Taxpayers cop $10m bill for COVID lockdown court battle

Taxpayers have spent more than $10 million funding the state government’s legal costs fighting a class action from Victorian businesses that say they suffered losses as a result of COVID lockdowns.

The final bill for the class action – brought on behalf of hospitality, retail, beauty, and fitness traders that lost money as a result of the restrictions – could be much higher, with mediation due to kick off in November.

A police officer outside a quarantine hotel in Melbourne during Covid lockdownsCredit: Jason South

More than 1000 businesses have joined the class action, seeking compensation over claims the government’s mishandling of Victoria’s hotel quarantine program led to the second lengthy lockdown between July and October 2020.

Victoria’s second COVID wave claimed more than 800 lives and triggered four months of restrictions in Melbourne and surrounding areas, including a curfew, workplace closures and a ban on leaving home for anything but exercise and essentials.

Shadow Minister for Industry Bridget Vallence said the money spent on legal fees could be better spent.Credit: Eddie Jim

Supreme Court documents list the state government and former ministers for health and jobs as defendants, dragging now-retired MPs Jenny Mikakos and Martin Pakula into the claim.

Critics have accused the government of wasting money on the mounting legal bill to fight the case, arguing the figure is twice as much as the $5 million in compensation awarded to residents of public housing towers forced into a hard lockdown inside their buildings.

Opposition industry spokeswoman Bridget Vallence told The Sunday Age the money allocated to legal fees could be better spent.

“This $10 million spent on lawyers defending Labor’s damaging actions could instead be spent compensating these businesses, if not spent fixing dangerous roads, upgrading hospitals or providing cost-of-living relief.”

“Considering these soaring legal costs are already double the compensation paid to vulnerable public housing towers residents after their mistreatment, it just goes to show Labor’s priorities are all wrong.”

Details of the bill were revealed last month in answers to questions on notice by Vallence, which forced Attorney-General Jaclyn Symes to reveal the overall cost in external legal fees for the four-year saga reached $10,681,642 on April 30.

In her response, Symes said Victoria’s legal costs would be covered by insurance held with Victoria’s state-backed insurance agency, the VMIA. The body has been under significant financial pressure in recent years after major increases in costs, prompting premium increases.

Vallence said money paid by Victorian taxpayers was still being used by the government on legal fees and it would likely lead to insurance premiums rising as a result of similar claims.

Last year, taxpayers picked up the $1.27 million legal bill for Victoria to cancel the 2026 Commonwealth Games. In 2021, the state government also revealed it had spent more than $15 million on legal representation for its inquiry into the state’s botched hotel quarantine program.

In response to questions about the latest COVID class action, a government spokesperson reiterated that the state’s legal costs were covered by insurance held with the VMIA and said it would be inappropriate to comment further given the matter was still before the courts.

The rising legal costs come as the state government attempts to auction off medical supplies stockpiled during the pandemic.

Tender documents, seen by The Sunday Age, show HealthShare Victoria – the agency responsible for intervening when there are medical supply shortages – is attempting to offload up to 10 per cent of its personal protective equipment (PPE) inventory in eye shields, visors and masks.

A Department of Health spokesperson said the one-off auction, to be completed by the end of the month, would ensure the PPE is used before it expires.

With Broede Carmody

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