The Victorian government has agreed to pay $125 million to settle a class action brought on behalf of businesses that suffered losses during the state’s 2020 Covid lockdowns.
What’s happening: The Victorian government has agreed to pay $125 million to settle a class action brought on behalf of businesses that suffered financial losses during the state’s second Covid wave in 2020, according to AAP reports from the Melbourne Supreme Court on Monday 16 March 2026. The settlement requires formal court approval before funds can be distributed.
Why this matters: For the approximately 16,000 Victorian businesses that registered for the class action, the settlement represents the conclusion of years of litigation over losses suffered during one of the world’s longest Covid lockdowns.
The Victorian government has agreed to pay $125 million to settle a class action brought on behalf of businesses that suffered financial losses during the state’s second Covid lockdown in 2020, according to AAP reports from proceedings at the Melbourne Supreme Court.
The settlement was announced on the eve of what had been scheduled as a 12-week trial, which was adjourned to a directions hearing on Monday after the parties reached agreement. Barrister Adam Hochroth SC, representing the class action, told the court the parties had reached a settlement, with the $125 million figure inclusive of all costs and interest, according to AAP.
The legal action was brought on behalf of Victorian businesses, alleging government negligence in the hotel quarantine program led to a second round of lockdowns between July and October 2020. About 16,000 businesses registered for the class action, according to AAP, with one estimate of total damages claimed reaching $2.6 billion, though the lawsuit was described as novel, complex and risky.
The lead plaintiff was retail business 5 Boroughs NY Pty Ltd, which argued the state government should compensate businesses for economic loss resulting from restrictions that prevented customers from attending physical premises during that period, according to AAP.
Damian Scattini, a partner at law firm Quinn Emanuel Urquhart & Sullivan, which backed the legal action, said in a statement that the settlement concluded years of hard-fought litigation. “July to October 2020 was an extraordinarily difficult period for Victorian retail businesses,” Scattini said. “The $125 million settlement that we have achieved on their behalf is recognition of this hardship and I hope it provides some measure of relief for eligible businesses.”
The Victorian government confirmed the settlement outside court on Monday, saying it stands by the steps it took during the pandemic to keep Victorians safe. “The $125 million settlement, agreed to between the parties, will avoid further protracted legal proceedings,” a government spokesperson said, according to AAP.
It is understood 30% of the settlement will go toward legal costs and litigation funders, according to Yahoo News reporting on the proceedings.
The settlement must be formally approved by Victoria’s Supreme Court before funds can be distributed. The approval application was adjourned to a date yet to be fixed.
This story is based on AAP reporting from Melbourne Supreme Court proceedings on 16 March 2026, as published by Yahoo News and aap. Dynamic Business has not independently attended the court proceedings.
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