Melbourne venues edge closer to compensation as Covid quarantine class action settles
Melbourne hospitality businesses that endured some of the world's longest pandemic lockdowns are a step closer to compensation, after the Allan government moved to settle a landmark class action linked to Victoria's botched hotel quarantine program.
The settlement, which remains subject to court approval, is expected to cost taxpayers more than $50 million — a figure that reflects the scale of economic devastation suffered by venues and operators who were forced to close or severely restrict trade during the state's stage 3 and stage 4 lockdowns.
The action was brought by lead plaintiff 5 Boroughs NY and represented by global law firm Quinn Emanuel Urquhart & Sullivan. It alleged that Covid-19 outbreaks at two Melbourne hotel quarantine sites — Rydges and Stamford Plaza — resulted from a negligent failure to implement effective infection prevention and control measures. Virus transmission from returned travellers to hotel workers, and subsequently into the wider community, was alleged to have triggered Victoria's devastating second wave in late 2020.
For hospitality operators, the consequences were catastrophic. Businesses contended they suffered significant economic loss as a direct result of the lockdown restrictions that followed, during which they were unable to trade or were severely limited in their ability to serve customers. Melburnians endured more than 260 days of government-imposed lockdowns across 2020 and 2021 — a burden felt most acutely by cafes, restaurants, bars, and event venues.
Named as defendants alongside the state of Victoria were former health minister Jenny Mikakos, former jobs minister Martin Pakula, former Department of Health and Human Services secretary Kym Peake, and former Department of Jobs, Precincts and Regions secretary Simon Phemister. Plaintiffs alleged each was negligent through actions or failures to act in relation to the quarantine program.
A Supreme Court trial had been scheduled to begin this week but was adjourned, with a directions hearing now set for March 16.
The settlement spares the government a politically fraught election-year trial, while offering operators — many of whom have spent years rebuilding — a measure of long-overdue acknowledgement that the damage done to their businesses was not simply an unavoidable consequence of the pandemic, but one with identifiable causes and responsible parties.
Jonathan Jackson, 11th March 2026
