Abuse claims set to rocket
This week, the Limitation (Childhood Abuse) Bill will come into effect, abolishing a three-year time limit on the pursuit of abuse claims in Scotland and giving victims who suffered childhood abuse from 1964 onwards new rights to sue for damages.
This legislation is part of an important drive by the Scottish Government to empower victims of historical abuse. But while the intended purpose of the new law is clear, the insurance community has raised an important consideration that won’t have crossed the minds of most Scottish organisations.
The fact that liable organisations may face abuse claims dating back by more than half a century means they will need to retrace and map out what, if any, insurance cover they had in place throughout that period. For those that were insured, this may show a patchwork of policies with different providers, but it could also reveal blank spots or issues arising from cover being with insurance providers which have since ceased to trade or are now insolvent.
There is also no guarantee that all affected businesses and public sector organisations will have held policies covering them for safeguarding issues, given that there was no legal compulsion for them to do so. If a successful claim comes from a time period an organisation is not properly covered for, they could find themselves directly liable for the potentially substantial cost of the damages.
These complications will add to the already huge administrative and financial pressures expected to result from an increase in claims. There will be significant practical challenges in responding to and investigating claims as old as 50 years. Valid questions have been raised about how local authorities and the Scottish court system in particular will cope. A new protocol to make the claims process simpler and a financial redress scheme have both been proposed to help tackle this, but, in reality, they could only scratch the surface of the issue.
Difficulties are exacerbated by a lack of clarity over what is defined as “abuse”. The wording of the legislation suggests it covers everything from systemic emotional and physical abuse received while in care, to corporal or verbal punishment in a school setting.
It’s clear that a rise in claims will present challenges. Scottish organisations need to prepare their back and front office functions to handle the administrative task of any influx. Doing this means the process of delivering compensation, if necessary, will be more financially manageable. But digging out and resolving coverage blank spots can be a complex and time consuming process, so engaging expert support, either from a solicitor, or in the form an insurance archaeologist – a specialist who majors in recovering old insurance policies – is sensible. ● Pamela Stevenson is a partner at Weightmans LLP in Glasgow