Recently, Rockefeller College’s Local and Intergovernmental Studies program in New York released preliminary data from a study evaluating how much localities in New York State are spending on judgments and other costs of lawsuits. The study, the first to tally the statewide costs of lawsuits in New York, was commissioned by the Lawsuit Reform Alliance of New York and its full results are due to be released this fall.
The preliminary data shows that New York State localities spend at least $1 billion a year on judgments and other costs related to lawsuits. That is $1 billion with a "B.” Keep in mind that this study only looked at the cost of lawsuits to localities – not the state government.
Researchers tracked lawsuit costs from the general funds of municipalities as well as from insurance programs that some local governments use. Not included in the preliminary data was information on how much commercial insurers pay out each year or the cost of bond sales that are sometimes needed by local governments to pay litigation costs.
With cities going bankrupt throughout the nation, the public should be asking their officials at all levels of government how much lawsuits are costing taxpayers. This is especially true here in California, where several cities have recently declared bankruptcy. In fact, the cost of a lawsuit directly contributed to the bankruptcy declaration of Mammoth Lakes, California.
California CALA routinely looks into the issue of the amount of taxpayer dollars being spent on lawsuit costs, and will continue to do so, but we need your help to push for greater transparency. During this upcoming election season, be sure to ask your candidates if they will work to reduce the amount of taxpayer dollars spent on lawsuits and where they stand on legal reform.