New York City's bill for claims arising out of personal injury lawsuits and other civil litigation is huge—and it gets bigger every year. For fiscal 1999, the city shelled out a jaw-dropping $418 million in claims, a 9 percent hike over 1998. During the last five years, the city has coughed up $1.69 billion in taxpayer money to settle claims. The tab for 1999 includes: $57 million paid for 2,800 sidewalk slips, $22 million for injuries on other city property, $23 million for lawsuits against the school system, and $118 for medical malpractice suits.
Even if you subtract the malpractice payments that New York must fork over thanks to its almost unique public hospital system, the remainder far exceeds what other major cities pay in civil liability claims. Los Angeles's tort bill was just $82.9 million last year, and nearly 60 percent was for settlements against the LAPD. Chicago's 1999 liability bill: a mere $10.2 million.
Gotham groans under its huge liability burden not because it's less safe than other cities, but because New York State, with one of the most plaintiff-friendly civil justice systems in the country, does little to protect its municipalities from frivolous lawsuits or outrageous judgments. Forty-two states, by contrast, put a cap on so-called pain and suffering awards in suits against municipalities. Illinois's Tort Immunity Act goes even further, restricting a wide range of suits against municipalities. Thanks in part to the act, litigants filed only 788 claims against Chicago in 1999, compared with an astonishing 26,632 claims against New York City.
Thirty-nine states, including California, have also abolished or curtailed "joint and several liability," which requires any defendant to pay the entire award in a case if other defendants can't come up with their share. This kind of liability hits major cities hard: where it's in place, personal injury lawyers always try to make cities co-defendants in tort suits, since their deep pockets make them always able to pay when other defendants can't.
Though New York City regularly proposes reforms to Albany, state legislators have refused to consider them. In recent years, the city has pressed to no avail for limits on lawyer fees and caps on pain and suffering awards. It has also unsuccessfully lobbied to have tort cases against it heard in the state Court of Claims, in which judges, who tend to be less sympathetic to plaintiffs than juries, render verdicts and make awards. Even though all lawsuits against state government go to the Court of Claims, Albany refuses to grant the city the same right.
Albany's noncooperation isn't surprising. Many key legislators are in the pockets of the state's trial lawyers, who vigorously oppose any reforms that would cut their fees. Assembly Speaker Sheldon Silver runs his law practice out of the offices of Schneider Kleinick Weitz Damashek & Shoot, a major personal injury firm with hundreds of cases pending against the city. On the other side of the aisle, Bronx state senator Guy Velella, chair of the Senate's Insurance Committee from 1993 to 1999, is a partner in Velella Velella & Basso, a firm that has brought numerous personal injury lawsuits against the city over the years—including several slip and fall cases successfully brought by members of Velella's family.
Instead of advancing reforms in Albany, the State Legislature is working to expand the rights of plaintiffs to sue and of lawyers to profit from tort cases. The Republican-controlled Senate recently voted with the Democratic Assembly majority for a bill lifting caps on lawyer fees in medical malpractice cases. Thankfully, Governor Pataki vetoed the legislation.
But Pataki will have to spend a lot more political capital if Gotham is ever to have meaningful tort reform. Meanwhile, New York taxpayers are the big losers.