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An Alberta lawyer won a confidential financial settlement yesterday in a defamation lawsuit he launched against Canadian Alliance Leader Stockwell Day last year.

"I'm just happy it's over. I'm feeling a lot better," said Lorne Goddard, who filed a $600,000 civil suit alleging that Mr. Day defamed his character and damaged his Red Deer law practice in a 1999 letter to the editor of a newspaper.

"It's been a lot of stress on my family and myself," Mr. Goddard added.

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While Mr. Day was Alberta's Treasurer, he wrote a letter to the Red Deer Advocate in April, 1999, criticizing Mr. Goddard for representing a pedophile who was convicted on charges of possessing child pornography.

In the letter, Mr. Day suggested that Mr. Goddard, who is also a long-time public-school-board trustee, believes pedophiles have the right to own kiddie porn and that, by extension, he must think teachers should enjoy the same freedom to have obscene pictures of their own students.

A number of lawyers who thought the case involved important issues for lawyers representing clients whose views differ from their own raised almost $50,000 to help finance Mr. Goddard's lawsuit.

While the settlement was reached after just one day of negotiations, Mr. Goddard, 53, said he was pleased with the undisclosed terms.

"I wouldn't have settled it if I wasn't [satisfied]"

The settlement still needs court approval.

Mr. Day won't be shelling out personally because his costs are being covered by the Alberta Risk Management Fund, an insurance program for public employees who are sued when they are acting within the scope of their official duties.

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Its premiums and the first $1-million of any court-ordered settlement are paid for with taxpayers' money.

Phil von Finckenstein, who is Mr. Day's official spokesman, said the party leader would not be available for comment.

"He was just informed that it was settled and he has no further comment," Mr. von Finckenstein said. "It's over. It's done."

After receiving Mr. Goddard's statement of claim last year, Mr. Day asked the Justice Minister whether there was insurance coverage for such cases.

The minister looked into it and found that the fund, which holds about $35-million, was amended in 1993 to cover members of the Legislative Assembly.

Mr. Day was subsequently accused by the opposition of exerting influence over government officials to approve payment of his legal bills. However, the province's ethics commissioner later cleared Mr. Day.

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Now, with the out-of-court settlement, Mr. Day has avoided the continuation of a trial that was scheduled to go before a judge alone on Jan. 15.

Indeed, the settlement may prove to be an early Christmas present for both Mr. Goddard and Mr. Day.

The issue was a bit of an albatross for Mr. Day, who has occasionally been questioned about it since he became federal Opposition Leader in the fall.

A trial would have led to intense media coverage at a time when Mr. Day is particularly vulnerable on the issue of social conservatism.

During the recent federal election, the Alliance Leader was forced on several occasions to defend his views on such issues as abortion and gay rights.

Several of his advisers and other party members say the party should avoid discussing such issues if it wishes to be a competitive force in the next election.

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In October, Mr. Day persuaded a judge to have the defamation trial postponed until after the Nov. 27 federal election.

In his statement of defence, Mr. Day maintained the letter amounted to "political comment on an issue of public importance, namely child pornography."

However, Mr. Day also sent Mr. Goddard a letter of apology, and said he would like to settle the lawsuit without going to court.

Virginia May, Mr. Goddard's lawyer, said she was pleased the case has finally been settled.

"I always, as plaintiff's counsel, and as all lawyers should, consider and hope for the possibility of settlement prior to final resolution in the court.

"That way the clients are able to resolve matters themselves rather than have a decision dictated for them," Ms. May said.

Mr. Goddard's lawsuit against the Red Deer Advocate in connection with the publication of the letter was previously settled out of court on undisclosed terms.

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