Attorneys for victims of child sex abuse have said the proposed settlement is not nearly sufficient for the tens of thousands of claims against the Scouts.
Insurance company The Hartford has agreed to pay the Boy Scouts of America $650 million as part of the latter group’s bankruptcy proceedings.
As the Hartford Courant earlier reported, the Boy Scouts of America—along with several of its local councils—filed a lawsuit against the insurance company in 2018. In their complaint, the Boy Scouts alleged that The Hartford had issued it policies which should have covered some of the sexual assault claims now pending against the Scouts.
“We are deeply sympathetic to the victims of childhood sexual abuse and the enduring trauma they suffer,” The Hartford spokesman Matthew Sturdevant said. “Our agreement with BSA is an encouraging step towards a global resolution that will promote the BSA’s efforts to equitably compensate survivors.”
According to The Associated Press, the funds will be deposited into a trust for victims of child sexual abuse.
In exchange for the payment, the Boy Scouts will release The Hartford from any obligations the insurer may have held from policies issued to the BSA dating back to 1971.
“The agreement, entered into after extensive negotiations, contemplates that, in exchange for The Hartford’s payment, the BSA and its local councils will fully release The Hartford from any obligation under policies it issued to the BSA and its local councils,” The Hartford said in a news release.
The settlement, notes The Associated Press, was submitted to the courts on Friday by a team of mediators who are working to resolve tens of thousands of sex abuse claims lodged against the Boy Scouts, even as the BSA heads towards bankruptcy.
“Our agreement with The Hartford is an encouraging step towards achieving a global resolution that will promote the BSA’s efforts to equitably compensate survivors and continue the mission of Scouting,” the Boy Scouts said in a statement. “We are committed to continuing our mediation efforts with all parties and look forward to sharing additional updates as these discussions progress.”
However, the settlement comes with a catch: The Hartford’s gross payment will be reduced if the Boy Scouts or the victims’ trust enters into an agreement with another insurer—Century Indemnity Company—and Century settles for less than two times the amount which The Hartford paid.
The Associated Press notes that, even without the potential reduction, attorneys representing abuse victims were “appalled” by the agreement.
“It’s outrageous,” said attorney Paul Mones, who is representing hundreds of abuse victims. “Their real liability is in the billions of dollars.”
“This is just business as usual for the Boy Scouts—paying lip service to their supposed understanding and concern for their horrific legacy of sex abuse, but not doing anything substantive,” he added.
If the settlement is not approved by abuse victims, then the Boy Scouts will create a self-funded trust. However, that trust will only pay claims filed against the national scouting organization and exclude those made against local councils.
The official tort claims committee, notes The Associated Press, estimates the value of the approximately 84,000 claims against the Boy Scouts as $103 billion. Right now, the Boy Scouts estimates that its settlement trust, once fully funded, will be worth anywhere between $2 billion and $7 billion.