Documents before the royal commission show Catholic church figures knew about sex abuse allegations against one priest as early as 1985.
Towards Healing was supposed to be a means for the Catholic Church to offer pastoral care and financial redress to people who had suffered years of anguish caused by pedophile priests.
Instead the process pitted lawyer against lawyer, an inquiry has heard, "horse-trading" over compensation sums.
Jennifer Ingham was subjected to four years of sexual abuse from the age of 16, at the hands of northern NSW parish priest Father Paul Rex Brown, and this year received a $265,000 settlement, most of which was paid by Catholic Church Insurance (CCI).
But Emma Fenby, a former CCI executive who dealt with child molestation claims, says she was advised to make an initial offer closer to $30,000.
She told the royal commission she ignored that advice.
"I didn't think it was very dignified or respectful to horse-trade in a facilitation," she told a public hearing on Friday.
Commission chair Peter McClelland described it as a "common law fight in the trenches".
Mrs Ingham's solicitor Peter Kelso said the low-balling approach showed the church's willingness to take advantage of victims' desperation.
"The Catholic Church has treated the Towards Healing process as an excuse to offer small financial settlements to people because they know that they have no other forum to go to in which to get a fair and reasonable settlement," he told AAP outside the commission.
Mrs Ingham told the commission she reported her abuse to church figures three times.
This included at a 1990 meeting attended by her family priest - who has denied knowing her - but her suffering was not acknowledged until she approached Towards Healing in 2012.
Documents tendered to the commission show the church knew about abuse allegations levelled at Fr Brown as early as 1985.
He would later be dumped from his priestly duties following a litany of complaints, including claims he was a drunk and that he sexually abused two boys.
Deacon Christopher Wallace, the chancellor of Lismore Diocese, which Fr Brown called home before his death in 2005, told the commission a woman had come forward via Towards Healing in 2002.
"The allegation was, (as a schoolchild in 1959), she walked in on Fr Brown in the act of sexually interfering with a child in the sacristy of the cathedral," Deacon Wallace said on Friday.
"She alleged that he also abused her, touched her, and she then fled to near the bell tower to escape, reported the matter to a nun and got a belting for casting aspersions on the priest."
Fr Brown denied the allegations when questioned in 2002.
A male victim complained about Fr Brown through Towards Healing in 2007, Deacon Wallace said.
Deacon Wallace, a former police officer, later wrote to Mrs Ingham saying he believed her account.
"What he did to you was wrong, and what wasn't done by the church was wrong," he wrote.
The royal commission has clocked up its thousandth private hearing as it scrutinises institutional responses to child sex abuse.
It resumes in Sydney on Monday.