Rau to receive $2.6m in compensation

A $2.6 million compensation package awarded to Cornelia Rau for her wrongful detention is "wonderful", her sister says, though reform of the immigration system is still urgently needed.

The German-born Australian resident is to receive $2.6 million compensation for the immigration debacle, the NSW Supreme Court revealed.

Ms Rau was wrongfully detained at a Brisbane's women's prison and later at the now-defunct Baxter immigration centre in South Australia over a period of 10 months in 2004-05.

She was locked up after authorities incorrectly assumed she was an illegal immigrant.

They did not properly establish her identity and failed to recognise she was mentally ill.

The NSW Supreme Court finalised her damages settlement of $2.6 million that was negotiated with the commonwealth.

It is understood to be more than double the offer made by the coalition government last year.

Cornelia's sister Chris Rau said the news was "wonderful", but said reform of the immigration system was still needed.

"To quote Churchill, `It's the beginning of the end of a long saga for our family," she said.

"For her personally it is terrific, but for the wider picture we still need these reforms.

"This case has shown both mental health and immigration need substantial reform and they are not over yet."

Chris Rau's appeal for reform of the immigration system was echoed by one of her sister's lawyers, George Newhouse.

Australia should move urgently to overhaul an immigration system in which public servants are "judge, jury, executioner and jailer", Mr Newhouse said.

"We still have a situation where a public servant can lock up an individual indefinitely without bringing that person before a judge," Mr Newhouse told reporters.

"Until that situation is rectified, while Cornelia's case is an example to all, there is no assurance that it won't happen again.

"There needs to be judicial oversight of detention and deportation in this country because what we have is a situation where a public servant is judge, jury, executioner and jailer of a person that they suspect of being an illegal immigrant."

Harry Freedman, another of Ms Rau's lawyers, said the commonwealth payment of $2.6 million and legal costs would compensate her for ongoing mental health problems that went untreated during her detention.

"The payment not only compensates her, but also is sufficiently large to provide for her for the rest of her life," he said.

Immigration Minister Chris Evans confirmed the monetary figure and said the commonwealth would pay Ms Rau's legal costs, which were still being determined.

"This was obviously a terrible experience for Ms Rau and we hope this settlement will enable Ms Rau to finally move forward with her life," Senator Evans said in a statement.

"The Rudd government made a commitment to resolve Ms Rau's compensation claim as quickly as possible and we have honoured that commitment in just three months."

The final compensation amount of $2.6 million is far higher than was offered by the previous government.

Senator Evans said the Howard government had let the matter drag on for too long, leaving Ms Rau in limbo.

"Ms Rau's protracted compensation claim is one of the many regrettable immigration legacies of the former Howard government that we are committed to resolving," he said.