NYC's $735 Million Payout on Legal Judgments and Settlements Prompts Renewed Calls for Legal Reform

ALBANY, N.Y., Sept. 11, 2012 /PRNewswire/ -- Recently released data which shows New York City anticipates spending $735 million on legal judgments and settlements in 2013 has prompted renewed calls for legal reform from city officials and tort reform supporters.

The payouts represent a 32% increase over the 2011 expenditures, and are part of a continuing trend of rapidly escalating lawsuit costs. Payouts by New York City have climbed in recent years, and are expected to increase to $815 million by 2016 – nearly double the amount paid in 2006.

Tort reform advocates point out many provisions of New York's law actually encourage lawsuits, such as "joint and several liability" which can force solvent defendants, like city governments, to pay the full amount of an award even if they were minimally at fault.  This problem is compounded in New York City, where juries are among the most generous in the state. For example, in 2009 a Brooklyn Judge upheld a $1.03 million dollar damage award for an 11-year old boy who fractured his ankle playing soccer during gym class.

New York City's perception as a "deep pocketed" defendant makes it a frequent target of lawsuits. Yet, often the City elects to settle claims rather than go to court because it is cheaper than paying the legal costs to win the lawsuit – and the cost of losing can be significant, even if the City was not primarily at fault. At a recent press conference, Mayor Bloomberg said, "We've [New York City] been found liable for a single digit percentage of a problem but have to pay 100% of the judgment because the other people don't have the money. That's not fair."

Tom Stebbins, Executive Director of the Lawsuit Reform Alliance of New York, noted, "New York is one of the most litigious states in the most litigious country in the world and our cities and towns are not immune.  Municipalities are often roped into cases because they are perceived to have endless money for settlements – even as they struggle to balance their budgets. I think most reasonable people would agree it's time for serious action to address the cost that lawsuit abuse is imposing on society."

Stebbins pointed to a number of reforms which would help reduce the cost of lawsuits, including limitations on non-quantifiable damages, elimination of "joint and several liability," and reform to the state's "Scaffold Law" - which holds property owners and contractors automatically fully liable in lawsuits for elevation-related injuries. But, he said, the state's powerful trial lawyer lobby will continue to pressure lawmakers to maintain the status quo. "There's a huge financial incentive for them to keep the system as it is, even if it's not working for anyone else."

SOURCE Lawsuit Reform Alliance of New York