Police Claims Climbed by 35%, to Nearly $186 Million, as Total Claims
Exceeded $550 Million in 2011; Medical-Malpractice Claims Steady
New York Comptroller John C. Liu today released his office’s Claims
Report for Fiscal Year 2011, providing New Yorkers with a detailed look
at data for claims filed against the City, an analysis of recent
trends, and recommendations for containing costs.
For
FY 2011, the City paid out $550.35 million in personal-injury and
property-damage tort settlements and judgments, up 5 percent from the
$522 million paid out in FY 2010. Tort claims included police actions,
medical malpractice, motor-vehicle property-damage claims, and slips,
trips and falls on City property.
“Settlements
have once again topped a half-billion dollars, underscoring a need for
better risk management by City agencies to contain costs and save
taxpayers’ money, Comptroller Liu said. “My office continues to work
with agencies to lower litigation costs, streamline processes, and learn
from recent trends – while also dealing fairly with claimants seeking
redress.
A
growing concern is the surge in claims against the New York Police
Department, which had the highest claim costs of any agency. In FY 2011,
the City settled $185.6 million in claims involving the NYPD, a
35-percent jump from the $137.3 million settled in FY 2010.
“The
surge in police-misconduct allegations and civil-rights claims against
the NYPD is an alarm bell for the City. The trend can and must be
stemmed and reversed with better risk management including training,
clearer accountability, and the convening of a multi-disciplinary task
force, Comptroller Liu said.
The
top tort claim adjudicated in FY 2011 was $9.9 million, to a claimant
who alleged false arrest and incarceration for 19 years as a result of
the actions of a former police detective known as one of the notorious
“Mafia cops.
The report for the first time includes a breakdown of claims by precinct.
By
contrast, medical-malpractice claims against the Health and Hospitals
Corporation (HHC) have dropped steadily in recent years, from a high of
$195.4 million in FY 2003 to $130 million in FY2011, due to proactive
steps by the HHC. Total claims against HHC cost the $131.8 million in FY
2011.
Unlike
other City entities, the HHC is responsible for its own claim costs and
has invested in risk management and other initiatives that have much
reduced those costs. In light of HHC’s impressive results, the
Comptroller’s office recommends that the City make other agencies bear
some financial responsibility for their claim costs.
The
Comptroller’s office also stepped up its pursuit of affirmative claims
against individuals who damaged City property – bringing in a
record-high $1.5 million in FY 2011.
The
Claims Report has traditionally been issued every two years – the last
one covered FY 2009 and FY 2010. To better support efforts to control
claim costs, this new report was accelerated to analyze claim activity
for one year, FY 2011. Data for FY 2012 will be released next year.
Non-Tort Claims:
In
addition to tort claims, the City paid out $135.9 million in non-tort
claims in FY 2011, down from the $165.1 million it paid out in FY 2010.
These claims primarily comprise contract disputes between City agencies
and their contractors, as well as alternative dispute-resolution claims,
equitable claims, employment-related claims, Department of Education
tuition-reimbursement claims, and sidewalk-assessment claims.
Additional Findings:
· The
Comptroller’s office early settlement of claims is estimated to have
saved the City more than $20.6 million in FY 2011, by working closely
with other City agencies, streamlining processes, and using technology
to allow early investigation and negotiation of claims.
· Personal-injury
claims accounted for $535.12 million, or 97 percent of the $550.35
million paid for tort claims in FY 2011. The costliest category was
medical malpractice, at $130 million. The second-costliest was
civil-rights claims, at $84 million. The third-costliest was
motor-vehicle claims, at $83.9 million. The fourth-costliest was
police-action claims, at $59.6 million.
· Property-damage
claims cost the City $15.23 million in FY 2011, a 50 percent rise from
the $10.1 million paid in FY 2010. One claim, settled for $2.5 million,
alleged that the design of the City’s back-up generator system for the
Office of Emergency Management in 7 World Trade Center resulted in the
building’s collapse on 9/11.
Data
may not include all claims against the City that will ultimately be
settled, due to a time lag between when a settlement occurs and when
settlements and updates are entered into the claims database. For the
purpose of this report, “settlement and judgment costs, “liabilities,
“expenditures, or “amounts paid are used interchangeably with
“recorded settlements and judgments.
Comptroller
Liu credited Deputy Comptroller for Legal Affairs and General Counsel
Valerie Budzik as well as Assistant Comptroller Karen S. Cohen and the
Bureau of Law and Adjustment for their efforts in compiling the report.
