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By Mark SavageBBC Music Correspondent

Four Tet’s best songs include Butterflies, Two Thousand and Seventeen, and Lush

Pioneering electronics artist Four Tet has reached a settlement in a legal battle against his former record label.

The musician, whose real name is Kieran Hebden, sued Domino Records last year for royalties he earned when his music was downloaded or streamed.

He argued that the 13.5% royalty rate offered to him was unfair, and demanded a 50% share with the label.

In the settlement, Dominoes agreed to honor the 50% rate and refund the musicians for the historic shortfall.

This is the opposite of the indie label, which initially responded to the case by removing several Four Tet albums from the streaming service (they were later reactivated).

“It has been a difficult and stressful experience to resolve this court case and I am very pleased that we have had this positive outcome,” Hebden wrote in a statement announcing the settlement.

“Hopefully I’ve opened up a constructive dialogue and perhaps encouraged others to push for a fairer deal on historical contracts, which were written at a time when the music industry was operating completely differently.”

The result can set a legal precedent for contract disputes in the music business; where royalty rates have been the subject of intense scrutiny since an investigation last year into the streaming market by lawmakers on the Cultural Elections Committee.

However, Four Tet’s legal challenges were ultimately decided out of court, so any future disputes would not be able to cite legal decisions.

The BBC has contacted Domino Records for a statement.

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Hebden’s case relates to a recording contract he signed with Domino in 2001, which resulted in four albums: Pause (2001), Rounds (2003), Everything Ecstatic (2005) and There Is Love In You (2010).

The deal was signed before stream downloads emerged – and the dispute hinges on whether his method of accessing his music can be defined as “sale” or “licence” under the terms of his contract.

The difference is far from academic as most artists receive 50% of royalties for licenses but a much lower figure, usually between 12% and 22%, for sales.

Historically, the difference was due to the way music was distributed: selling music in the CD, vinyl, and cassette era was expensive to manufacture and distribute, meaning labels were needed to cover their overhead. But when music is licensed for film, television, or advertising, the artist generally gets paid more, with the understanding that the third party bears the relevant costs.

After the advent of iTunes and Spotify, labels often argued that downloads and streams should count as sales.

This sparked a series of lawsuits, mainly in the US. Most notably, the producer who discovered Eminem won a case against Universal Records forcing the label to pay higher “licence” rates when his songs were downloaded.

The Four Tet case in England makes essentially the same argument.

Domino’s argues that digital downloads, including streaming, are considered a new technology format and Hebden is only entitled to a 13.5% royalty rate (although they have paid 18% at their discretion).

The case quickly became complicated, with Hebden adding a breach of contract claim after Domino’s pulled his music from the streaming service; and Domino’s said they could take the case to the High Court, which Hebden could not afford.

However, in a statement posted on social media today, Hebden said he had been offered the 50% rate he was seeking in the settlement, details of which were made public.

I have a major update on my case with @Dominorecordco. They have acknowledged my original claim, that I should be paid a 50% royalty on streaming and downloads, and that they should be treated as a license rather than the same as selling a CD or vinyl.(1/8)

The BBC is not responsible for the content of external sites. See the original tweet on Twitter

“Domino’s has now agreed to treat streaming and download revenue as license revenue and will apply a 50% rate on streaming and download revenue going forward, and has reimbursed Kieran for underpayments over the past few years,” his lawyer, Aneesh Patel, said in a statement. .

“I sincerely hope that my own actions encourage anyone who may feel intimidated by challenging record labels in a substantial way,” added Hebden.

“Unlike Domino’s, I don’t work with a big law firm and luckily the case took place at IPEC [Intellectual Property and Corporate Court] where legal fees were limited, so I was able to hang on.”

Hebden shared a picture of the settlement, which shows he will receive £56,921.08 in relation to all historical streaming and download revenue, as of July 2017, in addition to interest calculated at a rate of 5% per annum.

Follow us on Facebook, or on Twitter @BBCNewsEnts. If you have story suggestions, email entertainment.news@bbc.co.uk.

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