The Australian government has agreed to pay a confidential settlement to a nine-year-old Iranian asylum seeker over her detention on Christmas Island.
Lawyers for the girl, who was five at the time she was detained, alleged she received inadequate care on Christmas Island where she was held for 10 months in 2013 and 2014.
They argued the girl developed post-traumatic stress disorder, a recurrent dental infection, a stammer, separation anxiety and major depression.
And a lawyer said the win should encourage more people to come forward with individual claims for compensation.
The settlement between her lawyers and the Federal Government was approved by the Victorian Supreme Court ahead of an eight-week trial which was due to start today.
The terms of the settlement will remain confidential.
The girl, who cannot be identified, arrived on Christmas Island by boat with her family and now lives in Australia on a temporary bridging visa.
Her litigation guardian, Sister Brigid Arthur, said the girl's family was relieved the case had settled.
"While it's an effort to get justice it's also an extra trauma for them and an extra thing that they were waiting for a response to," she said.
The case was initially launched as a class action on behalf of other asylum seekers who said they also suffered injury while being detained on the island.
But the court earlier ruled the case should proceed as an individual claim only because claims made by the class action group members were too different.
Asylum seekers urged to make claims
Lawyer Thomas Ballantyne said despite the court refusing to hear the case as a class action, asylum seekers should be encouraged to make individual claims for compensation.
"This case really will have made subsequent cases a lot easier," he said.
"It's really important too that this litigation continues to shine a light on what happened on Christmas Island.
"So in that respect we'd also be hopeful that more people come forward."
About 35,000 people were held in offshore detention centres on Christmas Island in the period covered by the class action claim, between August 2011 and August 2014.