California’s newly enacted law Senate Bill 577 changes injury claims against public entities, including personal injury, wrongful death and childhood sexual assault claims. Wilcoxen Callaham, LLP wants every Californian to understand what this means if they have one of these potential claims against a California public entity.
Governor Gavin Newsom signed SB 577 on September 30, 2026 and it becomes effective on January 1, 2027. The law changes how injured people recover economic damages from public entities. It also adds requirements for certain childhood sexual assault cases and lets government defendants seek defense costs in more situations.
The new law does not eliminate the right to sue a California public entity. It does make three things more important: Who the defendants are, how fault is divided among them and when the lawsuit is filed.
How did it work before SB 577?
Many injury cases involve more than one wrongdoer. A drunk driver crashes on a county road with a known design defect. A delivery truck hits a child in a school crosswalk with a broken signal. When a jury finds several defendants at fault, California law decides how the bill is divided among them.
For most of California’s history, every defendant found at fault was “jointly and severally” liable. The injured person could collect the entire judgment from any one of them, even a defendant only slightly at fault. A defendant that paid more than its share could try to recover the difference from the others. If they had no money or insurance, that defendant absorbed the loss, not the injured person.
Cities, counties and school districts often ended up paying. Public entities rarely go broke, so when the main wrongdoer was uninsured, the government was often the only defendant left who could pay. Critics called this the “deep pocket” rule.
In 1986, California voters approved Proposition 51, which named the deep pocket rule as a threat to local governments and other public agencies. Proposition 51 split damages into two kinds. For non-economic damages, such as pain and suffering, each defendant now pays only its own percentage share. For economic damages, such as medical bills and lost wages, the old rule stayed in place. Any defendant found at fault, including a public entity, could still be made to pay all of them.
That is the rule SB 577 changes, but only for public entities, and only when they are found 15% or less at fault.
What does SB 577 change for California personal-injury cases?
The main change applies to personal-injury, property-damage and wrongful-death lawsuits filed on or after January 1, 2027. In those cases, a public entity found 15% or less at fault will generally pay only its own share of the plaintiff’s economic damages.
Public entities can include:
- The State of California and its agencies
- Cities and counties
- Public school districts
- Public transportation agencies
- Other state and local governmental bodies
The 15% line matters. If a jury finds a public entity more than 15% at fault, the old rule still applies, and the entity can be made to pay all of the economic damages. At 15% or less, it pays only its own share.
What are economic damages?
Economic damages are the objectively verifiable financial losses caused by an injury. They can include:
- Past and future medical expenses
- Lost wages and diminished earning capacity
- Rehabilitation and assistive-care expenses
- Burial and funeral costs
- Property-repair or replacement costs
- The cost of replacement household services
Economic damages are different from non-economic damages, which include pain, suffering, emotional distress and loss of companionship.
Proposition 51 already limits each defendant to its own share of non-economic damages. SB 577 changes only the rule for economic damages, and only for public entities.
How could the new 15% rule affect an injured plaintiff?
Consider a simplified example:
A jury awards an injured person $500,000 in economic damages. It finds a private defendant 90% at fault and a public entity 10% at fault. The private defendant is uninsured and cannot pay. Under the old rule, the injured person could collect the full $500,000 from the public entity. Under SB 577, the public entity generally pays only its 10% share, or $50,000.
That could leave $450,000 in medical bills and lost income unpaid.
Every case is different. Other laws, defenses and insurance can change the final recovery. The lesson holds, though. After SB 577, it matters more than ever to find every responsible party, every insurance policy and every asset that could pay a judgment.
When does the economic-damages provision apply?
The rule turns on the date the lawsuit is filed, not the date of the injury. An injury in 2026 can still fall under the new rule if the lawsuit is filed on or after January 1, 2027.
This does not mean every claim should be rushed into court. Lawsuits against public entities involve special claim-presentation requirements, short deadlines and strategic choices. In most cases, the injured person must first present a government claim. The lawsuit cannot be filed until the entity rejects the claim or its time to respond runs out. That process takes time. Anyone with a potential claim should have a lawyer review the facts, the responsible parties and the deadlines now.
💡 Read more about why it is important to choose Wilcoxen Callaham, LLP for complex claims.
Does SB 577 change the deadline for presenting a government claim?
No. The Government Claims Act’s requirements still apply.
Before filing many injury lawsuits against a state or local public entity, the injured person must first present an administrative claim. A personal-injury or wrongful-death claim generally must be presented within six months after the claim accrues, although exceptions and different rules can apply. Childhood sexual assault claims, for example, are generally exempt from the claim-presentation requirement.
Miss this deadline and the lawsuit may be lost, however strong it is. Anyone injured in an incident involving a government vehicle, dangerous public property, a public school or other government activity should talk to a lawyer promptly.
How does SB 577 affect childhood sexual assault claims?
SB 577 also changes the rules for childhood sexual assault claims, especially claims against public entities.
These changes follow years of expanded rights for survivors. In 2019, Assembly Bill 218 gave survivors until age 40, or five years after discovering that an adult injury was caused by the abuse, to sue. It opened a three-year window, 2020 through 2022, to revive claims that had already expired. It allowed up to triple damages against an institution that covered up abuse, and it removed the government-claim requirement for these cases. In 2023, Assembly Bill 452 eliminated the filing deadline for abuse that occurs on or after January 1, 2024.
Thousands of lawsuits followed, many against school districts, counties and other public agencies. Los Angeles County alone agreed in 2025 to settle claims for about $4 billion. Public entities asked the Legislature for relief, and SB 577 is the result.
For abuse that occurred before January 1, 2024, SB 577 shortens the discovery period from five years to three. A survivor may sue until age 40 or, if later, within three years after discovering (or when they reasonably should have discovered) that a psychological injury in adulthood was caused by the abuse.
SB 577 also raises the bar in some older cases. When a survivor age 40 or older sues a public entity, or its employees or agents, over abuse that occurred before January 1, 2024, the survivor must prove two things by clear and convincing evidence. That is a higher standard than the usual “more likely than not.” First, the survivor must prove that the public entity knew of misconduct that resulted in childhood sexual assault and failed to take reasonable steps or safeguards to prevent it. Second, the survivor must prove that the public entity negligently discharged a mandatory duty. This rule covers lawsuits filed on or after January 1, 2026. That date has passed, so the rule can reach lawsuits filed this year, before the bill was signed.
SB 577 also:
- Requires survivors age 40 or older to file certificates of merit with the complaint itself. A court clerk may not accept a complaint without them, subject to a limited exception.
- Prohibits treble damages against public entities for institutional cover-ups.
- Allows courts to structure certain judgments against public entities so they are paid over time, and requires courts to weigh specified factors when asked to reduce a jury’s award.
- Establishes a $25,000 civil penalty, per violation, when an attorney is found to have brought a childhood sexual assault claim in bad faith.
These provisions do not all start on the same date. The law takes effect January 1, 2027, but some parts reach cases filed earlier. Anyone with a pending or possible claim should have a lawyer check which dates apply.
Does the new law cap damages in childhood sexual assault cases?
No. SB 577 does not establish a general damages cap for childhood sexual assault claims.
It does, however, eliminate treble damages against public entities for institutional cover-ups and changes evidentiary, procedural and payment rules in specified cases. These changes may materially affect the proof required, potential recovery and timing of a claim.
Does SB 577 prevent people from suing government entities?
No. Injured people may still pursue claims against California public entities when the facts and law support liability.
The legislation instead changes:
- How economic damages are allocated when a public entity is 15% or less at fault
- The proof required in certain older childhood sexual assault cases
- The availability of treble damages against public entities
- Certificate-of-merit requirements
- Certain procedures governing defense costs and judgment payments
Cases against public entities already came with special immunity rules and short claim deadlines. SB 577 adds new rules on top of them.
What should injured Californians do?
Anyone who may have a claim involving a California public entity should act promptly. Important evidence can disappear, witnesses’ memories can fade and the deadline for presenting an administrative claim may be much shorter than the ordinary statute of limitations.
Early investigation may be necessary to determine:
- Which public and private parties share responsibility
- Whether a government claim must be presented
- What insurance and assets are available
- Whether the new 15% economic-damages rule applies
- Which filing and evidentiary requirements govern the case
Wilcoxen Callaham, LLP represents plaintiffs in personal-injury, wrongful-death and professional-negligence matters. If you were injured in an incident involving a state or local government entity, contact Wilcoxen Callaham, LLP or call the Sacramento office at 916-442-2777 to discuss your circumstances.
This article provides general information about California law and is not legal advice. Reading it does not create an attorney-client relationship. How SB 577 applies depends on the facts, defendants, filing date and claims involved
