Get a second opinion from a copyright specialist in the UK. If you were a US based company it would fall under the DMCA safe harbor as long as you were register

Get a second opinion from a copyright specialist in the UK. If you were a US based company it would fall under the DMCA safe harbor as long as you were registered. I imagine the UK has something similar. Things to check: Does the company actually own the copyright? When someone uploads an image does your privacy policy/terms of service indicate that you've been granted a license to use the photo OR at the very least does the uploader acknowledge that they have the right to the image? Is it possible that the uploader had been granted permission to use the photo inadvertently? Is the image in question actually the image that's copyrighted (the software used in rights management is often error prone). Was the image planted by the company? Remember that you can negotiate the fee down, assuming they even bother to file a lawsuit. The really important thing is to make sure that going forward you're protected from these types of complaints. This is what your current lawyer should have done when reviewing your terms and conditions, etc.