In light of the newly minted federal government apology to the stolen generations, there is a new focus on the other unfinished business from HREOC’s Bringing Them Home report: the issue of compensation. In the Weekend Australian on Tuesday, Noel Pearson argued that if Indigenous leaders were serious about compensation, the time to address it was at the time of the apology. “Blackfellas will get the words, the whitefellas will keep the money. And by Thursday, the Stolen Generations and their apology will be over as a political issue.”

Pearson is wrong in this. The apology is an important step, but by no means the final step in the issue of the Stolen Generations and money. This is so not because the apology has any impact on existing legal liability. Anyone with a law degree knows that common law claims for damages rely on the establishment of a duty of care, a breach of that duty and demonstrable damage at the time the alleged injury was supposed to have occurred, none of which can possibly be affected by a later government’s expression of sorrow and regret.

The link between an apology and compensation is political, not legal. But the link is intrinsic and inexorable. The apology was an admission that government policies of removal were ill-conceived, and that these policies caused harm to people who were subject to them. The apology draws a link between the suffering of Aboriginal people removed from their families and the policies which provided for this removal.

Noel Pearson rightly points out that government policies of removal, and indeed all policies contributing to the entrenchment of the dominant white society, had a complex impact on Aboriginal people, not all of which was negative. The apology brushes over the complexities of the impact of removal and other policies, and asserts a broader responsibility for the State’s action - that no matter how benign or even magnanimous was the intent of removal policies, and no matter that the lives of some may have been improved by them, we ought not to have removed children from their families to further Aboriginal integration or advancement (let alone for their extinction or assimilation).

Although the apology has no direct legal implications, it strongly suggests that if the State means what it says in its apology, it will create legal implications. The Howard government line that the government had no responsibility to the stolen generation beyond its existing legal liability made sense while the government refused to apologise. But now that the government has apologised, the question becomes what will be the form of legal liability to fulfil the government’s acknowledged responsibility for its past actions.

This is how responsibility works - whether it be James Hardy’s responsibility to sufferers of asbestosis, the American government’s responsibility to Japanese nationals interned during the second world war, or the German government’s responsibility to survivors of the Holocaust. Once responsibility for the action is admitted, the question is how to address the harm.

So the apology on Wednesday confirmed the government’s willingness to accept responsibility for the affects of its past policies. The question the Rudd government must now ask itself is whether existing legal liability at common law is an adequate mechanism for the stolen generation to make claims for compensation in light of the apology.

Once this question is put, the answer is clear. The existing mechanism for liability in the common law is a blunt instrument to deal with the sensitivity of stolen generation cases. The abstract duties of care that exist in common law are not well suited to dealing with removal cases, the adversarial process is an inappropriate environment to relive the pain of lives lost, and the structure of liability and damages at common law is such that while there may be some big winners, these will be more than matched by big losers. Psychologically, common law cases pit the government against those bringing actions. The government is put in the position of defending its record, and denying its responsibility to the extent that this is legally possible. In the post-apology era, its seems little short of hypocritical for governments to take this position.

Financially, allowing the common law to run its course also makes little sense. The government has no control over the amount of money that will end up being spent on child removal cases. What is more, a high proportion of the money spent on the legal process is lost in court costs and legal fees, with little going to compensate those who have suffered under the government’s policies. Where a case is successful as in the case of Bruce Trevorrow, who was awarded $525, 000 damages and another $250,000 in interest, it does not assist the reconciliation process as it simply highlights what lengths a plaintiff has to go through to seek redress in face of government resistance, and the success of one simply emphasises the lack of success of others.

Of course, there are limits to what the government will be prepared to put into any compensation package, but it is currently spending considerable sums assisting plaintiffs in the common law claims and even more money on defending these claims. This money would be far better spent in a dedicated compensation process. The legislative initiative of the Tasmanian government is instructive in this regard. Under the Stolen Generations of Aboriginal Children Act 2006, the government has placed $5 million in a fund to be distributed to Aboriginal people removed into State care as an ex gratia payment. To receive a payment, claimants need to make out that they were removed under specified legislative schemes for a period of at least twelve months, or if removed under other powers of the state, that the removal was without consent or involved duress. Biological descendants of persons so removed are also eligible for a payment of up to $5000. A Stolen Generations Assessor makes assessments over a twelve month period, after which the $5 million is to be used to pay the $5000 payments to biological descendants or persons removed, and the remainder is to be divided equally among members of the stolen generations whom the Assessor has authorised for payment.

A similar scheme is worthy of consideration by the federal government and the other state governments. Ideally the states and the Commonwealth, perhaps through COAG and in consultation with Indigenous representatives, would work out a national scheme which the Commonwealth administers in the Northern Territory, and the states administer themselves. Now is the time to act; not after hollow denials of responsibility which will directly undermine the power of the apology, not after more money is wasted on common law claims largely funded by state and Commonwealth governments.

Having dealt with the apology, it is time to revisit the Bringing Them Home report recommendations on compensation.