Reasons for claiming compensation from the AFP
If the Australian Federal Police (AFP) makes an error that causes someone to suffer “financial loss or some other detriment”, then the aggrieved party can seek to claim compensation. At present, the AFP says that claims for losses suffered can be sought as a result of the following:
- Legal liability (being at fault for harm or injury caused to another, resulting in a penalty, fine, or some other payment)
- Special circumstances caused by the Australian commonwealth’s administration
- Defective administration
Assessing legal liability claims
The AFP’s process for assessing and paying or denying legal liability claims are informed by the Legal Services Directions 2025, which are a set of legally binding rules provided by the Attorney General that explain how to properly provide legal services in the Commonwealth of Australia. The directions are administered by the Office of Legal Services Coordination (OLSC), who assists commonwealth agencies in complying with the directions.
The AFP advises those who believe their “circumstances might give rise to a claim that raises issues of potential legal liability” to seek “independent legal advice”.
Act of grace payments for special circumstances
For anyone who thinks they’ve been unintentionally disadvantaged by government actions, omissions, or legislation, they can seek restitution in the form of an act of grace payment, which is considered to be an “avenue of last resort”.
As stated in the Public Governance, Performance and Accountability Act 2013, in section 65(1), “the Finance Minister may, on behalf of the Commonwealth, authorise, in writing, one or more payments to be made to a person if the Finance Minister considers it appropriate to do so because of special circumstances”.
Special circumstances explained
Though the Public Governance, Performance and Accountability Act 2013 does not lay out the exact grounds for or define a special circumstance, the Department of Finance’s guide to act of grace payments does provide three examples identifying when an act of grace payment would be appropriate:
- The actions or inaction of a non-corporate commonwealth entity (NCE) caused an “unintended and inequitable result”
- Australian policy or legislation had an inadvertent, unexpected, unfair, or unacceptable impact upon a person
- No specific policy or legislation presently exists in relation to the issue, but the Australian government intends to introduce relevant policy or legislation
Requesting and deciding
An act of grace payment may be requested by an organisation, individual, or partnership, or someone authorised to act on their behalf, and can only be authorised by the Federal Minister of Finance, as noted in section 65 of the Public Governance, Performance and Accountability Act 2013.
The responsibility for actioning applications made under the CDDA scheme, however, ultimately rests with Portfolio Ministers, who “have responsibility for decisions made under the CDDA Scheme. Ministers may also delegate this power to decision makers within an NCE.”
The form for an act of grace application can be downloaded from the Department of Finance’s application process page.
Scheme for compensation for detriment caused by defective administration
The Scheme for Compensation for Detriment caused by Defective Administration (CDDA Scheme) is a mechanism that allows an NCE to compensate someone who experienced a detriment due to defective administration brought about by the NCE.
As a discretionary scheme, there is no guarantee that an application will be approved, and the scheme focuses on addressing issues of defective administration “where no legal liability exists”.
Even if defective administration has occurred, all other avenues (e.g. existing schemes or Commonwealth legislation) must be explored first and proof of detriment (direct loss) must also be substantiated, of which there are three types:
- detriment related to personal injuries, including mental injury (“personal injury loss”)
- economic detriment unrelated to personal injury (“pure economic loss”)
- detriment relating to property damage
Defective administration
Defective administration is a mistake that has been made by either a NCE (which includes the AFP), or a NCE official, and features examples such as:
- An NCE not complying with existing administrative procedures or failing to institute appropriate administrative procedures
- An NCE failing to give appropriate advice that was within their power to give or reasonably obtain
- An NCE giving advice that in all the circumstances was ambiguous or incorrect
CDDA scheme requirements
For a claim to successful under the CDDA Scheme, the decision maker reviewing the application must be convinced of the following:
- The defective administration was caused by the NCE
- The claim can substantiate that the NCE’s defective administration caused the detriment or loss
- The detriment suffered must have been “reasonably foreseeable” by the NCE
The form needed to apply for compensation under the CDDA Scheme can be found on the AFP’s claim compensation page.
Key takeaways
As identified by the AFP, there are three outcomes or circumstances that would merit seeking to lodge a claim for compensation, each of which has its own unique application process and specific set of requirements.
