$50m payment to stolen generation families approved

A $50 million class action settlement between the federal government and families of the stolen generation snatched from their homes in the Northern Territory has been given the green light by a judge.

In the NSW Supreme Court on Monday, Justice Robert Beech-Jones approved the settlement after hearing that the lawyers and funder behind the case would only take up to 20 per cent of the total amount paid by the Commonwealth to resolve the case.

"This is so far down the scale that I wouldn't even hesitate about approving it at a macro level," the judge said immediately after an approval hearing.

It was in the "overwhelming best interests" for all that the settlement be approved and steps taken to distribute the money, Justice Beech-Jones said.

The class action, launched by Shine Lawyers in April 2021, sought compensation for alleged breaches of a duty of care owed to Indigenous Australians forcibly removed from their families in the NT between 1912 and 1973.

In August 2021, the government announced a redress scheme for those members of the stolen generation who were still alive.

One year later, it agreed to settle the class action, excluding those eligible for the redress scheme.

Earlier on Monday, barrister Lachlan Armstrong KC, who represents lead plaintiff Natalie Ellis, said the settlement was "a very good result" for those eligible and should be approved.

Around 1200 people can now be compensated, including carers and siblings of stolen generation members and the estates of those taken from their families who are now deceased.

Shine Lawyers will be given $1.9m out of the settlement to cover their legal costs, successfully gaining permission to expand this from an initial $1.5m cap.

Future costs for Shine's work in assessing the claims of Indigenous Australians and distributing the money were also sought.

Litigation Lending Services was granted a commission of $5.5m, plus an additional $1m paid for after-the-event insurance covering its financial risks for backing the class action.

Barrister William Edwards SC said the percentage the funder wanted was far less than that approved by the court in other class actions.

A "very substantial proportion" of the total sum would still go to the families of the stolen generation.

Ms Ellis is among those who will receive compensation under the settlement after her mother Marita Parnell was snatched from her family at Elsie Station in 1941. Mrs Parnell passed away in 2014.

Eileen Cummings, who was removed from her parents at Mainoru Station in 1948, was leading the class action until she accepted a payment from the redress scheme and was replaced by Ms Ellis.

Compensation will be paid at relative rates, with 1000 families of deceased stolen generation members receiving the highest estimated amounts of $35,000 on average.

Over 100 carers and siblings who are still alive will receive a lower payment of about $23,000 while just under 100 estates of deceased carers and siblings will receive around $11,000.