Schutzhund

[KYS]

I agree, and would think
that Shutzhund is for well balance tempered dogs.
So IMHO, I would nix the idea of Schutzhund for Duncan.

You also know Duncan better than any of us.
It might be possible that Duncan sees children as
low ranking.
If you want to build up confidence, I would
try obedience training, and some activities that
Duncan might enjoy doing with you. Confident building
is life time of work, and if not kept up
the dog tends to regress.
You might strongly consider taking Duncan
to a good behavorist trainer and see if that helps.
At least you are aware of Duncan's behavior problems,
and because of that, you can protect Duncan and
others from any future incidents. : )