The settlement of a high-profile libel case between supermarket giant Tesco and The Guardian newspaper will encourage the use of ‘offers of amends’ as an alternative to trials, libel lawyers said this week.

Tesco Stores Ltd had sued Guardian News & Media Ltd and editor Alan Rusbridger over allegations made last February in two articles about the company’s tax practices. On Monday, a deadline set in the High Court by Mr Justice Eady, Tesco accepted an apology.

A statement published in Tuesday’s newspaper says that the damaging allegations were ‘unfounded’ and ‘should not have been published’. The paper said it had agreed to pay costs and a sum of damages to a charity of Tesco’s choice. Neither the newspaper nor the retailer would comment further.

In July, the parties clashed in the High Court over an offer of amends made under the Defamation Act 1996. This procedure allows a quick route to settlement where the defendant admits being in the wrong. In the hearing, Mr Justice Eady refused to allow Tesco to keep open its decision on whether to accept the Guardian’s offer while it pursued a separate action for malicious falsehood.

Amber Melville-Brown, of media specialists David Price Solicitors & Advocates in London, said that the decision had removed a threat to the offer of amends procedure. ‘If they had been allowed to carry it all the way to the court there would be no incentive on publishers to make offers of amends,’ she said. Allowing claimants to hang on to an offer until trial ‘would make a mockery’ of the procedure’.

John Linneker, partner at City firm Denton Wilde Sapte, said that Mr Justice Eady’s decision would reduce the temptation for plaintiffs who ‘try to have their cake and eat it’ with an offer of amends. ‘I suspect that fewer libel cases are coming to trial as a result,’ he said.

Robin Shaw, partner at London firm Davenport Lyons, said: ‘The courts are likely to exercise greater control over how a claimant reacts when an offer of amends is made, but in reality, I don’t think this will have profound consequences.’