The NDIS Provider Community on Notice After $1.8 Million Civil Penalty

Background

A civil penalty hearing concerning the breach of various National Disability Insurance Service (NDIS) standards arising from the death of an NDIS recipient is probably the largest in Australian history.

It serves as a timely warning for providers to ensure their systems and processes are current and tested to be fully fit for purpose. The consequences of failure were always dire for those involved, but now regulatory penalties are significant.

LiveBetter is the largest disability services provider in Western New South Wales, a registered NDIS provider, and an ACNC charity. It also delivered services in Victoria and Queensland.

LiveBetter’s audited financial report (ending June 2023) disclosed an operating loss of $5,366,889 and net assets of $49,602,390.

LiveBetter’s NDIS client, Ms Lucas, a 28-year-old Indigenous Australian woman with Cornelia de Lange Syndrome, was small in stature, unable to mobilise herself independently, and non-verbal (but could be vocal). Ms Lucas also had a profound intellectual disability.

LiveBetter provided Ms Lucas with in-home support, including personal care and bathing. Ms Lucas was bathed in water at an excessive temperature, which led to burns to 35-40% of her body and her eventual death.

The Commissioner of the NDIS Quality and Safeguards Commission (Commissioner) commenced proceeding against LiveBetter^[1] for contravention of the NDIS Act, declarations and the imposition of pecuniary penalties pursuant to s 82(3) of the Regulatory Powers (Standard Provisions) Act 2014 (Cth).

The primary purpose of any civil penalty regime is to ensure compliance with the statutory regime by deterring future contraventions, specifically by LiveBetter and generally by other would-be contraveners.

LiveBetter admitted liability to 17 contraventions of the NDIS Act and various regulations and codes, including failing to:

• conduct a formal risk assessment;
• provide bathing support safely and competently, with care and skill;
• formally train seven support workers in the proper bathing technique;
• formally assess the competency of seven support workers in the proper bathing technique; and
• provide access to responsive, timely, competent and appropriate support to meet Ms Lucas’ needs, desired outcomes, and goals.

Mediation resulted in the parties producing a Statement of Agreed Facts to the Court and an agreed penalty of $1,800,000. While the parties agreed on a penalty, the Court was not bound to accept it.

For the penalty assessment, the Court took into account:

• The nature and extent of the infringements were severe and antithetical to the NDIS scheme.
• The nature and extent of the loss and damage were most acute.
• The circumstances in which the infringements occurred were inadequate, although not deliberate, in training workers and testing the water temperature.
• The contravener’s circumstances were that it was a large service provider with $1,359,647 in unencumbered funds.

And in mitigation, that:

• Apologies were made by senior executives, both formal and informal, to the family, with continued support offered to the family.
• LiveBetter had fully cooperated with the Commissioner and other government agencies at all stages of the investigation.
• LiveBetter had no prior convictions.
• LiveBetter has made improvements to its policies, training and management structures.

The Court upheld the penalty amount of $1,800,000.

[1] Commissioner of the NDIS Quality and Safeguards Commission v LiveBetter Services Ltd [2024] FCA 374