Executive Summary

Under the New York City Charter, the Comptroller is responsible for settling and adjusting claims for and against the City of New York.1 This work is performed by the Comptroller’s Office Bureau of Law and Adjustment (BLA), which is composed of attorneys, claims professionals, and administrative staff under the direction of the Comptroller, General Counsel, and the Assistant Comptroller for BLA.

In an effort to drive down the cost of settlements and judgments by empowering City agencies to reduce claims, the Comptroller’s Office continues to work with City agencies to implement a city-wide, data-driven approach to legal risk analysis of claims that identifies potential problem areas in real time. This approach, known as ClaimStat, analyzes claim patterns that could lead to costly settlements and judgments against the City as a way to identify problems and propose pro-active solutions.

In FY 2015, BLA adjusted or settled 14,814 claims that ultimately resulted in authorizing total payment of $958.1 million.

For FY 2015, the City paid out $585.9 million in tort claim settlements and judgments— nearly five percent more than the $560.7 million paid out in FY 2014.2 These tort claims ranged from “slip, trip and fall” to medical malpractice, police action, and motor vehicle property damage claims.

In addition to tort claims, the City paid out $372.2 million in law (non-tort) claims in FY 2015, an increase of 38 percent from the $269.2 million paid in FY 2014. These claims consist primarily of contract disputes between City agencies and their contractors, as well as alternative dispute resolution claims, equitable claims, employment-related claims, Department of Education (DOE) special education-related claims, and sidewalk assessment claims.4  Notably, DOE special education claims5 experienced a 91 percent increase in the amount of settlements paid out, accounting for $250.8 million of the $372.2 million paid in law claim settlements in FY 2015.

In FY 2015, the City paid out $67.5 million for claims that accrued from 1987 to 2006, including a single $25 million payout for a 1998 claim against the FDNY.

Finally, this report also includes a look-back to FY 2006 to provide a broader perspective on claims filings and settlements in order to contextualize the FY 2015 numbers.

For Fiscal Year (“FY”) 2012, the City paid out $485.9 million in personal injury and property damage tort settlements and judgments; 12 percent less than the $553.7 million paid out in FY2011.2 The City spent $59 for each resident to fund the cost of tort claims in FY 2012. These tort claims ranged from slip and falls to medical malpractice, police actions, and motor vehicle property damage claims.

In addition to tort claims, the City paid out $250.7 million in non-tort claims in FY 2012, an increase from the $135.9 million paid in FY 2011. These claims consist primarily of contract disputes between City agencies and their contractors, as well as alternative dispute-resolution claims, equitable claims, employment-related claims, Department of Education (“DOE”) tuition-
reimbursement claims and sidewalk-assessment claims.
The Comptroller’s Office is committed to the fair and early settlement of meritorious claims in which an individual was injured or their property was damaged as a result of the City’s negligence. Early settlement of meritorious claims allows injured parties to be compensated relatively quickly when compared to litigation. In addition, our analysis has shown that early settlement reduces payout amounts as well as administrative and litigation costs. By settling claims early, we estimate that in FY 2012, the City saved more than $24 million in future payouts.

This report examines claims data from FY 2012 and reports on recent claim trends. Despite the reduction in claim payouts, the cost to the City still hovers at nearly half a billion dollars annually. The Comptroller’s Office continues to explore and adopt new strategies to settle meritorious claims earlier in an effort to reduce overall costs. Issuing this report on a yearly basis rather than biennially serves several purposes: 1) to provide stakeholders with critical information regarding claims and associated costs closer in time to identified trends; 2) to facilitate the reduction in costs via recommendations; and 3) to serve as a city-wide risk management tool.