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Duke of York has not ruled out pay-off for Virginia Roberts Giuffre paid by the Queen

Virginia Roberts Giuffre is alleging that the Duke of York sexually assaulted her on three separate occasions - Shutterstock
Virginia Roberts Giuffre is alleging that the Duke of York sexually assaulted her on three separate occasions - Shutterstock

The Duke of York has not ruled out making a financial settlement with his accuser in order to avoid further damaging the reputation of the Royal family, The Telegraph understands.

A potential pay-off for Virginia Roberts Giuffre could be “at least” several-million pounds and would be paid by his mother, the Queen.

If the Duke fails in his motion to get the sexual abuse case thrown out, an argument largely based on a 2009 settlement deal Ms Giuffre struck with Jeffrey Epstein, it will underline the severity of the uphill battle he would face in continuing to fight the legal action.

Those close to him privately acknowledge that the judge’s comments during a “brutal” 75-minute hearing this week made very clear to which side he was leaning.

The next step is a potentially very exposing discovery process, in which the Duke will have to give sworn testimony under oath, before a trial, scheduled for the autumn, which could land further devastating blows to his reputation, as well as that of the monarchy.

Watch: Prince Andrew in ‘difficult situation’, says royal correspondent

Ms Giuffre, now 38, claims she was forced to have sex with Prince Andrew on three separate occasions in 2001, when she was 17, in London, New York and on Epstein’s private Caribbean island. Her civil claim is seeking unspecified damages.

Although the Duke has indicated to his team of UK and US-based lawyers that he wants to fight the allegations and clear his name, sources close to his camp point out that it is a US civil case being fought by US lawyers.

As such, the issue of settlement is “never off the table” for his legal team, led by LA-based Andrew Brettler, as 99 per cent of civil cases in America are settled out of court.

The Queen offered support from her own private purse

While in the UK court of opinion, a financial pay-off would be considered an admission of guilt, in the US, it has different connotations.

The Duke would argue that he simply could not put his family, specifically his 95-year-old mother, or the monarchy, under any more strain and wanted to shield them from further fallout.

The Queen has offered her support in the form of footing the bill for his substantial legal fees from her own private purse.

The funds are sourced from her annual income from her private Duchy of Lancaster estate, which recently increased by £1.5 million to more than £23 million.

The case currently remains at the “technicality” stage, meaning that there are several other means of getting it dismissed, including a challenge to the court’s jurisdiction based on the fact that Ms Giuffre lives in Australia, and asking for a summary judgment, which would not be until after the discovery and deposition process.

But the judge’s repeated interruptions and observations made during the dismissal hearing on Tuesday did not bode well, sources close to him admit.

The next step is a potentially very exposing discovery process for the Duke of York - STEVE PARSONS/AFP
The next step is a potentially very exposing discovery process for the Duke of York - STEVE PARSONS/AFP

The Duke’s lawyer argued that the case should be thrown out as Ms Giuffre had "waived her rights" to sue him when she entered into the 2009 release agreement worth $500,000 with Jeffrey Epstein, but the judge appeared to disagree.

But Judge Lewis A. Kaplan unceremoniously rejected most legal points raised by Mr Brettler, telling him at one point: “With all due respect, Mr Brettler, that's not a dog that's going to hunt here.” And another time challenging him with a sharp: “So what?”

If the Duke were to opt to draw a line under proceedings before suffering any further blows, it would be Ms Giuffre’s decision about whether to accept a settlement.

However, those close to Prince Andrew believe that as the civil action always included a claim for damages it could therefore be resolved for money.

If it was designed to permanently damage the Duke’s reputation then that objective has already been met.

Ms Giuffre has not put a figure on the amount of compensation she is seeking for “significant emotional and psychological distress and harm” but is asking for compensatory and punitive damages, both of which would be “substantial”.

Watch: Victims' lawyer: Very optimistic case against Prince Andrew will proceed