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Hard cases make for bad compensation laws

By Brendan O'Reilly - posted Friday, 12 January 2018

Australia's legal system has a set of protections for defendants. In civil cases, for example, it normally rests on the plaintiff to prove his or her case on the balance of probabilities. Defendants are also entitled to other basic rights such as procedural fairness, reasonable time limits for damages claims, and protections afforded by rules of evidence. Our High Court has also said that "confrontation and the opportunity for cross-examination is of central significance to the common law adversarial system of trial".

In the light of all this, should the community quietly accept the sweeping away of many of these basic protections, when it comes to a "special case"? This is what the Royal Commission into Institutional Responses to Child Sexual Abuse (mainly in its Interim Report) has asked the Commonwealth and State Governments to do.

A host of protections for defendants in such cases have been either abolished or are proposed for abolition.

  • Personal injury claims in most jurisdictions need to be commenced within three years from the date of injury, though some exceptions are allowed where a plaintiff suffered a "disability" (e.g. was a minor, suffered latent injury). Following the recommendations of the Royal Commission, the States and Territories from 2016 began removing all such statutory time limitations for victims of child sex-abuse (with retrospective effect).
  • The standard of proof for determining applications for redress is to be lowered from "thebalance of probabilities" to "reasonable likelihood". In the US "reasonable likelihood" has been defined by the Courts to mean "a likelihood substantially higher than a mere possibility". It certainly encompasses fifty-fifty probability, and most likely extends below this.
  • Some aspects of the onus of proof (for institutions defending child abuse claims) are also being reversed with retrospective effect. Institutions to avoid liability now will need to prove ("on the balance of probabilities") that they took "reasonable steps" to prevent abuse. Victoria has already legislated (see Wrongs Amendment (Organisational Child Abuse) Act 2017).
  • The Victorian legislation also requires that "the institution in which the abuse is alleged or accepted to have occurred should fund the cost of redress". This reflects that nearly all individual abusers (the primary culprits) are either of little means or are already dead, and is irrespective of what the institution actually knew or did.
  • Where no one else can be sued, the State is to become liable. Victorian legislation states that "if the relevant organisation is not capable in law of being sued, the State is the appropriate defendant".
  • The proposed redress scheme cuts out normal judicial process. Instead the Royal Commission proposes that processing "should rely primarily on completion of a written application form" and a statutory declaration, if requested. The institution concerned will be asked to respond before a final decision (not open to external appeal) is made. (It thus seems that rights to cross-examine and to judicial appeal have gone too!)

It has been suggested that the burden of proof for compensation claims has been kept deliberately low (requiring minimal evidence) to avoid the legal costs experienced by an Irish redress scheme, that demanded a higher level of proof.

Overall, it is hard to avoid the conclusion that the rules are being changed to guarantee a viable defendant (any defendant seemingly will suffice), and to make it difficult to successfully defend claims for sexual-abuse redress. An estimated $4 billion in redress money (much of it taxpayers') is to be distributed in a process that appears to involve inadequate scrutiny and legal rules that are stacked against the defendants.

It is a simplistic to believe that liability for sexual abuses can be successfully transferred to institutions where the abuse happened. Some institutions cannot be sued because they are not incorporated bodies, or because they no longer exist. Others are neither insured or do not hold assets from which damages could be paid. Also, while it might seem reasonable to require institutions to prove that they took "reasonable steps"to prevent abuse, this is easily said with the benefit of hindsight. It was not until maybe the 1990s that the extent of institutional abuse and the need for prevention programmes became apparent.

It also seems clear that Governments, particularly State Governments, are set to be in the firing line to pay most of the compensation. (This goes against normal legal practice, where, if a defendant is deceased or has no means, liability does not transfer to innocent third parties, except for very limited ex gratia payments by government for criminal injury.) In addition, little thought seems to have been given to the question of how the redress scheme will take account of the hundreds of millions already paid under State Government and church compensation schemes.

Of the protections being removed, only one such removal (lifting time limitations for claims) seems broadly defensible. This is because, when many of the offences happened, the victims were minors and the social and institutional environment for those reporting offences was hardly welcoming. That said, it must be recognised that (for delayed claims) passage of time may result in cruelty as well as justice. By the time a stale claim is decided, defendants in some cases might have lost evidence necessary to disprove the claim.


At this stage there is a chance that the redress scheme will either fail to materialise or require considerable additional Commonwealth money. There seems to be very limited willingness to participate in the redress scheme, with a number of the States equivocating about opting in. (State Government participation is a prerequisite for non-government organisations joining.) South Australia announced in October that it was definitely not taking part. There seems to be bipartisan support at federal level for the redress scheme, though Labor is concerned that the Federal Government lowered the maximum compensation payment from $200,000 to $150,000.

Trying to dish out $4 billion in compensation on average 40 years after injury was actually or allegedly committed, is asking for problems. It is also questionable whether monetary compensation can be an effective remedy for psychological and other non-monetary injury. Potential claimants (overwhelmingly male) are now on average in their fifties. Perpetrators (nearly all now aged or deceased) were most likely to be clergy or religious, followed by teachers and residential care workers. Foster carers and children older than the victim were also reported as perpetrators.

The over-riding principle of our legal system is that the innocent should be protected both in criminal and legal processes. Sex abusers and those individuals and institutions, that knowingly facilitated their crimes, deserve no shelter. There is nothing equitable, however, about a compensation process that levies damages on the wrong group of people (taxpayers), many of whom were not even born when all this took place (often in non-government institutions).

The whole proposed compensation process is far too late to work properly and an inappropriate imposition on the taxpayer. The Royal Commission itself (which had 250 full-time-equivalent staff and contractors, plus a menagerie of lawyers hanging off its coat tails) was the epitome of extravagance. Its $550 million cost was bad enough by itself but the half-baked $4 billion redress scheme takes the prize for being expensive, ill-considered, and going against virtually every known legal principle designed to protect the innocent.

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About the Author

Brendan O’Reilly is a retired commonwealth public servant with a background in economics and accounting. He is currently pursuing private business interests.

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