Christian Brothers-linked entity agrees to fully compensate abuse survivors

The entity gifted vast property holdings by the Christian Brothers has agreed to help compensate abuse survivors in full, in a stunning reversal after weeks of public pressure.

The Christian Brothers, a Catholic order with a long history of clergy abuse, last month announced it was going broke and could not afford to meet civil claims from abuse survivors.

It instead proposed a scheme to sell off 36 properties, worth about $217m, and split the proceeds between a range of creditors, including survivors, who were estimated to be owed $774m.

The announcement prompted significant backlash and led to scrutiny of property dealings between the Christian Brothers and a related entity, the Trustees of Edmund Rice Education Australia (EREA). That entity was created in 2007 to assume control of former Christian Brothers schools.

Over a decade, the Christian Brothers gifted vastly lucrative property holdings – worth hundreds of millions of dollars – to EREA for amounts of $1. Survivors were told those properties were off-limits and would not be sold to meet their compensation claims.

EREA had previously refused to replace the Christian Brothers as the defendant to court claims. Survivors had been in the process of attempting to get a court order to force EREA to do so.

But on Friday, both entities issued statements indicating that Edmund Rice had agreed to help “compensate victims and survivors of historical abuse claims against the Christian Brothers in full”.

Dr Stephen Brown, chair of the Trustees of Edmund Rice Education Australia, said the organisation was “committed to supporting those who have suffered abuse”.

“We support the revised scheme because it is simply the right thing to do for victims and survivors to provide them a just and sustainable pathway,” he said.

“This decision will also support the long-term sustainability of the educational ministry, including more than 44,000 students entrusted to EREA’s stewardship.”

The new proposal means that the Christian Brothers’ remaining 36 properties will be sold off to pay survivors who have “outstanding settlements or judgements, including claims to legal costs”.

Others who have claims that “are not yet crystallised” will be able to sue EREA or claim redress from them through the government-run national redress scheme. The organisation will consent to replacing the Christian Brothers as a defendant in such cases.

A statement from the Christian Brothers said this meant that “not only will current claimants with settlements or judgments be paid in full, but EREA will assume responsibility and liability for all current and future legal proceedings as well as for claims before the national redress scheme”.

The federal social services minister, Tanya Plibersek, welcomed Friday’s announcement but said survivors should never have been put in such a position.

“The past few weeks of uncertainty have been difficult for victim survivors of abuse in institutions run by the Christian Brothers,” she said.

“They should never have been put in the position of wondering whether their claims would be met. We now expect that EREA, like all redress scheme participants, will act in good faith to resolve all current and future redress matters concerning them or the Christian Brothers.”

Rightside Legal, which represents dozens of people with claims against the Christian Brothers, said the backdown was a significant win for its clients.

“Make no mistake: survivors fought for this success,” said Grace Wilson, a partner at the firm.

“Edmund Rice are folding because the law is against them. Other orders should take note: transferring their wealth away will not protect them from their legal or moral obligations.”

The two entities will need up to two months to determine the details of the new proposal. It will then put the proposed scheme to a vote by creditors. It will also require court approval.

“EREA is committed to supporting those who have suffered abuse, so today we are seeking to provide reassurance that we will step in to address future funding shortfalls,” Brown said.

“EREA touchstones are justice, solidarity and inclusive community and we are committed to ensuring the victim-survivors’ journey of healing continues.”

Earlier this month, Guardian Australia revealed that the Christian Brothers had kept nine brothers convicted of child sexual abuse within the religious order. It did so because it said it had a “Gospel imperative” to “care for all Brothers” and “the needy”.

Members of the order receive free housing and living and entertainment expenses, courtesy of the Christian Brothers.