

First, failure to arrive at the truth is not always due to aggressive questioning by defence lawyers. Those bent on prosecution can also behave aggressively, and have greater opportunity to do so outside court.

Second, it reminds us that false accusations of abuse are as damaging to those accused as are failures to apprehend the guilty, and perhaps more so.

Justice Baynton wrote perceptively: "The ideological pendulum in our society has a history of swinging from one extreme to the other. In the early 1990s, pursuing allegations of child abuse was the ideology of the day. At the outset of the 21st century, pursuing wrongful prosecutions and convictions appears to be the ideology of the day. Hopefully a balance of these ideologies will prevail."

Up to 1989, the word of an adult was generally taken over that of a child, and judges frequently warned juries that children could be more imaginative and suggestible than adults. In 1989 the law concerning children's evidence was changed, and judges were no longer able to give this warning.

This change came about as a result of claims that the incidence of child sexual abuse was higher than previously thought, and it was widely proclaimed that children never lie.

Both children and adults tell lies, and it is also increasingly recognised that memory is highly fallible. To misrecall the past is not necessarily to lie. We should not always believe children, just as we should not always believe adults.

Accusations of satanic ritual abuse may now be largely a thing of the past, but there are undoubtedly still innocent people who have suffered the stigma of false accusation, and in some cases wrongful conviction.

The Saskatoon affair may be just the tip of an iceberg, and is a timely reminder that injustice can cut two ways.

* Professor Michael Corballis teaches in Auckland University's psychology department.