Pan Am set to pay out £500m

Lockerbie relatives could win up to £500m damages from Pan Am following a ruling in the US Supreme Court yesterday that the airline was guilty of "wilful misconduct" in failing to detect the bomb which destroyed flight 103 killing 270 people, writes John Arlidge. In a written judgment, America's most senior judges refused to consider Pan Am's appeal against a judicial ruling that its security arrangements at Frankfurt and Heathrow airports were flawed. They upheld arguments by lawyers for the bereaved families that the airline had knowingly breached safety regulations in allowing an unaccompanied suitcase, which contained a bomb, on board the jumbo jet.

The ruling means that relatives' claims for compensation, lodged shortly after the terrorist attack in December 1988, can now be heard in the US courts. Families are seeking awards of up to £7m from the insurers who are administering Pan Am's affairs. The company went into liquidation four years ago.

Relatives of the victims yesterday welcomed the court's decision. Dr Jim Swire, the spokesman for British families, said: "This at last marks the end of an agonising seven-year struggle to prove what we have known all along - that Pan Am's security was asham. Our loved ones paid a £3 surcharge on their tickets to cover the `special security arrangements' that the airline said it had introduced to prevent terrorist attacks.

" We now know that they had not even complied with basic US federal aviation safety regulations. Money - however much - cannot compensate for loss of life but this ruling will help ease families' ongoing suffering."