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1. You can sue your neighbour for defamation of character and slander for any false allegation which causes you concrete harm. So here, your neighbour made the false allegation that you were harming your children, which caused you stress and anxiety in your life. So, you should see a solicitor and get the solicitor to write a Letter before Action to your neighbour calling upon them to desist from making these false and hurtful allegations to the police about your treatment of your children, or their children. Essentially by making your Bell's Palsy illness worse, your neighbour is causing you concrete harm which allows you to sue for defamation. So, get a solicitor to issue legal proceedings against them to prevent them repeating the false allegations and for the harm to date.
2. Be aware that the solicitor will want to be put in funds to mount the litigation. So, get a quote from the solicitor for how much it is likely to cost. Be aware that a barrister is normally hired to draft the legal proceedings as they can be quite technical. So factor this into the equation when working out the likely cost.
3. I cannot recommend a solicitor because I don't know where you are living, nor do I know the solicitors in your area. I would suggest you find a solicitor who specialises in Defamation Law, or Libel & Slander. However, you will get damages for a successful action. Money damages are payable for defamation of character as occurred to you here.