Labor frontbencher Terri Butler has settled a defamation lawsuit with Queensland law student Calum Thwaites over what some described as her "racist smear" on national television.
Ms Butler was accused of traducing Mr Thwaites for repeating allegations he used the phrase "ITT niggers" in a Facebook post, after a race-hate case brought against him and two other students was thrown out of court.
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PM attacks Human Rights Commission
Malcolm Turnbull says the Human Right Commission has harmed its reputation over the recent case it pursued against Queensland students as debate continues over whether 18c should be changed. Courtesy ABC News 24.
Mr Thwaites, 25, a law student at the Queensland University of Technology, sued the Labor frontbencher for defamation, alleging he had been "greatly harmed and injured in his personal reputation" by her remarks, which were made on the ABC's prime-time Q&A; program.
The QUT students were embroiled in a three-year case levelled against them under section 18c of the Racial Discrimination Act after they posted about being ejected from an Indigenous-only computer lab at the university.
Mr Thwaites vehemently denied he used the phrase "ITT niggers". Fellow Q&A; panellist Greg Sheridan, of News Corp, accused Ms Butler of perpetrating a "racist smear".
In a statement posted to her website on Thursday, Ms Butler said she had agreed to make a "modest payment" to Mr Thwaites, and a contribution towards his legal costs.
Fairfax Media understands the settlement is five figures and the services of Mr Thwaites' lawyer, Anthony Morris, QC, would be somewhere between $5000 and $10,000.
In her public apology, also a condition of the settlement, Ms Butler acknowledged the court had heard evidence Mr Thwaites was not the author of the offending Facebook post that appeared under his name.
"Your legal representative, Mr Morris, QC, has described you as a victim of malicious identity theft or a prank, which I accept," she wrote.
"There should be no suggestion that you were responsible for the Facebook post, or that your denial was anything other than the truth.
"Equally, there should be no suggestion that you are racist, or bigoted. I offer you my unreserved apology for enabling those meanings about you to be conveyed, and for the distress and damage to your reputation caused as a consequence."
Mr Morris told Fairfax Media he was unable to divulge the settlement figure due to a confidentiality clause, but his client was satisfied that it reflected the seriousness of the defamatory remarks.
"Mr Thwaites is delighted it's over. He has no personal axe to grind with Terri Butler," Mr Morris said. "But when people accuse you of racism on national television you've got to take it seriously."
Ms Butler told Fairfax Media she was happy to waive the confidentiality agreement and release the figure if Mr Morris contacted her.
She said she had "no expectation" of the ALP picking up her own legal bill, which was to Maurice Blackburn, her former employer.
The case against the trio of students was ultimately thrown out of the Federal Circuit Court last month, but has been used by opponents of section 18c to criticise the Australian Human Rights Commission and lobby for reform or repeal of the clause.
Section 18c makes it unlawful to offend, insult, intimidate or humiliate another person on the basis of race. Free speech advocates say it is an illiberal restriction on free expression.