RECORD NUMBER OF $1 MILLION-PLUS PAYOUTS IN ’02

Annual Claims Report 2001-2002

New York City paid out $525 million in settlements and judgments from claims for personal injury, property damage and contract disputes in fiscal year 2002, a drop of $55.5 million from the record $580.5 million the City paid out during fiscal year 2001, according to New York City Comptroller William C. Thompson, Jr.’s “Claims Report 2001-2002.”

The report additionally notes that the number of new claims filed against the City in fiscal year 2002 was the lowest in the last 11 years- dropping from 26,330 in fiscal year 2001 to 24,376 in fiscal year 2002 – a 22 percent decrease from the historical high of 31,119 in fiscal year 1996.

“Although much of the data in the report is troubling, there are encouraging signs,” Thompson said, noting the drop in settlements and judgments from fiscal year 2001 to 2002. “At a time when New York City is grappling with billion-dollar budget deficits, it is more important than ever that we find creative ways to save City dollars.”

Concerned about the steep amount of settlements and judgments, Comptroller Thompson has instituted a number of measures since taking office in January 2002. The initiatives include: the creation of Risk Management and Motor Vehicle Personal Injury Settlement divisions; expansion of affirmative claims efforts; early settlement of medical malpractice and police action cases in collaboration with the office of Corporation Counsel; increasing agency accountability; and, a program, in which the Comptroller collected a record $8 million from claimants with outstanding obligations to the City.

Thompson also established a Fraud Division and Fraud Hotline (212-669-4747 or claimfraud@comptroller.nyc.gov), and last week released Public Service Announcements encouraging New Yorkers to report potential claim fraud against the City. Since the PSAs began airing, the Comptroller’s office has received more than 150 phone and email tips.

“A thoughtful re-examination of our tort laws would further relieve the City of its unacceptably high claims costs,” Thompson said. “By taking a determined and unwavering look at claims, we can forge a process that is responsive to those who file legitimate actions and that reduces the heavy burden on taxpayers.”

According to the Claims Report, until fiscal year 2001, the highest amount New York City ever paid out in settlements and judgments was $459.2 million in fiscal year 2000. The report notes that number jumped by 26 percent to $580.5 in fiscal year 2001 and then dipped by 10 percent to $525 million in fiscal year 2002. Nevertheless, the figures show a dramatic rise from fiscal year 1990, when the City recorded $176 million in claim costs.

The Comptroller’s report notes that, for the last 11 fiscal years, personal injury claims were the most costly of all claims. Thompson’s report shows that those payments amounted to $474.8 million, or 90 percent of the $525 million paid out during 2002. That
$474.8 million was for 7,679 claims. The average settlement or judgment for all personal injury cases was $61,833, an increase of five percent from $58,917 in fiscal year 2001.
Property damage claims cost $9.9 million in fiscal year 2002. Law claims, also known as contract claims, amounted to $40.3 million in fiscal year 2002. These claims include disputes with City contractors and claims relating to wages and sidewalk assessments.

The report further details cases resolved for more than $1 million. In fiscal year 2002, a record 94 cases were resolved for $1 million or more apiece, totaling $240.7 million, or 46 percent of the $525 million paid out that year. The average amount to resolve these claims in fiscal year 2002 was $2.6 million. In fiscal year 2002, 50 of the 94 cases resolved for $1 million or more were medical malpractice cases. Thirty-six involved allegations of inadequate or improper obstetrical or gynecological care.

Among the other findings in the report:

• Medical malpractice claims comprise a small percentage of personal injury claims filed but were the costliest personal injury claims paid each of the past 11 fiscal years. The 796 claims represented only three percent of fiscal year 2002 claims, but accounted for $190.5 million, or 36 percent, of the total $525 million.
• Hospitals in which the City paid the highest total amounts for medical malpractice claims resolved in fiscal year 2002 were Kings County Hospital ($35.6 million), Harlem Hospital ($26.6 million) and Jacobi/Bronx Municipal Hospital ($22.6 million).
• Four hospitals had significant increases in the number of medical malpractice claims filed. From fiscal year 2001 to 2002, claims filed against: Coney Island Hospital rose from 53 to 59, Jacobi/Bronx Municipal Hospital rose from 82 to 95, Metropolitan Hospital rose from 41 to 57, and, North Central Bronx Hospital rose from 27 to 35.
• Sidewalk claims are the most frequently filed personal injury claim. In fiscal year 2002, 3,276 sidewalk claims were filed against the City, a nine- percent decrease from the 3,606 sidewalk claims filed in the previous fiscal year. The number of sidewalk claims filed in fiscal year 2002 represents the lowest number of sidewalk claim filings in the last 11 years.
• The cost of police action claims decreased 43 percent from $38.5 million in fiscal year 2001 to $21.9 million in fiscal year 2002. There were 1,796 new police action claims filed in fiscal year 2002, a decrease of nine percent from the 1,980 filed in fiscal year 2001. Police action claims result from alleged improper police action such as false arrest or the use of excessive force.
• The cost of school claims rose from $25.7 million paid in fiscal year 2001 to $30.1 million in fiscal year 2002. The number of new school claims filed continued to drop from 1,656 in fiscal year 2001 to 1,510 in fiscal year 2002. School claims are those filed against the New York City Department of Education for injuries sustained at its facilities or during sponsored activities.
• Personal injury and property damage claim patterns were analyzed by borough based on the location of each incident. For fiscal year 2002, the greatest number of personal injury claims arose in Manhattan (4,987). The greatest number of property damage claims arose in Brooklyn (1,912).
• The Department of Transportation and the Police Department together accounted for the highest number of new claim filings in each of the last 11 fiscal years.
• Ten agencies showed a decrease in the number of claims filed, while two agencies showed an increase in the number of claims filed. Claims against the Fire Department rose by 85 percent mainly due to claims arising from the World Trade Center attack. Claims against the Parks Department increased seven percent.