LIU RELEASES NEW NYC CLAIMS REPORT

   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.

Notes:

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.

The full report can be viewed at: http://www.comptroller.nyc.gov/bureaus/bla/pdf/2012_Claims_Report.pdf

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