In the US, defendants and their insurers have paid out significant sums for sexual abuse claims. A landmark decision of the House of Lords in A v Hoare [2008] UKHL 6 may mean that insurers covering UK employers for similar abuse claims will begin to share the US's experience.

A v Hoare concerned the limitation period applicable to cases of sexual abuse. Previously, abuse claimants had 6 years to bring an action but the Lords in A v Hoare decided that this was wrongly imposed. Instead, they found that the limitation period should be only 3 years but, significantly, that the courts would have a discretion to extend the period when equitable to do so.

This is likely to have profound implications for employers and their insurers. A previous decision of their Lordships in 2002 ruled that employers could be held liable (in damages) for the acts of abuse of their employees. Now they can, potentially, be held liable for cases where the abuse occurred decades ago (when the courts find it equitable to extend the 3 year time-limit). This is perhaps most likely to be in cases where the relevant employee has already been convicted of an abuse offence.

The most affected will be churches, local authorities (particularly those involved in care and education), government bodies, and their respective insurers. Initial estimates are that several thousand claims could now be in the pipeline. There are already reports of old, previously time-barred, cases, being re-opened. This could turn into a significant liability problem.