Liberal Party Senator Sarah Henderson (Image: Private Media)

If you wanted further evidence of the political fracturing replacing COVID-19 consensus, look no further than the “we’re all in it together” lawsuits against the Victorian government.

You’d think after the Morrison government’s aborted attempt to support Clive Palmer’s challenge to Western Australia’s popular border closure the feds might be a bit more circumspect in rushing to support politically motivated lawsuits.

Especially when some legal experts think it is vulnerable itself, particularly over closing our international borders.

This week a potentially multibillion-dollar class action suit was lodged for small business against the Victorian government at the same time as Jim Penman prepared his multimillion-dollar compensation claim against the stage four lockdown.

(The Jim’s Mowing founder’s excuse for the claim is his concern for the economy in the millions in lost taxes from his workmen — so claiming millions more from the government is his answer.) 

While he’s potentially claiming a mere $7 million, of more concern was that it was being encouraged by the federal Victorian Liberal Senator Sarah Henderson. Last week she publicly urged people to use state law to demand financial compensation if they have lost money from the measures imposed by the state government.

“This provides, potentially, thousands of Victorians with the right to seek compensation,” she crowed. “Victorians have a voice. Restrictions should only be imposed insofar as they are absolutely necessary.”

The fact that most Victorians support the lockdown according to polls — and that even Scott “We’re all Melburnians now” Morrison initially voiced support — did not prevent her incendiary call.

The first to heed it was Penman, who threatened to keep working illegally during lockdown and pay his workers’ fines. This week he confirmed he was getting “top legal advice” to use the very law Henderson so helpfully publicised last week.

In fact so pleased with her role was she that she put up an AFR story on her website about a class action launched against the Andrews government this week over its quarantine failure.

She even highlighted a paragraph which noted that Penman was waging a one-man war against Andrews’ arbitrary restrictions “and been backed by Vic Lib Senator Sarah Henderson to use state laws to seek financial redress”.

The fact that her Victorian colleague, federal Treasurer Josh Frydenberg, has been railing against the evils of class action suits and has clamped down on litigation funders who sue big corporations was obviously not an issue.

Frydenberg’s decision to join in the Andrews pile-on this week probably overrides the issue of politicians encouraging lawsuits against each other in a national health crisis.

They will obviously be fine with Labor encouraging the expected lawsuits against the NSW government over the Ruby Princess debacle after the recent inquiry blamed its Health Department and the premier publicly apologised for the “horrible mistakes”.

And presumably no one would see anything amiss with ALP senators urging a raft of lawsuits over the federal government’s handling of nursing homes.

But they might not be so comfortable with some overseas legal experts who see a huge opportunity to use the controversial investor state dispute settlement (ISDS) clause in numerous trade deals to sue countries whose policies have harmed foreign corporations.

Given the number of free trade deals Australian governments have inked — which include the contentious ISDS — imagine what some American lawyers could make of the Morrison government’s international border shutdown and ensuing damage to foreign firms.

Well, the sharks are already circling.

According to the online journal Corporate Europe Observatory, “the legal industry is preparing the ground for costly ISDS suits against government actions that address the health and economic impacts of the coronavirus pandemic”.

In an article last May quoting numerous global law firms, it noted that “as ISDS disputes ‘often follow economic, financial, or other crisis’ … some lawyers are predicting a substantial ‘wave of disputes that will arise in response to the COVID-19 pandemic’. With legal costs for ISDS disputes averaging around US$5 million per party while having exceeded US$30 million in some cases, a boom in claims would mean big business for the law firms.”

Lawyers don’t need encouragement to sue governments.

Peter Fray

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