Brothers from the St John of God order fabricated a sex assault allegation about one of their own child-abuse victims to discredit him, confidential legal settlement documents allege, The Age reports.

Another brother from the order was the subject of at least seven abuse allegations between 1975 and the 1990s and was reported to officials in Rome, but not to police or his victims' families, according to the records of settlement negotiations seen by Fairfax Media.

The claims were made during secret legal negotiations in 2001 that eventually led to the order's Victorian abuse victims receiving $3.6 million in compensation.

The documents, an account of the negotiations kept by the order, raise questions about why no brother from St John of God has faced court for abusing children in Victoria and about the order's apparent failure to act on the abuse.

The 2001 meeting involved lawyers and representatives of the order, its insurers and the victims. It was held in response to legal claims by dozens of men who alleged they had been abused while being cared for as boys at the order's homes in Victoria.

The victims were mostly intellectually or physically impaired and had been living in the care of the order, which had homes at Cheltenham in Melbourne's south, Lilydale in the city's east and one in Greensborough called Churinga.

Peter Gordon, of Slater & Gordon, and barrister John Gordon represented victims and opened by laying out their claims for compensation and with stories of abuse.

According to the written summary of the meeting prepared for the order, John Gordon told those present a claim had been fabricated by brothers against one of the parties claiming to be a victim of abuse, attempting to discredit the victim by alleging he was himself guilty of assaulting a three-year-old.

FULL STORY Brothers 'set up' abuse victim (Age)

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Lawyer alleges cover-up in 2005 (ABC)