In brief

On 17 April 2024, the Federal Court (Court) made declarations that LiveBetter Services Ltd (LiveBetter) contravened the National Disability Insurance Scheme Act 2013 (Cth) (NDIS Act), and ordered that LiveBetter pay civil penalties to the Commonwealth of $1,800,000. The decision followed the death of NDIS participant Ms Kyah Lucas, who died five days after sustaining burns to 35% to 40% of her body while receiving bathing support services from LiveBetter. The medical records refer to Ms Lucas’ death as being caused by the burns.

The case^[1] is one of an increasing number of civil penalty proceedings being initiated by the Commissioner of the NDIS Quality and Safeguards Commission (Commissioner) against NDIS providers. It is the largest civil penalty imposed on a NDIS provider. LiveBetter was also ordered to pay the Commissioner’s costs.

The case highlights the consequences of NDIS providers failing to comply with the requirements of the NDIS Act, including the NDIS Practice Standards and the NDIS Code of Conduct (both contained in rules made under the NDIS Act). The penalty confirms the significant consequences where NDIS providers fail to provide participants with access to competent and appropriate supports that are provided in a safe manner. NDIS providers bear the responsibility of identifying and managing risks to participants (including through formal risk assessments), and ensuring that support workers receive adequate formal training and have their competency assessed.

While the case relates to the obligations of NDIS providers under that statutory scheme, it is essential reading for all providers of home-based care services to vulnerable persons, whether under the NDIS or otherwise.

Facts

LiveBetter, formerly CareWest, is the largest provider of disability services in regional New South Wales, and became registered as an NDIS provider in July 2018.

LiveBetter had been providing a range of support services to Ms Lucas since at least 2009. Ms Lucas was a 28-year-old Indigenous Australian woman who resided with her family at their home in Orange, New South Wales. Ms Lucas lived with a number of disabilities and health conditions. She was non-verbal but not non-vocal, and was unable to mobilise independently. Her disabilities and health conditions meant that she had eczema, minimal subcutaneous fat and muscle and had difficulty regulating her body temperature. On 81 occasions between April 2021 and February 2022, seven different LiveBetter support workers provided Ms Lucas with personal care and bathing support. On each occasion, two workers were present.

Ms Lucas sustained the burns while receiving bathing support on 2 February 2022. The Court found that while there was not a complete failure regarding training and competency assessment, the training that was delivered, which was supplemented by ‘on the job’ training, was inadequate.

In March 2023, the Commissioner commenced proceedings against LiveBetter, seeking:

• declarations that LiveBetter contravened the conditions of NDIS provider registration and the NDIS Code of Conduct and the NDIS Practice Standards;^[2] and
• the imposition of pecuniary penalties pursuant to the Regulatory Powers (Standard Provisions) Act 2014 (Cth).^[3]

The parties attended mediation on 2 August 2023 where LiveBetter admitted liability, which led to the settlement of the proceeding. The parties provided the Court with a list of 17 jointly agreed contraventions of the NDIS Act, seeking declarations and the agreed civil penalty of $1,800,000.

LiveBetter and the Commissioner agreed that the contraventions were, in summary, that LiveBetter had failed to:

• conduct a formal risk assessment of Ms Lucas’ residence prior to providing bathing supports (a contravention of the NDIS Act and the NDIS Practice Standards);
• ensure access to responsive, timely, competent and appropriate supports to meet Ms Lucas’ needs, desired outcomes or goals on 2 February 2022 (a contravention of the NDIS Act and the NDIS Practice Standards);
• provide bathing supports in a safe and competent manner, with care and skill on 2 February 2022 (in contravention of the NDIS Act and the NDIS Code of Conduct); and
• formally train certain named support workers in proper bathing technique and to assess their competency (in contravention of the NDIS Act and the NDIS Practice Standards).

The process of the Court in determining appropriate civil penalties

The Court needed to determine that liability had been established, that making the declaratory orders sought would be appropriate, and the appropriate penalties in the circumstances.

Declarations

In determining whether to grant declaratory relief, the Court considers factors including whether a declaration has public utility, whether the proceeding involves a matter of public interest, and whether the circumstances call for the Court to mark disapproval of the contravening conduct.^[4]

In her judgment, Justice Raper highlighted the public interest in the matter and the need for current or potential contraveners of the NDIS Act to understand the circumstances giving rise to contraventions, and consequences for contravening conduct. Justice Raper stated “… declaratory relief aids compliance. The tragic circumstances of this case speak loudly in favour of the Court, as strongly as possible, marking its disapproval of the contravening conduct.”

Accordingly, the Court made three declarations:

1. On 15 occasions, LiveBetter contravened s 73J of the NDIS Act by failing to comply with the standard which specified that risks to Ms Lucas be identified and managed,^[5] by reason of LiveBetter’s failure to:
   • conduct a formal risk assessment of Ms Lucas’ residence prior to providing bathing supports;
   • formally train each of the seven support workers in proper bathing technique; and
   • formally assess the competency of each of the seven support workers in proper bathing technique.
2. In providing bathing support to Ms Lucas on 2 February 2022, LiveBetter contravened s 73J of the NDIS Act by failing to provide Ms Lucas with access to competent and appropriate supports to meet her needs.^[6]
3. In providing bathing support to Ms Lucas on 2 February 2022, LiveBetter contravened s 73V of the NDIS Act by failing to provide to Ms Lucas supports and services in a safe and competent manner, with care and skill.^[7]

Penalty

In considering the penalty to be imposed, Justice Raper considered the specific and general harm suffered as a result of LiveBetter’s contraventions. She found that the specific harm suffered by Ms Lucas was “of the most acute kind” as it resulted in her death, and this specific harm extended to Ms Lucas’ family. The lack of adequate training and assessment of the LiveBetter support workers was considered a general harm that had the potential to manifest in serious consequences for any of LiveBetter’s clients.

The failure of LiveBetter to identify and manage readily apparent risks in the provision of bathing support was a significant, foreseeable risk. LiveBetter included three documents in evidence which identified risks to Ms Lucas, yet none identified the risk of Ms Lucas sustaining burns in receiving bathing supports. Accordingly, despite having some risk assessment in place, this was inadequate in identifying and managing the inherent risk of burns when providing bathing support. The judgment highlighted that there was not a complete absence of training and competency assessments of LiveBetter support workers, but rather an issue with the adequacy of such training and assessment. The training provided was insufficient and was supplemented by ‘on the job’ training.

Justice Raper also outlined a number of mitigatory factors in determining the penalties, which included:

• LiveBetter demonstrating contrition in apologising to Ms Lucas’ family and offering ongoing support;
• LiveBetter cooperating at the investigative and curial stages of the matter, and cooperating with relevant governmental agencies in relation to the incident;
• LiveBetter having no prior history of contravention; and
• remediation efforts made by LiveBetter following the incident, including a restructuring of services to ensure consistent standards of care, and the implementation of formal training, policies and procedures regarding safe bathing.

In weighing up the contributory and mitigating factors, Justice Raper had to determine whether the $1,800,000 penalty agreed by the parties was appropriate in the circumstances. To do so, the Court considered where on a spectrum the contravening conduct sits, with $277,500 being the maximum penalty (per contravention) that the Court may order a person to pay for the most extreme contravention.

The parties reached the $1,800,000 suggested penalty by contending that the failures that occurred on 2 February 2022 ought to attract close to the maximum penalty, proposing:

• 84.7% of the maximum penalty for the failure of LiveBetter to conduct a formal risk assessment (being $235,000); and
• 99.8% of the maximum penalty for the failure of LiveBetter to ensure access to responsive, timely, competent and appropriate supports to meet Ms Lucas’ needs, desired outcomes and goals, and failure to provide bathing supports in a safe and competent manner with care and skill (being $277,000).

The parties sought that the remaining 14 contraventions, being the failure to train the seven support workers who provided bathing support to Ms Lucas, and separately the failure to formally assess the competency of the seven support workers who provided bathing support to Ms Lucas, should attract a $92,000 penalty each (totalling $1,288,000).

Ultimately, Justice Raper agreed with the penalties proposed, noting that the Commissioner has statutory functions in promoting appropriate standards and compliance, and that consequently the Commissioner would have fashioned the penalty submissions with the view to achieving these objectives.

Key takeaways for NDIS providers

The case demonstrates the importance of NDIS providers not only having a clear understanding of their obligations under the NDIS Act, but also the need to have a strong working understanding of how the requirements arising from the NDIS Practice Standards and NDIS Code of Conduct translate into practice.

The findings in the case are potentially of broader application to providers of home-based care services to vulnerable persons, outside of the NDIS. For such providers, the case underlines the criticality of undertaking timely review of risk assessment procedures, training programs and staff competency assessment processes to determine where improvements can be made. To assist, we have prepared the following checklist:

Considerations for providers of home-based care services and supports

• Risk Assessments

  Review risk assessment policies and procedures to ensure that they support the delivery of competent and appropriate supports in a safe manner, with care and skill.	☐
  Review risk assessment procedures to ensure that risk assessments of a residence are conducted prior to any home-based care support or service being provided.	☐
  Review staff training in identifying risks and conducting home-based care risk assessments. Staff should be supported to adequately identify real risks to participants, and support the translation and implementation of strategies to mitigate these risks in practice.	☐
  Review procedures to ensure that risk assessments are not only conducted for new clients but also for existing clients who are receiving new supports and services (noting that in the LiveBetter case, Ms Lucas was a client of LiveBetter since 2009 but had only been receiving bathing support services from 2021).	☐

• Training Programs

  Ensure that procedures are in place to regularly reassess training programs so that they adequately respond to the supports and services actually provided, and the dynamic nature of the workforce. Providers should be aware of the impact that workforce turnover, casualisation and usage of agency staff may have on this, and ensure that procedures are responsive to such factors.	☐
  Review processes to ensure that mandatory training is complied with, with a clear tolerance level set by the board for non-compliance.	☐
  Consider whether staff who onboard and train new staff require further training or support.	☐
  Consider the adequacy of formal staff training and be aware that supplementing formal training with ‘on the job’ training has the potential to give rise to regulatory non-compliance. While on the job training has significant utility, it must be implemented in conjunction with the formal training of support workers.	☐
  Where bathing supports are provided, ensure that support workers are appropriately trained in proper bathing technique including for individuals with health conditions that increase risk when bathing (for example, where the individual is non-verbal, has difficulty regulating body temperature, or has minimal subcutaneous fat and muscle).	☐

• Staff competency assessments

  Review procedures to ensure that competency assessments are regularly conducted of individual support workers.

  ☐

  Review procedures to ensure that further training or support of staff is provided where a staff competency assessment identifies areas of development for a staff member. NDIS providers should note the ability of the Court to award a financial penalty for every support worker who is not adequately trained, and additionally for every support worker who has not been assessed in competency for the services that they are providing.

  ☐

• Further considerations

  Consider the organisation’s resourcing priorities and whether additional, dedicated resources should be prioritised to support clinical and care governance, quality and compliance initiatives.

  ☐

  Ask whether current structures support an understanding of the intricacies of distinct services being offered by the same provider. Where providers believe that a different structure may further benefit compliance, we recommend discussing options with an experienced legal team. In the LiveBetter decision, Justice Raper identified the restructuring of LiveBetter’s services as a mitigating factor in determining penalties. LiveBetter separated their operations into three distinct areas to ensure that management have visibility and understanding of the complexities of these workstreams, being In Home Supports, Accommodation Services and Community Services.

  ☐

Civil penalty proceedings against NDIS providers generally

The Commission continues to actively use its legislative powers to commence civil penalty proceedings against NDIS providers who fail to comply with their obligations, including under the NDIS Code of Conduct and the NDIS Practice Standards.

On 31 October 2024, the Court granted permission for the Commissioner to commence civil penalty proceedings against Irabina Autism Services (Irabina) for alleged use of prohibited restrictive practices. The civil penalty proceedings follow separate civil proceedings against Irabina’s former Chief Executive Officer and former General Manager where the Commission sought Court approval to proceed with a civil case against Irabina. The approval was granted notwithstanding that Irabina had been placed into liquidation earlier this year.

If the proceedings are successful, civil penalties may be imposed on Irabina, as well the former CEO and former General Manager, for failing to comply with the NDIS Code of Conduct.

Providers should be aware of the Commission’s continuing focus in this area, with the Commissioner stating that “We have strengthened our compliance and enforcement approach and are committed to using our legislative powers to identify providers who are doing the wrong thing and take action to prevent them from causing further harm.”

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

_{[2] Specifically, NDIS Act ss 73J and 73V.}

_{[3] Specifically, ss 82 to 87.}

_{[4] ASIC v Pegasus Leveraged Options Group Pty Ltd [2002] NSWSC 310, as included in the LiveBetter judgment.}

_{[5] As imposed by cl 10 of sch 1 pt 3 to the NDIS (Provider Registration and Practice Standards) Rules 2018 (Cth).}

_{[6] As required by cl 21 of sch 1 pt 4 to the NDIS (Provider Registration and Practice Standards) Rules 2018 (Cth).}

_{[7] As required by ss 5(3) and 6(c) of the National Disability Insurance Scheme (Code of Conduct) Rules 2018 (Cth).}