Insurance companies and the hospital where convicted serial child sex offender Dr. Earl Bradley worked have reached a proposed settlement of $123.15 million to create a fund for the reported hundreds of victims assaulted by the doctor.

Word that a $100 million-plus settlement was in the works has been out there for some time, but the parties, including Beebe Medical Center, officially announced the final number Wednesday. A November 13 hearing before Delaware Superior Court Judge Joseph R. Slights III is set to determine the fairness of the settlement.

According to the statement released Wednesday by Beebe, the hospital said it wanted to avoid costly litigation that could bankrupt the institution and be painful for the victims. Beebe said that for the first time anywhere, a class action was agreed upon to deal with sexual abuse.

According to the statement, the $123.15 million is a combination of insurance coverage and a donation from Beebe.

The allocation plan provides for the division of claimants into five categories, based upon the nature of the harm the child suffered and his or her need for continued treatment. Children within each category will each receive the same amount of compensation. For the many victims under the age of 18, these funds will be held in a trust for their needs under the ultimate supervision of the Delaware Court of Chancery, Beebe said.

The Chancery Court will likely appoint a special master to oversee the fund, its implementation and determine which category each of Bradley’s victims should be placed into.

John G. Culhane, a professor at Widener University School of Law, has written articles and lectured on the topic of victim compensation. He told The Legal that the compensation was the best solution for both parties to avoid expensive and lengthy litigation.

“A victim’s fund may have been particularly appealing in this case because of the victim’s ages and the length of the litigation,” he said. “It may have inspired both parties to look for some kind of alternative.

“Although there is no model in sexual-abuse cases, this is a good first case for it because of the nature of the victims and it is a way to get these kids set up so they can have a brighter future after what happened to them.”

The ages of Bradley’s victims may present a challenge to estimating a victim’s damages, according to Culhane. Bradley had assaulted very young children, some as young as 2 years old, who may not remember the abuse or never articulated it. However, he said there are ways to determine which category a child belongs into, including the number of appointments a victim had with Bradley and how many years they were a patient.

“It probably won’t exactly correspond to what happened, but it will be an approximate that everyone can live with given the uncertainty of trying to slug this out in litigation,” he said.

Beebe had brought in lawyers who specialized in insurance coverage to maximize the coverage available to it, the hospital said.

One of the lawyers, Michael M. Mustokoff of Duane Morris, declined to comment, noting that the court has asked both parties to refrain from talking about the case until the November 13 settlement. He did add that the settlement will not bankrupt Beebe and the hospital will be able to continue to provide care for its patients.

Bruce L. Hudson, a Wilmington, Del., attorney representing the plaintiffs, did not immediately return calls seeking comment.

According to the statement, the $123.15 million is a combination of insurance coverage and a donation from Beebe.

Lawyers for the victim class members and the hospital agreed to mediation, which was presided over by retired Delaware Supreme Court Justice Joseph T. Walsh.

“For 17 months, in monthly, weekly and finally, daily sessions, the lawyers sought to balance the legal rights of their respective clients against the needs of the children, the availability of insurance proceeds, and the hospital’s ability to continue to provide excellent care to the Lower Delaware community,” Beebe said. “All parties compromised.”

All claims against the Medical Society of Delaware and its Physicians’ Health Committee members had been dismissed, but Beebe said the society’s insurance carriers agreed to contribute to the settlement without any admission or finding of liability.

If Slights approves the proposed settlement, all claims against the hospital will be dismissed, Beebe said.

Lawyers for the children have submitted an allocation plan to Slights. Attorney Thomas Rutter, along with pediatrician and child forensic psychiatrist Dr. Annie Steinberg, will administer the plan. Beebe said there were “hundreds” of victims.

Bradley, a former Lewes, Del., pediatrician, had his June 2011 conviction for rape, second-degree assault and sexual exploitation of children affirmed by the Delaware Supreme Court in September. During Bradley’s trial last year, he was sentenced to 14 consecutive life terms plus 164 years.

Gina Passarella can be contacted at 215-557-2494 or at Follow her on Twitter @GPassarellaTLI.

Jeff Mordock can be contacted at 215-557-2485 or Follow him on Twitter @JeffMordockTLI. •