The PSNI is set to appeal a High Court order to pay £10,000 damages to a Catholic man who survived a loyalist murder bid more than 30 years ago.
John McEvoy who was injured during a UVF gun attack at the Thierafurth Inn, in Kilcoo, Co Down, in November 1992.
One man, Peter McCormack (42), was killed in the attack while three others were seriously injured when gunmen burst into the bar during a darts tournament.
Some of those believed to be involved have been linked to the 1994 Loughinisland massacre in which six Catholic men were shot dead as they watched a World Cup match in a bar.
Details of the gang’s activities were revealed in a report published by the Police Ombudsman in 2016 in which Dr Michael Maguire said there was collusion.
A documentary made by filmmaker Alex Gibney later named three suspects believed to have carried out the attack.
Mr McEvoy was awarded the payout earlier this year over the PSNI carrying out an effective investigation into the shootings at the Thierafurth Inn.
He was working behind the bar on the night of the attack and suffered post-traumatic stress disorder as a result of his experience.
In October last year, Mr Justice Humphreys held police were in breach of a legal duty to carry out a human rights-compliant investigation within a reasonable time.
The High Court judge found that new material contained in the watchdog report and a documentary film represented plausible evidence of significant state collusion and decided Mr McEvoy should be paid compensation for the identified breach of obligations within the European Convention on Human Rights.
Mr Justice Humphreys ruled: “I have concluded that, in addition to the findings in the primary judgment and the declaratory relief which he has obtained, an award of £10,000 damages is necessary in order to afford just satisfaction to the applicant.”
It has now emerged that the PSNI are set to appeal the High Court decision and a hearing was held on Wednesday.
A spokeswoman said: "It would be inappropriate to comment while legal proceedings remain ongoing."
However, Mr McEvoy's solicitor Gavin Booth, of Phoenix Law, described the decision "as a petty move to deny a victim compensation ordered by the court".
"The high court clearly ruled that our clients convention rights were breached and that the PSNI failed to take the proper steps to investigate serious allegation of collusion in our clients attempted murder and in relation to all the linked cases of collusion in south Down," he said.
"The PSNI should reflect on these decisions and how they are viewed by society here.
"This appeal will be fought and it’s hoped that the court of appeal will view this appeal for what it is."