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Victims of sexual abuse are taking advantage of state reviver statutes to file claims that were previously time-barred, leading to unexpected exposures for religious and educational institutions, among others. Richard C. Mason of the Cozen O'Connor law firm discusses the recently enacted laws and how they can lead to fresh claims.
Reviver statutes establish a period, or a window, in which lawsuits can be filed that otherwise would be barred by a statute of limitations. Recently, they have become a favored method of permitting victims of sexual abuse to bring claims based upon abuse that occurred many years ago.
The revival of tort claims under long-expired insurance policies can generate unexpected, long-tail exposure for vulnerable organizations and their insurers, and therefore bears close monitoring.
In the past few years, four states have enacted reviver statutes, and statute of limitation reform bills are pending in eight additional states. This article will report on the recently enacted laws, inform readers about pending legislation, and explain how the statutes can lead to fresh claims under very old policies.
Traditionally, claims for sexual abuse were subject to general statutes of limitations applicable to tort claims. These statutes set forth short periods — typically two or three years — in which a claim must be brought. The limitations periods in most cases began running from the date of the injury or, under some statutes, the date when the breach of duty occurred. Accordingly, it has been common for statutes of limitations to bar lawsuits commenced more than three years after the plaintiff has been harmed.
In cases involving injuries to minors, an important qualification long has been recognized: The limitations period cannot commence until the victim reaches the age of majority, which is 18 years old in most states. Accordingly, in a state with a two-year tort limitations period, a child victimized in 1975 at the age of 12, would have until 1983, two years after he or she turned 18, to commence an action for sexual abuse.
A second qualification to the running of limitations periods in some cases is the discovery rule. In most states that allow for a discovery rule, the limitations period does not commence until a victim could have discovered he or she had been harmed by childhood sexual abuse.
In sexual abuse cases, the discovery rule has been successfully invoked in cases of “repressed and recovered memory.” In many jurisdictions, repressed memory functions to suspend the running of statutes of limitations during the period when the victim cannot recall the injurious event. Thus, for example, a victim who establishes that he or she did not recover memory of a particular trauma until reaching age 31 may have until age 33 to file suit in a state that has a two-year statute of limitations. Such cases can present daunting issues of proof and credibility, but in compelling instances have permitted a suit to be brought long after the limitations period would otherwise have expired.
In recent years, activists and plaintiffs attorneys, dissatisfied with existing legal doctrines that broadly protect sexual abuse victims from any harsh application of statutes of limitations, have urged state legislatures to enact laws that permit the revival of decades-old sexual abuse claims that were presumed to have been time-barred.
During the past five years, legislation to revive time-barred sexual abuse cases has been enacted or is pending in a number of states.
Four states have enacted legislation permitting the revival of time-barred sexual abuse claims. California, Delaware, Hawaii and Minnesota have enacted such “window” legislation. A window is a period, usually from one to four years, during which any plaintiff can bring an action for sexual abuse no matter how long ago the abuse occurred. So under a two-year window, for example, a plaintiff can bring a suit based upon abuse that ceased 50 years ago, as long as he or she commences the suit during the next two years.
Some states look to other means of reviving matters in a more limited fashion. Massachusetts, for example, amended its statute to permit suits to be brought up to age 53 and to allow for a seven-year discovery rule in sexual abuse cases. Under that statute, a plaintiff need only commence an action within seven years of the date when the victim could reasonably have discovered his or her psychological harm was caused by another's sexual act.
Under such a statute, a plaintiff abused 50 years ago might be entitled to bring a suit now, but probably could not take advantage of the new statute unless he or she could demonstrate that current distress could not have been linked to past sexual abuse until seven or fewer years ago.
In addition, reviver-type legislation is pending in eight other states. In Pennsylvania, home to the Jerry Sandusky sexual abuse scandal, legislation has been introduced to revive previously barred claims for victims aged 50 or younger. The proposed statute of limitations would permit, for example, a 47-year-old man to sue for abuse that occurred in 1978.
Reviver statutes potentially can create long-tail exposures under many general liability policies. Policies that are decades old can, when reviver statutes have passed, be forced to respond to numerous tort claims. When reviver legislation passed in California in 2003, more than 1,000 new suits, including many alleging abuse occurring well over 10 years prior to the suit, were brought.
Claims under older policies may present distinct challenges. Sexual molestation exclusions were rare until about 20 years ago and almost certainly will be absent from general liability policies issued prior to 1980. Self-insured retentions likewise were rare decades ago. Also, rescission for concealment can be more difficult to investigate and to litigate, when proof would depend upon aged or deceased underwriters. On the more favorable end, policy limits for older policies also likely will be substantially lower than insureds currently require.
These new and increased exposures are nevertheless manageable. Serial sexual abuse cases, meaning instances in which an insured is sued by a large number of victims, have primarily afflicted public entities, religious and educational institutions, athletic organizations, medical facilities and other policyholders that cater to, service or treat minors. Thus, many insurers will be able to quantify their exposures in light of business lines insured and engage in contingency planning if needed.
This often includes defining and measuring the exposure by forming an accurate picture of horizontal and vertical coverages, quantified according to the varying allocation regimes in key states such as California, New York and Pennsylvania. Those insurers who were most prepared when reviver legislation passed in states such as Delaware secured the most favorable allocations during the high-pressure and chaotic settlement and mediation process that often follows rapidly upon passage of a reviver statute.
Richard C. Mason is co-chair of the professional liability practice group at the Cozen O'Connor law firm. He litigates insurance coverage issues nationwide on behalf of insurers in complex matters, including sexual abuse cases. He can be reached at firstname.lastname@example.org and (215) 665-2717.
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