NYC Pays Record $732M as Settlements Soar

NEW YORK (Bloomberg) -
A ClaimStat map showing sewer overflow claims and where they were filed. (NYC ClaimStat)
A ClaimStat map showing sewer overflow claims and where they were filed. (NYC ClaimStat)

New York incurred a record $732 million in legal costs in the last fiscal year, mostly from claims of police abuse, negligence and hiring discrimination, expenses that accelerated under Mayor de Blasio.

The amount accrued in settlements and judgments in the 12 months ended June 30 increased by 40 percent, or nearly 1 percent of the city budget — more than New York spends on parks, recreation and libraries combined. In the previous three years, legal costs averaged $590 million.

Sixty percent of the charges came after Jan. 1, when de Blasio was sworn in. A self-described progressive, de Blasio also calls himself a fiscal conservative. Yet Carol Kellermann, president of the Citizens Budget Commission, a business-backed watchdog, said the new administration may not be conservative enough when it comes to using taxpayer money for legal settlements.

“It’s a dramatic increase that’s worrisome because it indicates the new administration may be evaluating cases differently,” Kellermann said. “You walk a fine line between cleaning up backlog and giving … the message that you can sue and get a windfall.”

Zachary Carter, who heads de Blasio’s Law Department, said there’s no difference between how his office and past administrations handle lawsuits. Since Jan. 1, his department has won verdicts that saved the city $200 million in specious claims, he said.

“The court victories don’t get any attention,” said Carter, a former U.S. attorney for New York’s Eastern District in Brooklyn. “There will be anomalies in every year as to the amounts paid out. In each case we weigh the risk of an adverse decision and if so, find a fair resolution.”

This year, Comptroller Scott Stringer introduced a program called ClaimStat to track lawsuits in each agency. It was modeled after the police department’s CompStat, which maps crimes by type, date and time of day.

He reported a backlog of claims totaling more than $1.14 trillion on June 30, for which the office estimates that the city will face a liability of $6.9 billion over the next several years.

“Unless we do something serious about claims against the city, the numbers are going to continue,” Stringer said.