The Allan government will pay $125 million in compensation to Victorian businesses that were financially crippled during Dan Andrews’ Covid lockdown.

The state’s retail businesses had launched court proceedings against the government, claiming economic damage caused by Victoria’s hotel quarantine program, which plunged Melbourne into lockdown for 112 days in 2020.

The Hotel Quarantine (Business Losses) Class Action, which involves more than 1000 Victorian business owners, argued the state government was negligent and breached its duty of care with a trial due to begin in the Supreme Court on Monday.

However during settlement talks last week, the Allan government settled the massive class action for the hefty fee.

While the terms of the deal are confidential, the $125 million settlement includes all costs, including interest, the Australian Financial Review reports.

The settlement deal is subject to the Supreme Court’s approval.

The Allan government’s decision to settle avoids a high-profile and lengthy trial, which in the lead up to November’s state election, would have called upon senior government officials as witnesses.

The Daily Mail has contacted the suit’s law firm, Quinn Emanuel, for comment.

The Allan government will pay $125 million in compensation to Victorian businesses that were financially crippled during Dan Andrews’ Covid lockdown

The suit by over 1000 Victorian businesses aimed to force the government to cover losses suffered by them during the state’s July 2020 Covid-19 lockdown

The year-long class action aimed to force the government to cover losses suffered by the businesses during the state’s July 2020 lockdown.

The lockdown, the state’s second, was triggered after the government’s quarantine hotels – Rydges and Stamford Plaza –  failed to contain Covid infections, later leading to stage three and four restrictions.

An inquiry later found poor health controls were in place at the hotels and the program was responsible for the deaths of 768 people and 18,000 infections.

The businesses involved in the action claimed a family of four detained at the Rydges infected a hotel worker and private security staff.

Those infected did not wear masks or practise hand hygiene, with the family’s illness later epidemiologically linked to eight workers and nine of their contacts.

In early June at the Stamford Plaza, it is claimed a traveller and a couple spread the virus to security guards.

It then spread to 26 workers, a nurse and 19 other contacts.

The businesses claimed that, by mid-August 2020, genomic sequencing showed clustering of about 75 per cent of community infections with the quarantine hotel infections.

They say that ‘had the (State of Victoria) conducted themselves prudently to the appropriate standard, transmission at each hotel would not have occurred’.

More to come.