Representatives from Gordon Legal on Thursday appeared before a Senate committee probing the contentious Centrelink debt recovery scheme, announcing from the outset the class action it brought upon the government was never meant to be a Royal Commission.
“The class action was necessarily designed within the constraints of what the legal system could do for this group of very deserving people, and so the scope of the proceedings were necessarily limited,” Gordon Legal partner Andrew Grech told the Senate Community Affairs References Committee.
“For example, the class action was not designed to compensate group members, or their surviving family members, by the way of damages for personal injury and I know that’s been a subject of some contention and concern, understandably … that was not something the class action could have addressed, and so it didn’t.
“I think it’s worth noting that the class action could never have been, and was not designed to be a Royal Commission, or any kind of commission of inquiry with those kinds of powers into the conduct of the very senior public servants and various ministers of government that oversaw the design and implementation of the robo-debt scheme.”
Gordon Legal brought on the class action pertaining to the program colloquially referred to as robo-debt that was settled in the Federal Court, with the Commonwealth agreeing to pay AU$112 million in compensation.
Although not receiving the outcomes a Royal Commission might, quoting Justice Bernard Murphy who presided over the class action, Grech said the proceeding has, however, “exposed a shameful chapter in the administration of a Commonwealth social security system, and a massive failure of public administration”.
“It should have been obvious to the senior public servants charged with overseeing the robo-debt system, and to the responsible minister at different points in time that many social security recipients do not earn a stable or constant income,” he continued.
The Centrelink scheme resulted in approximately 347,000 people being pursued for debts that they did not owe based on an inaccurate, automated calculation of their income, totalling AU$1 billion.
On 14 July, Services Australia advised that AU$726 million has been paid in refunds and about 418,000 people have received a refund or had their debts zeroed. Grech expects March next year will be when class members will learn about their redress entitlements.
Asked if a Royal Commission should be instigated, Grech said themes raised by members of the class included feeling that no one has been held accountable for what happened. He also said they shared concerns that it may happen again.
“The class action was never going to be able to correct the culture that allowed that set of circumstances to come about, and I think that’s probably what a Royal Commission, if historical experience is anything to go by, has a much better chance of addressing,” he said.
Minister for Government Services Linda Reynolds made a claim to committee of “public interest immunity” earlier this month, reiterating reasoning her predecessor gave to not hand over certain documents.
The claim for public interest immunity is in respect of information about legal advice relating to robo-debt, as well as in respect of any deliberations of Cabinet in regards to the income compliance program, such as those which informed the design of the scheme.
The committee refused to accept the claim, and on Thursday, Grech was asked his thoughts on the matter.
He said although a settlement has been agreed to and approved by the court, it is legally still considered on-foot, only until settlement distribution is complete.
“That’s because the court has an ongoing supervisory role,” he explained.
“The issues which are … still alive now really relate only to the settlement and the mechanism for settlement. The issues can’t be relitigated in these proceedings — the settlement’s been approved.
“It’s hard to see, in fact, impossible to see, how the Commonwealth could legitimately sustain a claim.”
Grech took the opportunity to highlight concerns his firm had during proceedings.
“One of the concerns we had throughout the conduct of the proceeding is what we considered to be the Commonwealth making quite spurious claims of legal professional privilege and Parliamentary privilege in respect of documents,” he said.
“I think it is a quite concerning feature of the way, increasingly, the Commonwealth litigates disputes that it tends to claim both legal professional privilege and Parliamentary privilege, over a very, very wide array of documents.
“There is a deepening concern, or certainly a deep concern that we have … of how those privileges are being abused, and that’s not something for which I think the Commonwealth should be proud.”
He said the Commonwealth has obligations as a model litigant and said the cost and expense of litigating those issues “was immense in this case, and it need not have been”.
Guy Tiffany, lawyer for the applicant in the class action, told the committee the proceedings showed an absence of clear understanding of what is allowed under Australian social security laws.
“We found it quite remarkable that if the claim was that the government did not know the legality of what it was doing, that that could be the case when the people who were overseeing the system you would have imagined were the people with the most expert technical knowledge of what is allowed and permitted under the social security legal system,” he said.
“It could not be said that there was an absence of warnings or signals along the way that there were serious problems with the robo-debt system,” he said, pointing to the 70 AAT decisions made against the government, as well as commentary by experts and reports by the Commonwealth Ombudsman highlighting the scheme should be paused.
He said considering that, he was baffled as to how the system managed to remain on foot for over four years and had the “monumental” impact that it did.
“You could only arrive at the conclusion, I think, that the goal of recouping money from welfare recipients was an absolute priority of the government, and underneath that priority fell concerns such as the rights of social security recipients,” Tiffany said.
“This was, as his honour said, a shameful example of a government doing what it must have known, and even if it didn’t know, it was it was wilfully blind … if it didn’t know, it should have known, and it is unbelievable that it didn’t know,” Grech added.
“No one had the good judgement to stop and pause and ask a really fundamental question, ‘Is this lawful? Are we acting within the law?'”
He considered the scheme to have been a “series of very poor judgements”.
“I think the most likely explanation for how this occurred is that people just got in too deep, they made promises that couldn’t be fulfilled,” Grech said.
Following Thursday’s hearing, Senator Deborah O’Neill, alongside her colleague, former Labor Leader Bill Shorten, called again for a Royal Commission into robo-debt, as well as for Reynolds to “come clean” on the origins of the scheme.
“Relying on Public Interest Immunity even after the class action is over is cynical and shameful in the extreme,” the pair said in a statement.
“Minister Reynolds joins a conga line of incompetent and responsibility shirking ministers, including Prime Minister Scott Morrison, and Ministers Alan Tudge, Stuart Robert, and Christian Porter.”
The Labor duo said only a Royal Commission would get to the truth of this “sordid” chapter. They also said the public has a right to know what, if any, legal advice underpinned the “colossal mistake”. Specifically, they have asked the government to disclose if it received “bad legal advice that underpinned a legally insufficient debt recovery scheme”, whether it “abandoned all protocol and semblance of good government” and did not ask for legal advice, or if it received appropriate legal advice and decided to ignore it.
