Australia: Redress scheme moves closer to reality

In brief - Negotiations with non-participating states may mean Scheme is subject to change

Following the announcements by Victoria, New South Wales and the ACT that they will formally "opt-in", the federal government's Redress Scheme has moved one step closer to reality. This means that churches, charities and other non-government institutions in these states and territory can now also sign up to the Redress Scheme.

The governments of Queensland, South Australia, Western Australia, Tasmania and the Northern Territory are yet to clarify their position and they may seek amendments before passing legislation at the state level.

In this article we take a look at what the Scheme entails, who will be eligible for redress, how institutional liability may be established, how the Scheme differs to claims brought under the common law, and the process of opting-in for governments and institutions.

Redress Scheme is based off Royal Commission recommendations

The Redress Scheme has been designed by the Commonwealth government in response to the recommendations of the Royal Commission into Institutional Responses to Child Sexual Abuse to provide an avenue for redress for survivors of sexual abuse while they were children within the care of an institution.

It was first announced by the Commonwealth government on 26 October 2017, when the proposed scheme was tabled in the Commonwealth Parliament in the Commonwealth Redress Scheme for Institutional Child Sexual Abuse Bill 2017 (Cth).

It incorporates a number of the key recommendations from the Royal Commission so as to establish a scheme whereby survivors of institutional abuse are provided redress in the attempt to alleviate the impact of the abuse. However, not all the recommendations have been implemented, and some changes have been made.

Redress is offered to eligible survivors in the following three respects:

  1. a redress payment of up to $150,000 on a case-by-case basis reflecting the severity of the abuse suffered
  2. access to counselling and psychological services, and
  3. a direct personal response from the responsible institution to the survivor (upon request)

Survivors who have accessed redress under another scheme or who have received compensation through a settlement or a judgment by a court will not be excluded from applying for redress under the Redress Scheme. However, any prior payments made by a participating institution in relation to abuse suffered by a survivor that is within the scope of the Redress Scheme will be deducted from any amount payable by that participating institution.

Amendments to the Social Security Act 1991 (Cth) and the Veterans' Entitlements Act 1986 (Cth) will ensure that payments are not income tested and will therefore not reduce income support payments as a result of the receipt of a payment under the Redress Scheme. Amendments to the Bankruptcy Act 1966 (Cth) will ensure that payments under the Redress Scheme are quarantined from the divisible property of a bankrupt. Furthermore, any payments made will not be subject to income tax.

The Redress Scheme will operate from 1 July 2018 and will run for 10 years until 30 June 2028. Subject to the passage of the legislation, survivors will be able to lodge applications for redress from 1 July 2018 until 30 June 2027.

Eligibility for redress is dependent upon a number of factors

In order for a survivor to be eligible for redress, there are several factors that need to be satisfied. In particular:

  • the survivor must have been the victim of sexual abuse within an institutional setting
  • at the time of the abuse, the survivor must have been under the age of 18
  • the abuse must have occurred prior to 1 July 2018
  • the survivor must be an Australian citizen or permanent resident
  • the survivor must make a claim for redress under the Redress Scheme and survivors may make only one claim over the course of the Scheme
  • any survivors who have themselves been convicted of sexual offences or have been sentenced to five years imprisonment for a criminal offence are ineligible for redress
  • a participating institution (that is, an institution which has "opted-in" to the Redress Scheme) must have been equally or primarily responsible for the abuse

The term "institutional setting" is defined broadly under the proposed legislation, and will capture institutions such as schools, orphanages and youth centres. However, an individual or a family are not captured under the definition. Therefore, abuse occurring in the context of the family home will not be covered under the Scheme.

Institutional liability under the Redress Scheme

An institution will be found liable under the Redress Scheme where it is established that the institution was primarily or equally responsible for the "abuser" having contact with the survivor. Various circumstances are relevant to determining this question, such as whether:

  • the abuse occurred either on the premises of the participating institution or where activities of the participating institution occurred, or in connection with such activities
  • the perpetrator was an official of the institution, and
  • the participating institution was responsible for the care of the survivor

Examples cited in the Explanatory Memorandum accompanying the proposed legislation for where liability will be established include where a survivor was abused on school grounds, during school hours, by a teacher, where the school was a participating institution. On the other hand, using the same example, a participating institution may not be found to responsible for the "contact" if a victim was abused on school grounds but on a weekend, by someone who was not connected to the school.

The costs of providing redress for each person for whom an institution is responsible will be based on the proportionate share of the total amount of redress paid to each person.

A survivor who accepts an offer of redress will be required to release all the participating institutions determined under the Redress Scheme as being responsible for the sexual abuse from liability for the sexual and related non-sexual abuse that is within the scope of the Redress Scheme. The effect of this is that participation in the Redress Scheme and acceptance of an offer of redress means a survivor cannot subsequently bring a civil claim in court against the relevant institution.

How does the Redress Scheme differ from claims brought under the Common Law?

A key guiding principle of the Redress Scheme is to avoid re-traumatising or otherwise harming the survivor. This ties in with the other principles of alleviating the impact of past institutional child sexual abuse and related abuse, and to provide justice for survivors of that abuse.

An application for redress is therefore quite different to the process that would be undertaken were a survivor to seek compensation through a civil claim that is litigated through the courts.

In particular, a different standard of proof is to be applied. In order to be eligible for redress, the survivor must show that there was a reasonable likelihood that the abuse occurred. This is defined as "the chance of an event occurring or not occurring which is real - not fanciful or remote". One example that has been cited in the legislation as satisfying this burden of proof is where a survivor provides a statutory declaration detailing the allegations of abuse.

This is very different from a common law claim brought through the courts, where survivors may be required to undergo examination and cross-examination during a trial, as well as undergoing medico-legal assessments.

On the other hand, participating institutions have no right to be heard in respect of an application by a survivor. Rather, once they have opted-in, they must adhere to any decision made without making submissions in response.

After a decision has been made following an application for redress, a survivor can seek internal review of a decision. However, neither a survivor nor a participating institution can seek judicial or merits review of a decision, on the basis that the Redress Scheme is not intended to replicate civil litigation standards or processes. Rather, it is intended to be a non-legalistic alternative.

The Redress Scheme does limit what redress can be sought for. In particular, it is a pre-requisite that the survivor has been the victim of sexual abuse, as opposed to physical or psychological abuse or neglect. While these latter categories can be taken into consideration as an "aggravating factor" when determining the amount of redress, this will only be in the context where sexual abuse has occurred.

Not all jurisdictions have opted-in... Yet

As has been widely reported, a critical aspect of the Redress Scheme is that survivors of abuse can only apply for redress when the relevant institutional or organisation responsible for the abuse has "opted-in" to join the Redress Scheme.

In March 2018, Victoria and New South Wales jointly announced that they would formally "opt-in" to the Redress Scheme. Shortly thereafter, the ACT followed with a similar announcement. Further, an Inquiry by the Senate Standing Community Affairs Legislation Committee handed down its recommendation that the federal parliament pass the legislation creating the Redress Scheme.

However, Queensland, South Australia, Western Australia, Tasmania and the Northern Territory are yet to announce whether they will join the Redress Scheme. Discussions are ongoing between the Commonwealth government and the remaining states and there remains the possibility that some, if not all, will "opt-in". In particular, the new Liberal government in South Australia has indicated that they support the idea of joining a national approach to redress.

In addition to the state and territorial governments, non-government institutions such as churches and charities must also choose to "opt-in" in order for survivors of abuse at non-government institutions to be able to seek redress. While non-government institutions are currently able to "opt-in" in respect of institutions run in Victoria, NSW and the ACT, they cannot opt-in in respect of institutions based in the non-participating states until the states refer their legislative power to the Commonwealth.

Therefore, clarification of the position of Queensland, South Australia, Western Australia, Tasmania and the Northern Territory governments to the Redress Scheme is likely to be needed before non-government institutions participate. With the Redress Scheme set to commence on 1 July 2018, subject to passage of legislation, developments in this respect are likely over the coming months.

Implications for survivors and participating institutions

The Redress Scheme offers an alternative to litigation that will be quicker, cheaper and less traumatising for survivors. It will also provide greater certainty for survivors and participating institutions because there are clear parameters set around the process and outcomes. However, the participating institutions will not play an active role in the process beyond providing a direct personal response (if one is requested), and will not be able to make submissions in response to any applications.

It is anticipated that while many survivors will choose to participate in the Redress Scheme, there will still be a number of claims which are pursued through common law actions through litigation and alternative dispute resolution. In particular, claims which feature economic loss components (which are not provided for under the Redress Scheme), or which are of particular severity or complexity, may continue to be pursued outside of the Redress Scheme.

Of course, at this stage the Redress Scheme remains subject to change, particularly as negotiations between the federal government and the non-participating states continue, who may seek to make amendments before passing any legislation at the state level.

Andrew McArthur Charlie Morshead
Insurance and reinsurance
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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