The dark side of this protection is unappropriate usage of the law. There are always some bureaucratic idiots who will spoil any good intention and that is the case in OP's story.
If it had been a question of some idiots striking out a line of their own or simply messing up a few cases, the faults would have been corrected and restitution made to the affected families. Unfortunately it is not. It is a
system fault and it's serious.