COVID-19 class action in Victoria will be one for legal textbooks

The health, economic and political fallout from the spike in Victorian COVID-19 cases are immense. The legal fallout could be just as significant. The hotel quarantine fiasco is likely to lead to the largest class action in Australian history, one that effectively could bankrupt the state. It threatens to render the Robodebt case to being a footnote in litigation textbooks.

Given the glaring errors made by the Victorian government that have resulted in the state experiencing a second, deadlier coronavirus wave and the intense suffering that this has inflicted on many Victorians, it is almost inevitable that a negligence action will be launched.

The failure to quarantine returning travellers properly is the most glaring system failure underpinning the second wave. The immediate responsibility for this bungle rests with private security firms but the principal target of the class action will be the government; the security firms do not have the resources to pay large damages.

There is no doubt that the Victorian government owes a duty of care to all Victorians to imple­ment effective biosecurity arrange­ments. A duty of care is breached when there is a failure to take reasonable steps to avoid harm that was reasonably foreseeable.

The Victorian government was aware that the group with the highest rate of coronavirus infections was returned travellers and that if people who were shedding the virus mingled with others there was a demonstrable risk of a second wave.

Trained professionals, in the form of police and the army, were available to manage the risk. The Victorian government’s decision instead to subcontract the security arrangements for the most serious risk faced by Victorians in a century to private security firms on the face of it seems a profound error of judgment.

An action based in negligence, however, will need to overcome some legal obstacles (as demonstrated by the failed class action against the Victorian government by the abalone industry when a virus that killed abalone escaped from a farm: Regent Holdings Pty Ltd v State of Victoria).

The key obstacle to success in a COVID-19 class action is establishing that it was the government’s failings that caused the second wave. The likelihood that plaintiffs will be able to establish causation is greatly enhanced by epidemiological evidence tendered at the hotel quarantine inquiry that almost all of the second wave of the cases can be traced to the transmissions from outbreaks at the Rydges and Stamford Plaza hotels.

Disconcertingly for government officials, the test for negligence is an objective one — their actual intentions or motivations, no matter how pure or sanctimonious, are irrelevant. Hiring security guards to advance social inclusion won’t cut it.

Success in a COVID-19 class action won’t necessarily depend solely on the strict letter of the law; the Victorian government is likely to strongly desire to avoid close scrutiny of its actions. The decision to deploy private security at the quarantine hotels seems to involve a number of senior ministers (across five government departments) and the Premier, Daniel Andrews. They will not enjoy having their decisions examined under a legal microscope — they won’t even answer relevant questions in parliament or at press conferences.

If Victorian government ministers are subpoenaed to answer questions in court, they no longer will be able to arrogantly refuse. This will motivate the government to settle.

Of most concern to the Andrews government is the number of people who have been damaged by this second wave, and all those who have suffered significant physical or psychological injury as result would be eligible for compensation.

This number grows daily. Also, there is a risk that a negligence case would have the government liable to compensate people for their economic losses.

Most Victorians (but particularly those in retail and hospit­ality) have suffered financially from the second lockdown. This makes the size of any damages award almost incalculable — it is estimated that 1.5 million Victorians will be forced on to JobKeeper alone as a result of the second wave. Paradoxically, the magnitude of any damages award could be so large that it might cause net harm to the state given that it would be Victorian taxpayers who would foot this bill.

The only way to avoid this potential legal catastrophe for the state is for the government to legislate to grant itself immunity from any COVID-19-based legal actions. Avoiding liability for unlawful conduct violates the rule of law — one of the main pillars of democracy.

But the Andrews government has form on this front. In 2015 it created sovereign risk in Victoria when it shredded the multi-billion deal to develop the East-West link — a contract that had been carefully negotiated and settled by the previous government.

The choice between risking state financial ruin by being drawn into a pandemic class action or undermining a cornerstone of democracy is not an enviable one. The most telling aspect of this conundrum is that the Victorian government is the only state or territory government in Australia that is required to make the choice.

Irrespective of which decision the government makes on the civil action, politically the fallout from the hotel quarantine bungle is likely to be very significant. On the evidence to date, it is perhaps the most egregious mistake ever by a state government, and the suffering inflicted on Victorians by their government’s negligence is prodigious. When Victorians went into initial lockdown, there were fewer than 500 active COVID-19 cases. Today there are more than 14 times that.

This article was republished with permission from The Australian. Read the original article.