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Prior Settlements For Institutional Abuse – What Has Changed And How Can They Be Overturned?

Prior Settlements For Institutional Abuse – What Has Changed And How Can They Be Overturned

Legislative History of Institutional Abuse Law

Previously, many survivors of historical sexual abuse settled their cases for minimal compensation due to the profound legal difficulties and obstacles that cases then faced.

Recently, there have been three main changes to the law which have enabled victims of abuse to revisit their claims and potentially seek further compensation. After the findings of the Royal Commission and consequent legal changes, the law is more favourable now to victims of abuse that it has ever been.

1. The First Change: No Limitation Period

The first change, in 2015, was the removal of the limitation period for claims involving physical or sexual abuse committed when the person was a child.

The Royal Commission found that the average victim took around 23.9 years to make a disclosure of sexual abuse. Before the removal of limitation dates, victims of child abuse had just three years to pursue their cases.

2. The Second Change: Always Having Someone to Sue

The law changed again on 1 July 2018. The change allowed victims to sue on incorporated entities by making them nominate a proper Defendant to the claim on behalf of non-government organisations. This removed the ‘Ellis Defence’ often used by the Catholic Church to argue that they did not legally exist in an entity that could be sued.

Institutions were able to defend cases successfully on this basis prior to the above law coming into effect.

3. The Third Change: Setting Aside Earlier Settlements

The third and biggest change was on 18 September 2019. It provided a pathway for victims to apply to the Supreme Court to set aside a settlement agreement relating to a previous payment if the Court is satisfied that it is ‘just and reasonable’ to do so.


Application of the Law by the Courts

WCB v Roman Catholic Trusts Corporation for the Diocese of Sale was the first Victorian case heard by a Court involving an application to set aside a previous settlement agreement.

The Plaintiff in this case was an altar boy, abused between 1977 and 1980 when he was between the ages of 11 and 14. His abuser was a priest in the Warragul Catholic Church, Daniel Hourigan.

The perpetrator died shortly after the Plaintiff made his police complaint. As a result, there was never a criminal finding of guilt. The abuse was severe in nature and included different types of abuse.

The Plaintiff settled his case in 1996 for $32,500 in damages plus legal costs.

The Plaintiff was in a poor legal position when he settled his case. His claim was brought outside the limitation period and there was no proper Defendant to the proceedings (see the Ellis Defence, above).

In 2020, the Supreme Court of Victoria considered whether it was ‘just and reasonable’ to set aside the Plaintiff’s settlement agreement.

Some of the factors the Court considered were:

  • the circumstances of settlement;
  • whether the Plaintiff was legally represented;
  • the assessment of damages;
  • the consequences for the parties if the Deed were set aside;
  • the cause of action;
  • legal barriers at the time of settlement;
  • evidence available due to the passage of time.

The Plaintiff was successful, and the settlement agreement was set aside. The Church appealed the decision unsuccessfully. The Plaintiff was no longer bound by the previous settlement agreement. He could pursue a further claim for damages. This has now likely settled out of Court. 


Where To From Here?

Plaintiffs who have previously settled their abuse cases have two options in terms of a claim against an institution. They may either apply for a ‘top up’ from the National Redress Scheme or seek to revisit their common law claim. 

The National Redress Scheme (‘NRS’) commenced on 1 July 2018 and provides a ‘redress’ payment of up to $150,000 (less any relevant prior payments) to victims of sexual abuse. An institution responsible for the abuse must have agreed to participate in the NRS for compensation to be paid. Many institutions are participating in the scheme including the State of Victoria (and therefore State Schools), the Anglican Church, Catholic Religious Orders, Scouts Australia, Yooralla, De La Salle Brothers and more. 

Victims may also apply for counselling support and a ‘direct personal response’ from the institution. Upon accepting a payment, victims are required to sign an agreement which would prohibit them from suing the institution. Applications to the NRS must be made strictly by 30 June 2027.

Given the limited compensation amount available from the NRS, victims should always seek legal advice before pursuing further legal action.  If open to be pursued, a common law claims will nearly always result in a better outcome than a NRS claims. 

Arnold Dallas McPherson offer a first free consultation to survivors of abuse. We are experienced in both types of claims and can advise quickly whether there is further compensation that may be claimed.

Kelsey Johnston

Kelsey Johnston

Kelsey Johnston assists our clients in a variety of matters including WorkCover, TAC claims, Crimes Compensation matters including Sentencing Act applications, and applications to the National Redress Scheme. She also assists clients who are unable to work in superannuation matters to obtain their Income Protection or Total and Permanent Disablement Benefits.

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