The Challenges Of Limitations In Sexual Abuse Claims

Limitation periods provide comfort to both insureds and insurers. With the passing of a limitation period, each can draw comfort from the knowledge that a claim has not been pursued and is not likely to be pursued in the future. Limitation periods have been liberalised through the use of the discoverability principle, but for the most part the tolling of the limitation period means the end of a possible claim.

Claims for sexual abuse present a greater challenge. The Supreme Court of Canada liberalised the limitation period for sexual abuse claims in M. (K.) v. M. (H.)1 to the point where the limitation period does not begin until the plaintiff is reasonably capable of discovering the wrongful nature of the defendant's acts. Typically, that is not until he or she has received counselling. More recently, in Ontario, legislation has been passed to eliminate entirely the limitation period in cases of sexual abuse. A plaintiff is no longer required to demonstrate that there was a delay in his or her understanding of the wrongful nature of the acts of the assailant.2

The vicarious liability of a commercial entity for the acts of its employees is a well-established principle of common law. However, until 1999 employers were not responsible for the unauthorized intentional acts (sexual abuse) committed by an employee. When this issue was revisited by the Supreme Court of Canada in the decision of Bazley v. Curry3, the court expanded the scope of vicarious liability for sexual assault in circumstances where the nature of the employment relationship is such that it provides the opportunity for the abuse to take place.

It is important to remember that these changes in the law are retrospective in nature. The liberalization of the limitation period applies to all claims in the past. The expansion of the doctrine of vicarious liability applies equally to claims arising from incidents of abuse before the Supreme Court ruled on the issue in 1999.

All of this presents an interesting problem for insureds and insurers. While claims for sexual abuse are self-limiting in nature, by virtue of the age of the victim, they are often pursued when the victim is well in to their adult years, with the result that the abuse may have taken place at any time from the 1950s to the present.

One of the first challenges for the insured arises from the obligation of the insured to prove the existence of the policy, including the language and liability limits. In the years...