Councils setting aside money for child abuse compensation

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Only a small number of local authorities have money set aside to meet potential compensation claims from survivors of historical child abuse, it has emerged.

An investigation by The Scotsman has established that, while many councils have insurance policies in place to deal with claims dating back decades, others do not.

Given the financial environment local authorities operate in, local government will struggle to meet the financial implications of the legislation

Cosla spokesman

Under the Limitation (Child Abuse) Bill currently before the Scottish Parliament, a three-year time bar on bringing civil actions will be removed.

It is thought the legislation could lead to thousands of claims for compensation from those allegedly abused in local authority-run institutions.

Figures obtained under Freedom of Information legislation show more than £1 million has been paid out in claims since local authority re-organisation in 1996. A small number of councils, including Dundee and Glasgow, said money set aside in insurance funds would be used to meet potential liabilities under the new legislation.

Dundee City Council has £500,000 in its fund to deal with personal injury claims, including those relating to historical abuse. Glasgow has settled 103 claims since 1996 at a total cost of £113,500 and said it had insurance policies in place for “some [of the] years” covered by the bill. The council said its insurance fund would meet potential liabilities regardless of their nature.

Fife Council, which has made 28 compensation payments totalling nearly £900,000 since 1996, said future claims “may be” covered by either a historical or existing insurance policy. However, the council said it had no plans to set aside funds for potential claims which might result from the new legislation.

Stirling Council, which made two compensation payments totalling £23,500, said it did not set funds aside, but would have to consider it in future. Edinburgh City Council, which has settled one case for £21,474, said “some” claims could be dealt with using historical insurance policies.

A spokesman for local authority umbrella organisation Cosla said: “While impossible to quantify the potential volume of claims and therefore the cost, the overall impact of the legislation on local authorities is likely to be extensive, complex and not limited to successful claims.

“Given the financial environment that local authorities are operating in, local government will struggle to meet the financial implications of the legislation, in particular in light of the fact that it is unlikely that these costs are capable of being fully met from the identified insurance policies.”

A Scottish Government spokesman said: “Having listened to the views of survivors of childhood abuse, we are legislating to remove the time bar which prevents civil action from being taken after the limitation period has expired, which is usually the survivor’s 19th birthday.

“We feel that the law should recognise the reasons why people do not come forward until many years after the event.”