Many thanks for your patience. If you used these photographs without the copyright owner’s permission then this would be a breach of copyright and would entitle them to consider taking this further to seek damages.
The principle behind an award of damages is to put the copyright owner in the position in which it would have been had the infringing act not occurred.
The most obvious claim would be for the loss of the fees they would have received had you used the images properly and paid them for their use. So whatever the usual licence fee would have bene for these images they can consider claiming for. I see they have valued these at £200 per image but do not just accept that and ask for evidence of what they have sold or provided a licence for in the case of similar images.
Next a court can consider additional damages on top of these costs. These can include both infringement of moral rights and unauthorised use but to automatically claim 100% uplift on both counts is rather opportunistic. Only a court can decide whether these should be applied and then at wat uplift, which is unlikely to be 100% for both. He recognises this by making an offer for reduced payment.
So you can ask for further evidence of how the fees were arrived at and also dispute the additional uplifts and try to negotiate them further down. Or you could completely refuse to negotiate and let them have their day in court, but that is a risk you have to decide on whether to take or not.
I hope this has answered your query. I would be grateful if you could please take a second to leave a positive rating by selecting 3, 4 or 5 stars - this is an important part of our process and recognises the time I have spent assisting you. If you still need me to clarify anything else, please get back to me on here and I will assist further as best as I can. Thank you