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AB 218 Enactment Update

Several weeks ago, CAJPA sent an alert to members that AB 218 was signed by Governor Newsom. AB 218, among other provisions, extends the liability timeline where sexual abuse or molestation (SAM) claims can be filed and makes public entities liable for triple damages if there is any evidence a claim was purposely concealed. AB 218 also opens the door to retroactive claims that may be filed for the next three years.

While disheartened by this outcome, we would like to thank all those that responded to CAJPA’s call to action by contacting Governor Newsom via phone and email to request his veto. CAJPA members sent over 193 letters to the Legislature opposing AB 218.

In preparation for the new law which takes effect on January 1, 2020, CAJPA has compiled some helpful tips on best practices and resources to help prepare members for the expected surge in SAM claims.

Things all public entities need to know about the new law include:

  • Statute of Limitations for Childhood Sexual Assault and Molestation (SAM) extended by 22 years from the date an individual attains the age of majority (age 40) or within five years an individual discovers that their current psychological injury or illness was caused by a sexual assault occurring before they reached the age of majority.
  • Claims, including retroactive claims, can be filed starting January 1, 2020. There is a three-year retroactive window opened by AB 218’s enactment that permits old claims to be revived.
  • For all practical purposes, there is no statute of limitations. A claimant can be 90 years old and file a claim if they discover their psychological injury or illness was caused by a childhood sexual assault 80 years prior where the entity being sued owed a duty of care to the individual.
  • Public entities will be presented with claims that are difficult and expensive to defend. AB 218 claim targets will be public entities, including schools, city and county run day care operations, city or county operated before school or after school programs, public safety programs aimed at helping at risk youths, police and fire Explorer programs, foster child or adoption programs, to mention just a few.
  • For older claims, there may be no living witnesses or records to be found.
  • Because of the lack of documentation, this process is ripe for fraudulent claims to be filed.
  • Public entities need to be aware and prepared for claims that pre-date’s the existence of their risk pool.
    • New York recently enacted a similar law to AB 218. That law also included a revival window that opened August 14, 2019.  In the first few weeks permitting these claims, one of the major school risk pools had 27 cases filed in first week.  Of the 27 claims received, 20 claims predated the pool’s existence.
  • Treble Damages can be imposed if any effort to conceal can be proven. These damages may not be covered by a pool, excess pool or reinsurance and are ultimately the responsibility of the public entity to pay.
  • It is unknown at this point how AB 218’s provision will be interpreted by the courts.
  • The new law also sets a new, lower standard to establish employer culpability.
    • Prior to AB 218, a victim could bring a civil suit against a person or entity after the plaintiff attains age of majority (now 40) if they allege that the employer had some reason to know of “unlawful sexual conduct” by their employee, volunteer, representative, or agent, AND the employer failed to take action to prevent the abuse. AB 218 changed the “AND” to an “OR” which would have the effect of eliminating the requirement that an employer have knowledge, and reduced the standard of “unlawful sexual conduct” to “misconduct that creates the risk of childhood sexual assault” thereby creating a standard akin to strict liability, regardless of knowledge of or reasonable steps taken to safeguard children.

Steps for pools to take to prepare now:

  • Review all administrative policies, procedures, practices and training materials relating to:
    • Hiring: Consider available resources like NASDTEC LEA Clearinghouse.
    • Student/child supervision: Emphasis on early identification of possible grooming activities or physical boundary violations in order to prevent abuse.
  • Adopt and enforce ZERO TOLERANCE policy for student sexual harassment/assault/abuse. (See CSBA Policy info below).
  • Tighten site access (i.e. knowledge/control of all visitors, tradespersons, vendors, volunteers, and walk-on coaches, etc.).
  • Update and provide targeted staff training on best practices regarding:
    • Recognition of potential predator behavior.
    • Personal and physical boundaries.
    • Reporting requirements and mandates.
    • Response procedures.
    • Communication with students and families (i.e. who is responsible for this communication and content of the communications).

Prepare your members for pending financial impacts including:

  • If claim is not covered above Shared Layer, the public entity or school districts may be financially responsible.
  • Each case should be reserved above $1 million per claim.
  • Unknown fiscal effects on other school programs.
  • If pool covers losses, there will be substantial increases in Liability Premium
  • Prepare your members for insurance market responses including:
    • SAM coverage exclusions.
    • SAM coverage reduced limits.
    • Excess carriers/reinsurers may exit the CA market entirely.
  • Encourage members to identify insurance coverage prior to pool formation year
    • This will require significant document archeology and may require additional investigative resources.
  • Identify potential victims from old cases such as those that were rejected due to previously being time-barred.
  • Identify if previous insurance companies are still in business.
    • If so, note that coverage for “year of claim” may not have coverage to current levels
  • For pre-JPA claims, if carriers are insolvent, there is no guarantee that CIGA will respond, or limits may be significantly less.
  • Pools will need to determine if it is viable to share risk for old claims.
  • Determine whether damages and defense costs will be covered or defense costs only.

Please note this is not an exhaustive list or to be construed as legal advice.

CAJPA strongly recommends that each member and pool should consult their legal counsel and risk managers on how to best prepare and survive AB 218’s coming impact.

Be sure to contact your legal counsel immediately upon receiving notice of any SAM related report or claim.

New Model Ethics Resource for CAJPA members

CAJPA is pleased to share an exciting new free resource for all JPAs: the Model Code of Ethics for Educators (MCEE).

The National Education Association (NEA) has partnered with Digital Promise to create a new micro-credential based on the five principles of the MCEE.  This free resource was created by educators for educators and is now open to the public.

Educators will ultimately need to determine its value and appropriateness for their district. However, the MCEE is a great vehicle for communicating a higher level of commitment and training, and would be a great way to show “reasonable steps” toward prevention of student assault.

You can find the NEA micro-credential "Elevating the Profession Through Educator Ethics" by clicking:

For our education partners, please be sure to review the recently approved policies from the California School Board Association (CSBA) on appropriate standards and reporting requirements for classified, certificated and management staff. These policies are accessible with paid subscriptions to CSBA and are available here.

CAJPA strives to support members through this changing legal landscape. We encourage strategic thinking and collaborative partnerships to make sure members are using the best available resources and coverage options first and foremost to keep kids safe and to provide resources to any who are impacted, and secondly to set the culture that deters predatory behavior.  In these ways we will be able to prevent or mitigate losses associated with SAM claims.

The reality of AB 218’s enactment on CAJPA members is that we, as the public entity risk pooling community, now face an unprecedented, unknown liability landscape whose costs to public entities could easily climb into the billions of dollars over the next few years.

The silver lining to the legal mayhem that will be caused by AB 218’s enactment, is that it may lead to needed tort reform in the future aimed at protecting public entities from going insolvent due to AB 218 claims.  Even more important is that we, as public stewards, establish focused, stronger safe environments for not only children and students in our care, but also for our staff and administrators.

CAJPA urges all public entities take action to create and implement the strongest SAM prevention policies, training, detection and related protocols possible.

SAM Claims Data Needed From All Public Entities

Lastly, we need your SAM claim data, and hope you will partner with us as we prepare for the ongoing battle for better public policy in this area. In order to understand the impact of AB 218, we will be asking for this data as part of CAJPA’s tort liability project, announced over this last summer. Specific data collection details will be provided to CAJPA members at a future date.