Cleveland Police have agreed to pay more than £500,000 in damages to a solicitor who was falsely imprisoned.
James Watson, a senior partner in the Middlesbrough law firm Watson Woodhouse, was wrongfully arrested in June 2009.
He was taken to Northallerton police station and held in a cell for nearly 30 hours.
Mr Watson's wife, Rita, and their two sons were held at the family home in Middlesbrough while the property was searched.
The law firm's offices were also searched, and boxes of sensitive documents seized.
Cleveland Police began the investigation after a trial involving one of Mr Watson's clients collapsed. The defence lawyer was arrested on suspicion of conspiracy to pervert the course of justice.
Mr Watson was never charged with any offence, and the investigation into him was eventually dropped.
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