Christian Brothers and Edmund Rice Education Reach Agreement on Abuse Compensation Scheme

REVISED COMPENSATION SCHEME ANNOUNCED FOR CHRISTIAN BROTHERS ABUSE SURVIVORS

The Trustees of the Christian Brothers and Edmund Rice Education Australia (EREA) have reached a memorandum of understanding to establish a revised compensation scheme for survivors of historical child sexual abuse.

Under the proposed agreement, EREA will assume responsibility and liability for all current and future legal proceedings and claims related to such abuse.

"This is simply the right thing to do for victims and survivors." – Dr. Stephen Brown, Chair of EREA

Key Details of the Agreement

• Background: The agreement follows the Christian Brothers' application for a pause on civil claims, citing insufficient funds to pay victims. A moratorium on payments was granted by the court.
• Property Sales: The Christian Brothers had proposed a scheme to sell 36 properties worth approximately $217 million and split proceeds among creditors, including survivors owed an estimated $774 million.
• EREA's Role: EREA was created in 2007 to assume control of former Christian Brothers schools. Over a decade, the Christian Brothers transferred property holdings worth hundreds of millions of dollars to EREA for $1 each.
• Previous Stance: EREA had previously refused to replace the Christian Brothers as defendant in court claims and stated those properties were not available for compensation.

Under the new proposal:

• EREA will cover all current and future legal proceedings and claims before the government-run National Redress Scheme.
• The Christian Brothers' remaining 36 properties will be sold to pay survivors with outstanding settlements or judgments, including legal costs.
• Survivors with claims not yet finalized can sue EREA or seek redress through the National Redress Scheme. EREA will consent to replacing the Christian Brothers as defendant in legal proceedings.
• The two entities require six to eight weeks to document the revised scheme. It will then be put to a vote by creditors and requires court approval.

Financial Context

• The Christian Brothers stated they have $23 million in cash, spending $1.4 million weekly on settlements since October 2024.

"Edmund Rice are folding because the law is against them." – Grace Wilson, partner at Rightside Legal

Reactions from Key Parties

Dr. Stephen Brown, Chair of EREA: Stated the body would step in to address future funding shortfalls, calling the revised scheme "simply the right thing to do for victims and survivors."

The Trustees of the Christian Brothers: Stated the revised scheme is expected to provide a better outcome for all creditors, including victims, than liquidation.

Federal Social Services Minister Tanya Plibersek: Welcomed the announcement, stating victims should not have been put in such a position and that EREA is expected to act in good faith.

Grace Wilson, partner at Rightside Legal: "Edmund Rice are folding because the law is against them."

Lawyer Judy Courtin: Expressed relief for her clients but criticized the Christian Brothers and EREA for the stress caused to victims.

Lawyer Laird Macdonald: Called the initial attempt to avoid responsibility "disgraceful."

Lawyer Jodie Harris: Said the memorandum of understanding "offers renewed hope for survivors."

Background

• The Catholic order of the Christian Brothers has faced numerous abuse claims over several decades.
• The Royal Commission into Institutional Responses to Child Sexual Abuse had recommended dismantling the Ellis Defence, under which the church could not be held liable for clergy actions.
• EREA assured its 61 schools and 44,000 students that operations would continue unaffected.
• A directions hearing will be held at a later date.