I introduction

B Difficulties in Identifying a Proper Defendant in Institutions Other than Faith-Based Institutions
The Royal Commission’s recommendation concerning the nomination of proper defendants applies to institutions with which property trusts are associated. However, there would be many unincorporated institutions or associations having no association with property trusts. Under the legislation recommended by the Royal Commission, they would not be subject to any requirement to nominate proper defendants. There are many institutions or associations which are smaller and less hierarchically organised than their faith-based counterparts, but which are no less responsible for the wellbeing of children in their care or control. In such cases, the lack of a corporate entity to sue is, however, only the threshold problem. Many associations (particularly small interest groups or sporting or other clubs) may have no assets which would be available to meet a judgment, even if there were an entity to be sued.
One approach would be to require that in future such entities carry insurance or self-insure with declared assets against claims for civil liability for child sexual abuse by employees or associates or volunteers. Such a proposal was considered by the Royal Commission in its Redress Consultation Paper²¹⁵ and a similar solution has also been proposed by the Parliament of Victoria Family and Community Development Committee in its Betrayal of Trust Report.²¹⁶
The Royal Commission accepted that there may be ‘some merit’ in the Victorian Parliament Family and Community Development Committee’s recommendation that, where the Victorian Government funds non-government organisations or provides tax exemptions or other entitlements, the government consider requiring them to be incorporated and adequately insured.²¹⁷ The Commission was ultimately persuaded that compulsory incorporation and insurance of small community organisations would potentially deter people from forming small associations, thereby ‘losing the various sporting, cultural and other activities they provide in the community’.²¹⁸ For this reason the Royal Commission declined to recommend that any organisations should be required to incorporate.²¹⁹ The Royal Commission did however suggest that where unincorporated bodies receive direct or indirect government funding to provide children’s services, they might be required to insure.²²⁰
To ensure access to compensation by survivors, the preferable approach would be to require incorporation of bodies which undertake responsibility for the physical welfare or spiritual, psychological or emotional guidance of children. This is especially so in the case of organisations that are funded by government or provided with tax exemptions and other entitlements. Exemptions could be allowed for small organisations (sporting and other clubs with small memberships, for example). The requirement for compulsory incorporation and insurance could be limited to specific types of organisations which provide particular types of children’s services, as was suggested by the Royal Commission in its Redress Consultation Paper.²²¹
A statutory requirement for incorporation of at least some of these non-government organisations would ensure that survivors have the capacity to easily identify and sue a corporate entity. The Royal Commission did not discuss the reasons why such a proposal could not be framed in a way that provided the benefits of incorporation and insurance, but it was apparently to avoid deterring desirable social activities among sporting and smaller associations.