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 Note 8: Managing uncertainties

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This section analyses how the Attorney-General's Department manages financial risk within its operating environment.

8.1: Contingent assets and liabilities

8.1A: Departmental contingent assets and liabilities

   
Claims for damages 2018
$'000
2017
$'000

Contingent assets

   
Balance from previous period 645 345
New contingent assets recognised - 395
Re-measurement (238) -
Rights expired (390) (95)
Total contingent assets 17 645
     
Contingent liabilities    
Balance from previous period (534) -
New contingent liabilities recognised (287) (534)
Re-measurement 29 -
Liabilities realised 65 -
Obligations expired 440 -
Total contingent liabilities (287) (534)
Net contingent liabilities (270) 111

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Quantifiable contingencies

The department estimates $287,000 of contingent liabilities in respect of claims for damages/costs (2017: $534,000). This amount represents an estimate of the department's liability based on precedent in such cases. The department is defending the claims.

The department estimates $17,000 of contingent assets in respect of claims for damages/costs (2017: $645,000). This amount represents the department's estimate of claims against persons/organisations based on ongoing cases. The estimate is based on precedent in such cases.

Unquantifiable contingent liabilities

The department is party to a number of civil litigation matters arising out of its statutory duty to administer the laws for which it is responsible. As at the date of this report there are no matters where costs have been awarded against the Department.

Unquantifiable contingent assets

Conversely, the department, like any other party to civil litigation may be entitled to recover costs arising out of such litigation if it is successful. There are no matters at the date of this report where the department reasonably expects to have an award of costs in its favour.

Future compensation claims

The Scheme for Compensation for Detriment caused by Defective Administration (CDDA) allows agencies to provide compensation to persons who have been adversely affected by their maladministration, but who have no legal means to seek redress, such as a legal claim. It is not possible to estimate the value of future CDDA claims.

Accounting Policy

Contingent liabilities and contingent assets are not recognised in the statement of financial position but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset or represent an asset or liability in respect of which the amount cannot be reliably measured. Contingent assets are disclosed when settlement is probable but not virtually certain and contingent liabilities are disclosed when settlement is greater than remote.

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8.1B Administered contingent assets and liabilities

Unquantifiable administered contingencies

Native Title Costs and Agreements (access to geospatial data)

Under the Native Title Act 1993 (the NTA) and the Native Title Amendment (Indigenous Land Use Agreements) Act 2017, Schedule 1 s. 13(3), the Commonwealth will be liable for any compensation found to be payable in respect of compensable acts for which the Commonwealth is responsible.

The Australian Government has entered into agreements with State and Territory Governments to access their geospatial land tenure data, which is essential to support the National Native Title Tribunal in achieving its outcomes. Under these agreements the Australian Government provides indemnities against third-party claims arising from errors in the data.

At balance date the department is unable to reliably measure the future value of potential claims, and no provision for these claims has been recognised in the Administered financial statements.

Future compensation claims

The Scheme for Compensation for Detriment caused by Defective Administration (CDDA) allows agencies to provide compensation to persons who have been adversely affected by their maladministration, but who have no legal means to seek redress, such as a legal claim. It is not possible to estimate the value of future CDDA claims.

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