FIGURES in the Vatican in the 1990s thought that sexual-abuse accusations against priests were made by enemies of the Roman Catholic Church to "make trouble", Cardinal George Pell has told the Australian Royal Commission into Institutional Responses to Child Sexual Abuse.

These people thought that accusations should be dealt with sceptically, he said, meaning it was more likely that the accused would be given the benefit of the doubt than that listening "seriously to the complainant" would take place. This changed, he said, when a deputation of American cardinals explained "vigorously" to the Vatican that there were genuine complaints, and that "good people, people who loved the Church, were saying that it's not being dealt with well enough."

Similar sceptical sentiments were not apparent in the Church in Australia at that time "to anything like the same degree", he said.

Cardinal Pell is shortly to leave Australia to take up the position of Prefect for the Secretariat of the Economy of the Holy See, one of the most senior offices in the Vatican.

He was called before the Commission in relation to a case study concerning a former altar boy, John Ellis, whose abuse complaint was the subject of a landmark court case when he attempted to sue the RC Church. In 2007, the NSW Court of Appeal accepted the Church's claim that it was not a legal entity, and therefore could not be sued, a ruling that has become known as the "Ellis Defence". The ruling has since been used in other cases.

The Church spent $1.5 million defending itself after refusing Mr Ellis's offer to settle for $100,000 in compensation; Mr Ellis refused the Church's offer of $30,000.

Cardinal Pell told the Royal Commission that he had not been consulted about the compensation amounts involved, contradicting evidence from three diocesan officers that he had been consulted. He said that he had "explicitly endorsed the major strategies of the defence" in the Ellis case, although he had not been aware of the strategy now known as the "Ellis Defence".

Cardinal Pell also called on the federal government to set up an independent body to recommend damages to be paid to child-abuse survivors.

Meanwhile, the Victorian government is introducing legislation making it an offence, punishable by up to three years in prison, for anyone in responsibility to fail to report known or suspected child sexual abuse to police. The laws, an outcome of the Victorian Parliament's inquiry into child sexual abuse, which concluded last year, will apply to churches, schools, sporting clubs, youth clubs, and the government.

The laws will not apply to information obtained in the confessional, but the Premier, Dr Denis Napthine, said that priests would have a moral and ethical responsibility to speak to the child concerned outside the confessional, and then report the abuse.