Abuse compensation payouts: redress scheme options

Evidence was given at the most recent hearings at the Independent Inquiry into Child Sexual Abuse (“IICSA”) in relation to future potential redress schemes for compensating victims of child sexual abuse.

The issue of a national redress scheme has formed part of the IICSA civil justice investigation from the outset in which IICSA made it clear that:

“The Inquiry acknowledges that many victims and survivors of child sexual abuse may seek broader outcomes from any reparations process than those delivered through a civil claim for damages…the Inquiry hopes that the views provided will feed into any wider investigation into possible reforms and/or alternatives to this process.”

The need for a redress scheme, its form and potential operation is therefore currently under consideration in an attempt to effectively circumvent civil litigation as a means to appropriately compensate victims of abuse, which has often been criticised as being ‘drawn-out’ and ‘adversarial’.

Alternative methods of compensating victims and funding

Changes to existing CICA process

The Criminal Injuries Compensation Authority (“CICA”), is a last resort, no-fault compensation scheme which is funded by the tax-payer. It provides compensation for victims of violent assault when the victim has exhausted every other route and form of compensation available to them.

A suggestion was made as to whether thought had ever been given to changing the existing CICA rules to make it a fault-finding organisation to justify recoupment by victims of sexual abuse. However, this raised concerns as to fundamentally changing the nature of the scheme and that it would simply bring the CICA into a more adversarial and Court setting, moving it away from an administrative scheme for which any redress scheme would need to be.

Something akin the MIB scheme

Another option mooted included a scheme designed just for insurers to fund the redress scheme, according to how much business they have done covering institutions who have been subject to allegations of abuse or, perhaps even more so, focusing on the extent to which the insureds have been guilty of “culpable conduct”, so that the balancing of resourcing falls on a body of insurers.

Perpetrators

The general consensus amongst those in attendance at the IICSA hearing was that having the perpetrators pay, or at least pay in part, for compensation deriving from any future redress scheme would be welcomed, especially as this would provide the functions of “accountability and responsibility” that many victims are searching for.

This raised a number of issues given that most, if not all, perpetrators are unlikely to have sufficient assets to make a meaningful contribution to any redress scheme, and it was noted that victims and survivors were understandably not unanimous about the prospect of receiving money directly from the perpetrators.

Institutions

It was also discussed as to whether or not institutions should pay and/or contribute to any potential redress scheme. This was a way in which to demonstrate that institutions who had been subject to allegations of abuse should be held accountable for past failings.

However, this view was not without criticism or concern, and it was noted that this would cause potential issues for smaller institutions who potentially could not pay, which would create unfairness on all sides including the victim who would not gain access to any redress compared to those who had been abused which involved institutions who still had the means to pay.

Ombudsman

Another of the alternative methods of funding a national redress scheme used to compensate victims of child sexual abuse was similar to the Financial Ombudsman Service. This option was suggested in an effort to resolve and adjudicate upon disputes which would be directly funded by the state. However, whilst it may be that a quicker system of adjudication could be implemented that the civil claim process, it would still have adversarial elements to the process without the guarantee receiving redress payments.

Insurers

The panel also discussed the potential involvement of insurers in a potential redress scheme however  several issues were highlighted, such as the fact that not only did historic Public Liability insurance not anticipate liability for abuse, but they did not anticipate redress schemes payments of any kind and the premiums taken were therefore very small. It was therefore suggested that insurers cannot be expected to have any obligation to pay for a redress scheme in such circumstances.

However, one suggestion was that cost savings may be an incentive for insurers to engage in any future redress scheme. This is on the basis that if it was possible to produce a simple redress scheme, matters ought to be resolved quicker and at lower cost compared to that cost which might be incurred via the current civil process.

Redress schemes in other jurisdictions and sectors

There have already been attempts to establish redress schemes in other jurisdictions and sectors.

 Northern Ireland and Australia have alternative redress schemes to civil litigation for child sex abuse survivors, though such schemes have received criticism for being “narrow in scope”, especially in relation to who was eligible to apply for their respective schemes.

There would also be an issue with any future redress scheme in this country, especially regarding victims of interfamilial sexual abuse, if the scheme was only set up to compensate victims of institutional sex abuse as it would potentially alienate other victims. However, it ought to be noted that victims of interfamilial child sex abuse cannot currently claim compensation via the civil justice system in the event that an institution was not involved and at least partly to blame i.e. in circumstances where the victim was unknown to social services and/or the local authority etc.

The redress schemes in Australia and Northern Ireland have also come under further scrutiny due to them being ‘fault-based’ systems that require a very low evidential barrier. On the other hand, if a fault-based system required a higher evidential requirement then this would begin to look more like the civil justice system.

Conclusion

There are clearly a number of significant challenges in attempting to create an alternative method of compensation by way of a national redress scheme. The message which underpins any such redress scheme, and which is likely to be the most difficult to satisfy, is fairness. Any redress scheme has to achieve fairness not only to those contributing to the scheme but to those victims who would be entitled to access the scheme. This permeates throughout the entire discussion and raises a number of questions including:

1. What evidence/information must a victim need to provide to be eligible under the scheme?
2. What tariff will be applied; how will redress by measured and to what extent will legal costs be included or excluded?
3. Who will make the decisions on redress payments and how can it be ensured that this decision will be independent?
4. How will any redress scheme be funded and by whom?

Given the sensitivity and complexity of establishing a redress scheme to operate fairly to all, there is no doubt that further conversations and consultations around this subject will be needed before any potential redress scheme can be introduced.

For more information, please contact author, Beth Hilton.