New York City plans to spend $735 million this year on settlements or awards in lawsuits claiming negligence, police abuse and property damage, the most in its history and almost six times what Los Angeles pays per capita.
The cost of claims is forecast to rise to $815 million by 2016, more than the city pays to run the Parks and Recreation Department, according to budget documents. Among the incidents triggering payments are malpractice in public hospitals, police beatings, improper arrests, collisions with fire trucks and potholes causing accidents.
The increase in litigation payouts may put pressure on Mayor Michael Bloomberg as he weighs job and service cuts to close a $3.5 billion deficit in a $72 billion budget next year. The gap widened by $1 billion last month when a court struck down a plan to sell 2,000 new taxi medallions.
One reason New York’s legal payouts are rising, according to the Law Department, is that unlike California, Illinois and Pennsylvania, the state has no laws that cap damages or limit liability in suits against municipal governments.
New York’s payouts dwarf those of other large U.S. cities. Los Angeles, with a population of 3.9 million, paid $54 million for claims in 2011, or about $14 per capita. New York’s per capita cost, based upon a population of 8.2 million, is $81.