William and Winifred Beggs had claimed damages for personal injuries and distress after they were arrested at their County Down home and taken to Belfast's Grosvenor Road police station.
The retired school teachers from Moira sued the Strathclyde Police Force following their arrest in January 2001.
The writs were issued in the High Court in Belfast.
The couple were held for six hours by Scottish detectives.
They were questioned about allegations that they helped their son redecorate his Kilmarnock flat after the gruesome murder of teenager Barry Wallace.
His body was cut up by Beggs, 39, who was convicted of the murder in December 1999.
Application
Beggs had picked up the 18-year-old in Kilmarnock, took him back to his flat and sexually assaulted him before murdering him.
His limbs were dumped in Loch Lomond and his head was washed up on a beach in Ayrshire.
Beggs' parents said they were wrongfully arrested and deprived of their liberty without justification.
They also sought aggravated and exemplary damages for having their fingerprints and mouth swabs taken while in custody.
Three days had been set aside for the hearing next month, but on Tuesday the action was struck out on the application of a lawyer for the couple.
Strathclyde Police had denied liability.
Beggs was convicted of a similar murder in 1987 at Teesside Crown Court after killing and mutilating Barry Oldham, 28.
However, he was later freed by Appeal Court judges on a technicality and went on to attack another man in Kilmarnock, being sentenced to six years as a result.