Why compensation is important?

It’s a fairly common belief that “good things never happen to me”. Victims of abuse in Australia are not used to getting very much, you know, so they have never had much to cheer for or hope for in years gone by.

The same applies to compensation for victims. Most States of Australia have a victim’s compensation scheme. The maximum award for compensation varies from around fifty thousand dollars to seventy five thousand dollars. The statutory limitation is usually three years. In New South Wales, the time limit is two years. In NSW, victims of child sexual abuse usually receive up to thirty-five thousand dollars; the most serious cases of long-term pattern abuse can receive forty thousand dollars to fifty thousand dollars. These sorts of payouts are what I call token payouts. They are not calculated using any formula. They are simply amounts which the government scheme can afford. They do not reflect in any way the victim’s suffering, past or future. They take no account of economic loss, past or future. Typically, civil payouts by churches and charities are often in the order of fifty thousand dollars to a hundred thousand dollars. In some cases a bit more. But these are still token payments. They are payments offered to people who are living in poverty. The institutions take advantage of the victims’ poor circumstances.  The victims are expected to take the money and keep quiet.

Australia’s Royal Commission is bringing hope to many thousands of victims of institutional child sexual abuse…. hope that there will be justice and redress…. hope that perpetrators will be jailed…. hope that real compensation will be paid. Gone are the days of simple apologies. Saying sorry is easy and, in itself, is often unhelpful to the victims. I believe that when someone says that they are sorry, they must be really sorry. Compensation is needed to “seal” the apology and to make it believable and genuine. Real compensation sends the message to the community that the perpetrator did the wrong thing. The message is given to the community that this sort of behaviour is unacceptable and will be met with the full force of the law if it happens again.

The Laws of Australia state at [33.10.10]:

“The principal remedy for tort is compensatory monetary damages. It is recognised   that damages cannot return a plaintiff precisely to the pre-tort position, but the award is calculated to achieve this as far as money can. The remedial purpose of compensation is to put injured parties back as nearly as possible into the position in which they would have been had the wrong not been committed”.

These principles are further expounded in Todorovic v Waller[i], a 1980 High Court of Australia decision which states:-

1.   A plaintiff who has been injured by the negligence of the defendant should be awarded such a sum of money as will, as nearly as possible, put him in the same position as if he had not sustained the injuries.

2.   Damages for one cause of action must be recovered once and forever, and (in the absence of any statutory exception) must be awarded as a lump sum; the court cannot order a defendant to make periodic payments to the plaintiff.

3.   The Court has no concern with the manner in which the plaintiff uses the sum awarded to him; the plaintiff is free to do what he likes with it.

4.   Fourthly, the burden lies on the plaintiff to prove the injury and the loss for which he received damages.

I think it is important to recognise that it is the law in Australia that compensation must be awarded in a lump sum. This is to be a sum of money which will as far as possible return a victim to the same position that he or she would have occupied if it was not for the abuse suffered. It is also to be noted that compensation serves a remedial purpose as well as a restorative purpose. I think it is interesting that the case of Todorovic gives an injured party full and unfettered right to do what he or she wants to do with their lump sum compensation. I will be proposing to the Royal Commission that free expert financial advice be made available to all victims seeking compensation and the costs of this advice be built into a national fund to be subsidised by the institutions at fault. All too often, victims who have never seen thousands of dollars before receiving a lump sum find their compensation is used up with very little to show for it. However, with sound financial advice, there is an opportunity for victims to use their compensation money wisely, perhaps to purchase a house and to have something left over to invest and to provide an income for themselves into their old age.


[1] Todorovic v Waller (1981) 150 CLR 402, 412.


About Peter Kelso

I am a solicitor of the Supreme Court of New South Wales. I have been admitted to practice since 1984. I am the principal and founder of Kelso Lawyers which has operated in Newcastle since 1986.

I have been an advocate for compensation for victims of abuse since the commencement of the Victims Compensation Tribunal in New South Wales in 1988. I conduct the largest victims practice in New South Wales. I have a high level of engagement with numerous NGOs such as woman’s refuges, sexual assault services, community organisations and healing centres.

On 31 October 2012 I was a finalist for the Justice Medal, presented by the Law and Justice Foundation of New South Wales.

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