Robodebt inquiry hears claim social services official ‘sat on’ damning external legal advice about scheme

A former Department of Social Services official accused one of her bosses of “sitting on” damning external legal advice, a royal commission has been told.

The commission is examining why and how the unlawful Centrelink debt recovery scheme was established in 2015 and ran until November 2019, ending in a $1.8bn settlement with hundreds of thousands of victims.

Kristin Lumley, a former mid-level official at the Department of Social Services, said on Friday she first became concerned about the legality of the scheme in early 2017.

Her concerns heightened the following year after warnings from the former administrative appeals tribunal member Terry Carney.

Lumley told the royal commission she tried to get the authority to obtain external legal advice in April 2018, but was unsuccessful. She could not recall who blocked the request.

The inquiry heard that by the middle of 2018, after media attention of Carney’s comments, Lumley got permission to request the advice.

The “catastrophic” draft advice from law firm Clayton Utz, which has already been revealed, found the scheme was unlawful. The commission has heard it was never finalised.

Under questioning by counsel assisting, Angus Scott KC, Lumley agreed that as soon as the advice was received it should have been urgently briefed to top officials including the department secretary, minister, and possibly federal cabinet.

“I absolutely felt it should be briefed up as a matter of urgency,” Lumley said.

Asked why the advice might not have been shared urgently, Lumley noted it wasn’t “good news” and would damage the department’s reputation.

Lumley said she understood the advice showed the scheme was unlawful and emails provided to the commission show she forwarded it to her branch manager at DSS, Allyson Essex, on 15 August 2018.

The inquiry heard Essex held a meeting with some staff including Lumley one week later. In a later email, Lumley told a colleague she’d briefed Essex on the advice at that meeting and Essex had been provided with a folder with all the hard copies.

In the email, Lumley quoted Essex as saying in the meeting she’d “consider the issue further and speak to [senior official] Nathan [Williamson] ‘when the time was right’”.

“Surely the right time was immediately,” Scott asked.

“I would think so, yes,” Lumley replied.

The inquiry heard by December 2018, Lumley had become even more frustrated. In an email to another colleague, she shared a link to a media article quoting another top lawyer who believed the scheme was unlawful.

Lumley wrote: “I am extremely concerned that we are sitting on the legal advice … It will definitely end up in the federal court.”

The email was again forwarded to Essex, who replied: “I am not ‘sitting on’ the advice, which could have been clarified by further discussion with me. I do not think it will ‘definitely end in the federal court’.’”

In her response, Essex claimed she had seen other external legal advice that backed the scheme’s legality. Lumley, who authored a list of all advices sought by the departments at the time, said on Friday it was not clear what Essex was referring to.

Lumley said she believed there was “inaction” from those above her.

Asked if she was aware if Essex had done anything to act on the advice between August and December 2018, Lumley replied: “I had no visibility that she had done anything with that advice.”

Essex is expected to be called as a witness on Friday.

Anna Fredericks, a former lawyer at the Department of Human Services and then Social Services, also told the commission on Friday she believed at the time the government was legally exposed.

She said she’d briefly raised the prospect of getting independent advice on the matter with colleagues but was rebuffed.

At the time, the government held only conflicting internal legal advice, including damning 2014 advice which said the scheme was unlawful.

Fredericks was scathing of the culture at both departments, singling out the former secretary of Human Services and then Social Services, Kathryn Campbell.

“My observation, noting I was [an executive level two] and not [senior executive service], was the secretary could be quite controlling,” Fredericks said. “There came to be a culture of, even at the higher levels, reticence to raise issues … Colloquially there was a comment, ‘No one wanted to give her bad news.’”

Campbell has already appeared twice at the royal commission but is expected to give further evidence.

The commission before Catherine Holmes AC SC continues.