Center for America

Speaker's Resource: 3. Lawsuit Abuse Costs, p 4

 

 

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Key Reference Citations (KRC)

 

Impact on Municipalities

 

Municipalities are named in lawsuits for a wide variety of claims: sidewalks with cracks, streets with potholes, hospitals where fatal mistakes can be made, schools where children can be injured, and parks where toddlers can fall, among many other examples.

  • U.S. Conference of Mayors Tort Reform Resolution: The problem has become so great in cities like New York and Chicago that the U.S. Conference of Mayors adopted a Resolution at its June 2004 annual meeting calling for Congress to “enact tort reform legislation directing the judicial system to emphasize appropriate compensation for victims in actions against municipalities.”  According to the Resolution, which was proposed by the City of Chicago, “resources that cities must devote to frivolous tort litigation and tort settlements and judgments could otherwise be made available for other important public purposes, and ultimately, the costs of such tort settlements and judgments are generally borne by local taxpayers.”

The New York City Experience

New York City provides the starkest example of this problem.  As the New York Times wrote in May 2002, we live in “a legal climate in which the city is seen as an easy mark and a deep pocket”:

  • From 1978 to 2003, there was a 2,500% increase in tort payouts.  According to a July 16, 2003 press release published by Mayor Bloomberg, during the previous three years, New York City paid more than $189 million in judgments as a result of actions brought for damages caused by sidewalk defects and falls on snow and ice.  In 2003, New York City enacted legislation explicitly transferring liability for such suits to property owners, who are responsible for the maintenance of sidewalks, to maintain insurance policies to cover their liability for sidewalk accidents.   PDF of news release

  • In 2003, tort suits cost NYC taxpayers more than $500 million. 

  • The New York State Trial Lawyers Association, in 1982 formed the “Big Apple Sidewalk and Pothole Protection Committee.”  This Committee surveys all sidewalk cracks and potholes in NYC and sends to NYC officials maps with squiggles where each lies.  In 2001, for example, the Committee noted 700,000 cracks/potholes, thereby putting the City on notice should an accident happen at one of those locations.  Thus, just by receiving the maps, the city becomes liable if someone is injured by tripping over the crack or driving over the pothole.  In 1999, the City paid out $57 million for 2,800 sidewalk slips.

  • Example: In 1992, two brothers in their late 20s recklessly dove off a 10-foot high, fenced pier at Coney Island and experienced broken necks.  They were awarded $104 million, $75 million of which was for pain and suffering.  The awards were later reduced, but the city was still on the hook for $19 million each.

Increasing Jury Awards Against Public Entities

 

According to Jury Verdict Research Series, which conducted its study in 1999, the median jury award for government negligence claims was highest in suits against state governments when compared to negligence claims against other government bodies.  The median jury award against state governments was $437,652. 

 

The study also looked at median jury awards for government negligence cases in various categories, including:  

  • $422,939 for roads and bridges liability

  • $318,000 in the public services category

  • $214,500 in the township/boroughs category, and

  • $100,000 against federal government, city government and county government.

The study also showed that the most frequently claimed injury was “emotional distress,” at 26 percent of the total number of plaintiff verdicts.  It also took more than 40 months for the claims that went to trial to be resolved.  The only positive news is that the number of cases where punitive damage awards were given have been decreasing.   

  • In 1998, only 10 percent of the cases included punitive damages, where in 1996 it was 18 percent and in 1993 it was 15 percent. 

  • The median punitive award also went down from $150,000 in 1992 to $10,250 in 1998.

School Tort Liability

 

Another area where tort costs have skyrocketed is in public schools.  According to a 1999 joint study by the American Tort Reform Association and the National School Boards Association:  

  • 64% of school principals surveyed said they changed school-related activities because of liability concerns.         

  • 20% said they spend 5-10 hours a week on liability avoidance issues.

  • 25% said they faced lawsuits in the past two years.

Other Examples of Expanding Liability Problems for Schools

  • The St. Petersburg Times reported that the local Pinellas County School Board had a $1.3 million legal bill in 2003.  Because of all the suits filed against the School Board, it was forced to send cases to outside firms specializing in negligence, workers’ compensation and environmental claims. Said School Board attorney John Bowen: “The school system is a big target . . .  Attorneys see it as a big pocket to go after.” 

  • In fact, parents who want to volunteer at their kids’ schools are facing the expense of $100 background checks and new “rigorous security policies” in a growing number of school districts. As the New York Times reported, in the post 9/11 world, schools do not want to be liable for “failure to screen,” which is how the trial lawyers would go after the school districts if a volunteer engaged in criminal activity. 

  • Parents in Oak Park, Illinois filed a purported class action in October 2003 against the local school board saying that the new wireless network the school put into the classrooms somehow threatens the health of the students.  This is akin to the cell phone suits, which have been largely discredited given modern technology.

 

Solutions for Municipalities

Among the traditional tort reforms, the two most mentioned for municipalities would be ending joint and several liability and allowing for offsets from collateral sources.  For example, according to City Corporate Counsel Michael Cardozo, collateral source offsets would save New York City $130 million per year.  Also, municipal suits could be heard in a special Court of Claims, such as the one that hears suits against some states, where the trier of fact in the Court of Claims is a specialized judge.  The State of New York, for example, has a Court of Claims and paid out only $32.6 million in total tort costs in 2003. 

 

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Please Note:  The material presented in this Speaker's Resource has been collected from a wide variety of sources.  You are welcome to use this material for quotations and factual material in your speeches, presentations and articles.  To the best of our ability, we have provided original citations so that you can document the comments you use.  If you become aware that any of the citations or facts presented in this collection are inaccurate or outdated by newer information, please send an email to Speakers@lawexec.com to tell us so that we can update this material.  The materials cited are generally copyrighted by the original author and when you quote from their material, you should include the original attribution to acknowledge their role as authors.  Original material © 2005 American Justice Partnership.