Redress and Civil Litigation –  Recommendations of the Child Sexual Abuse Royal Commission

 

Geoff Atkins summarises the final report on Redress and Civil Liability, on behalf of the Working Group on Royal Commission into Institutional Responses to Child Sexual Abuse, concentrating on the financial implications.

The final report on Redress and Civil Liability was released on 14 September 2015, the same day as the change in Prime Minister. The full report is over 600 pages in length, with the executive summary being 60 pages and the list of 99 recommendations another 20 pages.  

Redress Structure

The Commission recommends that a national redress scheme is the most effective structure for providing redress.  It immediately goes on to recommend that should the Federal Government be unwilling to establish a single national scheme (which is their current known position), each State should establish a scheme with the same terms.

Redress includes three main elements:

  • Direct personal response
  • Counselling and psychological care, available for life
  • Monetary payments.

The relevant institution is to fund the cost of redress for survivors abused in that institution, with governments acting as funder of last resort.

Estimates of number and cost

The published actuarial estimates are for 60,000 redress participants (revised down from 65,000) and a total cost for redress of $4 billion over a period of more than ten years.  The actuarial report is published on the Commission’s website.

About a third of the cost is the direct responsibility of governments, increasing to over 40% after including the last resort funding.  These estimates are on the basis that funding for an institution run for government by a private organisation is the responsibility of the private organisation.

Monetary payments

About 87% of the cost of redress is expected to arise from monetary payments.  The recommended method of determining the payment is as follows:

  • A minimum of $10,000
  • A maximum of $200,000
  • A target average of $65,000
  • Determined on a 100 point scale taking account of the severity of abuse (40 points), the impact on the survivor (40 points) and additional elements (20 points).

Deed of release

Participants will receive an offer of a monetary payment and will have up to one year to accept the offer.  During this period legal and financial advice will be available.  A condition of accepting the offer is completion of a deed of release from civil liability.

Civil liability

A parallel system of civil liability, with no restrictions other than the deeds of release for monetary redress, is recommended.

Two of the three most common legal defences will no longer be available:

  • Limitation periods are to be abolished
  • Identifying a proper defendant will be resolved.

The third common defence is that an institution is not usually responsible for acts of persons other than employees, and is not responsible for criminal actions even if committed by employees.  This defence is to be abolished prospectively (i.e. for abuse occurring in future) but not retrospectively.  In the prospective system the onus of proof is reversed, in that the institution would need to prove that they took reasonable steps to prevent the abuse.

It is expected that following the Royal Commission it will be much more difficult for an institution to resist or compromise a civil liability claim, for reasons including the following:

  • Removal of some legal defences
  • The evidence established by the Royal Commission
  • Changed community expectations, including as reflected by the judiciary
  • Moral opprobrium of strenuously defending a claim
  • Model litigant requirements.

It is also reasonable to expect an increased exposure to class actions, although members of a class would need to have not accepted monetary redress.

Insurance implications

The final report leaves unknown many insurance implications.  The civil liability situation would appear to be adverse for defendants and insurers, but details will still depend on many specifics of policy coverages.  There is no suggestion in the report of insurers having funding responsibility for redress, and legally the less onerous burden of proof requirements under redress (‘reasonable likelihood’) are unlikely to trigger insurance. However institutions may still pursue insurance contribution to redress and there are other considerations for insurers including insurer-customer relations and potential adverse publicity.

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