Diocese Abuse Suit Settled for $85 Million
Covington Deal Cuts Insurers' Payout

By Peter Smith psmith@courier-journal.com
The Courier-Journal [Louisville KY]
January 10, 2006

http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20060110/NEWS01/601100405/1008/NEWS01

[See also Covington Diocese, Insurance Carriers Announce Settlement in Federal Case, by Brett Barrouquere, Associated Press (January 9, 2006); Ky. Diocese to Pay Up to $120 Million to Sex-Abuse Victims, By Alan Cooperman, Washington Post (June 4, 2005); and the Doe v. Roman Catholic Diocese of Covington website.

Victims of sexual abuse and the Roman Catholic Diocese of Covington announced an agreement with insurance companies yesterday that would reduce the maximum total payout to abuse victims to $85 million, down from what could have been a record $120 million.

Lawyers for victims and the diocese say they're still satisfied with the settlement, which was the subject of a hearing yesterday in Boone Circuit Court.

Lawyers for both sides originally settled the lawsuit last year and set up a fund that could have gone as high as $120 million -- the highest payout by any diocese in the nation. The diocese pledged to pay $40 million directly and to seek up to $80 million from its insurers.

The two insurance companies involved objected. But lawyers Stan Chesley for the victims and Carrie Huff for the diocese said yesterday the insurers have now agreed to pay about $45 million.

That puts the settlement total at $85 million, still one of the highest in the nation but lower than a $100 million settlement reached between the Diocese of Orange, Calif., and victims in 2004.

In Boone Circuit Court yesterday, Judge John W. Potter heard arguments on whether the Covington settlement in the class-action suit was fair.

Three legal experts and three victims testified in favor of the settlement, lawyers for both sides said, and the judge is expected to rule on it in the coming weeks. The lawyers said two people had earlier submitted objections to the settlement but withdrew them.

The two sides had already set up a formula in which victims would receive $5,000 to $450,000, depending on the severity of abuse, with an additional $550,000 available in exceptional cases.

That formula remains intact, despite the lower maximum, said Stan Chesley, lawyer for the victims. If the total claims exceed $85 million, the individual amounts would have to be lowered, but "we think based on our analysis, the best we know is it will work out."

About 382 people had sent in forms following a nationwide advertising campaign about the settlement, Chesley said. About 21 of those forms allege abuse in other dioceses and wouldn't qualify, and the others will be reviewed once Potter rules on the fairness of the settlement, he said.

Both sides said they're satisfied with the process. "This has worked out far better than we could ever have imagined," Huff said.

Chesley called the settlement a "model" for class-action litigation because -- unlike settlements in which the corporation paying out money admits no fault -- "here the bishop made it clear he wanted to take responsibility."