'Hush' money: NSW police pay out more than $100m in relation to legal settlements

New South Wales police have paid out more than $100m in relation to legal settlements over the past four years but in most cases details of the suits were never made public due to confidentiality clauses that prevent victims speaking about alleged officer misconduct.

Figures obtained by the NSW upper house Greens MP David Shoebridge show the amount paid to settle claims against officers each year dwarfs the official sums reported by NSW police.

In the past four financial years police in the state have settled more than 1,000 civil cases. The settlements cover a sweeping range of misconduct claims, including unlawful searches, illegal arrests, false imprisonment, assault and harassment. The figure includes legal costs as well as damages paid to plaintiffs.

The cost of the payments to taxpayers has never dropped below $20m a year, peaking at $32.6m in 2016-17. In the past four years NSW police have handed out $113.5m to settle claims.

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“Since the Coalition came to power in 2011, the NSW Police have paid hundreds of millions in hush payments to people who have [allegedly] experienced unlawful searches, illegal arrest, assault and other police misconduct,” Shoebridge told Guardian Australia.

But the details of almost all the cases remain secret, thanks to the widespread use of confidentiality clauses in settlement deeds. The clauses prevent victims discussing the terms of the settlement and the amount paid.

Some plaintiffs opt to have the clauses inserted into settlements but lawyers say that in cases involving allegations of officer misconduct the vast majority are driven by police.

Peter O’Brien, a lawyer who specialises in civil cases against the police, said the insistence on confidentiality clauses was often used as leverage in negotiating a settlement.

“The police often have a commercial incentive to have a confidentiality clause in place, and in those matters there becomes a value attached to it,” he said.

“In cases where we’re saying, ‘Well, we don’t want a confidentiality clause, we want to tell everyone and sundry about this,’ and the police are not happy with that, we’ll say, ‘Well, what’s it worth to you? If you want us to keep quiet about it, pay us for it.’ That’s the way it often works.”

David Marocchi, the founding partner of Sydney law firm Paramount Lawyers, said the clauses were “part and parcel” of a settlement and could be beneficial if clients did not want the details of their case made public.

But, he said, taxpayers had a right to know “what it is costing the state” to fund police cases. Marocchi was critical of delays in processing claims, which he believed were often exacerbated by the use of private law firms to run cases for the government.

“They’ve already got a reserve on the value of the settlement but they won’t give you that offer until six or 10 months later when you’re on the doorstep of the courthouse. That’s the reality.

“They get paid every time they open the file or refer to the case, and in my view that part of it should be reviewed because it is quite embarrassing.”“

In a statement, a spokeswoman for NSW police did not answer questions about the use of confidentiality agreements in settlements, but said the figures reported to parliament “relate to all costs” incurred during cases “including defence legal costs, court costs, plaintiff legal costs when paid by the State and damages amounts”.

“Figures supplied to the Legislative Council also include matters where the State either successfully defends a matter at hearing or settles in its favour,” she said.

But Shoebridge was critical of the use of confidentiality agreements by a government body, saying a lack of transparency around settlements meant only a tiny portion of cases against police were ever made public.

“Around 300 people are suing the police each year for alleged misconduct and in the most recent year reported only eight of these went to court,” he said.

“In 2019-20 a total of eight cases were taken to court, representing only 2.7% of the 298 cases brought against them. The rest were settled behind closed doors, almost all with binding secrecy provisions.”

Marocchi acted in a high-profile 2019 case against police in which a Sydney man, Steven Attalla, was awarded $112,000 after being illegally strip searched. In that case, he said, lawyers acting for the state made a number of offers in the lead-up to the trial which were “embarrassingly low”.

But he and other lawyers who spoke to the Guardian said the Attalla case was an outlier. More commonly, the state is eager to settle cases before they make it to court to avoid trial fees.

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That appears to be supported in the data obtained by the Greens. Out-of-court settlements massively outweigh the number of misconduct claims that make it to trial. Over the same four-year period, the police paid out about $1.4m as a result of judgments made in courts.

O’Brien said the value of out-of-court settlements over the past four years was “particularly high because the damages awarded in these types of matters are unfortunately low”.

The reason for that is complex, and changes depending on the type of case. But O’Brien said the difficulty of pursuing a case against police and the risk of losing carried an incentive for people to settle out of court.

He used the example of malicious prosecution, which is one of the three most common types of cases against police, along with assault and false imprisonment.

Malice, he said, was “notoriously hard to prove” in cases against officers.

“Incompetence is a defence, so is overzealousness and stupidity,” he said.

“You could see why a plaintiff suing the police might be thinking, ‘Oh goodness, I have the burden of proving to a high standard that police were more likely than not acting with malice against me. How would I do that? What if I lose and there’s a cost order made against me?’

“So the incentive to accept a settlement which might be seen to be a compromise is very attractive.”