Labor is demanding senior Coalition figures detail what involvement they had in a failed sexual harassment case against former parliamentary speaker Peter Slipper.

On Wednesday Justice Steven Rares ruled the case brought against Mr Slipper by one of his staff members was an "abuse of process", declaring its predominant purpose was to cause "significant public, reputational and political damage".

Staffer James Ashby said he was "extremely disappointed" with the ruling and indicated he would lodge an appeal.

In dismissing the case, Justice Rares said it was clear Mr Ashby had been working with former Howard government minister Mal Brough to advance the interests of the Liberal National Party (LNP).

Labor frontbencher Mark Dreyfus has described the case as a "sinister" and "anti-democratic" attempt to overthrow the Government, and has called for action to be taken against Mr Brough.

Attorney-General Nicola Roxon has also sought to target the Coalition, saying it has serious questions to answer about its involvement in the court case.

"In an absolutely scathing judgment, the Federal Court has made completely clear that Mr Ashby and other members of the Liberal Party were working actively to undermine and politically damage Mr Slipper, and also to damage the Government," she told reporters in Melbourne.

"It's a very embarrassing moment for the Liberal Party.

"Mr Abbott needs to come out now and explain why members of his political party took this action (and) I think he will need to consider whether it's appropriate for Mr Brough to contest the next election."

Mr Brough has been pre-selected as the LNP's candidate for Mr Slipper's Queensland electorate of Fisher, and on Wednesday afternoon released a short statement.

"I reiterate that I have at all times acted appropriately in relation to this matter, and given the decision is subject to appeal I do not intend to make further comment," he said.

Labor frontbencher Craig Emerson has told 7.30 the Commonwealth could set up an inquiry to investigate the LNP's involvement in the affair.

"This was a concocted process that brought in issues such as Cabcharges that were then dropped, all of which were calculated to damage Mr Slipper, to the advantage of the Liberal National Parties of Australia," he said.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 6 minutes 58 seconds 6 m Craig Emerson reflects on the Slipper case

Running commentary

Shadow attorney-general George Brandis is standing by Mr Brough, describing him as a "friend" and as an "admirable person".

He also criticised Ms Roxon for "running a commentary" on today's judgment while there was likely to be an appeal.

"Mr Ashby has made it clear that he is going to pursue the matter further, and therefore I think it is inappropriate for either of us to be commenting on [the case]," Senator Brandis told ABC local radio.

The issue of the case being before the court has not previously prevented the Coalition from commenting.

The story of Mr Ashby's claim was first revealed in News Limited newspapers on a Saturday morning.

At 9:16am that day, Mr Abbott released a lengthy statement demanding the Prime Minister remove Mr Slipper from his position.

As part of the case, Mr Ashby also sued the Commonwealth Government for failing to provide a safe workplace.

The Government reached an out-of-court settlement with Mr Ashby worth $50,000.

At the time, Senator Brandis said the deal had in effect "conceded the accuracy of his claims against Mr Slipper".

Mr Dreyfus on Wednesday defended the settlement payment to Mr Ashby, saying it was in the "interests of taxpayers" to avoid the costs associated with ongoing court action.

However Justice Rares said in his judgment that the $50,000 payment was more than Mr Ashby would have been awarded in damages and pecuniary penalties had he won the case.

Opposition Leader Tony Abbott is on his way to the United Kingdom and has not yet commented on the judgment.