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Keoghs Insight

We keep you up-to-date on emerging market issues and their impact on the insurance sector, through a variety of publications, events and our leading market initiatives.

Author

David  Hennessy

David Hennessy

Partner

T: 0141 238 0068

Scottish Parliament passes Limitation (Childhood Abuse) (Scotland) Bill

Client Alerts||22/06/2017

The Limitation (Childhood Abuse) (Scotland) Bill has today been passed by Parliament.  

The Bill seeks to amend the Prescription & Limitation (Scotland) Act 1973 by removing the current three year limitation period in actions seeking damages in respect of personal injury where the action relates to abuse when the person who sustained the injuries was a child at the time of the abuse.  It allows the raising of claims dating as far back as 1964.  It also gives the right to resurrect claims that previously failed on the grounds of limitation.  

A final debate took place today and Parliament voted unanimously in favour of passing the Bill. 

What happens next?

The Bill will now go forward to law officers and if they do not raise any concerns within a 30 day period it will then go forward for Royal Assent.  The Scottish Ministers will return to Holyrood in the Autumn to lodge a commencement order which will state when the Act will come into effect. This could be as soon as the Autumn.

What does this mean for compensators?

Alastair Ross, Head of Public Policy (Scotland, Wales & NI) at the Association of British Insurers commented this evening that:

“At the heart of this legislation are victims and survivors who have been abused. The insurance industry is keen to be part of a system which keeps any further pain and distress to a minimum.

The ABI has expressed significant concerns on this Bill and the implications for insurers and their insureds who may now face claims dating as far back as 1964 under vicarious liability. These include the traceability of policies and legacy insurers, the verification of the details of historic claims, and the increased risk of claims in the future which may push up the cost of premiums.

We believe the Scottish Government has significantly underestimated the level of claims which will come forward, and the cost implications especially for charities, third sector organisations and public bodies including local authorities.”

Keoghs Viewpoint

There is anecdotal evidence that some claimant firms have a large number of claims waiting in the wings.  This obviously presents a concern for compensators particularly if these claims proceed to litigation at a pace.  Discussions are ongoing between interested parties regarding the possibility of a compulsory protocol being introduced specifically for historic child abuse claims in Scotland.  If the terms of such a protocol can be agreed, there are potential benefits for all parties.  Not only could this reduce costs for the compensators, particularly those who are self-insured, but could also avoid the trauma of claimants having to go through the litigation process.

This comes at a time when the funding of litigation in Scotland has been brought into sharp focus. On 2 June 2017, The Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill was published following Sheriff Principal Taylor’s review of Civil Litigation. This includes provision for QOCS (Qualified One-Way Costs Shifting) in personal injury claims meaning that any pursuer who conducts proceedings in an ‘appropriate manner’ will not have an award of expenses made against them. It is likely that QOCS will be introduced.  Therefore it will be vital for compensators to front load investigations in order to reduce the high cost of avoidable litigation.

David Pugh, Director of Disease Strategy, has acted for insurers in legacy claims in the Court of Appeal and Supreme Court. He explains:

“The removal of limitation will concentrate defenders’ minds on other defences, especially the reliability of each pursuer’s evidence. Keoghs’ Scottish team is highly skilled in conducting all the defences which remain open to compensators.  As well as Keoghs overall experience, the Scottish team includes a dual-qualified partner who dealt with such litigation in England & Wales when compensators were faced with a multitude of such claims.  Therefore the team are well placed to advise on tactics and strategy.”

For more information please contact:

David Pugh
Partner, Director of Disease Strategy
T: 0247 665 8274
E: dpugh@keoghs.co.uk

David Hennessy
Partner
T: 0141 238 0068
E: dhennessy@keoghs.co.uk

Stefanie Johnston
Partner (qualified in Scotland, England & Wales)
T: 0141 238 0067
E: sjohnston@keoghs.co.uk

Douglas Cowan
Partner
T: 0141 238 0070
E: dcowan@keoghs.co.uk