The Big Apple Makes Big Payouts

If you’re familiar with California Citizens Against Lawsuit Abuse (CALA) you will know that we focus a lot of attention on private lawsuits. However, we also spend a lot of time discussing public sector lawsuits. We have done reports in recent years on the cost of lawsuits to cities, counties, schools and prisons and and the cost of lawsuits paid by public entities continues to amaze.

Just last week Michael Cardoza, Corporate Counsel for the City of New York, gave a speech to the Citizen Commission and stated that New York City had paid out $561 million in lawsuits costs in the last fiscal year. I have seen some pretty impressive numbers from cities and counties, but this number is huge! What, are they just issuing checks at the Holland Tunnel?

Cardoza went on to cite some of the reasons for this huge number. They are as follows:

* The requirement that the City pay damages even when the plaintiff's actions were the primary cause of an accident.

* Unlimited awards for pain and suffering that result in multimillion dollar verdicts.

* Unfair joint and several liability rules that hold the City responsible even when another defendant was primarily responsible.

* Anachronistic laws awarding an unheard of 9% interest on judgments.

Cardoza went on to state that reforming these laws would relieve municipalities across the state from a tort albatross that is in effect an unfunded state mandate.

What is even more stunning is that the New York City Law Department has an active case load of more than 90,000 cases involving 17 legal divisions.

Since CALA has come forth with studies looking closely at the issue of public sector lawsuits, the taxpayer sensitivity to the issue has become very strong. Reforms are being presented. Groups are pressuring elected officials for change. Public officials need to be held more accountable for these expenses.

No wonder people view cities and counties as deep pockets. Elected officials need to make it clear that the run on the bank is over. Public funds must be protected and fought for.

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