On Monday, the US Court of Appeal in Manhattan rejected Pan Am's appeal against a ruling that its security arrangements at Frankfurt and Heathrow airports were wholly inadequate. Judges upheld arguments by lawyers for the relatives that the airline had knowingly breached safety regulations in allowing an unaccompanied suitcase - which contained a bomb - on board flight 103.
Pan Am, currently in liquidation, is unlikely to seek a review of the judgment, which means that claims for compensation, lodged shortly after the disaster in December 1988, can be settled. Families can seek damages of up to pounds 7m each. Relatives of the victims yesterday welcomed the court's decision.
Dr Jim Swire, spokesman for British families, said: 'At last, five years after the bombing, the courts have confirmed what we knew all along - that Pan Am's security was a sham.
'Money - however much - cannot compensate for loss of life but this ruling will help ensure that those families who have suffered terrible financial losses, not to mention the stress and anxiety, could have one to two fewer worries in future.'
Peter Watson, secretary of the Lockerbie Air Disaster Group whose lawyers represent most of the British families, urged the airline's insurers to negotiate settlements swiftly to avoid 'prolonging the agony for the relatives'.
In a separate action, Pan Am is seeking an estimated dollars 300m damages from two Libyans who have been charged with the bombing, the Libyan government and Libyan Arab Airlines.