A former top judge in B.C. has settled a wrongful arrest suit against the government of the Cayman Islands for almost $2 million.

Alex Henderson, a former B.C. Supreme Court justice, was arrested last September during an investigation into allegations of local police misconduct.

Police raided Henderson's home and office in September 2008 as part of a sprawling investigation into corruption involving the police force and the local newspaper, the Cayman Net News.

Henderson, who had been a judge in the Caribbean nation since 2003, was alleged to have encouraged staff at the paper to break into an editor's office to find out who had sent letters that had been critical of the judiciary.

He was questioned for two days and had his computer, cellphone, passport and other documents seized.

Henderson maintained he was innocent of any wrongdoing, no charges were ever brought against him and a Cayman judge later ruled the police acted on erroneous information.

In a ruling last October, Sir Peter Cresswell, an acting judge of the Cayman Islands Grand Court, found that the search warrant used to enter Henderson's home and office was obtained improperly.

Cresswell said police relied on numerous misrepresentations of facts and failed to reveal relevant information in order to obtain the search warrant.

They then failed to tell the justice of the peace who issued the warrant all that he should have been told, the judge ruled, and compromised his independence.

The court process was "conscripted to the service of arbitrary and unfair action by police officers," the judge said.

Henderson sued the Cayman government for wrongful arrest and unlawful search and seizure and announced Thursday that he settled the case for $1.9 million, with most of the money going to cover his legal expenses.

"The settlement also covers damages for the arrest, detention, trespass and damage to Mr. Justice Henderson's reputation resulting from publicity given to the incident, particularly in British Columbia, where Mr. Justice Henderson expects to resume legal practice when his Cayman Islands appointment expires in 2011," Henderson said a statement sent out by his lawyer.

He noted that last December the Cayman Island Police Service offered he and his family an apology in court "for what it admitted had been entirely unwarranted and unlawful actions on the part of the police."

With files from The Canadian Press