Raising Hell: Interview: Darren O'Donovan On The Robodebt Decision
“The case against Clevinger was open and shut. The only thing missing was something to charge him with," - Joseph Heller, Catch-22.
It’s official: robodebt was a $1.7 billion dollar heist carried off against Australia’s poorest citizens by their government. In their decision, Federal court Justice Bernard Murphy described the whole episode as a “shameful chapter” and “a massive failure” that was so plainly wrong it “should have been obvious to the senior public servants charged with overseeing the robodebt system and to the responsible Minister”.
Strong words. But they don’t begin to capture the hope, idealism and anger that originally drove people to put their government on trial. For many, the class action was meant to be their chance at a day in court; a moment of catharsis when the usual power dynamics might be reversed into something resembling justice. Yet when the settlement offer failed to compensate people beyond what had already taken from them, the response was an overwhelming feeling of having been robbed twice. To add to insult, the reaction from the federal Coalition government, whose membership had authored the system, has so far been to lazily wave away the scandal in the hope that, as of Monday morning, Australia had moved onto the next outrage.
Unfortunately for those who took part of the class action, theirs was a pyrrhic victory. When dealing with a system so broken and a political leadership so brazen, the idea a single court case might prove to be a vehicle for fundamental change was always a longshot. It is only by going under-the-hood on the judgment that we can see how robodebt exposes the very limitations of the Australian system of government. To walk us through it, I spoke with Darren O’Donovan, a senior lecture in administrative law at La Trobe Law School who has been in the trenches on robodebt from the beginning. When I last spoke with him — in the early days of Raising Hell — Darren was calling for a Royal Commission before it was cool and so I hit him up again to unpack what happened.
This interview has been lightly edited for style and length.
Royce Kurmelovs: In brief, what did the judgment say?
Darren O’Donovan: It confirmed $1.763 billion in debt raised by crudely and irrationally averaging a person’s income were unlawful. As part of the class action settlement the Federal Government formally refunded or zeroed all those debts.
The settlement provides restitution, meaning it essentially hands the money back with interest. Interest payments will be made on any amounts people paid to the government — after legal fees are deducted. It does not purport to compensate people for any harms caused. The approval judgment also reinforced the established approach that Services Australia does not owe Australians any duty of reasonable care when exercising its powers under the social security law.
RK: Broadly speaking, what was the significance of this judgment?
DO: Prior to this case, there had been a string of appeals to the Administrative Appeal Tribunal (AAT). Justice Murphy underlined that even before the first senate inquiry into robodebt ended in May 2017, 29 decisions of the AAT had rejected income averaging as a legitimate basis for asserting a social security debt. In his words, ‘the financial hardship and distress caused to so many people could have been avoided had the Commonwealth paid heed to the AAT decisions, or if it had disagreed with them appealed them to a court’. That is a particularly damning finding when you consider Services Australia were under a legal obligation to have due regard to AAT decisions.
“…all Australians of principle should be spitting fire over robodebt. In effect, the Government’s defence was that there was no duty of care because of the tribunal — the same tribunal whose decisions it effectively parked for five years.”
The class action succeeded in ensuring the systematic enforcement of Victoria Legal Aid’s Amato case. That case proved averaging was baseless. Here Gordon Legal plugged that into a private law mechanism — the doctrine of unjust enrichment — to force the Government to hand back the money wrongfully taken. People didn’t have to complain individually and didn’t have to fight Centrelink over their file. This was important because we know that only a small number of people demanded Services Australia stop after the Amato decision. A huge number — 123,000 people — were still making repayments on their unlawful debts until Centrelink paused them.
RK: Much of the frustration with this process has been about the nature of the compensation. Can you unpack that for us?
DO: The judgment contains no compensation as such. Only people who paid money to the government will receive some interest on those amounts. The amount of interest will depend on the amount of money repaid and the length of time the money was held. It is likely that the highest amounts will go to the earliest victims: debts issued in 2015 and 2016. I am happy to see that, given how part of the government’s initial communications strategy was to say that the debts created in this period were not robodebts. It underlines how up-front averaging was launched by the 2015 Employment Income Matching budget measure. That has resulted in politicians and commentators pointing out how the Minister for Social Services at the time was Prime Minister Scott Morrison.
There was never really any legal avenue to get people damages for distress or anxiety. Those are not currently recognised as compensable harms under the law. The law largely focuses on economic loss and psychiatric injury — which attract strict rules around causation. Even if psychiatric injury could be made out for some people, there were broader weaknesses in the duty of care arguments.
RK: One of the things that I found confusing was that stuff around the duty of care. Could you lay out what Murphy J actually said about this?
DO: Justice Murphy doubted that Centrelink owes any duty of reasonable care when making decisions under the social security law. This might strike the public as surprising, but it is well established by a chain of cases. A duty of care only exists where Parliament left the space for it. Here Parliament nominated the remedy it wanted for those who suffer poor Centrelink decision-making — the Administrative Appeals Tribunal. By doing that, Parliament can be taken to have not intended to allow people sue for damages for breach of duty of care.
Those technical points underline why all Australians of principle should be spitting fire over robodebt. In effect, the Government’s defence was that there was no duty of care because of the tribunal was an avenue of appeal — the same tribunal whose decisions it effectively parked for five years. This means the central protection offered to those on social security packs limited punch, with its views of the law easily fenced off or disregarded. It is unlikely we will see another social security class action — unjust enrichment only applies to debts. You cannot generally sue for wrongful payment suspensions, incorrect refusals of social security payments, the everyday petty tyrannies of Centrelink’s business processes.
RK: Murphy J's statement on robodebt was strong, but it also seemed to leave the government off the hook by saying there wasn't enough evidence to establish that senior politicians actually knew it was wrong. For those watching this, there seems to be a wealth of material to establish that senior government Ministers did actually know what was going on. What gives?
DO: The ‘actual’ knowledge finding needs to be unpacked. It reflects the way the case was pleaded. The government was absolutely stuffed on unjust enrichment. From Amato we knew they had no right to the money and had to restore that direct financial loss. As the case neared hearing, Gordon Legal probably sat down and said: ‘right that’s the debts, what else can we do for our clients?’ Late in the day, they parachuted in a claim for aggravated and exemplary damages — an established category. To get those, they pled the highest form of knowledge — not negligence or carelessness, not reckless indifference or inaction but that the Department had actual knowledge the system was unlawful.
“Australia’s constitution bets on politicians and parliament. It is not a constitution that is distrustful of government, it’s the opposite.”
The actual knowledge pleading was going nowhere. Justice Lee discussed throwing it out before the trial. In order to prove actual knowledge that the system was unlawful, you have to do so many things. First of all, can you actually know something is unlawful without a binding court ruling on it? Even the most direct legal advice is expressed in probabilistic terms using words like, “it is very likely”. Here, there were even some AAT members affirming averaging. They are a disappointing read, but the government could put them in evidence. Alleging that government figures actually knew also attracts one of the highest evidential onuses in the legal system. Then there’s the issue around how cabinet confidentiality and legal professional privilege apply to nearly all the interactions you’re trying to reconstruct. Plus there are the added complexities of attributing any knowledge of particular individuals to the department as an institution. I think Justice Lee was right about the limited basis for such arguments when he commented that Gordon Legal had ‘nailed its colours to the mast’ in going for actual knowledge and not recklessness or carelessness.
That is confronting to read for victims — and I’m saying all this as someone who has invested time and energy in arguing against robodebt. Nothing in the case as pled approached proving actual knowledge of unlawfulness. It showed awareness of the brewing legal risk, of the AAT decisions, of the arguments that the government’s own lawyers later advised could not be rebutted. Based on this alone, at no time were Ministers and public servants ever going to ‘take the stand’.
None of those technicalities minimise what Services Australia did. Robodebt was an arrogant disappearing of known and obvious legal issues — which makes the situation so much worse because it is structural and goes beyond single individuals or one-time gaffs. Far too often, when engaging with stories like this, we look for the faux Watergate ‘who knew what, when’ frame. That is not how institutional power works. A government can pick up a legal issue or not. You can shout at them until you are blue in the face — we did. You can read tribunal decisions slamming them in Parliament — we did. But robodebt was a five-year programme built by ordinary acts of unaccountable administrative power. The structures government operates within do not require them to be careful, to attend to risks, to show basic respect for the rule of law or other values. That’s why the absence of any post-robodebt reform is devastating. It’s so hard to go back and try to work that broken system again.
Video: DHS Officials appearing before the Senate Community Affairs Committee to answer questions about 10,000 “zombie debts” sent out by mistake.
RK: When the judgment was handed down, I saw someone share a story about how they, as a carer, spent months of their life fighting the department over three successive robodebt claims. Under this process, that person will receive nothing to compensate them for that time. Does this show the limits of the law?
DO: Absolutely. The law does not offer the protections the public often thinks it does and often plays an outsized role in public debate. Australia’s constitution bets on politicians and parliament. It is not a constitution that is distrustful of government, it’s the opposite. The administrative law I use every day is shaped by that. We look at whether the government has a rational basis for its decision, not whether it has a good one. We don’t summon up any visions of ‘justice’ but only ask what powers Parliament intended Ministers to have. Law is essential to making government powers visible. Lawyers can empower the public and help them fight. But even high profile wins need to be set in proper context. For instance, after the recent climate case "duty of care" may be in vogue, but it is a residual concept easily ousted by the merest flick of the legislative pen.
That’s why it is disappointing to hear leading journalists say ‘let’s hope that’s the last we hear of robodebt’. To think a court process can capture what was really troubling about robodebt is either achingly naïve or a convenient ethical lifeboat. We should all feel deeply uncomfortable with what robodebt says about the relationship between government and ordinary people, transparency, even how federal budgets are put together. We all lose when we let technical legal judgments stand in for actual debate about what was done to some of our most vulnerable citizens.
RK: The counterpoint to the Australian experience is that time the Dutch government resigned over a Robodebt-esque scandal. Do you think anyone will ever be held accountable for this in Australia?
DO: No, though it is right that more journalists are pointing to the political reason why — the Prime Minister’s personal involvement in the programme’s design. The more important question here is: why has it been so easy for the government to control this story every step of the way? Because it has been.
Even though robodebt built $4.6 billion into forward estimates and was key to the rhetoric about being ‘back in black surplus’, it was treated as a ‘welfare’ story. I might be the only person who has read every piece of media coverage from 2015 to research Freedom of Information applications. Across three budgets, from the initial $1.5 billion in 2015, right up to the final $4.6 billion, no one got details of where this magic money tree was coming from. Anyone putting in Freedom of Information requests to learn more faced cabinet confidentiality and laughable semantic duels with the department. It took a full three years simply to defeat the government’s argument that robodebt’s creation was not disclosed in 2015! The system is not set up for accountability.
So when the controversy finally hit the headlines, after 100,000 files had already been processed, journalists were in the dark. It looked like it all began in 2016 with a program called the “Online Compliance Initiative”. It actually began in 2015 and was called the “Employment Income Matching” budget measure. The department’s media team was very effective in diverting media coverage towards examining the budget savings over whether it was even legal. The Office of the Ombudsman then wrote a catastrophically bad report for which it has never really been held accountable. We were left with a limited band of journalists who heard us out and gave people a voice.
Robodebt also never quite cracked the TV medium. If you are explaining, you’re unbroadcastable. You needed space to explain it all to the public in order to hold the government’s feet to the fire. Watching Minister Stuart Robert fob off the formidable Lara Tingle with ‘they should call the department’ embodied this.
“Many stayed silent due to the fear they’d ‘bring Centrelink on them’. People triaged their mental health and trauma by treating the debt as the cost of doing business. There was the sense of being outgunned by a force you can never reason with.”
Finally, party politics sadly remains the lifeblood of so much media coverage. All the government has needed to ‘move on’ is the totally unsupported proposition that this type of averaging occurred all the way back to the Keating government. That is balderdash. The pre-2015 policy banned up front averaging and staff were required to seek evidence from the person and the employer. Even where there were no documents — they would obtain a range of oral evidence from the recipient or the employer. There was also an express warning to watch the legality of inferring that someone’s earnings were constant. To be sure I have seen crudely handled, pre-2015 debt files. But they are entirely different from the 2015 policy. We called for all dubious pre-2015 and bank statement debts to be audited. The government ran away. So we end as we began — with the spin outrunning accountability.
RK: Bill Shorten has now joined Greens Senator Rachel Siewert in calling for a Royal Commission into robodebt. Last year you called for a Royal Commission in an interview on Raising Hell. What do you make of it?
DO: I don’t care who you vote for, when you have maladministration on this scale, you should institute some kind of independent inquiry. The refusal to do so here is going to be a damaging precedent. If we were ever going to have an inquiry on our social security system, ever commit to improving it, it would be now. Any system that permits an institution to sit on legal questions, to bury its processes, to engage in such broken public administration needs end-to-end reform.
Just one example: in 2017 the department called in consultants, sat down and redesigned the robodebt online platform. They’d just been through a senate inquiry where everyone nearly agreed averaging was crude and that people needed support. And yet they made the decision not to track which debts were being averaged. Surely they could have inserted a simple check box system to mark which ones had evidence? That decision alone cost the taxpayers millions. All told, 649 staff had to crawl through files to find which ones were averaged. How is that risk management? Who took that decision? I even tweeted my disbelief at the time:
Whatever the response, the starting point for responding to robodebt should be addressing what people felt within themselves when they got these letters. Many stayed silent due to the fear they’d ‘bring Centrelink on them’. People triaged their mental health and trauma by treating the debt as the cost of doing business. There was the sense of being outgunned by a force you can never reason with. An inquiry would give us a platform to reshape the system around the working mum or dad, on the phone, two kids at their feet. Given the vulnerability and limited resources of those on social security, Centrelink’s legal interpretations and administrative procedures often go untested. If we don’t resource access to justice within the social security system, risk and unfairness can build up in ways you don’t see in taxation or corporate law, every inch of which are litigated to the n-th degree. We need to recognise that and act.
RK: Anything else you think is particularly relevance or important about this?
DO: There’s been a lot of guff about the rule of law this year. It suits the powerful to paint some oil canvas vision of a legal system shaped by high and noble ideals. Courts are important places, but far too often they are inaccessible. The rule of law is often an underfunded community lawyer desperately reassuring someone so scared of his own government he won’t leave his own house. A story from Townsville’s Community Legal Service’s submission to the senate inquiry in 2017 will always stay with me:
James is a 59-year-old man also currently on Newstart1. James is a carpenter by trade. He owned his own business for many years. Unfortunately the downturn in the economy since 2009 means he has had a number of periods of unemployment in recent years. … In mid January Centrelink, without contacting James and despite the reassessment still pending, began deducting $80 per fortnight from James's Newstart payment. James believed that by repaying the alleged debt, he was acknowledging the debt, so he cancelled his Newstart payment, his only form of income. By the time James sought our assistance he had not received any income for a few weeks. Further the letters he received from Centrelink led James to believe he was being accused of fraud and was at imminent risk of being criminally prosecuted. As a result, James was afraid to drive his car for fear of being pulled over by the police and arrested. We were able to reassure James repayment was not an admission of guilt and he was not at imminent risk of arrest and prosecution. We encouraged him to continue challenging the debt. We encouraged him to reinstate his Newstart payment. We also advised him to negotiate an affordable repayment plan while the debt was being reassessed.
Centrelink eventually reduced James's debt to $1700 after the matter was referred to the "Integrity Debt Collection Agency". Centrelink accepted he had declared all income correctly from employers A and B. However Centrelink would not accept James's group certificate from employer C or his bank records…He felt stressed and harassed. James told us he would spend all day and much of the night worrying and trying to remember events over three years ago. James ended up deciding it was all too hard and is now paying back the $1700 at $80 per week. James has not reapplied for Newstart, as he does not want to go through this experience again. He has had to draw down on his Superannuation to meet his living requirements. James is confident that as a carpenter he will find work soon, even if he has to travel for it.
Before You Go (Go)…
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