Morrison government settles robodebt class action for $112 million

By Chris Woods

November 16, 2020

Bill Shorten (AAP image)

Gordon Legal has today announced a settlement of the robodebt class action, on the same day a Federal Court trial was set to begin and subject to Federal Court approval, that will see the Morrison government agree to pay $112 million in compensation to approximately 400,000 eligible individual group members, including legal costs.

If approved by the Federal Court, more than $1.2 billion in financial benefit will have been provided to group members, with the government repaying more than $720 million in invalidly collected debts and agreeing to drop claims for approximately $398 million in invalidly asserted debts.

“We want to acknowledge the courage of the lead applicants — Katherine, Elyane, Steven, Felicity, Shannon and Devon — who led these proceedings on behalf of all robodebt victims in pursuit of this class action, which has allowed this outcome to be achieved today,” Gordon Legal Partner Andrew Grech said.

“Our clients have asked us to especially thank Bill Shorten for his relentless pursuit of this issue, for his compassion over the last four years for vulnerable Australians hurt by robodebt and for bringing the case to Gordon Legal’s attention when it seemed that all other options had been exhausted and only resorting to the legal system would help.”

Gordon Legal launched the class action on November 2019 on behalf of five representative applicants and on behalf of hundreds of thousands of people are included in the case as “Group Members”.

In settling the class action, the Morrison government has not admitted that it was legally liable to group members, and made clear earlier in the case it — which was alleging on “unjust enrichment” and “negligence”, with an earlier consideration of “malfeasance in public office” ultimately not pursued — that the government would not call any witnesses.

The settlement confirms that no members of parliament — i.e., then-Human Services minister Alan Tudge — will face court, while questions sent to Government Services Minister Stuart Robert by The New Daily only received a joint statement from Gordon Legal and Services Australia:

“Both the Applicants and their solicitors, Gordon Legal, acknowledge that the Commonwealth’s agreement to settle the matter is not an admission of liability by the Commonwealth, and does not reflect any acceptance by the Commonwealth of the allegations that the Commonwealth, or any of its officers, had any knowledge of unlawfulness associated with the income compliance program,” the statement read.

Grech noted that while the team had asked at various times for an apology — and Scott Morrison had delivered “what we thought was quite a sincere apology” some time ago — “we think the agreement we reached today speaks for itself” and the government’s response in the settlement “speaks volumes”.

Subject to court approval, a Settlement Distribution Scheme will provide that eligible individual group members’ entitlements will be assessed and all amounts due to them be paid in 2021. All 400,000 group members are eligible to access the settlement meaning that, of the new figure excluding legal fees, they will receive on average $280. Not all applicants, however, may be eligible.

While Grech offered no comment on the potential for future inquiries or government debt recovery — which, as ZDNet reported in August, is using a modified form of data-matching — former opposition leader Bill Shorten pledged that Labor will still push for a royal commission.

“Even a crocodile wouldn’t swallow the government’s defence today,” Shorten said, according to The Guardian. “In Australia, you shouldn’t have to go, in the biggest class action in Australian history, to get this government to adhere to the law.

“And furthermore, whatever happened to the notion of ministerial accountability? The Morrison government needs to tell us which minister authorised the program, when did they know it was illegal, and why does it take a class action, and a lot of brave people, to force the Morrison government to repay an eye-watering $1.2bn in illegal debts it raised against Australians.

“Of course I think the government should apologise.”

Greens Senator Rachel Siewert is also calling for a royal commission, and points out that the Morrison government has not provided “legal advice they have relating to robodebt and have hidden behind ‘public interest immunity claims'”.

At the time news of the settlement broke, Morrison was announcing new mental health funding in Melbourne and the Productivity Commission released its mental health report. Which, as The Saturday Paper’s Rick Morton notes, includes findings related to other aspects of Australia’s unemployment system i.e. mutual obligations.

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