Sensational allegations that a clandestine pedophile ring operated in eastern Ontario were fuelled by the kind of moral panic that takes hold when the public presumes people accused of sexually abusing children are guilty, a public inquiry was told 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, and charges were laid after the third but eventually stayed because the case took too long to come to trial.

As more people came forward and alleged they too had been abused by a priest, or teacher or some other official, the city was gripped by a "hysteria" that a mass of child abusers were in their midst, lawyers Cipriano and Michael Neville told the inquiry.

"What images more caught the imagination and raised the anxieties of the Cornwall community than the allegations that prominent citizens of Cornwall preyed on Cornwall's young and used their positions... to prevent detection, or worse, to corrupt the law enforcement process," said Neville, who represents MacDonald.

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 said. 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.

He also said the first two decisions not to lay charges against MacDonald were "not only proper, they were legally, indeed constitutionally, correct."

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, Neville argued.

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.

The Crown's failure to convict any others was seen by some as further evidence of collusion among Cornwall's upper echelons of power and fuelled the rumours that not only was a pedophile ring operating in the city, but that high-ranking officials were conspiring to shield its participants.

In closing submissions to the inquiry, the Ministry of the Attorney General acknowledged some problems with the cases, but said there have since been relevant changes made.

Last year, the province launched a "Justice on Target" strategy, which strives toward a 30 per cent reduction in the average number of days and court appearances in 90 per cent of cases by 2012.

In addition, under today's standards, the Project Truth prosecutions would have been handled as a "major case" within a protocol established in 2001.

The Ministry of Community Safety and Correctional Services also said many changes have been made with respect to probation offices since the Seguin allegations and that still more changes will be implemented

"This is a different ministry with different clientele that is operating much more transparently with a higher degree of professionalism," said ministry lawyer David Rose.