Get all your news in one place.
100’s of premium titles.
One app.
Start reading
The Guardian - AU
The Guardian - AU
National
Christopher Knaus

Australian Catholic church’s insurer launches court bid to cover smaller share of abuse compensation

Frontage of St Patrick's Cathedral in Melbourne
PwC will have the power to determine which percentage of abuse payouts would be covered by CCI and what would be left up to individual church bodies. Photograph: Dean Lewins/AAP

The Catholic church insurer wants to establish a scheme that would stave off its own insolvency by paying church bodies only a fraction of the money owed to abuse survivors at rates to be determined by the scandal-plagued consultancy PwC, documents show.

Catholic Church Insurance is facing significant financial turmoil due to the rising volume of abuse claims, estimating it has $381m in liabilities relating to professional standards payouts to various church entities, including dioceses and church-aligned charities.

In an attempt to protect itself financially, CCI is asking the federal court to approve a legally binding scheme that, if it comes close to insolvency, would trigger a reduction in abuse payouts to church bodies. The scheme would allow the insurer to pay out only a yet-to-be-determined percentage of what is owed to survivors.

Church entities, including non-Catholic charitable service providers operating on minuscule resources, would be left to cover the rest. They would also be stripped of the power to take legal action against CCI to recover what is owed.

Documents detailing the proposal show that the beleaguered consultancy PwC will be given a critical role in the scheme’s operation. PwC will have the power to determine which percentage of abuse payouts would be covered by CCI and what would be left up to individual church bodies.

Survivors and survivor groups have not been consulted in any way on the proposal.

Only church bodies that hold insurance policies with CCI, deemed as creditors in the current process, have a chance to object before the court decides whether to approve CCI’s scheme.

The proposal is due to be considered at a creditors’ meeting on 31 October, which will include creditor committee members Uniting church, the dioceses of Bunbury, Cairns and Parramatta, the Archdiocese of Melbourne, Anglicare SA, and Baptist Insurance Services.

The survivor group Beyond Abuse has expressed significant concern about the lack of any consultation with survivors and says the proposal is “another example of the church crying poor to the public when in fact they are sitting on billions of dollars of assets and continue to receive hundreds of millions of dollars of Commonwealth and state subsidies for private schools and private hospitals”.

“I am unaware of any survivor groups being consulted but that seems to be the norm when dealing with [Catholic groups],” said Steve Fisher, the chief executive of Beyond Abuse. “They very rarely consult as they do not want to hear the truth as to what survivors need, as to be quite honest all they care about is their bottom line.”

CCI’s financial troubles means church entities will be forced to seek new insurers to cover them for child abuse. But the broader market for such coverage has collapsed due to nationwide reforms in 2021 removing time limits on abuse claims.

That has prompted state governments in many jurisdictions to step in and indemnify organisations using taxpayer money. They have done so out of fear that they would cease providing critical community services, including out-of-home foster care and youth homelessness care.

Asked whether it was concerned the CCI’s scheme creates a risk that survivors would not receive payments, a spokesperson for CCI said: “Survivors’ payments remain as they always have been the ultimate liability of the Catholic church entities in question, and any inability for insurance to meet all those liabilities either in part or in full would ultimately be met by the Catholic church as they have previously stated publicly.”

The Australian Catholic Bishops Conference responded to questions by referring to a previous statement about CCI’s financial difficulties, issued in May.

That statement said the church was committed to working “towards justice and healing for the crimes and sins that took place, where that is possible, including through the payment of compensation”.

“The Catholic Church Insurance run-off also means that Church entities that have been insured with CCI will need to find new insurers,” the statement said. “We are supporting Catholic ministries currently insured with CCI to ensure continuity of general insurance cover, and we are confident that will be achieved.”

• Information and support for anyone affected by rape or sexual abuse issues is available from the following organisations. In Australia, support is available at 1800Respect (1800 737 732). In the UK, Rape Crisis offers support on 0808 500 2222. In the US, Rainn offers support on 800-656-4673. Other international helplines can be found at ibiblio.org/rcip/internl.html

Sign up to read this article
Read news from 100’s of titles, curated specifically for you.
Already a member? Sign in here
Related Stories
Top stories on inkl right now
One subscription that gives you access to news from hundreds of sites
Already a member? Sign in here
Our Picks
Fourteen days free
Download the app
One app. One membership.
100+ trusted global sources.