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Published: 10 April 2018
Author: Creon Coolahan

Victims of crime accessing offenders' superannuation for compensation a step forward for justice

Changes proposed by the Federal Government to compensation laws have the significant potential to address longstanding barriers to victims of crime from obtaining compensation from their perpetrators.

As the law presently stands in Victoria, monies and assets held by offenders in superannuation funds are considered not to be “property of” the offender.

This means that if a victim of a crime launches civil action against an offender, or makes an application under the Sentencing Act 1991 (Vic) to the Judge or Magistrate who originally sentenced the offender for compensation, then the offender is presently entitled to say that any money he or she has saved in their superannuation fund cannot be taken into account by the Court in awarding compensation, or otherwise be accessed by the victim.

Unscrupulous offenders, perhaps anticipating claims against them by victims of their crimes, can presently shift assets and money into their super fund to thwart victims’ claims. One notorious example cited by the Federal Government in mandating these changes to compensation laws was that of a convicted paedophile who taunted his victims about them having no rights to compensation from monies held in his super fund.

Is it a level playing field for victims of crime?

These laws are a welcome step in levelling the playing field for victims of crime, and ensuring that offenders cannot hide behind legal technicalities when facing up to Court for their crimes.  But can the law go further for victims?

The present legal avenues open to victims of crimes committed in Victoria are very limited, not only in terms of the number of those avenues, but by the very means of the offender to pay compensation.

For example, under the Sentencing Act 1991 there is presently scope for offenders to make the law work for them and against their victims by requiring a Court to take into account the offender’s financial circumstances when making a compensation order in favour of a victim (see s85H1(1)). By being able to argue that monies held in a superannuation fund are not “theirs”, offenders can effectively “talk down” financial circumstances and seek to limit the compensation that should be awarded by the Court to the victim.

The saying “you can’t get blood out of a stone” really bites victims hard, especially when the stone happens to have money conveniently stashed under the proverbial mattress in the form of a superannuation fund.

Another kick in the guts for victims in the Sentencing Act arena is the requirement for the Court to reduce any compensation order by the amount of any compensation that the victim has received under the Victorian taxpayer-funded crimes compensation Scheme. If the victim pursues other remedies her/himself against the offender outside the taxpayer-funded statutory scheme, then the victim usually has the value of those remedies reduced by what they have recovered from the statutory scheme.

Whilst the statutory scheme was established in recognition of the fact that criminal offenders rarely have the financial resources or motivation to pay compensation to their victims, and that almost always the offender is not insured for losses arising from intentional criminal acts, the statutory scheme administered by the Victims of Crime Assistance Tribunal is very miserly.

The statutory scheme is in reality an under-funded safety net. The potential for the scheme to be part-funded by offenders’ superannuation funds has the ability to inject substantial capital into the scheme.

How can an offender’s super inject funds into the statutory scheme?

An overlooked provision in the legislation (indeed one we have never seen used) underpinning the taxpayer-funded system is one that enables a victim to assign to the State their right “to recover from any other person by civil proceedings, damages or compensation in respect of the injury or death” to which an award of compensation made under taxpayer-funded system relates.

In other words, a victim can assign their rights to the State to pursue any form of compensation relating to the criminal act that is the subject of their claim under the taxpayer-funded system upon the victim’s behalf.

If the State did pursue those claims against the offender, on behalf of the victim, the legislation goes on to say that the money recovered from the offender (and let’s say for the present purposes that that money includes money held in the offender’s superannuation fund) must then be dealt with in the following fashion:

  1. By paying into Consolidated Revenue (i.e. the State’s coffers) the amount of compensation paid to the victim under the taxpayer-funded scheme, as well as all costs and expenses incurred by the Tribunal in connection with determining the victim’s claim and any associated appeal costs, and also any costs incurred by the State in pursuing the offender upon behalf of the victim; and
  2. By then paying any money left over to the victim.

With the changes proposed by the Federal Government there is a great opportunity for the State to not only inject funds back into the taxpayer-funded compensation scheme (using offenders’ superannuation funds where they exist), but for the State to also make its resources available for the benefit of victims to go after offenders’ superannuation assets and re-distribute them to victims.

Creating a system where victims are compensated

Obviously, the State would need to ensure that it puts these new potential financial resources back into the taxpayer-funded compensation scheme, in the form of higher payments of compensation to victims, and that victims get to keep the compensation they are awarded under the statutory scheme.

Similarly, the State needs to continue to enable victims to pursue their own legal remedies against offenders if they so choose. Current checks and balances in the legislation governing the taxpayer-funded scheme adequately prevent victims from “double-dipping” from the taxpayer-funded scheme and also from other sources of compensation (such as directly from the offender under the Sentencing Act 1991 (Vic) and via a civil damages claim).

These are potentially empowering times for victims and present an opportunity to re-invigorate the current legal avenues available to victims of crime, as well as create a source of revenue for an essential but underfunded element of our legal system.