Duty of care: new laws in Victoria for organisational child abuseAuthor : Andrew Seiter (Partner), Noa Zur (Special Counsel)

General Liability

From 1 July 2017, a child abuse victim in Victoria will be able to avoid many of the historical impediments that would have previously prevented them from seeking legal redress.

New laws have been passed in Victoria that impose a new duty of care on organisations exercising care, supervision or authority to take “reasonable precautions” to prevent the physical or sexual abuse of children committed by individuals associated with those organisations.

BACKGROUND

With overwhelming parliamentary support, key recommendations made in the Inquiry into the Handling of Child Abuse Allegations within Religious and Other Non-Government Organisation’s final report, Betrayal of Trust, have now been formally adopted.

The Betrayal of Trust report identified what the Inquiry considered the greatest challenges to victims of criminal child abuse, namely:

  • finding an entity to sue because of the legal structures of some non-government organisations;
  •  establishing that an organisation has a legal duty to take reasonable care to prevent child abuse by its members;  and
  • identifying a legal relationship between the perpetrator and the entity; convincing courts that organisations should be subject to vicarious liability for criminal acts.

The new laws endeavour to overcome the concerns identified in the report that some institutions, where abuse had taken place, had sought to deflect responsibility and liability to the individuals in the institution who may have been perpetrators of child abuse, without the institution itself accepting any responsibility.

The new laws will erode historical common law principles that said an employer should not be liable for merely creating the opportunity for an employee to be negligent, or because the abuse could not fairly be regarded as so closely connected with the abuser’s responsibilities as to be committed in the course of his employment [New South Wales v Lepore [2003] HCA 4].

Furthermore, the new laws dissolve many of the legal distinctions in the characterisation of the relationship between an organisation and an individual that may have previously provided a basis for organisations to avoid liability.  Religious organisations have, in particular, been criticised for relying upon these legal distinctions.

WHO DOES IT IMPACT?

The new laws will apply to any entity (referred to in the Act as a “Relevant Organisation”) that ‘organises for some end, purpose or work that exercises care, supervision or authority over children, whether as part of its primary functions or activities or otherwise’.

The definition is broad enough to include the obvious; childcare centres, after-school programmes, schools and religious institutions, but will also encompass those who have less structured or even ad hoc involvement with children such as sporting clubs.

The new laws also expressly extend to a holder of a statutory office, Department or Administrative Office within the meaning of the Public Administration Act 2004 (Vic), a body corporate established for public purposes and the Victoria Police.  It will have wide scope across government organisations responsible for care.

HOW WILL THEY BE IMPACTED?

A Relevant Organisation that assumes responsibility for the care, supervision or authority of children may now be held liable for the legal consequences of abuse committed after 1 July 2017 for any individual associated with the organisation, regardless of the legal characterisation of the relationship between them and the individual; unless the organisation can satisfy a Court that they took “reasonable precautions” to avoid the abuse.

Who can a “Relevant Organisation” be held responsible for?

A Relevant Organisation will be legally responsible for the abuse of individuals associated with the organisation, who include:

  • an officer, office holder, employee, owner, volunteer or contractor of the relevant organisation;
  • in the case of a religious organisation, a minister of religion, a religious leader, an officer or a member of the personnel of the religious organisation.

Where a Relevant Organisation has delegated, by means of contract or otherwise, the care, supervision or authority over the child to whom the claim relates to another organisation, an individual associated with the delegator organisation or the delegate organisation may still be regarded as an individual associated with that first organisation.

When can a Relevant Organisation be held liable for child abuse?

The Act provides for a new cause of action in negligence whereby a relevant organisation will owe a duty to a child:

“to take the care that in all the circumstances of the case is reasonable to prevent the abuse of a child by an individual associated with the relevant organisation while the child is under the care, supervision or authority of the relevant organisation”.

Abuse includes sexual and physical abuse.  The court is empowered to determine the meaning of physical abuse; an acknowledgement that each incident of abuse has its individual circumstances.

Importantly, once there is proof of abuse by an individual associated with the Relevant Organisation, the burden shifts to the Relevant Organisation to prove, on the balance of probabilities, that it took reasonable precautions to prevent the abuse in question.  This is a significant departure from the previous legal position that imposed the responsibility upon the claimant to establish negligence at the organisation level.

The new laws are not prescriptive about what constitutes “reasonable precautions”, but recognises it will vary depending on a range of factors such as the nature of the organisation, the role of the perpetrator in the organisation, and the relationship between the organisation and child.

The new laws also recognise some organisations may lack legal capacity to be sued.  The Relevant Organisation can, in lieu, nominate another party to be sued in its place.

IMPLICATIONS

The new laws overcome current legal obstacles that may have prevented persons who have suffered child abuse from suing the organisation that, whilst not guilty of committing the abuse, had given the offender opportunity and access.  The new laws reinforce the judicial trend in Victoria to make an organisation liable for the misconduct of one of its members [see Erlich v Leifer and Adass Israel School Inc [2015] VSC 499].

The new provisions will only apply to abuse that occurs on or after 1 July 2017.

The prospective nature of the amendments means organisations have a final opportunity to ensure they have put in place procedures and processes that will not only do the best to protect children from abuse, but will also allow the organisation to discharge the evidentiary burden that will now be imposed upon to satisfy a Court that the organisation did take “reasonable precautions” should, unfortunately, instances of abuse occur in the future.

Insurers need to be aware of the new laws when considering the potential for the vicarious assumption of liability by organisations for deliberate misconduct of employees or other associated members.

Insurers may want to consider whether a ‘molestation’ endorsement or exclusion should be incorporated into their policies to ensure the underwriting intention is clear on whether or not the policy is to cover organisations for any assumed liability for the deliberate wrongdoing of individuals the organisation may now be responsible for.

21/07/2017