Victoria has introduced a bill that would make it the first jurisdiction in Australia to abolish a legal defence used by churches to prevent child sexual abuse victims from targeting their assets in compensation claims.

Known as “the Ellis defence”, it is based on a 2007 court case brought by abuse survivor John Ellis against the Catholic church. The New South Wales court of appeal found church assets could not be targeted by Ellis in pursuing compensation for the crimes he endured within the church, because church trustees could not be held to account for the crimes of individuals.

Associate Prof Elizabeth Curran from the Australian National University’s school of law said the Ellis defence “has been used by the church to obfuscate, and to avoid accountability”.

“Religious institutions have used the defence to protect their rather wealthy assets from any form of seizure,” she said.

“It’s a defence that no one else has access to, only churches do. The Victorian government, by getting rid of this defence, is offering greater protection to the most vulnerable people, and it means churches are no longer allowed to be above the law. This defence has seen people who have been harmed within religious institutions left with no real avenue for pursuing monetary recourse.”

In a statement the premier, Daniel Andrews, said the legislation introduced into state parliament on Monday was designed to remove the defence and to “quash an unfair legal loophole preventing child abuse survivors from suing some organisations for their abuse”.

Under the proposed laws, which are widely expected to pass, unincorporated organisations – including religious institutions – would be given an opportunity to nominate a legal entity with sufficient assets for child abuse survivors to sue. If a religious organisation failed to nominate an entity, a court could order the unincorporated organisation’s associated trusts to be sued and used to pay compensation to victims.

Dr Judy Courtin, a lawyer who has represented dozens of child sexual abuse survivors and their families, said many religious institutions around the country had ceased using the Ellis defence due to escalating criticism that doing so was unjust.

“But I was never happy with that, because all it takes is a new archbishop or leader who holds a different view to come in and decide using the defence is fair, so that’s why it is important Victoria has enshrined changes in the law,” Courtin said.

Reforming the defence was a key recommendation from the royal commission into institutional responses to child sexual abuse, and of the Betrayal of Trust report tabled in Victorian parliament in 2013.

“These Victorian reforms, combined with abolishing the statute of limitations, means guaranteeing victims that they will have an entity to sue,” Courtin said. “It provides victims with the same right to access courts as everyone else in the community. It has taken a royal commission, state inquiries, and hundreds of suicides and stuffed lives to get here, but it’s fantastic that the churches have finally lost their battle.”

The head of the Catholic church’s Truth Justice and Healing Council, Francis Sullivan, welcomed the legislation.

“This is a proper step forward as a pathway for people who want to seek damages for what’s happened to them in abuse cases in institutions like the Catholic church. This is a very positive thing,” he told ABC radio.