Earlier quoted context omitted.
Both 'libel' and 'liable' are real legal words. Libel refers to written/printed/online defamatory statements [1] - as opposed to slander, which is spoken defamation. [1] https://en.wikipedia.org/wiki/Libel#Libel
I believe declan is referring to the fact that libel, being a civil tort, exposes one to be liable for defamation, not guilty of it (being that it's not criminal).
You can held liable for libel, but that's an awkward phrasing, so "liable for defamation" is broader and better.