THE Federal Government still hopes to reach an out-of-court settlement with an Australian resident wrongly held in immigration detention, despite her lawyers' intention to sue.
Cornelia Rau ... seeking compensation.
Former Qantas flight attendant Cornelia Rau, who suffers from mental illness, is seeking compensation after being mistaken for an illegal immigrant and detained for 10 months.
German-born Ms Rau was held at a Queensland women's prison and then for four months at South Australia's now-defunct Baxter detention centre during 2004 and 2005.
One of her solicitors, George Newhouse, yesterday said the Government's contracting of Baxter's operations to private company Global Solutions Limited had complicated Ms Rau's compensation claim.
The legal team had been forced to withdraw from a dispute resolution process and launch proceedings through the NSW Supreme Court, Mr Newhouse said.
Government lawyers have reportedly argued the Commonwealth was not responsible for Ms Rau's treatment as the detention centre was run by private contractors.
"The Commonwealth Government has its own financial arrangements with the operators of the detention centre that appear to be complicating Cornelia's case," Mr Newhouse said.
"That's not Cornelia Rau's problem.
"It was the Commonwealth Government that set up this ridiculous system of immigration detention.
"She shouldn't suffer because of ... privatisation of detention."