At least they have owned up Lew.
It can happen.
Also how did they get hold of a copy of high enougth quality for magazine work? Or were they using it quite small?
He is I believe in talks with them and lawyers about how they inadvertently removed his Copy right protected stamp?
That is a bit weird. Should just be a matter of agreeing a price though. If they have put their hands up presumably they want to put things right.
If agreement can't be reached there shouldn't be any need to waste time and money on lawyers, if he's based in the UK, it's just a matter of going through the smalls claims court process (England,Wales, Scotland and I assume Northern Ireland all have similar processes). Total cost is 40 quid which you get back when you win.
And of course all sorts of organisations from Visit Kent, charities, commerical companies etc etc hoover up photo rights and build their own free image libraries to use as they please through these so called photo competitions.
If you are are approcahed for use of an image and don't have a clue what to ask for;
http://www.londonfreelance.org/feesguide/index.php