What is a compensation order?
A compensation order is a type of ancillary order that a criminal court can impose in addition to an offender’s sentence that provides a mechanism for a victim to recover compensation. Restitution orders may also be imposed by the court as a means of recovering or replacing the value of goods stolen by an offender (see the link for more).
While compensation orders are not intended to be punitive, they may cause financial hardship to an offender (RK v Mirik (2009) 21 VR 623, 628). Compensation orders are intended to compensate a victim for harm caused as a result of an offence. They may be ordered to help victims cover expenses that result from an offence (such as medical treatment or counselling) or for the pain and suffering experienced as a result of the offence. Compensation orders may also be ordered to recover losses or damage to property sustained as a result of an offence.
Although an application for a compensation order is ancillary to a criminal proceeding, it is a civil proceeding to which the civil standard of proof (on the balance of probabilities) applies (Moresco v Budimir [2015] VSC 51, [24]).
This page considers orders for compensation in criminal proceedings under the Sentencing Act 1991 (Vic) and does not address civil litigation or applications to the Victims of Crime Assistance Tribunal.
Compensation orders under the Sentencing Act
The purpose of conferring power on criminal courts to order offenders to pay compensation is to give victims a simple and expeditious means to achieve civil justice – saving the victim time and money and the stress of instituting separate proceedings.
In Victoria, compensation orders are provided for under Part 4, Divisions 1 and 2 of the Sentencing Act 1991 (Vic). These provisions deal with several compensatory mechanisms, such as restitution (s84), compensation for pain and suffering (ss85A-85M) and compensation for property damage or loss (s86).
Injury compensation (s85B)
Under section 85B(1), if a court finds a person guilty or convicts a person of an offence, it may, on the application of a person who has suffered any injury as a direct result of the offence, order the offender to pay compensation of an amount the court thinks fit.
Under section 85B(2), a compensation order may be made up of amounts for:
- Pain and suffering experienced by the victim as a direct result of the offence;
- Some or all of any expenses actually incurred, or reasonably likely to be incurred, by the victim for reasonable counselling services as a direct result of the offence;
- Some or all of any medical expenses actually and reasonably incurred, or reasonably likely to be incurred, by the victim as a direct result of the offence;
- Some or all of any other expenses actually incurred, or reasonably likely to be incurred, by the victim as a direct result of the offence, not including any expense arising from loss of property or damage to property.
“Injury” means –
- Actual physical bodily harm;
- Mental illness or disorder or an exacerbation of a mental illness or disorder, whether or not flowing from nervous shock;
- Pregnancy;
- Grief, distress or trauma or other significant adverse effect; or
- Any combination of matters referred to above arising from an offence, but not including injury arising from loss of or damage to property (s85A(1)).
“Medical expenses” include dental, optometry, physiotherapy, psychology treatment, hospital and ambulance expenses (s85A(1)).
Who can make a s85B application?
A compensation order for injury may only be made on application by the injured person (s85B(1)), who may appear in proceedings personally or be represented by a legal practitioner or third party (with leave of the court) under section 85E(1).
Under section 85C(1)(b), an application may be made on the victim’s behalf:
- By any person if the victim is a child or is incapable of making the application by reason of injury, disease, senility, illness or physical or mental impairment;
- By the Director of Public Prosecutions (DPP) if the sentencing court was a court other than the Magistrates’ Court; or
- The informant or police prosecutor if the sentencing court was the Magistrates’ Court.
When a s85B application can be made
An application for compensation for personal injury under section 85B must be made within 12 months after the offender is found guilty or convicted of the offence (s85C(1)(a)). However, this period may be extended by application or on the court’s own motion if it is in the interests of justice to do so (s85D(1)).
In considering an application for an extension of time, the court considers the circumstances of the application, such as those stated in Sullivan v Gibson [2018] VSC 785:
- Whether the application would have succeeded if brought within time;
- The length of the delay in comparison to other cases;
- Whether the delay would significantly prejudice the offender’s rehabilitation.
A court must not extend the time for an application without giving the offender a reasonable opportunity to be heard on the matter (s85D(3)).
Compensation for property loss or damage (s86)
If a court finds a person guilty or convicts a person of an offence, it may order the offender to pay any compensation (not exceeding the value of the property damaged) to a person who has suffered loss or damage to property as a result of the offence (s86(1)).
If a court decides to make an order under section 86(1), it may take into account the offender’s financial circumstances and the nature of the burden imposed in determining the amount and method of payment (s86(2)). However, if the court cannot determine the offender’s financial circumstances, it is not prevented from making an order (s86(3))
Who can make a s86 application?
A compensation order under section 86(1) may be made on the application of the person who suffered loss or damage to property (s 86(5)(b)(i)). An application may also be made by the DPP on the victim’s behalf (in higher courts) or by the DPP, informant or police prosecutor on their behalf in the Magistrates’ Court (s 86(5)(b)(ii)).
An order may be made on the court’s own motion if:
- the person who suffered loss or damage to property does not oppose the order being made; and
- the court has given the offender the opportunity to be heard in respect of the order (s86(1A)).
When a s86 application can be made
A section 86 application must be made as soon as practicable after a person is found guilty or convicted of an offence (s86(5)(a)).
Whether the court finds an application is made ”as soon as practicable” depends on the circumstances and is interpreted in favour of the claimant (Werden v Legal Services Board (2012) 36 VR 637, 646 [35].)
Procedure and considerations
During the hearing for compensation proceedings, the victim and offender may give evidence or call others to give evidence, and all parties giving evidence may be cross-examined and re-examined (s85G(1)).
Following the application for a compensation order, a court must consider whether to grant the order before determining the amount of any compensation to be paid.
The court must not refuse to hear and determine an application unless the relevant facts do not sufficiently appear from the evidence and materials before it (ss 85F(1)-(2), s86(8)-(9)). However, the court can exercise discretion to refuse to do so if it thinks the case is too complex for hearing and determination.
The relevant facts include:
- the commission of the offence;
- the offender’s identification;
- the injuries sustained by the victim;
- the physical and psychological impact of those injuries on the victim, which may be relevant to an assessment of the pain and suffering experienced;
- the character and amount of special expenses (RK v Mirikat [2009] VSC)
- the elements of the particular compensation order (such as whether loss was caused ”as a direct result of the offence” (s85B(1)).
While the mechanism for compensation orders is intended to provide a simple process for the benefit of claimants, courts will only exercise discretion to impose an order in clear cases. For example, in circumstances where the court can hear and determine the application based on material already before it or with some supplementary evidence (RK v Mirik (2009) 21 VR 639 [69]). An application with significant and unresolved factual conflicts after trial is likely too complex. In such cases, proceedings may be commenced to seek compensation in a civil court (Kaplan v Lee-Archer [2007] VSCA 42 at [31])
Enforcement of a compensation order
If an offender subject to a compensation order fails to comply with the order, the debt that is owed becomes a judgment debt. Non-compliance with a compensation order does not impact the offender’s sentence or expose them to further criminal penalties. However, the court that made the original order through its civil jurisdiction can enforce the judgment debt (s85M).
If an offender does not have insufficient assets, they cannot be forced to pay the order for compensation. However, a victim can still obtain a judgment debt against the offender. As a judgment debt can be enforced for 15 years, the victim can seek recovery of the debt if the offender’s financial circumstances improve within that period.
Appealing a compensation order
Under the Criminal Procedure Act 2009 (CPA), a compensation order can be appealed. As a compensation order is considered a sentence under section 3 of the CPA, an appeal against an order is an appeal against a sentence and requires leave of the court (s278 CPA).
What to do if subject to a compensation order
If you are the subject of a compensation order application, it is essential to seek experienced legal advice as soon as possible. Understanding the mechanisms for compensation following a finding of guilt or conviction for a criminal offence is critical to avoid more severe legal consequences. Our lawyers can provide expert advice and representation to ensure you understand your obligations and that your legal rights are protected.
