Victoria Will Pay $125 Million for the Second Wave. The Businesses Get About $5,165 Each.

The trial was listed to begin in the Supreme Court of Victoria on Tuesday 10 March 2026. It never ran. Before it started, the State of Victoria and the businesses suing it over the second wave agreed in principle to settle, and a deed followed.¹

The number is $125 million. The State admits nothing.¹

On 29 September a judge will be asked to approve it. Objections close at 4pm tomorrow.² The proceeding is still listed as current in the Supreme Court's group proceedings list.⁹

What the case said

The plaintiff is 5 Boroughs NY Pty Ltd, a Melbourne bagel restaurant, represented by the law firm Quinn Emanuel Urquhart & Sullivan. The defendants are the State of Victoria together with former ministers and former secretaries of the Department of Health and Human Services and the Department of Jobs, Precincts and Regions.¹

The claim was that the State was negligent in the way it ran hotel quarantine, that the negligence caused the second wave, and that the second wave caused the stage 3 and stage 4 restrictions imposed across Melbourne and parts of regional Victoria between July and October 2020. The businesses shut by those restrictions wanted their losses back.⁶

The causal step at the front of that argument is not the plaintiff's invention. The Board of Inquiry conducted by former judge Jennifer Coate reported in December 2020 that the hotel quarantine program was the source of Victoria's second wave.¹⁰

The defendants denied the claims and denied any liability, and they still do.⁷ The settlement is expressly without admission.¹

Where the money goes

The 30 per cent to Quinn Emanuel is fixed by a group costs order made in November 2023, under which the firm carried the risk of an adverse costs order had the case failed. Group members pay nothing out of pocket. The settlement is without any admission of liability.

Source: Notice to Group Members, Hotel Quarantine (Business Losses) Class Action, published by order of the Supreme Court of Victoria, 11 August 2026, paragraphs 12 to 17 and 30 to 35.

NOFUF

Two deductions will be put to the Court.¹

The first is $37.5 million, being 30 per cent of the settlement sum, payable to Quinn Emanuel. That figure is not a bill the firm has written. It is fixed by a group costs order the Court made in November 2023, under which the firm ran the case for the group and carried the risk of paying the State's costs if the case had failed.⁵ Group members are not liable for any legal costs out of their own pockets.¹

The second is $310,000 in reimbursements. Of that, $250,000 is proposed for 5 Boroughs itself and $60,000 is proposed for twelve group members who supplied financial information for the 2024 mediation, at $5,000 each.¹

That leaves $87.19 million to be shared.¹

About 16,322 people registered a claim by the deadline of 4pm on 8 July 2024, and about another 557 registered after it.¹ The notice does the division in the open, and the number it produces is this: if every one of them turns out to be eligible, the average payment is about $5,165.¹

Individual amounts will be worked out pro rata against the size of each claim under a distribution scheme the Court must also approve, administered by Simon R. Weeks of Sonority Pty Ltd, trading as The Advisory Company, whose costs come out of interest earned on the settlement sum rather than out of the sum itself.^1,8

The businesses that are not in it

Three groups of Victorian business owners get nothing from this settlement. Each of them is worth setting out, because none of them is obvious from the headline figure.

Companies that have been deregistered. The notice is unusually blunt about this. If the business was carried on through a company, that company must still exist and still be registered in order to be a group member, because if it has been deregistered the legal entity that suffered the loss no longer exists.¹ The rule is orthodox company law. Its effect here is not. A business that was shut in 2020, limped on, failed, and was wound up and struck off is outside the settlement for the reason that it did not survive. The ones that got through are compensated. The ones that did not are not.

Businesses that never registered. Registration closed on 8 July 2024, and the portal stayed open until 11 March 2026, by which point the settlement was already being reported. Under the plaintiff's proposal, anyone who did not register before 12 March 2026 is ineligible for a payment.¹ They are not, however, released from the settlement. If it is approved, their claims against the State are extinguished along with everyone else's, whether or not they ever knew the case existed.¹ The Court, not the plaintiff, decides that question on 29 September.

Businesses the public did not walk into. On 3 August 2026 the Court amended the definition of who is in the class.³ The definition on the writ had covered any business supplying goods or services to the public from Victorian premises whose ability to do so was adversely affected. The amended definition requires that the ordinary operations of the business involved members of the public attending the premises to acquire the goods or services.⁴ A wholesaler, a workshop, a trade operating out of a depot, a business that went to its customers rather than the other way round: on the amended wording, out.

The plaintiff and the defendants both told group members the change was one of form only, that it did not affect anyone's substantive rights, and that it should apply retrospectively to 12 February 2021, because that is the definition both sides had been working to since a statement of claim filed on that date.⁴ The same notice advised anyone who fell inside the old definition and outside the new one to seek legal advice immediately.¹

Those two statements are hard to hold at once. A change that alters nobody's rights does not require anybody to get a lawyer.

The lead plaintiff

There is a paragraph in the settlement notice that explains what the last five years cost the restaurant that put its name on the case.

In support of the $250,000 reimbursement, the plaintiff says it acted as class representative for more than five years, during which it was subjected to public ridicule and hatred, including a campaign to give its restaurant one-star reviews on Yelp, and that this contributed to the closure of its business. It says it borrowed about $90,000 to avoid liquidation, and that it will have to repay that loan out of the reimbursement.¹

The business that brought the case did not survive it either.

What happens next

Any group member, registered or not, may object. The objection must reach the Court through the online form on the Supreme Court website, or on the prescribed form to the Civil Registry, by 4pm on 11 September 2026.¹

The approval hearing is at 10:30am on 29 September 2026 at 210 William Street, Melbourne. Objectors may appear in person, by video link, or through a lawyer.^1,2

The Court will approve the settlement only if it is satisfied that it is fair and reasonable and in the interests of group members as a whole.¹ It is not obliged to approve it at all.

Five years and seven months after the first Victorian lockdown, that hearing is the only forum in which anyone will be asked to weigh what the second wave did to Victorian business against a number. No court has found the State liable. On these terms, none ever will.