Limitation period changes for child abuse actions may lead to spike in claims

In New South Wales (NSW) there is no longer any limitation period for past, present or future child abuse actions.

All organisations which deal with or provide services to children in NSW, and their insurers, will be affected by the recent changes to the Limitation Act 1969 (NSW) to remove the limitation period for child abuse actions.

Institutions and their insurers will need to review their exposure to and insurance coverage for all child abuse claims, including for likely new reports of historical sexual and serious physical abuse claims and further action on some categories of previously finalised matters.

Section 6A of the Limitation Act was inserted in March 2016 with retrospective effect. The change follows recommendations in the Redress and Civil Litigation Report of the Royal Commission into Institutional Responses to Child Sexual Abuse released in late 2015.

Removal of the limitation period applies to a broader category of claims than “just” child abuse claims brought by victims against perpetrators:

  • “Child abuse” is defined in the amendment to include sexual abuse, “serious” physical abuse and “connected abuse” of a person under the age of 18.  It applies to claims by victims against both perpetrators and third parties for breach of their own duties of care resulting in abuse or their vicarious liability for that abuse.
  • Serious physical abuse is not defined, and at the margins what is considered “serious” is likely to be contentious.
  • Connected abuse is defined as other abuse perpetrated on a child in connection with sexual or serious physical abuse of the child, and the definition allows for the connected abuse to be perpetrated by a third person.   It would cover punishment or bullying of a child who had reported sexual or serious physical abuse.
  • In addition it applies to other people claiming through the child abuse victim:  compensation to relatives actions arising out of the death of a person because of child abuse and the continuation of claims by their estates after the death of a claimant are covered by s6A of the Act.

The amendment means that claims which had been barred because of the limitation period may now be brought by victims of child abuse.

The associated transitional provisions empower the Supreme Court to set aside judgments already made on the grounds that a limitation period had expired and to take into account damages or costs connected with that action. The effect is likely to be that plaintiffs who had lost proceedings and been ordered to pay costs will now seek to recover those costs, and judgments made because of a plaintiff’s limitation problems are at risk of being set aside with any damages already paid set off.

The ability for claimants to re-agitate some finalised claims makes it especially important for insurers and institutions to check the limits of indemnity on their past and current policies intended to cover child abuse claims.  In circumstances where further claims are expected it may be prudent to seek early advice on the adequacy of insurance coverage.

Similar amendments were made to the Victorian Limitation of Actions Act 1958 last year and institutions and insurers will need to be aware of those effects on the scope of claims arising from child abuse in Victoria.

In her second reading speech for this amendment the NSW Attorney General indicated further changes to the way in which claims arising out of institutional child abuse are managed will be implemented. Subscribe to the Hicksons blog for periodic updates.

Post by Kerry Smith and Freida Stylianou 

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