An out of court settlement was reached on Friday between the leader of the Canadian Alliance Party, Stockwell Day, and Red Deer lawyer, Lorne Goddard.

In 1999, Goddard filed a defamation lawsuit against Day for comments he made in a letter to a local newspaper. Day was being sued for $600,000.

In that letter, Day criticized Goddard for defending a man charged with possessing child pornography. Day, who was the Alberta Treasurer at the time, suggested Goddard held the same views as his client.

Gary Wanless, Goddard's lawyer, would not provide many details of the settlement except to says that his client is satisfied.

"Frankly for the parties involved I think the settlement makes the most sense and it certainly has brought the issue of a person's right to be defended to the foreground," says Wanless.

This much is known, Goddard must pay his own legal bills, although a legal defence fund has already raised $50,000 for him.

Day's bills will be picked up by the province because he was an MLA at the time.

"Alberta taxpayers are really the losers," says Howard Sapers, Alberta Liberal Treasury Critic. "It looks like we're going to have to pay out for Mr. Day's inappropriate comments."

The settlement averts a trial which was scheduled to start January 15th.

Judy Aldous reports for CBC Radio