Accusers’ attorneys express skepticism over NY Archdiocese settlement fund for sexual abuse claims

The Archdiocese of New York will use money from real estate sales, staff layoffs and budget reductions to set up a $300 million fund to pay for a settlement with 1,300 people who accused its priests and staff of sexual assault as it enters a 60-day mediation process with victim attorneys, the country’s second-largest archdiocese announced Monday.

In a public statement, Cardinal Timothy Dolan said its his “hope and prayer,” the archdiocese can “provide victim-survivors with the most financial compensation possible to help heal [their] wounds.” Dolan said the archdiocese and victim attorneys agreed to engage retired Judge Daniel J. Buckley as a mediator to work towards a global settlement for all 1,300 victims collectively. Buckley played a similar role in last year’s $880 million settlement between the Archdiocese of Los Angeles and over 1,000 victims.

Since its Monday announcement, the archdiocese has faced criticism from victim attorneys for saying it will raise $300 million for the settlement. Some say the archdiocese has no business proposing a number at this point and is trying to mislead victims and the public, while others called $300 million insultingly low.

“Unfortunately, the archdiocese’s statement appears intentionally misleading [and] as an attempt to sway public opinion in their favor,” said Mallory Allen, a partner at Pfau Cochran Vertetis Amala, which represents 75 of the 1,300 accusers. “It ignores really horrible conduct in litigation over the past six years. The archdiocese hired an army of lawyers…forced people to go through difficult, painful litigation…and spent millions to prevent people from getting their day in court.”

Allen said the archdiocese never officially conveyed an offer of $300 million to victims or their attorneys, it’s not an official offer and grossly undervalues the claims.

“This pseudo offer is not even remotely close to enough. If that’s all they plan to offer it has virtually a 0% chance of [a settlement],” Allen said. “This is a fraction of what the archdiocese can pay. They have incredible wealth. The notion that they may need to lay off employees, sell property [is ridiculous.]”

She emphasized that, regardless of what happens in mediation, each individual victim will be able to choose whether to agree to a settlement or take their case to trial. However, if the archdiocese elects to file for bankruptcy, it will prevent victims from taking cases to trial until the archdiocese’s bankruptcy is finalized.

The archdiocese has retained financial advisors and Proskauer Rose LLP, a law firm known for helping clients obtain global settlements and file for bankruptcy.

Attorney Jeff Anderson, whose firm is representing 300 of the 1,300 victims, called the archdiocese announcing the $300 million number “out of line.” He said he “doesn’t know” where the archdiocese got the number from and that he believed it was premature to be talking about numbers before the parties engaged in negotiations.

“There’s never been any discussion about that number or anything close to it,” Anderson told amNewYork Law. “I don’t think it’s appropriate to put it out there.”

He emphasized nothing was settled yet, and if the two sides don’t come to an agreement over the next 60 days, the case will go to trial. However, he said he was “optimistic and hopeful” for a positive settlement.

“This is the first time in over six years that the archdiocese has seriously agreed with us in serious settlement negotiations,” Anderson said. “They’ve been using hardball legal tactics, wearing survivors down.”

Jason Amala, another Pfau Cochran Vertetis Amala partner, called the $300 million number “insulting,” accusing the archdiocese of “lowballing” victims and trying to drag out the legal process long enough for survivors of assault to die so they don’t have to pay them.

“For more than half a decade, the Archdiocese of New York has waged a campaign of threats and delays to the more than 1,300 cases its facing as a result of decades of child sexual abuse,” said Jason Amala, a partner at PCVA Law and attorney for the survivors. “Some have gotten sick and others have died waiting for justice – and now, instead of presenting a fair deal, the ADNY is offering survivors half of what the Diocese of Rockville Center just settled for. It’s insulting, and it can’t stand.”

The majority of the claims, which are largely based on assaults from the mid-1950s through the 2000s, were filed in 2020, after New York passed the Child Victims Act and opened up a temporary window extending the statute of limitations on sexual assault.

Dolan’s Monday statement blamed its longtime insurer, Chubb Insurance, for the lengthy legal process. He said the archdiocese has paid Chubb “millions” in premiums for general liability coverage, which included sexual assault claims, for decades; however, the insurer has refused to “honor the policies it issued.” The two remain engaged in a lawsuit where Chubb argues its not liable because its policies cover “accidents” and it alleges the archdiocese “expected or intended” the sexual assault to occur.

Attorney Mitchell Garabedian, who represents dozens of victims in claims against the New York archdiocese and represented victims in similar sexual assault claims against the Archdiocese of Boston, said many clergy sexual abuse victims remain “skeptical about the Catholic Church participating in a good faith settlement,” given the church’s “poor track record.”

“A settlement which would bring validation, dignity and transparency is welcomed by many victims,” Garabedian said. “Only time will tell if that can actually happen or if the Catholic Church understands that.”