How UK postal scandal eerily mirrors our own robodebt debacle

Government lawyers from across Australia have been given a timely refresher on their ethical obligations in administering justice on the eve of a royal commission into the failed ‘robodebt’ scheme.

Aug 26, 2022, updated Aug 26, 2022
The robodebt scheme delivered by Centrelink is to come under the microscope of a royal commission.

The robodebt scheme delivered by Centrelink is to come under the microscope of a royal commission.

As Prime Minister Anthony Albanese announced the parameters of the legal investigation into ‘who and what’ created the botched debt recovery program, about 1000 government lawyers have tuned into a webinar series in Brisbane reminding them of the power they hold to keep decision makers accountable.

While there are abundant examples from Australia that could have been cited – the recently trashed robodebt scheme under the former federal Coalition Government and the famed Queensland Health payroll bungle under the Bligh Labor Government in 2010 come to mind – it was the UK postal scandal at the centre of discussion.

In anyone’s language, it offers the blueprint for how government institutions and departments collaborate to construct and then defend inherently flawed systems that are the obvious culprits in causing widespread human misery and ongoing distress.

For those not familiar with the saga, the British postal scandal, as it is most commonly known, is considered the most widespread miscarriage of justice in UK history

More than 700 post office managers throughout the UK were given criminal convictions relating to theft and fraud when faulty accounting software made by Fujitsu made it look as though money was missing from their sites.

The legal pursuit caused prosecutions, civil actions, and extortions resulting in criminal convictions, false confessions, imprisonments, defamation, loss of livelihood, bankruptcy, divorce, and suicide

Many cases remain unresolved, while the legal pursuit is the subject of a current inquiry led by former High Court judge Sir Wyn Williams.

Williams said the system contained “bugs, errors and defects”, and that there was a “materiel risk” that shortfalls in branch accounts were caused by the system.

In December 2019 , at the end of a long-running series of civil cases, the UK Post Office settled with 555 claimants to the tune of 58 million pounds in damages, which was reduced to a share of 12 million pounds after legal costs.

Nobody at the Post Office or the software manufacturer, Fujitsu, has been held accountable.

Gadens partner and legal ethics specialist Liam Hennessy says the robodebt scheme has some eery parallels with the disaster that unfolded in the UK from 2001 to 2014.

Twelve months after its conclusion, the former Coalition government in Australia was rolling out the ultimately doomed robodebt, an automated Centrelink debt recovery program, which ran between July 2015 and November 2019.

It used data-matching algorithms in an attempt to identify the overpayment of social security benefits, but it wrongly accused many people of owing the government money.

Last year, the Federal Court approved a $1.8 billion settlement between victims and the federal government.

The court was told the Commonwealth had raised $1.73 billion in debts against more than 400,000 people.

In total, $751 million was wrongly recovered from 381,000 people.

In approving the settlement, Justice Bernard Murphy delivered a scathing assessment of the scheme.

He said the program had “resulted in a huge waste of public money” and added the class action had “exposed a shameful chapter in the administration of the Commonwealth social security system”.

In announcing the royal commission today, to be headed by Queensland Supreme Court chief justice Catherine Holmes, Albanese has reiterated his description of robodebt as a “human tragedy”.

While the UK example involved lawyers pursuing innocent people on behalf of their government client, both cases involved misplaced faith in the power of technology.

As Hennessy explained, those who implemented the Fujitsu software knew they had “a stinker” on their hands as far back as the late 90s. The program, called the Horizon system, was later investigated and found to be not fit for purpose.

Rather than just “press the pause button” to provide time to resolve the issues, Hennessy said, government agents and their lawyers instead enacted a “scorched earth tactic that over-compensated for a particularly shaky system”.

“It shows the accretion of a number of problems over a long-time span and how that aggregates together to create a really horrific result,” he said.

“There was certainly enough smoke for people to do more investigation and there were enough technically sharp people within the teams of internal lawyers to say ‘is this the right thing to be doing here’?” Hennessy said.

If the UK postal scandal is any guide, when Holmes hands down her report in April 2023, technological faults will be in the mix, but people and culture will more than likely go to the heart of the matter.

Former prime minister Scott Morrison, who was the social services minister when the robodebt program was set up, has rejected suggestions he was to blame for its problems.

The Coalition has long said there is no need for a royal commission, arguing the matter had been dealt with by the settlement.

But the settlement didn’t examine who was responsible for the scheme, what advice informed its design, how complaints were handled, what problems were known about its legality, and the total cost to taxpayers and the harm caused to victims.

These tasks will now fall to Holmes and her investigators.

As Hennessy reflected on the lessons from the UK postal scandal for his lawyer audience this week, the problems balloon in large organisations when people fail to “join the dots”.

“It’s likely that no one person had all this evidence laid out before them at any one time,” he said.

“A large government organisation can at a corporate level know that there are fundamental problems with the system being used, in this case, to prosecute and bankrupt people, but no one aggregates that together and says ‘look, we may have a bit of a problem here’.”

  • The Gadens workshops for government lawyers is supported by InQueensland as the official media partner.




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