Australia on the brink of record-breaking class action settlement
In a landmark decision, the Australian government has agreed to settle a class action lawsuit related to the controversial Robodebt scheme, committing an additional AUD 475 million in compensation. This brings the total potential value of the settlement, including legal costs and administration fees, to AUD 548.5 million (GBP 266 million).
The settlement, announced by Attorney General Michelle Rowland, was described as the "just and fair thing to do". It follows an earlier class action, Prygodicz v Commonwealth of Australia, filed in 2019, and paved the way for both the Prygodicz settlement and the subsequent appeal in Knox.
The Robodebt scheme, a welfare policy in Australia, has been under scrutiny for several years due to its controversial nature. The Federal Court's decision in Amato v Commonwealth of Australia [2019] held that debts raised solely by averaging tax data were unlawful, setting a precedent for the settlements. This decision fatally undermined the Robodebt scheme, and more than AUD 1.7 billion (GBP 830 million) has already been refunded or waived.
The settlement is for hundreds of thousands of welfare recipients who were affected by the Robodebt scheme. A group of class members launched an appeal, contending that the 2021 settlement had been agreed without the benefit of evidence capable of sustaining claims in tort, including misfeasance in public office. The Victorian Aboriginal Legal Service represented lawyer Peter Gordon in both cases related to the Robodebt scandal in the Australian welfare system.
The 2023 Royal Commission into the Robodebt scheme concluded that it was "a crude and cruel mechanism, neither fair nor legal". The commission also found that senior government officials were aware of the scheme's unlawfulness yet allowed it to continue. Justice Bernard Murphy of the Federal Court described the Robodebt scheme as "a shameful chapter in the administration of the Commonwealth social security system and a massive failure of public administration" in 2021.
Gordon Legal, who acted for the claimants in both cases, commented that it was a "day of vindication and validation for hundreds of thousands of Australians afflicted by the Robodebt scandal". The settlement, if approved by the Federal Court, will mark the largest class action settlement in Australian legal history.
The Robodebt class action lawsuit was filed against the Commonwealth of Australia, challenging the legality of debts raised under the Robodebt scheme, which used Australian Taxation Office data to allege overpayments of welfare benefits. The settlement comes in response to a class action, an appeal, and a Royal Commission regarding the Robodebt scheme.
This settlement marks a significant step towards rectifying the harm caused by the Robodebt scheme and provides a sense of justice for those affected.
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