Civil Liability Reform NSW – Child Abuse (Sexual and Physical)
Proper Defendant and Associated Trusts
The Civil Liability Amendment (Organisational Child Abuse Liability) Bill 2018 (NSW) has passed both houses of parliament on 17 October 2018 without amendment and is awaiting assent.
The objects of the Bill, according to its explanatory memorandum, are:
(a) to create a duty on organisations to prevent child abuse and to create a legal presumption that an organisation has breached the duty if a child for which it has responsibility is subjected to child abuse by an individual associated with the organisation, and
(b) to make an organisation vicariously liable for child abuse committed by employees and persons akin to employees, and
(c) to permit plaintiffs to bring civil child abuse proceedings against unincorporated organisations that may be liable for the abuse.
It is noted:
- It applies to incorporated bodies and unincorporated associations (UAs)
- It imposes a duty prevent child abuse (sexual or physical)
- Section 6C – A “successor” organisation is taken to be the old organisation (whether incorporated or not). This has immediate implications in the M&A space. Taking over the assets and undertaking, may result in the acquirer assuming the historic liabilities (even if the old entity is left behind).
- It allows proceedings to be commenced against an UA in its name and orders to be made against it (as if it had corporate identity)
- It has machinery for the trustee of an “associated trust” being nominated as the proper defendant (or ordered to be so) but the UA also remains liable
- The list of what may make a trust an “associated trust” is similar to similar legislation passed in Victoria earlier this year.
Have a question about Trusts, Incorporated Bodies or Associations?
Corney & Lind commercial lawyers will be happy to answer your questions about these sensitive matters.