CORNWALL, Ont. - The public's tendency to presume the guilt of people accused of sexually abusing children allowed a "moral panic" to take root in this eastern Ontario city and rumours of a pedophile clan to flourish, a public inquiry heard Tuesday.

There are safeguards in the Canadian legal system to ensure an accused is presumed innocent unless proven otherwise, but no such safeguards exist for public perception, said lawyer Giuseppe Cipriano.

"When society places the onus on the alleged abuser to prove his innocence then a moral panic is possible," Cipriano said in closing submissions to the three-year, $40-million Cornwall inquiry.

In 1992, a 35-year-old former altar boy came forward with allegations he was sexually abused by both probation officer Ken Seguin and Rev. Charles MacDonald.

Seguin committed suicide in 1993 and was never charged. MacDonald was investigated three times, charges were laid after the third but were eventually stayed because the case took too long to come to trial.

A moral panic ensued when further allegations of sexual abuse involving high-profile local officials emerged and rumours abounded that a clan of pedophiles was involved in bizarre sexual rituals, said Cipriano, the lawyer for the estate of Seguin.

Cipriano was joined by MacDonald's lawyer, Michael Neville, in arguing changes to the system are needed.

Better public education would help ensure accused sex abusers aren't immediately presumed guilty and hopefully prevent the controversy that has gripped Cornwall for so many years from occurring elsewhere, the inquiry heard.

A test of a reasonable prospect of conviction before sexual assault charges are laid should be replaced with the requirement of an "objective likelihood" of conviction, Neville added. When such an allegation is made, it shouldn't automatically be passed on to the accused's employer without proper investigation of the claim, he added.

"Some genies never go back in the bottle," Neville told the inquiry.

The inquiry's mandate is not to examine the veracity of the clan theory. Rather, it was established to probe how public institutions handled allegations of sexual abuse.

Still, rumours of a pedophile ring make up the context that gave rise to the inquiry.

Following the original abuse complaint in 1992, the Ministry of Community Safety and Correctional Services received 22 complaints of alleged abuse by Seguin.

In its written submissions to the inquiry, the ministry alleged people didn't come forward before because Seguin exploited victims' inability to speak about abuse.

However, Cipriano said all the alleged victims came forward in the context of hysteria created by former Cornwall police officer Perry Dunlop and others.

Dunlop championed the investigation and was determined to unearth a backroom clan, pursuing his own investigation off-hours and passing on information to other police forces.

Provincial police set up the Project Truth investigation in 1997 and laid 114 charges against 15 people, but found no evidence of a pedophile ring and, ultimately, only one person was convicted.

In closing submissions Monday, several parties suggested a failure by local institutions to properly address sex abuse allegations left a void in the community that was filled by Dunlop, making him the "alternate constabulary."

Dunlop, who had pushed for the Cornwall inquiry, refused to testify and was jailed for seven months on civil and criminal contempt convictions.