Victims of clerical abuse have told the Royal Commission that the Catholic Church's response was primarily concerned with avoiding civil litigation and limiting compensation payouts.

The church was urged to reform its controversial Melbourne Response and review all of the 326 cases it has settled since the system was introduced in 1996 by former archbishop of Melbourne George Pell.

The commission was told on Monday that the church paid $17.2 million in ex gratia payments for child sexual abuse claims over the past 18 years, which included medical and counselling expenses. Victims received an average payout of $36,100.

The cost of administering the Melbourne Response was more than $17 million, which included $7.7 million to Independent Commissioner Peter O'Callaghan, QC, and his staff.

Serial paedophile priest Kevin O'Donnell was responsible for the largest number of payouts, with 50 victims receiving compensation for abuse spanning from 1944 to 1992.

Chrissie Foster told a packed room in Melbourne's County Court that O'Donnell was directly responsible for the suicide of her eldest daughter Emma and the permanent brain damage sustained by her daughter Katie in a car accident.

O'Donnell preyed upon both girls when they attended Oakleigh's Sacred Heart primary school in the late 1980s, despite the church receiving repeated complaints about the priest from 1958.

Mrs Foster and her husband Anthony Foster fought back tears as they recounted their decade-long battle with the church and its lawyers.

They pleaded for a more compassionate system that recognised the full extent of damage caused by predatory priests.

"Our view is that the Melbourne Response should be re-evaluated to ensure it complies with the legal and moral standards of our society to ensure just compensation and care for all victims.

"To be clear, we think it is appropriate to revisit every previous settlement under the Melbourne Response to make sure proper financial compensation was paid," Mrs Foster told the commission.

In August, 1998, the Fosters received a letter from the church's lawyers Corrs Chambers Westgarth informing them the church had agreed to pay $50,000 for the abuse to their eldest daughter.

The letter said it was an alternative to litigation, which would be strenuously defended.

The legal letter was accompanied by a written apology from former archbishop Pell.

"I felt there was an apology and then a threat. It was more of the same from the Catholic Church," Mrs Foster said.

In 2002, the Fosters launched civil proceedings against the church, which included former archbishop of Melbourne Sir Frank Little and his successor Denis Hart as defendants.

The church settled the case in 2006 and agreed to pay $750,000, but refused to accept any liability.

Mrs Foster said the money could never compensate her family for the misery caused by O'Donnell, but acknowledged it was far greater than they would have been awarded under the Melbourne Response.

"Based on our experience, we consider the victims without adequate support or legal representation would feel intimidated and overwhelmed by the whole process," Ms Foster told the commission.

The couple received an warm ovation from supporters and other victims of clerical abuse, when they finished their statement before the commission.

Mr O'Callaghan will give testimony tomorrow, while Cardinal Pell is expected to appear via video link from Rome on Thursday.