Government Schemes for Extra-Judicial Compensation: an Assessment

Abstract

Providing redress where loss has been suffered is not the sole preserve of the judiciary. At least in part, this is because loss can be suffered by individuals in the absence of legal liability. While this is not the exclusive province of public entities, it is more commonly the case that ‘moral liability’ justifying the payment of compensation is borne by public entities.1 For one thing, public entities generally have a much greater capacity to cause individuals — even relatively sophisticated or commercially adept parties2 — to act in a way that they otherwise might not. Government and other public figures come cloaked in authority,3 with the consequence that people are more likely to comply with requests or instructions. Such compliance will frequently not create a legal obligation if the individual suffers loss. Compensation schemes are premised on the belief that the action might nonetheless create moral obligations and that these can be a sufficient basis for compensation to issue. This article considers the provision of compensation outside the legal system, usually paid on the basis of ‘moral liability’ rather than a claim founded in law. There are a number of different schemes in place which may achieve this end, across every Australian jurisdiction and they are both statutory and executive. Our consideration of those schemes forms part of the article, the rest being given over to the assessment of whether and to what extent they are successful in what they set out to do. Our conclusion on this point may be summarised by saying that extrajudicial compensation has become an essential part of seeing that justice is done in public law matters, particularly those which do not disclose a strong legal basis but in which a party has undoubtedly suffered loss as a result of a public entity’s acts or decisions.