Australia: Queensland – Employer's vicarious liability expanded by abolition of sexual abuse civil action limitation periods

Last Updated: 11 November 2016
Article by Mark Waller

On 8 November the Queensland Parliament passed legislation1 that removed the limitation period for historical and prospective civil actions for damages for personal injury as a result of child sexual abuse. This reform will be particularly relevant to employers who may be vicariously liable to victims abused by employees.

Prior to this legislation, a plaintiff who suffered injury as a child was required to commence proceedings within 3 years of the plaintiff's 18th birthday.2 The legislation abolishes the limitation period for a civil cause of action for damages by a person who was sexually abused as a child.3 The legislation will commence on a date to be fixed by proclamation, which is expected to be in early 2017.

This abolition of the limitation period implements and goes further than a key recommendation of The Royal Commission into Institutional Responses to Child Sexual Abuse. On 14 September 2015, the Commission's Redress and Civil Litigation Report was tabled in Federal Parliament. In Part Four of the Report, the Commission recommended that:

  • State and Territory Governments should remove any limitation periods that apply to "claims for damages brought by a person, where that claim is founded on the personal injury of the person resulting from sexual abuse of the person in an institutional context when the person is or was a child";
  • the removal apply retrospectively; and
  • the removal occur as soon as possible (recommendations 85, 86 and 88).

The Commission considered that the removal should however be balanced by expressly preserving the relevant courts' existing jurisdictions and powers to stay proceedings where it would be unfair to the defendant to proceed (recommendation 87).

As recommended by the Commission, under the legislation:

  • the removal of the limitation period applies retrospectively to causes of action that are time barred by reason of expiry of the limitation period, including giving the power to the Supreme Court to set aside an existing judgment of a court dismissing a plaintiff's claim based on the application of the now abolished limitation period4 and
  • the court retains its inherent power to stay proceedings where, by reason of the effluxion of time and the loss of witnesses and other evidence, it would be unfair to allow the action to proceed.5

The fact that the legislation is not limited to abuse in an institutional context is consistent with legislation introduced in Victoria and New South Wales. Those States have also adopted legislation to remove limitation periods in respect of actions involving child abuse, inclusive of child sexual abuse.

A significant amendment was made to the Bill as originally tabled to give the court power to set aside settlement agreements relating to abuse claims where the court considers it "just and reasonable" to do so. This amendment also provides that "associated agreements" (which may extend to releases given to insurers) are also void if the settlement agreement is set aside. These changes are likely to have significant consequences.

An important practical consequence of the new legislation is that, prior to the legislation, if a limitation period had expired, the onus was on the plaintiff to apply for an extension of the limitation period.6 That application would only be granted if:

  • the plaintiff brought the application for an extension within 12 months of becoming aware of a material fact of a decisive character relating to the right of action;
  • the plaintiff could satisfy the court that it was just in all the circumstances for the court to extend the limitation period; and
  • the defendant would not be significantly prejudiced if the discretion was exercised in the plaintiff's favour.

Now, a plaintiff can commence proceedings against an employer for vicarious liability for abuse by an employee no matter how long ago the relevant events occurred and the onus will now be upon a defendant to apply to the court for an order staying an action if the defendant asserts it cannot get a fair trial.

In light of the recent decision of the High Court in Prince Alfred College Incorporated v ADC7, defendant employers have some guidance regarding the principles that need to be considered in assessing whether they are vicariously liable for sexual abuse perpetrated by an employee. In the case, the High Court held that the fact that a wrongful act by an employee is a criminal offence does not preclude the possibility of an employer being vicariously liable for that act and that the relevant approach is to consider:

  • any special role that the employer has assigned to the employee;
  • the position in which the employee is placed in relation to the victim and the particular features of that role such as authority, power, trust, control and the ability to achieve intimacy with the victim; and
  • whether those features not only provide the opportunity for the employee to commit the wrongful act, but also provide the occasion for the employee to do so.

The plaintiff was sexually abused by an employee of the College when he was 12 years old. The limitation period in respect of the action brought by the plaintiff had expired in 1973, some 35 years before he commenced the action against the College in 2008. The High Court was hearing an appeal from the decision of the Full Court of South Australia by which that court granted an extension of the limitation period.

In order for ADC to obtain an extension of the limitation period, ADC was required to show that it was just in all the circumstances for the court to extend the limitation period8, which included a consideration of whether the College would be significantly prejudiced if the discretion was exercised in his favour.9 In deciding that the limitation period should not be extended, the majority of the High Court (French CJ, Kiefel, Bell, Keane and Nettle JJ) held that the College would be unduly prejudiced in defending ADC's claim and could not receive a fair trial because much of the evidence relevant to the claim against the College had been lost. The court was particularly influenced by the fact that ADC had agreed not to sue the College in September 1997.

What does this mean for employers?

If you are employer and the nature of your operations exposes you to either an historical or prospective risk of civil damages claims based on vicarious liability for child sex abuse by employees, you should:

  • review your records to assess whether you are aware of any prior claims or complaints that did not proceed either because the limitation period had expired or because it has since expired;
  • determine whether you have previously settled a claim or obtained judgement in any prior proceedings based on the application of a limitation period;
  • gather any records you can that may be relevant to such claims and ensure that those records are preserved;
  • if it is apparent that records have been destroyed or relevant witnesses are no longer available or have died, those matters should be noted;
  • for future risk, you should review your record keeping policies and procedures and assess whether they are adequate to respond to long tail sexual abuse claims;
  • you should carefully consider whether roles assigned to your employee(s) are such that they afford both the opportunity and the occasion for the employee(s) to engage in criminal conduct. If so, your organisation will be at risk of being found vicariously liable for the criminal conduct of those employees and therefore should take steps and implement procedures and policies to manage that risk, such as incorporating audit and supervisory checks, to reduce the risk of such liability; and
  • once you have reviewed and assessed your risk exposure to latent and historical claims for vicarious liability for abuse by employees you should consider notification obligations under existing and past liability insurance and review settled claims with your liability insurers.

In another, but related development, the same legislation introduces a new class action procedure in the Queensland Supreme Court.10 This legislation also commences on a date to be fixed by proclamation, again likely to be early 2017. This may facilitate group actions in respect of historical institutional sexual abuse and thereby make it easier for these claims to be litigated, despite the likely high cost burden associated with commencing claims that relate to events that occurred many years earlier.

Footnotes

1 Limitation of Actions ( Child Sexual Abuse) and Other Legislation Amendment Act 2016

2 Section 11 of the Limitation of Actions Act 1974

3 The legislation inserts a new section 11A(2) into the Limitation of Actions Act 1974 that defines when sexual abuse happens in an institutional context and a new section 11A(6) that defines what is an institution.

4 The new section 48 of the Limitation of Actions Act 1974

5 The new section 11A(5) of the Limitation of Actions Act 1974

6 Section 31 of the Limitation of Actions Act 1974

7 [2016] HCA 37.

8 Limitation of Actions Act 1936 (SA), s 48(3)(b).

9 Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541; [1996] HCA 25.

10 Limitation of Actions (Child Sexual Abuse) and Other Legislation Amendment Act 2016

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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