Hotels in Melbourne were used as quarantine centres. Photo / Getty Images
Hotels in Melbourne were used as quarantine centres. Photo / Getty Images
The Victorian government has agreed to pay A$125 million ($135m) in compensation to businesses that suffered financial losses during the state’s second Covid wave in 2020.
The settlement figure was announced on Monday, six days after a mammoth 12-week trial was abruptly postponed in Victoria’s Supreme Court.
Lawyers representing theclass action lawsuit said a settlement with the government had been reached on the eve of the trial.
It’s understood 30% of the settlement will go towards legal costs and litigation funders.
The legal action was brought on behalf of Victorian businesses, alleging government negligence in the hotel quarantine programme led to a second round of lockdowns in the latter half of that year.
Collins St in Melbourne during the Coronavirus pandemic and associated lockdown. Photo / Getty Images
Earlier this year, the court was told about 16,000 businesses had registered for the class action, with one estimate of the damages claimed reaching $2.6 billion, although the lawsuit was described as novel, complex and risky.
The lawsuit alleged Victoria’s second lockdown, which began on July 2, 2020, was caused by negligence or failure to act by the state as well as two former government ministers and two public servants.
Damian Scattini, a partner at law firm Quinn Emanuel Urquhart & Sullivan, which backed the legal action, said the settlement ended “years of hard-fought litigation”.
“July to October 2020 was an extraordinarily difficult period for Victorian retail businesses,” he said.
“The $125m settlement that we have achieved on their behalf is recognition of this hardship, and I hope it provides some measure of relief for eligible businesses.”
The settlement is yet to be approved by Victoria’s Supreme Court.
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