Angry federal judges are refusing to hear cases for fear that they may be held financially liable for struck-down judgments, potentially bringing one of the nation’s busiest courts to a standstill.

A video conference on Friday of most of the 76 division-two judges of the Federal Circuit and Family Court was told that three jurists were boycotting some scheduled sittings while others had sent cases up the line to the Federal Court.

The intermediate-level judges are up in arms over a landmark $309,000 damages award last month to a father who was wrongly jailed for contempt of court by Brisbane judge Salvatore Vasta.

Justice Michael Wigney, of the Federal Court, ruled that Judge Vasta was personally liable for the man’s false imprisonment and could not rely on the judicial immunity available to most judges. He is on the hook to pay $50,000 of the total sum in exemplary damages, alongside Queensland and the federal government.

The Chief Justice of the Federal Circuit and Family Court, Will Alstergren, is understood to have asked federal Attorney-General Mark Dreyfus to indemnify the division-two judges against such claims, extending the protection afforded to higher-ranked jurists such as division-one Family Court judges or those sitting on a Supreme Court bench. Justice Alstergren was involved in the hook-up when the rebel division-two judges stunned the meeting by announcing they would not sit again until the loophole was closed. It is understood the trio subsequently clarified their position, saying they would continue to hear some cases pending a response from Mr Dreyfus. Another division-two judge told The Weekend Australian: “It is a really serious matter because matters are being adjourned to the never never and costs are being incurred. “Who is going to pay those costs? And you know, the people who come before the courts expecting to have their matters heard have already incurred costs, they might have engaged solicitors or barristers, and then they front up to the hearing date to be told, well, no, no one’s sitting.”

In a statement, a spokesperson for division two of the Federal Circuit and Family Court warned that the “operations of one of the largest and busiest courts” in the country was being affected by “uncertainty with respect to – judicial immunity”.

“This has the potential to undermine the administration of justice, provide another avenue for systems abuse by perpetrators of family violence and may result in delays in the resolution of disputes coming before the court,” the spokesperson said.

“On a daily basis, judges of the Federal Circuit and Family Court of Australia … are required to make difficult decisions involving people in immigration detention, facing bankruptcy or who have had their livelihoods at stake as part of workplace disputes. “Judges in almost every other court in Australia have statutory immunity. Until recently, it was assumed that judges of the court had common law immunity which was assumed to be sufficient. “However the extent of this immunity has recently been called into question for judges of the court.”

Mr Dreyfus’s office refused to be drawn, saying only that the government was considering Justice Wigney’s judgment on August 30 that found Judge Vasta had behaved like a character from “Alice in Wonderland” in jailing the man in 2018 for failing to produce specified financial documents pertaining to a family law property dispute. The man identified in court papers by the pseudonym of Mr Stradford said he had suffered an anxiety attack after being assaulted in a prison van, and was threatened with rape in jail before the 12-month sentence was overturned on appeal.

Justice Wigney ruled that Judge Vasta had denied Mr Stradford procedural fairness in a “gross and obvious irregularity of procedure”.

It is understood that Judge Vasta has until next Wednesday to appeal the finding.

In a letter to Mr Dreyfus on Tuesday, University of Queensland emeritus professor of law Patrick Parkinson urged the nation’s first law officer to legislate “as a matter of urgency to address the situation arising” from the Vasta case. “I am not suggesting that Wigney J. was incorrect in his analysis of the law and I am certainly not defending Judge Vasta’s conduct; but the judgment does indicate that inferior court judges could lose immunity in circumstances that are not entirely uncommon, and whether or not they have behaved in ways that ought reasonably to lead to their censure or removal,” Dr Parkinson wrote.

The Australian Judicial Officers Association representing judges has acknowledged that the case had “potentially profound implications for certain members” who might not have judicial immunity, while Law Council of Australia president Luke Murphy said “legislative certainty” could be required for affected judges of the Federal Circuit and Family Court.

Opposition legal affairs spokeswoman Michaelia Cash, who has been approached by a number of judges alarmed by their potential liability, said on Friday: “Attorney-General Dreyfus’s inaction means we are now in a situation where some judges may refuse to sit on cases.”

A barrister practising in family law in Brisbane said he had already had one trial “go away because judges are concerned about hearing matters that might result in crazy people suing them”.

Addressing an Australian Bar Association conference on Thursday, Justice Alstergren said judges would have a strong incentive to decide cases in a way that reduced the risk of personal suit if they weren’t provided with legal immunity. “This immunity should not be seen as a personal right or gift afforded to the judges, but a collective right held by the public for judges to decide cases without interference, in according with the law and only the law,” he said.