Prygodicz v Commonwealth of Australia (No 2)

In the case of Prygodicz v Commonwealth of Australia (No 2), the applicants sought approval of a settlement for a representative proceeding that had been brought on behalf of a large group of people who had been erroneously pursued by the Commonwealth for debts arising out of the now-defunct Robodebt scheme. The Commonwealth had, without admission of liability, agreed to make a payment of $112 million, inclusive of legal costs, which would be distributed to the group members in accordance with a scheme approved by the Court. The applicants also sought orders approving their legal costs, as well as costs for the person who would administer the settlement. The Commonwealth did not oppose the settlement, but the costs were contested. The applicants and their solicitors argued that the legal costs were reasonable, and the Commonwealth contended that the costs were excessive.

The Court had to determine whether the settlement was fair and reasonable, both between the applicants and group members on the one hand, and the Commonwealth on the other, and between the different categories of group members. The Court also needed to consider whether the legal costs proposed to be charged by the applicants’ solicitors were reasonable. After considering the evidence and submissions, the Court concluded that the settlement was fair and reasonable inter partes and that the proposed legal costs were reasonable. The Court approved the settlement and made orders for its implementation, including extending the time for group members to opt out of the proceeding.

The Court also made orders approving the applicants’ legal costs and the costs of the settlement administrator, subject to future review. The Court held that the settlement was a significant achievement that would provide substantial benefits to the group members, who had suffered considerable hardship and distress as a result of the Commonwealth’s unlawful conduct. The settlement represented a just and efficient resolution of the representative proceeding, and the Court was satisfied that the proposed settlement was fair and reasonable both inter partes and inter se. The Court approved the settlement and made orders for its implementation, including orders extending the time for group members to opt out of the proceeding, approving the applicants’ legal costs, and approving the costs of the settlement administrator.