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Local governments and school districts have faced higher insurance premiums and a wave of new litigation for claims of sexual abuse dating back years. <\/p>\n
Getty Images<\/p>\n
In 2019, California passed a law that gave victims of child sexual abuse more time to sue their alleged abusers and the employers who hired them. Now, seven years later, that law has created a financial crisis for local governments and school districts facing a wave of new claims.<\/p>\n
The Los Angeles Unified School District, for example, is borrowing $250 million<\/a> to help pay mounting claims that could exceed $1 billion in settlements. Los Angeles County, facing 5,000 new claims<\/a> \u2014 some of which it believes are fraudulent \u2014 has one supervisor calling on lawmakers to overhaul Assembly Bill 218, which was signed into law by Gov. Gavin Newsom.<\/a> County officials estimate that $5 billion in government funds intended for local services has already gone to settlements.<\/p>\n An attempt to revise AB 218 failed in Sacramento last year, a sign of trial attorneys\u2019 influence at the Capitol. Meanwhile, a burgeoning cottage industry has emerged within California\u2019s legal field, producing claim after claim of child abuse, with no end in sight.<\/p>\n Before AB 218, a victim had until age 26 to sue. The law extended that window to as late as age 40.<\/p>\n Normally, when the Legislature mandates new responsibilities for local governments, it must provide funding to implement them. Unfunded mandates typically die because the sponsoring lawmaker cannot identify a funding source.<\/p>\n However, lawmakers circumvented this requirement because expanding the ability to file these lawsuits didn\u2019t come with a precise cost. Only now are the fiscal consequences becoming clear.<\/p>\n Many of these claims are undoubtedly valid, but lawmakers must now decide whether it makes sense, as a matter of public policy, for governments to redirect so much money to settle cases involving their employees\u2019 alleged wrongdoing.<\/p>\n This legislation was not pushed through by a coalition of liberal Democrats. The expansion of child abuse litigation had bipartisan support and passed without a single Republican vote in the final votes in both chambers.<\/p>\n Still, the Legislature has created a genuine financial crisis for schools and local governments across California. Few lawmakers seem eager to confront it.<\/p>\n Lorena Gonzalez, the former Assemblymember who authored AB 218 and now leads the California Federation of Labor, told the Insurance Journal that local governments have become unintended victims of her bill.<\/p>\n \u201cThere\u2019s a problem with people looking at cities and counties and school districts as deep pockets, and I think trial attorneys are taking advantage of that; they\u2019re making far too much off taxpayer dollars,\u201d she said.<\/p>\n
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