Royal Commission into Child Sexual Abuse Releases Consultation Paper on Redress Schemes and Civil Litigation

The Royal Commission into Institutional Responses to Child Sexual Abuse has released its long awaited consultation paper on redress schemes and civil litigation . The Royal commission has requested feedback, and the Actuaries Institute provided a submission.  The Royal Commission expects to issue its final paper in mid-2015.

The Royal Commission has not yet reached a final decision regarding its recommendation to government. However, the paper sets out a number of options for the formation and ongoing management of a redress scheme, including a single national scheme administered by the Australian Government. Under this option Institutions and Governments would fund the scheme according to their responsibility to individual survivors of abuse, as well as a share of administration costs. Detailed modelling by Finity Consulting suggests a total cost of redress (including counselling) in the order of $4.378B, based on 65,000 victims receiving monetary payments of an average of $65,000 each. 45% of this cost would fall to government, after allowing for the government to fund the contributions of Institutions that no longer exist, or that have insufficient funds.

The Royal Commission envisages the continuation of civil litigation on a parallel basis to the redress scheme. This would have significant implications for insurers that provided cover to Institutions. The Royal Commission is also considering changes to barriers to claims by survivors, including removing limitation periods, strengthening the legal duty of institutions, and allowing property trusts to be sued.

Some further background to this issue can be found in the paper The Royal Commission into Institutional Responses to Child Sexual Abuse - Implications for Insurers presented at the General Insurance Seminar 2014.