Total claims filed against the City decline by 6%, but settlements and judgments costs increase by 5%

(New York, NY) – On Wednesday, the Office of New York City Comptroller Scott M. Stringer released its Annual Claims Report covering data for Fiscal Year (FY) 2015. The Claims Report, which includes breakdowns of personal injury and property damage claims filed and settlement costs paid by the City, shows that 27,321 new tort claims were filed in FY 2015, a 6% decline from FY 2014. Despite this decline in the number of claims, the cost of tort settlements increased by nearly 5%, to $585.9 million, marking the fourth consecutive year of rising costs. Meanwhile, the cost of non-tort claims – namely those related to contracts, salary disputes and refund claims – rose by 38% over the previous fiscal year, to $372.2 million.

“Every dollar that we spend to resolve claims is one less that we can put toward housing, infrastructure and vital services,” Comptroller Stringer said. “Last year, the number of claims filed against the City declined, but the cost of settlements and judgments continued to rise. We do not have to accept rising settlements as the cost of doing business. City agencies must take steps to improve their operations and reduce the incidents that lead to costly payouts.”

Under the City Charter, the Comptroller’s Office is responsible for settling and adjusting claims against the City of New York. Building on this integral role, in 2014, Comptroller Stringer introduced ClaimStat, a data-driven approach to help reduce claims and costly settlements. Last year, ClaimStat examined several City agencies, including the New York Police Department (NYPD) and Parks Department, as well as pothole costs and playground injuries.

Highlights of the report include:

Claims against the NYPD declined

  • In the last year, the total number of claims filed against the NYPD declined from 9,485 to 8,411, an 11% drop, and a continued reversal of the trend of steadily rising claims in recent years.
  • The number of police action claims for improper conduct such as false arrest or imprisonment fell from 5,641 in FY 2014 to 4,919 in FY 2015, a 13% decline.
  • In addition, $222.7 million was spent to settle claims against the NYPD in FY 2015, essentially level with the previous year.

During 2015, the Comptroller’s Office’s Bureau of Law & Adjustment (BLA) continued its formal partnership with the New York Police Department to share claim information in real-time and implement risk management procedures to help reduce claim filings.

“My office works closely with the NYPD to share claims information in real time and spot problems before they become crises, a collaboration that should be a model for other City agencies,” Stringer said.

Non-tort claims on the rise, led by Special Education claims against the Department of Education

  • Overall, the number of non-tort claims arising from issues such as City contracts, salary disputes, and other refund claims increased by 46% in FY 2015, to 6,165, from 4,214 in FY 2014. In the last fiscal year, the cost of settlements related to these claims against the City grew by 38%, from $269.2 million in FY 2014 to $372.2 million in FY 2015

The City is required by law to provide every child with a free, appropriate public education. If parents believe their child’s schooling does not meet that standard, they may file a claim against the Department of Education (DOE) to pay for tuition and other special-education related services. If DOE wants to settle the matter without having to litigate the case to conclusion, it must seek the Comptroller’s approval.

  • Settlement costs related to these special-education related claims filed against the DOE, a subset of non-tort claims described in the Claims Report, grew from $131.3 million in FY 2014 to $250.8 million in FY 2015, a 91% increase.

“Every child in our City is entitled to a free, appropriate public education and the City is legally mandated to provide that. My office works diligently to ensure that every settlement is in the best interests of all parties,” Stringer said.

Civil rights claims, including constitutional rights violations by law enforcement, dropped

  • Civil rights claims include those related to alleged discrimination based on sex, race, or disability as well as alleged constitutional civil rights violations by law enforcement. This category of claims fell from 2,900 in FY 2014 to 2,684 in FY 2015.
  • There was a concurrent 14% decline in the cost of settlements related to civil rights cases from $106.9 million in FY 2014 to $91.6 million in FY 2015.

Claims continued to rise at the Department of Correction

The number of personal injury claims filed against the Department of Correction jumped by 19%, to 3,459 in FY 2015, from 2,909 in FY 2014.

  • As outlined in last year’s Claims Report and a recent ClaimStat Alert, the cost of settlements and judgments skyrocketed by 146%, rising to $27.1 million in FY 2015 from $11 million in FY 2014.

“The sustained increase in claims at the Department of Correction, coupled with the sharp rise in the cost of settlements and judgments, is a significant area of concern. Rikers Island continues to be a case study in bad outcomes for inmates, officers, and taxpayers alike,” Stringer said.

Malpractice claims increased at New York City Health + Hospitals

  • The number of new malpractice claims filed against NYC Health + Hospitals’ acute care hospitals increased by 9%, rising from 485 claims in FY 2014 to 528 in FY 2015, reversing a prior decline.
  • The two biggest increases in malpractice claims in FY 2015 at acute care hospitals were recorded at Bellevue (from 65 to 82 claims) and Kings County (from 74 to 90 claims) Hospitals.
  • The overall number of settlements and judgments to resolve medical malpractice claims rose from $118.5 million in FY 2014 to $144.9 million in FY 2015.

Settlement costs fell for claims relating to incidents that occurred decades ago

  • Settlement of Legacy Claims (defined as those that occurred from 1987-2006) cost New York City $67.5 million in FY 2015, down from $101 million in FY 2014. There was a $25 million payout for a single 1998 claim concerning an emergency response by EMS.

Comptroller Stringer settled several major civil rights cases pre-litigation, saving taxpayer dollars

  • In 2015, the Comptroller’s Office continued its practice of settling certain civil rights cases pre-litigation, including the wrongful imprisonment cases of Jonathan Fleming and the Hill Brothers.

“When it is prudent to do so, my office continues to evaluate and resolve meritorious civil rights claims pre-litigation. This provides closure to claimants and enables the City to save money in the long-term by avoiding costs associated with lengthy litigation,” Comptroller Stringer said.

Borough Breakdown: Bronx continues to lead in claims filed, settlements

  • A borough-by-borough breakdown of claims showed that the Bronx resolved the highest number of personal injury claims filed last year (2,358) while Brooklyn paid the highest costs to settle claims ($214.9 million).
  • For property damage claims, Queens led the boroughs in the number of resolved claims (1,130) and the amount paid to settle them ($6.7 million).
  • The total number of Personal Injury and Property Damage claims filed by borough in FY 2015 were, in descending order:
    • The Bronx with 6,065 Personal Injury and 1,377 Property Damage claims;
    • Brooklyn with 4,952 Personal Injury and 1,987 Property Damage claims;
    • Manhattan with 3,515 Personal Injury and 1,538 Property Damage claims;
    • Queens with 2,576 Personal Injury and 2,295 Property Damage claims; and
    • Staten Island with 648 Personal Injury and 741 Property Damage claims.

“Across all five boroughs, claims are the leading indicator of trouble spots that will continue to cause problems in the future. Identifying these trends now allows us to improve City services and save taxpayer dollars in the long-term,” Stringer said.