Robodebt is no more

Robodebt is officially dead. It has been on life support since Stuart Robert’s announcement in November 2019 that it was under review. Quietly a few Friday afternoons ago, 15 minutes into a press conference by the PM (thereby avoiding questions on it), the switch was flicked off. A month on, the story has almost completely disappeared.

$721M is to be repaid to around 320,000 people in relation to nearly 470,000 claimed debts.  Why? Because the government has conceded four years after the controversial scheme commenced that the debts do not have a proper legal basis.

It is shocking in a number of respects.

First, because any number of competent lawyers would have given the government this advice in 2016/2017 when the scheme was being hatched. Legally, nothing has changed. Many lawyers called the scheme illegal from the outset—lawyers from all sides and political persuasions. We agreed. So how does a government take money without a lawful basis from people who are, by definition, of lower economic status and ability to respond, for four years? What was its legal advice in 2016/2017? Who gave it? Who did or didn’t act upon it?

Second, because the scheme is contrary to one of the fundamental principles of our adversarial legal system. That the party bringing an action bears the threshold onus of establishing its case.  A lawyer in Victoria cannot bring a claim on behalf of a client without having a proper legal basis to do so. That is exactly what the ATO did. One of our lawyers was targeted years after the fact in relation to purported overpayments to him of a study allowance, based on incorrect averaging. Over a protracted period of months, the ATO repeatedly failed to explain how the debt was calculated.

But they didn’t bring a claim (which could be thrown out). They raised a debt and used their position of power to entice people to pay and avoid proper process and scrutiny.

Third, because of who it targets and how. By and large those targeted by the scheme are of lower economic strata and means. Many are not sophisticated or have direct access to legal resources. Others, such as students, have some level of sophistication and legal capital, but limited resources. Fighting the process was near impossible. Many simply gave in. Those who tried to fight the debt, effectively took on the onus of disproving the debt. To do this they needed to understand its calculation. The ATO would not provide this. And the ATO did not need to go to court, where it would be required to establish its case before the defendant had to answer it.  It simply garnished people’s accounts, withheld entitlements or tax.

Fourth, because of the reason it has pulled the pin. A class action. Gordon Legal’s class action in respect of Robodebt was due to return to court week following the announcement. It is on the docket of Murphy J in the Federal Court, an eminent plaintiff class action lawyer, and the government faced the very real prospect of senior bureaucrats or ministers being cross-examined. Legal Aid and individual firms fought individual actions, winning cases in low-level administrative tribunals, yet the ATO scheme ran on, until the government was met with a Federal Court decision and then the stark prospect of facing a class action on a more even playing field.

Fifth, because the government is determined to make changes to financial services laws to make class actions more expensive and difficult to run.

That’s right, more difficult.

Less access to justice.

Why? Pretty obvious isn’t it?

Published by Dan Mackay