The allegations first appeared in The Sun newspaper in 1994. It was in the pages of the tabloid that Grobbelaar had been accused of taking �40,000 to ensure Liverpool were beaten by Newcastle the previous year while it was also said that he had blown his chance of earning an additional �125,000 because of an 'accidental save' against Manchester United. The paper also laid allegations at the feet of Dutch keeper Hans Segers and striker John Fashanu due to Wimbledon's loss to Manchester United that same year. All of the charges also concerned Malaysian businessman Heng Suan Lim.

During the initial trial, the jury was unable to reach a verdict and the outcome was the same second-time round. Having been cleared, Grobbelaar sued The Sun, winning �85,000 in libel damages but when newspaper appealed, the matter ended up in the House of Lords. It was there Grobbelaar was told that although the specific allegations had not been proven, there was adequate evidence of dishonesty.

In his judgement Lord Bingham of Cornhill stated: "The tort of defamation protects those whose reputations have been unlawfully injured. It affords little or no protection to those who have, or deserve to have, no reputation deserving of legal protection.

Until 9 November 1994 when the newspaper published its first articles about him, the appellant's public reputation was unblemished. But he had in fact acted in a way in which no decent or honest footballer would act and in a way which could, if not exposed and stamped on, undermine the integrity of a game which earns the loyalty and support of millions."

Grobbelaar won damages of �1, the lowest possible under British law and was also ordered to pay The Sun's legal costs, estimated at roughly �500,000.

Unable to pay the fees, he was forced to declare bankruptcy.

Having managed a number of clubs in South Africa, he returned to England in 2000 where he took part in a replay of the 1986 FA Cup final for the Marina Daglish Appeal. He also featured twice since on Sky's show, The Match. In 2006 he was voted by Liverpool fans number 17 in a poll of players that had shook The Kop and recently announced "he hopes one day to return to Anfield as manager of Liverpool."