THE Coogee Bay Hotel, Sydney has agreed to pay $50,000 as compensation to the family that was served faecal ice cream recently. The matter had become a sensation in the country.
It follows a 12-hour mediation session on Friday between hotel management and Steve and Jessica Whyte.
It is understood the $50,000 was agreed upon, plus a full apology from the hotel and a retraction of any suggestion the Whytes staged the whole affair to extort money.
A police investigation is still underway.
While a substantial amount of money, it will have to cover hefty legal fees the Whytes have incurred after a two-week fight with the Coogee Bay Hotel.
The settlement also gags all parties from discussing its details with the media.
Steve and Jessica Whyte refused to answer questions yesterday, as did their solicitor Steven Lewis, of Slater and Gordon.
Prior to Friday's mediation, The Sunday Telegraph was told the Whytes would file a legal action in court on Monday morning if an agreement was not reached.
Friday's 12-hour mediation session was without breaks for lunch or dinner and concluded about 10pm. The mediation was between the Whytes and the hotel and did not involve other members of staff as previously requested.
The hotel has employed three well-respected former NSW detectives in a bid to get to the bottom of the scandal as quickly as possible and find out who was responsible.
The scandal arose after the Whyte family was served a bowl of ice cream containing foul-smelling brown matter at an NRL grand final lunch at the hotel's brasserie last month.
Laboratory reports confirmed it was faecal waste.
Hugh Macken, president of the NSW Law Society, said a civil case against the hotel by the Whytes would have been unlikely to succeed.
"Clearly, if there was any prospect of recovering damages from an act of negligence against a hotel, they have reduced their cost very significantly by resolving it before the litigation starts," he said.
But defamation cases regularly award plaintiffs payouts of more than $100,000.
"A defamation act would have been far more likely to succeed," he said, unless the hotel could prove the extortion allegations were true.
Legal experts estimated the Whytes' legal bill to date would range from between $10,000 to $30,000.