Legislative amendment puts employers at risk for personal injury claims from child sexual abuse
A recent and important legislative amendment in Queensland removed the limitation period for actions for damages for personal injury resulting from child sexual abuse. This reform is particularly relevant to employers who could be vicariously liable to victims who, as a result of the employer’s business and undertaking, were sexually abused by employees or former employees.
This legislative amendment becomes important for employers following a recent High Court decision that confirms that employers can be vicariously liable for their employee’s criminal conduct.
Previously, a person who sustained an injury during their childhood had to commence proceedings within 3 years of reaching 18 years of age. This amendment abolishes the limitation period for a damages claim, by a person who was sexually abused as a child.
The legislation is expected to commence in early 2017.
The amendment was passed in response to the key recommendations of The Royal Commission into Institutional Responses to Child Sexual Abuse. The Commission recommended State and Territory Governments remove any limitation periods that apply to “claims for damages brought by a person, where that claim is founded on the personal injury of the person resulting from sexual abuse of the person in an institutional context when the person is or was a child”.
As a check and balance to an otherwise unfettered extension of the limitation period, the Commission also recommended that any amendment preserve the Courts’ existing jurisdiction and power to stay proceedings if it would be unfair to the defendant for the claim to proceed.
The legalisation also gives the Court power to set aside settlement agreements relating to abuse claims if the Court considers it “just and reasonable” to do so. Any “associated agreements” to the settlement agreement (for example, releases given to insurers) are also made void if the settlement agreement is set aside.
Another change is the reversal of the onus of proof, relating to prejudice. Previously, the onus was on the person who applied for an extension of the limitation period to satisfy a Court that:
- it is just in all the circumstances to extend the limitation period; and
- the defendant will not be significantly prejudiced if the discretion to extend time is exercised.
Now, a person can commence proceedings against an employer for vicarious liability no matter how long ago the relevant events occurred, and the onus will be upon the employer to satisfy the Court stay the action if the employer asserts it cannot get a fair trial.
This legislative amendment is important given the recent High Court decision that an employer can be vicariously liable for sexual abuse perpetrated by an employee’s criminal act. If that criminal act was sexual abuse the employer can be liable if the acts took place in connecion with:
- a particular role that the employer assigned to the employee that was one of authority, power, trust, control and the ability to achieve intimacy with the victim; and
- a assigned role not only gave the employee the opportunity to commit the wrongful act, but also the occasion to do so.
The decision was one in which a person was sexually abused by an employee of a College. The person was 12 years old at the time and the traditional limitation period for the action expired some 35 years before the person commenced the action.
In this instance however, the High Court held that the employer would be significantly prejudiced in defending the claim because much of the evidence relevant to the claim had been lost. The Court was particularly influenced as well by the fact that person had agreed not to sue the College in September 1997.
Lessons for employers
If your business operations could give rise to an historical or prospective risk of a vicarious liability claim for child sex abuse by employees, you should:
- review your records to assess if there are prior claims or complaints that did not proceed either because the limitation period had expired or because it has since expired
- determine whether you have previously settled a claim or obtained judgement in any prior proceedings based on the application of a limitation period
- gather any records you can that may be relevant to such claims and ensure that those records are preserved
- record if records have been destroyed or if relevant witnesses are no longer available or have died
- review any record keeping policies and procedures to assess if they are adequate to respond to a long tail sexual abuse claims; and
- consider any notification obligations under existing and past liability insurance and review settled claims with your liability insurers.
For the future, given that employer can be liable for an employee’s criminal conduct, employers should consider which occasions or situations give opportunity to an employee to engage in criminal conduct; consider which roles may afford both the opportunity; and occasion for sexual abuse.
If there are any, you may be at risk of being vicariously liable for the criminal conduct of those employees and you should take steps and implement procedures and policies to manage that risk, such as incorporating audit and supervisory checks.
For further advice contact our legal team.