(1) If a person suffers loss of or serious damage to property, or personal injury, in the course of, or as a direct result of a controlled operation authorised under this Part, the Commonwealth is liable to pay to the person compensation as agreed between the Commonwealth and the person or, in default of agreement, as determined by action against the Commonwealth in a court of competent jurisdiction.
(2) Subsection (1) does not apply if:
(a) the person suffered the loss, damage or injury in the course of, or as a direct result of, engaging in any criminal activity (other than criminal activity that is controlled conduct); or
(b) the person was a law enforcement participant at the time of suffering the loss, damage or injury.