Explainer: The legal position

• Clare Dyer
• The Guardian,
• Thursday March 20 2008
• Article history

The quick capitulation by the Daily Express and Star and their Sunday equivalents to libel threats by Gerry and Kate McCann came from a recognition by the papers that their allegations were baseless and could not be defended in court.

The burden would have been on the newspapers to prove the lurid suggestions they reported - that the couple were responsible for the death of their child, or had sold her, or were part of a swingers' group - which were floated in an attempt to move the story on when nothing much was happening.

The days of million-pound libel awards are gone and some libel lawyers reckoned the damages of £550,000 were over the odds. Nowadays, £250,000 is considered the ceiling for the most serious libels. But the sum is to compensate both McCanns, £275,000 each, and the papers would have faced massive costs on top if the case had gone to court. Carter-Ruck, the couple's lawyers, were poised to take it forward under a no-win, no-fee agreement which would have allowed the firm to charge the losing side a large success fee on top of its normal fees.

David Hooper, a libel lawyer at Reynolds Porter Chamberlain, said: "There has not been a case like this since 1988 when the Sun had to pay £1m to Elton John, with a front page headline Sorry Elton, following a series of 17 homophobic articles about the singer."

Since the Express and the Star could not prove the truth of the allegations, they have had to pay heavily for raising question marks about the McCanns' innocence. Had they not settled so early, it could have been even worse: "Although the damages of £550,000 paid to the McCanns were less, arguably this was a much worse case - 100 articles prominently captioned with Madeleine's name suggesting, as the Express and Star papers admitted, that the McCanns had caused their daughter's death and then covered it up," Hooper said.

Newspapers which agree quickly to make an "offer of amends" - to publish a correction and apology and pay damages - can expect a discount of up to 50% on the sum the libel is worth. But Carter-Ruck are thought to have argued that the Express newspapers were not entitled to a discount because the articles were published with malice - in the legal sense, knowing that the allegations were false, or with a reckless indifference to the truth.