COMPENSATION claims from people who suffered abuse as children while in local authority care could have “severe financial implications” for East Lothian Council.

Councillors have been warned a national inquiry into the abuse of children in care could lead to a high level of demand for damages from victims.

The warning comes as the inquiry was set to resume hearings. The Scottish Childhood Abuse Inquiry, launched in October 2015, is chaired by Supreme Court judge the Rt Hon Lady Smith.

The inquiry has been hearing evidence from victims and aims to raise awareness of abuse suffered by children in care, as well as providing a public acknowledgement of that suffering. It has been advertising for people affected to get in touch as it looks to investigate how widespread the problems were.

East Lothian Council has confirmed to the Courier that it has already had one person contact them in connection with a compensation claim.

At a meeting of the council’s cabinet, members were told that the inquiry, along with the Scottish Government’s decision last November to lift the three-year time limit on civil actions being brought in relation to children abused in care, made it likely compensation claims could be made.

Cabinet urged the local authority to look into lobbying the Scottish Government to consider the powers of the Apology Act to provide a “non-financial” outcome to the accusation process. And it called for the Scottish Government and COSLA to be lobbied to set up a national settlement fund or financial support.

The risk to the council from the inquiry was ‘high’.

The council report said: “In conjunction with the Scottish Child Abuse Inquiry there is an increased likelihood of claimants coming forward.

“This could potentially result in severe financial implications if historic allegations of child abuse are made and upheld against the council.

“There is no way of knowing how many claims may be made nationwide; however, if there are any local claims, it has been established that it is unlikely the council will have an insurance policy to cover any claims.

“Any compensation payments would therefore normally be met by the council unless other national funding is made available through the Scottish Government.”

At a council meeting last month the chief social worker said they had not received any contact from any alleged victims but warned they did expect cases.

Since then, one person has made contact.

A council spokesperson said: “We can confirm that we have had one contact regarding a potential claim.”