Victorian taxpayers will bear a $125 million cost after the Allan government agreed to pay out a class action lawsuit brought by businesses that alleged they were financially devastated by the state’s second-wave shutdowns in 2020.
The settlement was revealed in the Supreme Court on Monday, after a trial scheduled to begin on 10 March was adjourned and replaced with a directions hearing.
The case, titled 5 Boroughs NY Pty Ltd v State of Victoria, was brought on behalf of business owners who alleged they suffered economic loss as a result of the imposition of Stage 3 and Stage 4 restrictions in Melbourne and regional Victoria due to the second wave of COVID 19.
Court documents state that the claim was about losses associated with the restrictions, but also alleged that the state’s hotel quarantine system was flawed, allowing the virus to get out into the community.
Former health minister Jenny Mikakos, former jobs minister Martin Pakula, and public servants were among those named in the lawsuit.
One of the most controversial parts of Victoria’s pandemic response served as the foundation for that legal battle.
According to the Hotel Quarantine Inquiry, outbreaks started in the Rydges and Stamford Plaza hotels and had “disastrous consequences” for Victoria as they spread from returning travelers to employees and then into the community.
Those shortcomings contributed to the lockdowns that affected physical businesses and retailers between July and October of 2020.
The settlement amount was $125 million, including costs and interest, according to barrister Adam Hochroth SC, although the deeds themselves are not public yet.
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However, the settlement amount still requires approval from the court before any payment is made.
Approximately 16,000 businesses have filed for the class action lawsuit, although not all claimants are guaranteed compensation yet.
The Victorian government claimed that the settlement will spare the state from a costly court fight, although it still insisted that it had done the right thing to protect the public interest in the face of an unprecedented global health crisis.
