Update on National Redress Scheme (NRS) and Common Law Claims

The NRS continues to be criticised for delays in claims being processed, lack of transparency in how claims are determined (particularly with respect to the finding of  “extreme circumstances” being the gateway to the maximum payment of $150,000) and the indexation of prior payments. The fact that a payment can be reduced on review is also a matter of great distress to claimants who agonise over whether to request a review of their NRS offers. 

The NRS has released some key data as at 1 November 2019 regarding the scheme:

5,292 applications have been received; 604 or 14% of claims are currently on hold because the claim involves a non participating institution; 708 redress payments have been made totalling just under $60,000,000 with approximately $567,000 being paid for counselling and psychological services; Average payment of $80,466; 2 in 3 applicants are male; QLD has the largest number of applicants at 30% of all claims; All Australian Governments and 67 Non Government Organisations have joined the scheme covering 41,900 sites; About 77% of applications involve more than one institution and 21% involve 4 or more institutions.

The NRS has also introduced a case management approach which means that claimants will deal with only one customer services officer. The NRS is also hoping to appoint another 18 “Independent Decision Makers” (IDP’s). The IDP’s determine the amount of any offer.  The Federal Government recently announced $11.7m in additional funding in 2019/2020 which includes $6.6m to implement the case manager model and to increase the number of IDP’s.

Whilst improvements in the scheme will assist claimants, the NRS remains the option of last resort, particularly now that legislative change means that survivors of child abuse have much better prospects of winning in a court of law and now that claimants in several states have the option of applying to a judge to have their prior deeds set aside. In this connection, claimants who were abused in Victorian institutions need to take particular care in accepting a redress offer given that pursuant to s27QA of the Limitations of Actions Act 1958, any claimant who accepts an offer under the NRS cannot then apply to a judge to have any prior settlement to which the NRS payment relates set aside.

This emphasises the importance of claimants getting independent legal advice before starting the NRS process, and certainly when an offer is received, noting that claimants only have 6 months to decide to accept an NRS  offer (although an extension can be sought) and 6 months is likely to be insufficient time for a potential common law claim to be properly investigated. Claimants should be aware that only one application can be made in the lifetime of the scheme, whether successful or unsuccessful. If an offer is declined or allowed to lapse, it is not possible to reapply to the NRS in the future, even with respect to abuse that may have occurred in another institution.

Whilst the NRS gives survivors another option, the potential monetary payments achieved in common law claims remain significantly higher than in redress claims.  Angela Sdrinis Legal has recently negotiated several significant payments for historical child abuse victims including $1.25m for a claimant abused in a private school, $1m for a claimant abused in school, state care and in prison, $850,000 for a claimant abused in a state school and $550,000 in a ward of state claim. Having said that, it is still difficult to achieve high payments in historical abuse claims. Proving claims in a court of law is difficult even when the events occurred 12 months ago. The difficulties in running historical abuse claims increase exponentially where the events occurred 20/30/40 or even 50 years ago. Proving economic loss can also be very difficult in historical abuse claims. All of the cases referred to above included a significant component for loss of income.

 The bottom line is that claimants should seek advice before making a redress claim or accepting a redress offer. Even if legal advice has been previously sought and litigation was not recommended, the legal landscape in the area of historical child abuse is changing daily and a second opinion should always be sought.