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Government to settle robodebt class action for an extra $112m
The government will pay an extra $112m to about 400,000 robodebt victims after the firm running a class action struck a deal on the same day a federal court trial was set to begin.
Counsel for Gordon Legal, Bernie Quinn QC, told the court on Monday afternoon he was “delighted” to say the matter had been “resolved”.
The firm said in a press release the government had agreed to pay “$112m in compensation to approximately 400,000 eligible individual group members, including legal costs”.
It said other details of the settlement included:
“The commonwealth has agreed to drop claims for approximately $398m in debts it had invalidly asserted against group members of the class action. 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.”
The government had already promised to repay about $720m and wipe about $400m in debts in May.
Gordon Legal will hold a press conference at 2.30pm.
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The federal government may avoid a potentially embarrassing court trial over the robodebt scandal as the class action edges towards a settlement.
On the first day of the two-week trial, federal court justice Bernard Murphy immediately adjourned the proceedings to allow the parties to continue what were described as “productive” discussions this morning.
The move came in response to a request from the lead counsel for Gordon Legal, Bernie Quinn QC. He had noted at a case management hearing last week there were ongoing discussions between the parties.
The hearing will now resume at 1.30pm.
In May, the government agreed to pay back $721 million and wipe about $300 million in further debts, but the class action is also seeking interest payments and damages on behalf of hundreds of thousands of victims.
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