A class action was brought in the Supreme Court on behalf of businesses impacted financially by Victoria's 2020 lockdowns.
Retail businesses, including lead plaintiff 5 Boroughs NY Pty Ltd, argued the state government should pay them for economic loss resulting from the lockdown as customers were prevented from attending their physical businesses, due to restrictions between July and October.
The matter had been listed for trial on March 10, however it was adjourned to a directions hearing at the Melbourne Supreme Court on Monday.
Barrister Adam Hochroth SC, representing the class action, said the trial had been vacated as he was "pleased" to inform the court the parties had reached a settlement.
"The terms of the settlement deeds are confidential at this stage, but I can tell Your Honour the amount of the settlement is $125 million, inclusive of everything, costs, interest," he told the court on Monday.
The settlement must be formally approved by the court before the funds can be distributed.
The Victorian government confirmed the settlement, outside of court on Monday, saying it continues to stand by "the steps it took during the pandemic to keep Victorians safe".
"The state has reached an agreement to resolve the matter," a spokesperson said.
"The $125m settlement, agreed to between the parties, will avoid further protracted legal proceedings."
The class action's law firm, Quinn Emanuel Urquhart & Sullivan, said the settlement concluded "years of hard-fought litigation" by impacted businesses.
"This is a significant outcome for eligible businesses. July to October 2020 was an extraordinarily difficult period for Victorian retail businesses," partner Damian Scattini said in a statement.
"The $125 million settlement that we have achieved on their behalf is recognition of this hardship and I hope it provides some measure of relief for eligible businesses."
The settlement approval application was adjourned to a date to be fixed.
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