Largest class action payout in Australian history as government settles robo-debt appeal

1 week ago 3

Robo-debt victims and their families have been awarded the largest class action settlement in Australian history after the Albanese government agreed to settle an appeal for an extra $475 million in compensation.

A royal commission into the Coalition government’s policy, which hounded more than 500,000 Australians for welfare repayments they did not owe, said the scheme was illegal, cruel, and the fallout utterly mishandled.

Victims of the robo-debt scheme will receive a further $475 million from the Commonwealth.

The commonwealth had settled the case in 2020 for $112 million, but law firm Gordon Legal launched an appeal for further payouts following the royal commission, which revealed new evidence of serious misconduct from senior public servants who designed and ran the scheme who knew it was unlawful.

The victims will receive a further settlement of $475 million in compensation from the government. Including legal and administration costs, the settlement will cost the government up to an extra $548.5 million.

The $587 million in compensation – $112 million from 2020 and the new $475 million settlement – for robo-debt victims eclipses the $500 million awarded to victims of the 2009 Black Saturday bushfires by power distributor SP AusNet and asset managers Utility Services Group in 2014.

Attorney-General Michelle Rowland said on Thursday the settlement, which still requires approval from the Federal Court, demonstrated Labor’s commitment to addressing the harms from the former government’s “heartless and disastrous” scheme.

“The royal commission described robo-debt as a ‘crude and cruel mechanism, neither fair nor legal’,” Rowland said in a statement.

“It found that ‘people were traumatised on the off chance they might owe money’ and that robo-debt was ‘a costly failure of public administration, in both human and economic terms’. Settling this claim is the just and fair thing to do.”

Gordon Legal partner Andrew Grech commended the victims who came forward and said the settlement would not have been reached without their persistence and bravery.

Robo-debt victim Felicity Button said she had been ignored and treated like a second-class citizen before Gordon Legal took on the case.

“Today I feel as though myself and all the other victims of robo-debt have been heard and finally have our voice back,” she said.

Fellow applicant Nathan Knox said the group could finally put the “terrible chapter” behind them.

“Everyday Australians should now know that they can stand up and demand respect and fairness, especially from their government,” he said.

Gordon Legal said if approved by the courts, the final settlement would mean the scheme had cost the government more than $2.4 billion in compensation and costs, including repayments to victims and unlawful debts being dropped.

More to come

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