The Flawed System of Sexual Abuse Settlements

There was a window from the late 1980s through the early 2000s when the sex abuse of minors seemed to be a predominantly Catholic Church problem. At least in the United States, that delusion is now dead. On June 17, the Wall Street Journal reported that sex abuse claims against the Boy Scouts of America, totaling some 60,000, now exceed $7 billion in value. This is more than double the financial resources allotted by the organization for compensating victims in its 2022 bankruptcy settlement. Even that figure may not be enough. Abuse survivors argue that abuse damages should be valued even higher, between $30 billion and $103 billion. 

The Boy Scouts’ story follows a $4 billion abuse settlement—the largest in U.S. history—by Los Angeles County. Under a 2020 state law, the county’s money will go to nearly seven thousand survivors from decades of sexual and physical abuse at the county’s juvenile facilities. The settlement does not preclude similar lawsuits in the future by the abuse victims of other public institutions and schools. It also dwarfs the $1.5 billion paid out by the Archdiocese of Los Angeles to victims of clergy abuse.  

Los Angeles County is not alone. In the past, government-related institutions nationwide typically enjoyed protection from various forms of civil litigation based on the sovereign immunity principle. Survivors of sexual abuse in public institutions faced shorter windows to report their abuse and far lower settlement caps than victims of the same forms of abuse in private institutions. Under public pressure, some state legislatures have addressed that inequity by including liability for public agencies in retroactive statute of limitations reform, and increasing the penalties assessed to those agencies.  

The intent of such lawmakers—equal justice for all sex abuse victims—has been admirable. The result has been closer to sticker shock. In 2023, Maryland enacted the Child Victims Act (CVA), a law partly triggered by abuse allegations against the Archdiocese of Baltimore, that eliminated the statute of limitations for civil suits related to child sex abuse against both public and private institutions. It set a “per occurrence” damage cap of $1.5 million for private institutions and $890,000 for public institutions. The law then survived a court challenge.

By early this year, thousands of unforeseen sex abuse claims had been filed against state agencies, mainly involving Maryland’s Department of Juvenile Services (DJS). Lawmakers promptly passed a bill to limit future liabilities for cases filed after May 31, 2025. Public institution caps were lowered from $890,000 to $400,000, and private caps from $1.5 million to $700,000. They restricted claims to a single payment per lawsuit, regardless of the number of abuse incidents involved. They also capped attorney fees at 20 percent for out-of-court settlements and 25 percent for cases resolved in court.  

Despite these measures, a revised fiscal note, posted on the last day of the legislative session, suggested that the state’s liability could be catastrophic—somewhere between $3.5 billion and $34 billion—just for Department of Juvenile Services cases. And this fails to take into account a subsequent $300 million federal lawsuit filed June 25 against Maryland’s DJS on behalf of three abuse survivors.

Simply put, the current legal process for compensating abuse victims makes no sense. Why, for example, is a victim under Maryland’s 2025 law any less worthy of restitution than a similar victim under the state’s 2023 law? Why is the victim of public-entity abuse less deserving than the victim of a private entity? From the abuse survivor’s perspective, nothing justifies preferential damage caps for public entities. Nor can anything justify the industrial scale contingency fees—up to 40 percent—that incentivize plaintiffs’ attorneys to press for crippling settlements. 

Driving social-serving institutions into bankruptcy not only hurts society, but also the victims. The Boy Scouts bankruptcy exemplifies the unequal treatment experienced by early and late litigants. Later litigants face diminished settlement resources. They risk getting a fraction of what they might otherwise be due, and have a tougher time collecting. Nor is righting the historic wrongs of sexual abuse best managed in a civil court system. Such a process is often hardest on the victims themselves who must endure depositions, trial, and re-victimization by having to openly share their intimate medical histories and subsequent life challenges. 

Sexual abuse has proven to be a bitterly widespread global evil over the past seven decades. We can’t change the legal terrain in other countries. But in the United States, we can take a new and better approach to dealing with the problem. Abuse perpetrators need to be punished under criminal law. But in the civil sphere, youth-serving organizations, both public and private, must keep the young people in their care safe. This takes background checks, mandatory reporting, and other safe environment efforts like training employees and volunteers, and then ensuring such programs are applied and enforced.  

U.S. Catholic dioceses have learned that lesson the hard way. But with recent examples like L.A. County and Maryland above, it’s clear that public entities still have a long way to go in establishing good practices. Thus, reforming legislative or legal efforts should begin by asking if an institution under scrutiny is genuinely committed to safety—now. The answer should help guide the scope and gravity of any consequent financial penalties. Simply put, we need to stop making historic wrongs a high-profit business, and instead ensure that (a) our social institutions are safe for children and others, and that (b) victims of abuse receive the care, not merely the cash, they deserve. 

At a bare minimum, victim compensation and attorney fees should have more reasonable caps applied equally across institutions. This would ensure the survival of resources for future victims. But this doesn’t solve the real problem, which is healing for abuse survivors. The priority goal of any legal reform needs to be getting resources from offending institutions directly to victims to aid their healing in a fair and effective way.  

Autonomous reparations programs for victims, rooted in restorative justice and modeled roughly on current crime-victim funds, would help abuse survivors recover, get them referrals to licensed counselors, and assist their families. These would ensure that government money and private resources paid by offending institutions would actually go to the victims for healing and essential services rather than to legal fees. Similar programs have already been successful in various parts of the country.

We live at a moment of acute irony. The sexual revolution promised sexual freedom. What we got instead is an environment that encourages sexual anarchy, including the abuse of minors. Public officials, with the same disordered fixation on sex, then go into a panic about the consequences of the revolution many of them welcomed, implementing policies that destroy civil society and cripple state, local, and nonprofit institutions. Meanwhile, billions of dollars are harvested by lawyers and litigation funding companies in fees.  

This does nothing to heal victims. Nor does it protect the vulnerable going forward. The current system too often fails the people it should serve—which is why it urgently needs to change.