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The Adult Survivors Act[1] (“ASA”), a law recently signed by New York Governor Kathy Hochul, will go into effect on November 24, 2022 and provide a one-year window for individuals who were 18 or older at the time of the offense to file suit for previously time-barred sexual offense claims, regardless of when the alleged act occurred. The ASA will impact any entity that regularly interacts with adults in any capacity; thus, a significant influx of claims and lawsuits is anticipated.
New York’s Child Victims Act (“CVA”)[2], which opened a one-year window (ending in August 2021) extending the statute of limitations for claims of childhood sexual abuse, brought an influx of over 11,000 cases into New York courts and had a substantial impact on businesses and institutions serving children, and their insurers[3]. The impact of New York’s Adult Survivors Act (“ASA”), signed into law in May 2022, could be even greater.
Similar to the CVA, the ASA allows plaintiffs to sue businesses and institutions under the theory of “vicarious liability,” in addition to allowing suits against individual perpetrators. As such, any organization allegedly involved in creating conditions for the abuse to occur could be implicated in ASA lawsuits. Given that so many more entities employ, interact and serve adults than children, the ASA’s reach will be significantly broader than the CVA.
Potential ASA defendants who are likely to see any influx of sexual abuse claims starting in November include those in the financial, health care, hospitality and entertainment industries as well as professional services firms.
The ASA is likely to expand upon the increasing number of “vicarious liability” claims brought in New York courts against businesses and institutions. While an employer cannot be held vicarious liable under the doctrine of respondeat superior for an employee’s acts of sexual abuse, they can be held liable under a negligence theories of liability including negligent supervision, negligent training and/or retention, negligent hiring, negligent security and common law negligence.[4]
The enactment of the ASA will present obstacles to both organizations and their liability insurers, which must be addressed proactively in order to mitigate risks and costs from the significant influx of ASA claims and lawsuits anticipated in the next year.
Best Practices in Preparing for ASA Claims
In preparing for the litigation of ASA lawsuits, all organizations which fall under the umbrella of susceptibility to ASA claims should conduct a thorough investigation of historical and modern internal policies addressing the identification and reporting of sexual abuse, harassment and assault of any kind and any related internal communications about said policies and/or reports made pursuant regarding same. It is also expected that impacted organizations will review their insurance coverage profiles.
Undertaking these precautions now will position potential defendants to face the anticipated wave of ASA litigation that will be filed over the next year.
Anticipated Impact of ASA on Insurers
Similar to the CVA, the retroactive enlargement of the civil statute of limitations in sexual abuse cases under the ASA is also anticipated to have wide-reaching impacts on insurers. Given the historical nature of these claims, having the advice and counsel of experienced lawyers to navigate the complex web of potentially overlapping and concurring policies, disparate terms, and more will be critical to defending ASA claims. These claims may implicate various kinds of coverage including general liability insurance contemporaneous with the alleged occurrences, employment practices liability insurance (EPLI), and Director & Officer (D&O) policies.
Lawsuits stemming from the ASA may raise issues pertaining to the potential availability of insurance coverage, including issues surrounding lost policies, scope of coverage, number of occurrences, and compliance with policies’ notice requirements. Insurers will need to be ready for the large influx of ASA claims and be prepared to promptly investigate the existence of coverage and assert any and all available coverage defenses in a timely manner.
Conclusion
Both insurers and insureds would be well-served to prepare for the anticipated volume of lawsuits under the ASA by identifying insurance policies and secondary evidence that would be implicated by the new sexual abuse claims and development of a comprehensive legal strategy for defending these claims. Knowing in advance what liabilities may exist, what insurance may cover those liabilities and what defenses to liability and coverage will be presented is invaluable towards the goal of mitigating risks under any and all ASA claims that are likely to arise in the next year.
[1] NY Senate Bill S.66A/ Assembly Bill A.648A
[2] NY Senate Bill S2440
[3] https://childusa.org/wp-content/uploads/2021/08/A-Preliminary-Report-on-the-New-York-Child-Victims-Act.pdf
[4] Singh v. Memorial Sloan Kettering Cancer Center et al, 2019 WL 6977106 (S.D.N.Y. Dec. 20, 2019); M.C. v. State, 163 N.Y.S.3d 741, 753 (N.Y. Ct. Cl. 2022)
Insurance and reinsurance