New limitation legislation for child sexual abuse claims: What insurance brokers need to know

Until now, all personal injury claims, including those for historical childhood sexual abuse, have been subject to a three-year limitation period.

Under the Limitation Act 1980 the three year “clock” starts on a complainant’s 18th birthday and expires when they are 21, although they can take on the burden of (and often succeed in) persuading the court that it would be equitable to allow the claim to proceed out of time, and that a fair trial can still happen.

If passed, s.82 of the Crime and Policing Bill inserts new sections into the Act - one of which disapplies the usual three-year time limit to cases of child sexual abuse. Below we examine the implications for organisations that have worked with children, the practical challenges of historical insurance coverage, and the essential risk management steps brokers should recommend to clients.

Why this matters for insurance brokers

It's significant across multiple sectors. Thankfully victims and complainants feel less shame now, and these days with all the recent publicity about child sexual exploitation and potential public inquiries, there is an undoubted upsurge in safeguarding and sexual abuse claims against organisations that work or have worked with children - not just local authorities, but also sports clubs, social care providers, education providers, faith organisations, scout and social clubs, and health and leisure services.

Claimants' solicitors practising in this area have whole sections of their website devoted to resources for people who wish to make complaints and claims of this nature. They don't usually sue the alleged perpetrators themselves, instead directing the claims to the organisations they regard as being liable for the perpetrators' actions. This is because they assume those organisations will have the insurance or financial wherewithal to pay the claims.

Understanding the legal framework

If it passes as drafted, s.82 of the Crime and Policing Bill inserts new Sections 11ZA and 11ZB into the Limitation Act 1980.

The new Section 11ZA disapplies the usual three-year time limit to cases of child sexual abuse. For the new regime to apply, three conditions must be satisfied: 

• the damages must include damages for personal injuries; 
• the claimant must have been under 18 when the cause of action accrued; 
• the act or omission must have constituted sexual abuse.

The retrospective impact

Critically the new section will likely be retrospective in effect, applying to actions brought and causes of action accrued before (as well as after) it comes into force. 

However, the new law does not apply to claims which, before this section comes into force, were settled by agreement between the parties or determined by a court.

This means organisations could face claims relating to abuse that occurred decades ago, potentially before modern insurance arrangements were in place or when the common law was significantly different. For example over the past 15 to 20 years, the law on vicarious liability has changed significantly. In many ways, it has simplified matters for claimants. Generally, the assertion that organisations face is they are vicariously liable for the actions of abusers engaged by the organisation, such as coaches, Priests, HCPs, teachers, youth workers, board members and even leisure centre staff.

So, for these types of cases if a court can be persuaded the relationship is sufficiently similar to employment, then vicarious liability is established. No matter how robust the recruitment, monitoring and safeguarding resources are, they could, in principle, be liable for any sexual assault and personal injury each claimant will prove.

Defences available to defendants

The new law does not create an unlimited right to sue. The court must dismiss the action if the defendant satisfies the court that it is not possible for a fair hearing to take place.

For historical claims (those where the cause of action accrued before the new law comes into force), the court must also dismiss the action if the defendant satisfies the court that there would be substantial prejudice to the defendant because of the application of Section 11ZA, and having regard to that prejudice and the prejudice to the claimant if the action is dismissed, the court is satisfied that it would not be equitable to allow the action to proceed.

Most child sexual abuse cases are historic in nature, so a defendant facing a claim from before the coming into force of the Act has two key arguments to submit:

• that a fair hearing is impossible, and 
• that there would be substantial prejudice to the defendant.

Lessons from Scotland

Scotland implemented similar (but not identical) legislation in 2017. Scottish decisions provide valuable insights into how English courts might interpret the new provisions.

The Scottish courts have held that there is no time bar to be disapplied, no presumption that stale actions should not be brought and no onus on a claimant to demonstrate a good reason for delay. Nevertheless, if a defender succeeds in showing that a fair hearing is not possible, that is an end of the matter with no question of attempting to balance the interests of the parties.

Scotland recognises that criminal trials concerning physical and sexual abuse dating from the 1970s often lead eventually to contemporary claims, making it difficult to argue that a fair civil trial before a professional judge would be impossible.

However, in one Scottish case B v Sailor’s Society [2021], the defender was found to be substantially prejudiced by exposure to a liability which was not of a type or extent envisaged when the defender made arrangements for insurance in the late 1960s and early 1970s, noting that the law relating to vicarious liability for criminal acts of an employee had changed.

What this means for insurance brokers

• Historical claims exposure: Organisations that provided services for children at any point in their history now face potential claims going back decades. 
• Insurance archaeology: Brokers will need to conduct thorough reviews of historical insurance policies to understand what coverage may have been in place when alleged abuse occurred. This is particularly challenging given that many claims may relate to periods 30, 40 or even 50 years ago. The whole point of this legislation is to allow claimants to bring the claims when they feel ready. Understandably that is often when their own parents (who they want to protect) or their alleged abusers, have died. 
• Policy wording review: Current policies need careful scrutiny to ensure they adequately address this new exposure. Exclusions, notification requirements and retroactive dates all require fresh consideration in light of the retrospective nature of the legislation.
• Claims notification: Organisations should be advised to notify insurers promptly of any circumstances that might give rise to claims, even if no formal claim has been made. The retrospective nature of the legislation means that circumstances known before the law comes into force could crystallise into claims afterwards.
• Risk management: Clients working with children need robust safeguarding policies and procedures and to review their document retention policies. Whilst these cannot eliminate historical exposure, they are essential for managing future risk and demonstrating organisational commitment to child protection.

Key takeaways to prepare for the future

We can expect several years of litigation in the courts about the effect and meaning of the new provisions. Insurance brokers should:

• Conduct comprehensive reviews of clients' historical activities involving children.
• Assess historical insurance coverage and identify potential gaps.
• Review current policy wordings to ensure adequate protection.
• Advise clients on the importance of robust safeguarding policies.
• Establish clear protocols for claims notification.
• Monitor emerging case law as English courts interpret the new provisions.

The changes to limitation law represent a fundamental shift in the legal landscape for organisations that have worked with children. For insurance brokers, this requires proactive engagement with clients to understand their exposure, review their coverage and ensure they are adequately protected against both historical claims and future risks.