A one-time staffer for former parliamentary speaker Peter Slipper has won an appeal against a decision to throw a sexual harassment case out of court.

James Ashby launched the appeal after Justice Stephen Rares dismissed his case against Mr Slipper in the Federal Court in December 2012.

The full bench of the Federal Court in Sydney today ruled in favour of the appeal, overruling Justice Rares finding that the case was an "abuse of process" designed to cause "significant public, reputational and political damage".

"It is self-evident that allegations of sexual harassment made publicly against Slipper in legal proceedings would likely damage Slipper’s personal and political reputation. This does not mean that the predominate purpose was to cause such harm," the three-judge panel ruled today.

"We are satisfied that the evidence before the primary judge did not warrant the adverse finding said to constitute an abuse of the court’s process on the two bases found and did not warrant the rejection by his Honour of the sworn and unchallenged evidence of each of Ashby and Harmer.”

The decision means the case will now proceed to a full hearing.

Speaking outside court Mr Ashby said he felt emotional and "had a cry" after the decision was handed down.

He said the case has never been politically based

"I've always believed the original court decision was wrong. It was unjust and not based on all the facts," Mr Ashby said.

"We will now continue with the legal fight and my chance to obtain justice for my original claim against Mr Slipper."

Mr Slipper resigned as speaker of the house two months before the decision was handed down.

Mr Ashby initially also tried to sue the Commonwealth, as Mr Slipper's employer.

He continued to pursue the case against his former boss despite reaching an out-of-court settlement with the Commonwealth.

After a failed attempt at mediation and six months of pre-trial argument, Justice Rares found Mr Ashby was vexatious and only trying to ruin his former boss's reputation.

Mr Ashby's lawyer Michael Harmer also tried to appeal against Justice Rares' judgment because it was critical of the way he conducted the case.

But today the three-judge panel refused to grant him leave to appeal, despite finding that "adverse findings in relation to his conduct... ought not to have been made".

The judge said Mr Ashby, another former staffer Karen Doane and Mr Slipper's one-time political rival Mal Brough worked together to advance Mr Brough's interests and the interests of the Liberal National Party.

Mr Ashby had alleged that while working as Mr Slipper's media adviser he was harassed through unwanted sexual advances and hundreds of suggestive text messages.

Peter Slipper lost his longtime position as the member for Fisher at last year's federal election. ( ABC TV )

He also alleged that Mr Slipper asked him to shower with the door open in a Canberra flat.

In 2013 Mr Ashby launched an appeal against Justice Rares's decision, arguing he was denied procedural fairness and that the judge did not consider all the facts in the case.

Mr Slipper has previously called for a royal commission into the circumstances surrounding the case.

The 64-year-old controversially defected from the Coalition in 2011 to take up the position of speaker under the then-Labor government.