In 2002, the Irish Ministers for Finance and Education entered into a binding ‘Congregational Indemnity Agreement‘ with the Conference of Religious in Ireland, which was then representing 18 religious orders. The State had established the Residential Institutions Redress Board (RIRB), which was intended to provide redress to the former inmates of religious residential institutions. Pat Rabbitte ably summarised the difficulties with the agreement as follows:

[This was an] extraordinary deal concluded by the then Minister for Education, Dr. Michael Woods, on his final day in office in 2002. The deal was agreed without a memo being brought to government and with limited involvement of the Office of the Attorney General. While the original recommendation of the Department of Finance was that the liability for financial compensation for the damage done to these children should be shared 50:50 between the state and the Religious Congregations.

Under the 2002 agreement, the congregations agreed to contribute €128 million in cash, property (to be handed over to the HSE, the Department of Education and other bodies) and counselling services to the scheme. In exchange, the State agreed to indemnify the orders against any legal actions which former residents might bring against them during the lifetime of RIRB. The State did so; in 2006 it paid out €745,000 to former residents of St Joseph’s Orphanage in Kilkenny, on foot of a High Court action.

It seems fair to say that the State indemnity was a mistake. It is worth noting that, in the UK, the state has not stepped in to subsidise Church payments to successful litigants. Insurers have been central both in ensuring access to litigation, and in ultimately paying compensation in sex abuse cases in ways which preserve diocesan and parish funds for social and charitable purposes.

By 2009, following the Ryan Report and a larger-than-expected number of successful claims before the RIRB, another mistake was in evidence. It had become clear that the indemnity agreement fell far short of meeting the needs of abuse victims, and would only meet about 10% of the costs of the Board’s payments. In 2009, a unanimous Dail motion demanded that the Orders increase their contribution. The Orders offered an increase to €348.5 million, comprising of €111m in cash, €2m in a rent waiver, and €235.5m in property. These offers were made on a voluntary basis and are not legally binding. The property has since significantly diminished in value, and not all of it is of use to the State. The state has rejected some offers of property, but expects to receive further substantial cash payments and property from the congregations between now and 2015.

These offers did not go far enough for the government. The cost of redress now stands at €1.5 billion. The last, late, applications to the Board have only recently been processed and funds are required to meet the costs of the new Residential Institutions Statutory Funds. The impact on the taxpayer is huge. The former policy of the current government was that the costs of redress should be shared 50:50 between the congregations and the State. In April 2010, the Government made a request to this effect.

The Minister for Education Ruairi Quinn, with cabinet support, had originally taken a hard line on this point, arguing that the congregations should make up the shortfall between the original indemnity and the 50% threshold by transferring schools infrastructure to the State. He proposed that school property should be subject to blocking orders, to prevent transfer of title without the prior consent of the state. Today’s Irish Examiner reports that this policy has now been abandoned, since the congregations were simply unwilling to negotiate around it.

An important issue here is the schools’ patronage debate, especially as it bears on reputation and social esteem. It seems that some of the congregations, particularly the Sisters of Mercy, wish to move on from the issue of redress and guilt. They will not transfer assets to government on that basis. However, some will participate in the schools patronage debate on a ‘clean slate’ basis, which recognises them as important stakeholders who have made a long-standing contribution to Irish education. The government is now seeking to decouple the question of redress from that of school patronage and control.

The inventory of correspondence published by the Examiner gives a sense of the firmly dismissive tone taken by the congregations in response to the government’s attempts to modify the indemnity agreement. Many of them feel that the 50:50 principle is a unilateral modification of what was agreed in 2002. Securing timely compliance with the original indemnity agreement has always been a problem. By July, only €70 million of the compensation (property and cash) promised to the State under the 2002 agreement had left the hands of the congregations, although the Department expects that the bulk of the remainder will have been paid by the end of this year. Some orders say that the collapse of the property market has made it difficult for them to comply, and note that they have other financial commitments – particularly charitable and social purposes. A document published in today’s Examiner details each of the congregations’ significant assets. Some individual orders have further complained that it is not clear which of them were the subject of the greatest number of successful claims to the RIRB, and appear to feel that compensation obligations should be distributed on that basis.

On the other hand, the abandonment of efforts to enter into legally binding agreements with the congregations is troubling. The congregations have performed better in the area governed by the indemnity than in the context of the Magdalene Laundries: the relevant orders were not bound into an agreement in advance of the establishment of a compensation scheme, and simply refused to contribute. The constitutional protection of the right to property – and the special protection of the church’s property – prevents the State from confiscating church assets to meet the cost of a redress fund. But the point remains that the route of private bargain, negotiation and persuasion, has left us with a very lop-sided distribution of responsibility for abuse in Roman Catholic institutions.

The orders drive a hard bargain, and are well-advised. It is interesting to note, as Broadsheet does today, that the Sisters of Mercy have transferred school properties worth €412m to the CEIST Trust. The question of how church institutions maintain control of property which might otherwise be the subject of compensation paid on litigation, or which might come within the ambit of redress schemes, has taken on significant weight in other jurisdictions. In the United States, in July, District Judge Rudolph Randa held that clerical abuse victims – the primary creditors of the bankrupt Archdiocese of Milwaukee – could not access $55m which, in 2007, the then Archbishop had placed in a cemetery trust for the perpetual care of the deceased of the Archdiocese. The Judge held that any interference with the trust would compromise the constitutional protection for free expression of religion. The former Archbishop, now Cardinal Dolan, maintains that the transfer of this enormous sum was not an attempt to avoid compensation claims. In New South Wales and in Victoria, campaigners have advocated reform of the Roman Catholic Church Trust Property Act, which the Catholic Church has used to avoid paying compensation in sexual abuse claims. The church has successfully argued, using the so-called ‘Ellis defence‘ – that diocesan statutory property trusts cannot be sued except on property claims. Victims must rely on mediation with dioceses to obtain redress under the controversial Towards Healing‘ scheme and this raises controversial issues of oversight and bargaining power, similar to those which arise on settlement of a lawsuit. (These are just the tactics than can be used to avoid paying out on successful claims. There are other means to avoid claims altogether – statutes of limitation, charitable immunity, and bishops’ invocation of the doctrine of corporation sole among them). To get the full story on redress, we may need to look far beyond the indemnity agreement and its successors.