Legal executive Hazel Jones, 33, sued the Chief Constable of Essex for false imprisonment, malicious prosecution, defamation, malicious falsehood and conspiracy for the "anxiety, distress and humiliation" she suffered when she was acting for a client.
The action, launched in January 1994, was settled when the Chief Constable issued her with an apology and accepted the arrest should not have taken place.
Her counsel, Ben Emmerson, told Mr Justice French: "In addition, the Chief Constable has offered to pay pounds 45,000 in satisfaction of her claims.
"Her reason for bringing this action was to vindicate her good name and reputation, and to remove any remaining doubts which may linger as to the validity of her arrest and prosecution."
The police chief was not represented at the hearing when a statement read out in court described the "oppressive, arbitrary and unconstitutional" misconduct of his officers, who kept Ms Jones in custody for four hours.
Ms Jones said after the hearing that the policemen involved had since been promoted and had moved from Chelmsford police station. None had faced disciplinary action, she said.
"The amount of the damages demonstrate the extent of the wrong done to me," she said outside court.
Ms Jones was arrested in April 1992 on suspicion of dishonestly handling stolen property after a client, suspected by the police of burglary, brought a bag to her Chelmsford office. The client had been asked by police to bring the bag to Chelmsford police station. A detective told Ms Jones she would have to make a statement about how she came into possession of the bag, but she said she could not supply evidence against her own client.
"The plaintiff was removed from the firm's offices under police escort and in full view of the firm's staff," said Mr Emmerson. She was charged with handling stolen property, photographed, fingerprinted and released on bail, but the charge was dropped a month later.Reuse content