Robodebt victims have come out swinging against class action lawyers, amid objections to the federal government’s offer to settle for $1.2 billion without admitting legal liability.
The Federal Court has heard “harrowing tales” about victims of the unlawful automated commonwealth scheme matching tax and Centrelink data to claw back welfare benefits the government said had been overpaid.
“If the settlement is approved, there’s a large number of people who won’t receive money but will have given up their rights … and there’s people here who have lost their children,” Justice Bernard Murphy said on Thursday.
Dubbed robodebt, the scheme was ruled unlawful in 2019 after the Federal Court found Centrelink could not have been satisfied the debts calculated automatically were correct.
One man, Jeremy, detailed his experience with the “targeted, punitive” program. He raised concerns the settlement previously offered by the Commonwealth allowed politicians to avoid admitting publicly that robodebt was unlawful.
He also raised concerns that Gordon Legal, the firm behind the class action, would be the primary beneficiary.
“The government will have used state power to persecute the weakest members of society and then used public funds to stop them being held accountable,” Jeremy said.
“In contrast, victims will have endured enormous stress and anxiety, from which a wealthy legal firm profits.”
Others raised concerns about the transparency of the law firm’s costs, some details of which haven’t been released.
Justice Murphy said there needed to be “a good reason for costs not to be open to read”.
“Having said that, I can’t see anything embarrassing,” the judge added.
Acting for Gordon Legal, Bernie Quinn QC said while some people wouldn’t be compensated under the settlement, they would receive “closure”.
Jennifer Miller said robodebt played a “very prominent” role in her son Rhys Cauzzo taking his own life about four years ago after he was pursued by Centrelink and debt collectors.
Ms Miller said she was pleased money had been returned, but objected to the settlement as no one in power had been held accountable.
“The only thing I’ve ever had is platitudes – I’ve been shown no respect,” she told the court.
“My objection is there has been no accountability. This was proven to be an illegal process early in the piece.”
Ms Miller said Centrelink pursued her son despite knowing he had mental health issues and also gave private information about him to the media.
More than 500 people had made objections to the settlement and many had “harrowing tales,” Justice Murphy said.
Another woman told the court her partner and father had taken their lives after being pursued by debt collectors.
“The emotional toll is absolutely ridiculous,” she said.
A man said his debt was reduced from more than $3000 to $400 after he spent six months providing material to authorities, but the stress he endured meant he could no longer work.
He said the settlement as it stood meant he wouldn’t receive compensation for his mental suffering.
“That’s shocking, isn’t it?” the man said.
“I reckon that’s totally wrong – me running around everywhere and them not taking my word for it at all.”
Another man, aged 45, said he’d spent one-tenth of his life worrying about and dealing with his robodebt case.
It was previously revealed victims would receive $112 million in compensation, be repaid $720 million and have $400 million in unlawful debts wiped.
Income averaging is no longer used as the sole proof for a possible debt.
The hearing to help determine the final shape of the settlement is expected to continue on Friday.