A House of Lords ruling on the time limit for an abuse victim to make a claim is worrying insurers
Insurers could face an increase in claims following a landmark House of Lords ruling that extends the deadline for abuse victims seeking compensation.
Five law lords overturned the time limit for historic abuse claims to be brought before the courts.
A victim of a 1988 sexual assault was allowed to claim compensation from her abuser who won the lottery after being released from prison.
Previously, victims could launch a claim only up to six years after an attack or, in child abuse cases, no more than six years after their eighteenth birthday.
Extending the current limitation period opens up the possibility for claims that otherwise wouldn’t be made, said Lindsay Gray, senior liability underwriter at Ecclesiastical Insurance.
She said: “If the change in the law prompts a greater number of claims for compensation and pushes up claims costs, the price of insurance will have to reflect this. If, however, any change in the law is retrospective, insurers may be a great deal more uneasy, as pricing in the past was based on the legal situation at the time. Claims costs could differ dramatically from what was expected.”
Sarah Erwin-Jones, a partner at law firm Browne Jacobson, said she did not anticipate a flood of claims following the ruling, but wouldn’t rule out the possibility in the future.
She added that the ruling could also present an opportunity for insurers to write more business, as more companies and institutions looked to better protect themselves against historic claims.
This would primarily affect insurers that write business to protect workers in social care or in
the health and education sectors.
She added there could be additional responsibilities that rest with insurers, given the sensitive nature of the claims being handled.
She said: “Insurers will need to work very closely with the accused in order to resist allegations made by the claimant because of damage to reputation.”