Ministers and officials named in updated robo-debt class action claim
Former Minister for Human Services Alan Tudge is alleged to have known that Centrelink's debt collection practices were causing harm long before the scheme was paused.
The class action lawsuit brought on by Gordon Legal against the Commonwealth of Australia in relation to the Centrelink Online Compliance Intervention (OCI) scheme, colloquially known as robo-debt, was scheduled to begin 21 September 2020, but the trial was pushed out to allow the applicants to file an amended statement of claim.In the amended statement of claim, Gordon Legal has alleged two Australian ministers and a handful of government officials had knowledge robo-debt was causing harm to vulnerable Centrelink customers.
The Department of Human Services, now Services Australia, kicked off the data-matching program of work in 2016, which saw the automatic issuing of debt notices to those in receipt of welfare payments through the Centrelink scheme.
From 1 July 2016 through 31 August 2019, Centrelink's OCI program saw 1,159,662 assessments be initiated using the automated data-matching technique.
The amended statement alleges that former Minister for Human Services Alan Tudge was aware robo-debt notifications contained errors on the department's part.
The amendment also alleges that the Commonwealth knew about the vulnerability status of its customers as the knowledge could be inferred from the eligibility criteria for receiving financial assistance. It added that any recovery by the Commonwealth of an asserted overpayment could cause significant financial hardship.
In addition, the claim alleges that the department knew its fortnightly averaging practices were erroneous back in February 2015 and that in March 2017, Tudge was told 33% of robo-debts "were changed to AU$0 on review".
According to the applicants, two department officials -- Social Services chief operating officer Annette Musolino and Malisa Golightly, who is currently Deputy Secretary Immigration and Settlement Services at the Department of Home Affairs -- were allegedly made aware in March 2017 of a draft recommendation by the Ombudsman in relation to the OCI system that the Commonwealth "should … give further consideration as to how to mitigate the risk of possible over-recovery of debts".
The claim said the two officials allegedly never sought to dispute or qualify that recommendation, and neither did Tudge, when he was told of the same in April.
The claim further accuses the department of being told on 76 occasions by the Administrative Appeals Tribunal (AAT) that Centrelink robo-debts had been set aside on the basis that the fortnightly income assumption could not lawfully support the existence of a debt. The applicants allege the Commonwealth acted unlawfully in determining and asserting any debt overpayment, in requesting or demanding repayment, and recovering the asserted debt.
"The Commonwealth had and has no statutory or other power to raise and recover or seek to recover any Asserted Overpayment Debt, or impose any penalty thereon, in respect of any Applicant or Group Member," the claim reads.
"The Commonwealth knew of these matters (including their unlawfulness) because: It was party to Administrative Appeals Tribunal reviews in which Asserted Overpayment and which it elected not to appeal or have reviewed (AAT Unlawful Debt Decisions), including the 76 decisions," it adds.
The amended claim lists dozens of situations where customers were threatening self-harm or even suicide in response to receiving a debt letter. It also alleges that Tudge in July 2017 was told a "DHS recipient took their own life" following receipt of a robo-debt notification.
Tudge ended his tenure as Human Services minister in December 2017 and is currently Minister for Population, Cities and Urban Infrastructure.
The claim also accuses former Minister for Families and Social Services Paul Fletcher of having knowledge that a certain ATO payment differential was not an overpayment.
Gordon Legal launched the robo-debt class action in November last year on behalf of five representative applicants and hundreds of thousands of people who are included in the case as group members.
The essence of the applicants' case is that debts raised by robo-debt are unlawful, and all recipients should be compensated by the federal government. Gordon Legal was previously seeking interest payments and damages, but is now asking for exemplary damages due to the government's continued running of the scheme in light of its new claims.
Instead of the class action kicking off on Monday, another case management hearing was heard instead to discuss the amended claim. The Commonwealth, represented by Michael Hodge QC, said the applicants were "trying to run a case which is outside the pleaded case".
"They haven't pleaded either knowledge or reckless indifference in relation to actual unlawfulness. They pleaded knowledge of other things in relation to minister Tudge," Hodge said.
During the hearing, Justice Bernard Murphy said that given Hodge's strong focus on the allegations made against Tudge, over the other new claims, the judge noted that "likely there was some substance in the complaint, otherwise [Hodge] wouldn't have pushed it as hard as [he did]".
"I'm becoming frustrated with the pleadings fight in this case. I'm frustrated with both sides … on the applicants' side, the pleading has moved around; it wasn't adequately particularised … I suspect when you are confronted with Mr Hodge's complaints about your submissions that you'll find some of them are outside the pleaded case," Murphy said.
"From Mr Hodge's side, there's a fair bit of strategy going on in all of this … my focus is on giving both parties a fair opportunity to put their case and to make sure the respondent understands the case that's being brought against it.
"This affects hundreds and thousands of people."
Representatives for the Commonwealth will have until Friday to provide a list of issues it has regarding the amended statement of claim, while the applicants will have until October 2 to respond. In the interim, another case management hearing has been set for Thursday.
www.zdnet.com/article/ministers-and-officials-named-in-updated-robo-debt-class-action-claim/Robodebt: fresh claims against federal minister Alan Tudge delay court trialCommonwealth needs to prepare for new argument former human services minister knew scheme was unlawful, court says
A federal court trial set to decide whether robodebt victims are entitled to compensation has been delayed after fresh claims were levelled against government minister Alan Tudge.
The court heard at a pre-trial hearing on Monday that Gordon Legal plans to argue Tudge, who was human services minister in 2016-17, either knew or was “recklessly indifferent” to the fact the botched program was unlawful.
The government agreed to repay $721m to 370,000 people in May after it settled an earlier legal challenge in November, but it insists it only learned the debts were “legally insufficient” last year when it suspended the program.
Tudge was named in Gordon Legal’s updated statement of claim filed last week but Michael Hodge QC, for the commonwealth, said the allegations were general in nature and had not explicitly stated that the minister knew the program was unlawful.
The court heard on Monday, however, that Gordon Legal had argued in written opening submissions that Tudge knew the scheme was unlawful or was “recklessly indifferent”. Hodge said that was one of several allegations that did not appear in the firm’s statement of claim.
Hodge said it created an unfair situation where the commonwealth didn’t know whether it had to defend those claims or if they fell outside the case and would be ignored by the court.
The distinction would weigh on the commonwealth’s preparation for the trial, including whether it would call witnesses. These could now potentially include Tudge, another frontbencher, Paul Fletcher, and top department officials.
Given Gordon Legal had now made the serious allegation the government knew the scheme was unlawful, Hodge said the commonwealth would also need to consider whether to waive privilege over legal advice, “if any”, that it may have possessed.
Bernie Quinn QC, for Gordon Legal, said the firm was happy to consider Hodge’s concerns and further amend its case if required.
Though the trial had been set down for Thursday, Justice Bernard Murphy had already said last week he would be likely to give the commonwealth more time to prepare its case because Gordon Legal had introduced new claims only a week before the start date.
The court heard on Monday the trial may now be held in November, though a new date has not been set.
A further case management hearing to sort out the current disagreement has been scheduled for next Thursday.
It remains possible the two parties could reach a settlement.
Guardian Australia revealed on Saturday Gordon Legal’s fresh statement of claim includes the allegation that the commonwealth lost a staggering 76 robodebt cases at the Administrative Appeals Tribunal.
The cases, Gordon Legal will argue, add to proof the government was aware the scheme was unlawful because it declined to appeal on each occasion. The government will likely point to other judgments where robodebts were upheld by the tribunal.
The bulk of the 76 judgements were handed down when Tudge was minister in 2017, though he has not been identified in any evidence made public as being aware of them.
Gordon Legal has also pointed to documents viewed by Tudge and other senior bureaucrats that the firm said demonstrates the commonwealth was aware of major problems with the way robodebts were calculated.
There is also one reference to the communications minister, Paul Fletcher, who was the social services minister in 2018. Fletcher, according to Gordon Legal, was also told in 2018 about the problem of raising welfare debts based on annual ATO pay data when Centrelink recipients reported their income on a fortnightly basis.
Gordon Legal had already been demanding interest payments and damages, claiming the government had unjustly enriched itself and breached a duty of care to welfare recipients.
It has now asked the court to also impose exemplary damages, which would punish the government for its conduct.
The robodebt scheme ran from 2015 until it was wound up in November 2019. The government has been forced to repay debts where it used annual pay data to assert welfare recipients had underreported their fortnightly employment income.
www.theguardian.com/australia-news/2020/sep/21/robodebt-fresh-claims-against-federal-minister-alan-tudge-delay-court-trial