The Salvation Army instructed a law firm to try to resolve claims made by sexual and physical abuse victims without going to court, a royal commission has heard.

The Royal Commission into Institutional Responses to Child Sexual Abuse is examining four Salvation Army-run children's homes in South Australia, Victoria and Western Australia.

Philip Brewin from law firm Nevett Ford gave evidence about his firm's advice to the Salvation Army on dealing with alleged abuse.

He said his firm was instructed by the Salvation Army to "attempt to resolve matters amicably, without the need for the claimant to issue proceedings".

The commission, sitting in Adelaide, was told that claims of physical abuse would generally be settled for between $5,000 and $35,000, while claims of sexual abuse would be settled for up to $50,000.

It heard the average redress payments made by the Salvation Army were $40,000.

Mr Brewin said his instructions were to encourage people to go to the police, but not for the Salvation Army to report allegations to police, as they were not legally obliged to do so if a complaint were made by an adult.

Counsel assisting the commission, Sophie David, asked why, on one occasion in July 2001, counsel advised the Salvation Army's former employee relations director Graham Sapwell not to encourage one man, Graham Rundle, to report to police his allegations of abuse while at the Eden Park Boys' Home.

Ms David: Can you recall now why your advice to Mr Sapwell was that it was better to deal with the matter on an informal basis without encouraging Mr Rundle to make a complaint to the police? Mr Brewin: No I can't.

Ms David pressed Mr Brewin about the advice relating to allegations of sexual and physical abuse by former Salvation Army sergeant and now convicted paedophile William John Keith Ellis.

Ms David: Would it be better in terms of the civil litigation and the Salvation Army's prospects of success on the civil litigation? Mr Brewin: Well, I mean, look, there may be a number of reasons why it might have been better, but the fact of the matter is that that did not happen, that the matter was referred to the police and the matter was dealt with and Mr Ellis got the justice he deserved.

Mr Brewin said although it was not a legal requirement to report to police a complaint of sexual or physical abuse made by an adult, he and the Salvation Army now realised it was important.

"I think what we've learnt from this royal commission is the importance — not withstanding the reluctance of care-givers to report the matter to the police — it's important the the police have a complete database and that's what's now come out of this commission and that's what the Salvation Army are now doing, irrespective of the legal obligation," he said.

Mr Brewin said the law firm did not want to be seen to be "protecting" the Salvation Army from litigation risk, but as promoting the "airing" of claims so they might be resolved in an informal manner.

He was questioned about the firm's independence in assessing claims.

Ms David: Can I pick up on the term you've used of 'acting with as much freedom and independence as possible'. Of course, you were instructed by the Salvation Army? Mr Brewin: Yes, I think that was quite clear. Our instructions were to act on behalf of the Salvation Army, but to try and resolve these matters without the need to resort to litigation. Ms David: And you have a solicitor/client relationship with the Salvation Army? Mr Brewin: Correct. Ms David: And you could never act independently of that, of course? Mr Brewin: That's right, you wouldn't act independently of the relationship but, as I said in my statement, to act with as much freedom as possible and within obviously the confines of the solicitor/client relationship.

Mr Brewin said he informed alleged victims who did not have legal representation that he was acting on behalf of the Salvation Army.

He said it was his understanding that the $50,000 compensation figure was set as the limit his firm could offer people without having to get authorisation and approval from the Salvation Army board.

Mr Brewin was asked whether all claims were assessed consistently and replied they "aspired for consistency".

"You had to look at the circumstances of each case. There were some cases where people couldn't name the abuser — they were very vague in terms of the allegations and they were matters, if you took a strict legal approach, you would probably deny the claim but that didn't happen in too many cases," he said.

"People were given the benefit of the doubt and that's what happened, so the assessment had to be consistent — but the consistency also varied a lot because we, as I began to understand, sometimes the abuse could have been minor but the impact of the abuse could have been horrific.

"In other cases the abuse could have been extremely severe but the person had not had the damage that others had, so consistency is important."

Mr Brewin also told the commission after the Children in State Care inquiry by South Australian Commissioner Ted Mullighan, which included testimony from people who had lived at the Eden Park home, the amount of the Salvation Army's payments increased.

"Factors arose following the release of the Mullighan report and documents that indicated that clearly there was knowledge by the Salvation Army of claims of abuse and this led to an increase in settlement amounts generally, and I would have thought specifically in relation to court matters," he said.

"It relates to individuals who've been abused at Eden Park but I can think of one specific case where it went on for many, many years but initially the matter was assessed at a relatively modest amount but subsequently, legal proceedings were commenced and the matter was resolved at a much greater sum.

"What we're saying is that as a result of the documentation that came in relation to the Mullighan inquiry the matters that were ongoing were assessed under a different light, be they matters that had been litigated, commenced or not.

"There was clear evidence out of the Mullighan inquiry that you'd had reports, people had complained to government, and that then caused us to look at existing claims in a different light."