Abuse in Care: a case for compensation

Can ACC handle this?

Notes to readers: I’ve been a bit slow in posting this week. I was drafting a piece for North & South magazine’s forthcoming issue on “the State of the Nation”. So I hope you’ll look out for that on newsstands later.

Thank you to those who’ve pledged subscriptions to Politics Happens. That vote of confidence means a lot. I still haven’t decided when or whether to turn on paid subscriptions. But the support is appreciated. I strive to provide a balanced commentary, and the fact that I have readers from left and right suggests that something’s working.

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Abuse in Care

The final report on the abuse and neglect of children, young people and adults in the care of the State and faith-based institutions in Aotearoa New Zealand between 1950 and 1999 is now out. It’s a huge report – not just in the number of pages, but in the scope of human pain and suffering that it documents.

Of the estimated 655,000 children, young people and adults in care from 1950 to 2019, it is estimated that up to 256,000 were abused and neglected. During the Inquiry period, 1950 to 1999, it is estimated around 510,000 people were in care and up to 200,000 were abused and neglected.  The true number will never be fully known as records of the most vulnerable people in Aotearoa New Zealand were never created or were lost and, in some cases, destroyed.

In late 2022, an initial report on Lake Alice’s Child and Adolescent Unit made revelations about torture (paraldehyde injections and electric shocks) and rape that horrified us. The toll on people is incomprehensible.

Official apologies and financial sums can never restore what the survivors have lost nor remedy the wrongs. But something substantial should be done, and we have the institutional means to do it.

Some survivors of abuse in care would already have made sensitive claims under ACC. That could entitle them to receive counselling services for free, but probably little else.

An earlier report by the Inquiry found that, thus far, “payments by State and faith-based institutions do not amount to meaningful redress”. They’ve been inconsistent across agencies and low compared with other countries. It recommended that “the Crown should establish a puretumu torowhānui [holisitc redress] system to respond to abuse in State care, indirect State care and faith-based care”. But its financial payments wouldn’t amount to meaningful compensation for losses and for pain and suffering, and so: “Survivors should not have to give away the right to seek accountability and compensation in return for redress from the scheme.” Acceptance of a payment should not limit the right to sue or to lay a complaint with the Police. Survivors who suffered physical injury and/or sexual abuse in care would normally be covered by ACC law, and hence barred from suing for compensation. So that report recommended “an exception to the ACC bar [on the right to sue] for abuse in care cases so survivors can seek compensation through the courts”. But we also know that remedies in civil courts are very inconsistent too.

If the government chooses not to progress those civil litigation reforms, however, the final report’s alternative is:

The government should reform the accident compensation (ACC) scheme to provide tailored compensation for survivors of abuse and neglect in care and other appropriate remedies. (Recommendation 11).

ACC cover and compensation may sound like a good idea, as it’s relatively simple administratively, being based on facts not fault. As it means “no right to sue”, however, the entitlements should be meaningful substitutes for compensatory damages recoverable in court.

According to ACC’s financial statements to 31 March 2024, the scheme has $49.5 billion in funds under management. As it’s meant to be fully funded, the sum of total assets ($51.8 billion) is balanced against total liabilities ($55.9 billion) which are mainly outstanding claims liabilities.

ACC reserves are accumulated from levies drawn for purposes specified in law, so they can’t be tapped for other needs. But it shows how New Zealanders can collectively build such funds. That massive fund is “ours”. Furthermore, ACC has experience in compensation claims of a sensitive nature, particularly “mental injury” caused to victims of sexual crimes.

If ACC were to handle compensation for abuse in care, it would need an amendment to its law to create special categories of cover and entitlements, a dedicated account and a source of funds. Presumably the money would come from taxes and (perhaps) a levy on those faith-based organisations involved. As the victims weren’t (I guess) in employment at the time the abuse occurred, the earners’ and employers’ accounts wouldn’t be affected. Some claims may date back before ACC was instituted in 1974, so there’d have to be a retrospective law to cover those.

Realising that such matters can’t really be reduced to figures, the Inquiry makes these estimates:

The average lifetime cost to the survivor of things that New Zealanders consider normal, day-to-day activities was estimated in 2020 to be approximately $857,000. Based on the estimated number of people abused and neglected in care between 1950 and 2019, the total cost is estimated to be between $96 billion and $217 billion. Of this the smallest proportion, up to $46.7 billion, is paid by the taxpayers of New Zealand. The largest cost, estimated at up to $172 billion, is borne by survivors. (Executive Summary, 51–52).

Potential sums in compensation would be staggeringly large, even if the law limited them somehow. If there were 100,000 people surviving and eligible, then $100,000 per claimant amounts to $10 billion.

Doing this, or anything like it, isn’t easy, but it’s not out of reach. Politically, though, it’s a hard sell because, unlike personal injury by accident under ACC, abuse in care, except perhaps in old age, isn’t something that the middle class worry about.

Seacliff.