June 2019

Opting into the National Redress Scheme: what might it mean for you?

In light of recent cases and extensive media coverage involving institutional sexual abuse, it is a timely reminder for institutions working with children, to consider whether they should opt into the National Redress Scheme.

The Scheme

The National Redress Scheme (Scheme) created under the National Redress Scheme for Institutional Child Sexual Abuse Act 2018 (Cth) (Act) is a new Scheme introduced to provide victims of childhood sexual abuse with expedited access to financial compensation, counselling services and recognition from institutions responsible for the cause of sexual abuse.

The Scheme commenced on 1 July 2018, and applies to Federal, State and Territory government departments and the following types of institutions who voluntarily opt into the Scheme before 30 June 2020:

  • not for profit organisations and charities;

  • religious institutions;

  • educational institutions; and

  • any other body, entity, group of persons or organisation (whether or not incorporated) that work with children.

Under the Scheme, victims of childhood sexual abuse are able to make claims for redress to the government (Operator) regarding instances of abuse that meet the eligibility criteria.  The eligibility criteria include that the sexual abuse must have occurred before 1 July 2018, one or more participating institutions must have been responsible for the abuse and the victim must at the time of application be an Australian citizen or a permanent resident.

The Operator must review applications made by victims, seek information from participating institutions alleged to be responsible for the abuse and make determinations as to the likelihood of abuse and the responsibility of relevant participating institutions.  

If the Operator determines that there is a reasonable likelihood of abuse, the Operator will make an offer of redress to eligible victims, which will include a redress payment of up to $150,000, access to counselling and other psychological services (or payment up to $5,000 to enable the victim to receive those services) and a ‘direct personal response’ from each Institution (eg. an apology or a statement of acknowledgement or regret).

Specific obligations for participating institutions

If a participating institution decides to opt into the Scheme, then it agrees to be bound by determinations made by the Operator under the Scheme. The Act also requires participating institutions to:

  • provide information to the Operator where requested for the purpose of determining claims;

  • take reasonable steps to provide victims with direct personal responses where the Operator directs the institution to do so; and

  • pay the Operator a quarterly funding contribution amount (to be determined by the Operator) which will include an amount to cover the institution’s share of redress and counselling payments and a contribution to the Operator’s costs of running the Scheme.

Responsibility for abuse

An institution will be determined to be responsible for abuse if it is found to either be:

  • ‘primarily responsible’, where the institution is solely or primarily responsible for the abuser having contact with the person; or

  • ‘equally responsible’, where the participating institution and one or more other institutions are approximately equally responsible for the abuser having contact with the person, and no participating institution is primarily responsible for the abuse of the person.

Factors that will be taken into account when determining responsibility include:

  • who was responsible for the day to day care or custody of the person when the abuse occurred;

  • who was the legal guardian of the person when the abuse occurred;

  • who was responsible for placing the person into the institution in which the abuse occurred;

  • whether the abuser was an official of the institution when the abuse occurred; or

  • whether the abuse occurred on the premises, or in connection with the activities, of the institution.

The Scheme does not provide institutions with a right to dispute or appeal determinations made by the Operator under the Scheme.  Only victims have the right to request a review of a determination.  However determinations made under the Scheme do not have the effect of being a finding of law or fact made by a court.  Determinations are only effective for the purposes of the Scheme. 

Can victims who are successful under the Scheme, then bring court proceedings against institutions?

This will depend upon whether the victim accepts an offer of redress from the Operator.  If a victim accepts a redress offer under the Scheme, then a condition of acceptance under the Act is that the victim releases and forever discharges the participating institution and its officials from civil liability for abuse of the person that is within the scope of the Scheme. 

However, this release does not displace any criminal liability for abuse or the criminal/civil liability of individual abusers. 

If a victim declines an offer of redress, then the victim retains any rights it has to commence  proceedings against each participating institution (and their officials) responsible for abuse. 

Risks associated with not opting into the Scheme

The government appears to be making publicly available registers that list the names of institutions that have not yet opted into the Scheme.  Being placed on a public register may cause reputational damage.

Another risk for institutions that choose not to opt into the Scheme, is that institutions that are responsible for abuse, could be found to be liable for significantly greater amounts of money if they are taken to court and found to be liable for damages. 

How to opt into (or out of) the Scheme?

We understand that the application process takes between 3-6 months.  In addition to entering into various agreements with the Operator, a participating institution will also need to provide various information to the Operator, attend on-boarding training and demonstrate its ability to pay the quarterly contribution funding payments. 

While the application process requires a bit of work, withdrawing from the Scheme is relatively easy.  An institution can cease to be a participating institution under the Scheme, at any time, by giving the Operator written notice.

Take home message

Institutions involved with children should seek appropriate advice to navigate the risks and determine whether opting into the Scheme is going to be beneficial for them.  Choosing to opt into the Scheme (or not) has the potential to impact institutions:

  • financially – eg. liability for redress and administration contribution payments vs the risk of civil liability for damages in court; and

  • reputationally – eg. having the inability to appeal determinations under the Scheme vs going through what could be a very public court process or being put on a public register.

Author: Matthew Wilson and Michael Cossetto