--New Initiatives Save the City Millions--

View Fiscal Year 2004 Annual Claims Report

New York City paid out $575.6 million in settlements and judgments for personal injury, property damage and law claims in Fiscal Year 2004, a decline from $582.9 million in Fiscal Year 2003, according to Comptroller William C. Thompson, Jr. in a new report issued today.

The claims report also notes that the total number of new claims filed in FY 2004 was 24,719, the second lowest number in ten years and a decline from the 25,346 claims filed in FY 2003.

“With the City continuing to struggle with budget deficits, I have focused on settling claims earlier and reducing overall costs,” Thompson said. “We have been successful in instituting new initiatives to help save the City millions of dollars and will continue to find more ways to expand those efforts to reduce the burden on New Yorkers.”

Since taking office in January 2002, Thompson has created and expanded initiatives to reduce the costs to the City. They include:

•  Pre-litigation settlement, by which the Comptroller's Office settled a record 1,625 personal injury claims prior to litigation in FY 2004, saving the City $28 million;

•  The use of Cybersettle, an Internet-based settlement tool that facilitates cost- and time-saving settlements, which the Comptroller's Office has used to settle more than 1,000 personal injury and property damage claims and save the City approximately $15 million since February 2004;

•  The Medical Malpractice Mediation pilot, which is designed to increase the role of mediation in medical malpractice claims filed against Health and Hospital Corporation (HHC) facilities. The Comptroller's Office participated in the project which saved the City substantial litigation costs by mediating nineteen medical malpractice cases, including twelve which were settled early in the process;

•  The expansion of property damage affirmative claims, which the Comptroller's Office has used to collect money from individuals who have damaged City property. In FY 2004, the Office collected a record $1,057,479 in affirmative claims, an increase from $570,000 in FY 2003; and,

•  The Recovery Program, by which the Comptroller's Office collected a record $9.4 million in FY 2004 from claimants with outstanding obligations to the City, a 53% increase from FY 2003.

Despite positive steps to reduce the costs of settlements, there are problematic trends in the City's claims activity. Medical malpractice is an area of particular concern, as these claims continue to represent the largest payouts made by the City. A record high of 42 separate cases were settled for more than $1 million in FY 2004.

Among the other findings:

• Personal injury claims, which include medical malpractice, sidewalk, motor vehicle, police action, schools and defective roadway claims, accounted for $536.8 million, or 93 percent, of the $575.6 million paid in FY 2004. During FY 2003, personal injury claims accounted for $540.2 million, or 93 percent of the $582.9 million paid.

• The number of personal injury claims filed in FY 2004 was 14,621, the lowest number in ten years. This represents an eight percent decrease from FY 2003 when 15,860 claims were filed.

• In FY 2004, the costliest personal injury claims category was medical malpractice, which cost the City $167.5 million for 339 cases. In FY 2003, medical malpractice cases cost the City $195.4 million for 345 cases.

• The three hospitals for which the City paid the highest total amount for medical malpractice claims in FY 2004 were Kings County ($25.2 million), Elmhurst ($18.4 million), and Woodhull ($17.1 million).

•  Two hospitals had significant increases in the number of medical malpractice claims filed. Medical malpractice claims filed against Coney Island Hospital rose from 47 in FY 2003 to 60 in FY 2004. Claims against Elmhurst rose from 50 in FY 2003 to 64 in FY 2004.

•  The second costliest personal injury claims category was defective sidewalks, at $71.6 million. In FY 2003, sidewalk claims cost $68 million.

• In FY 2004, 3,229 sidewalk claims were filed against the City, the lowest number of sidewalk claims in ten years. This represents a seven percent decrease from the 3,482 sidewalk claims filed during FY 2003.

•  As a result of Local Law 49, the Comptroller's Office disallowed 1,216 of the 3,229-- 38 percent --of the sidewalk claims filed in FY 2004.

• Property damage claims, which are those that allege damage to personal property or loss as a result of the City's negligence, cost $22.2 million in FY 2004. This represents a 49 percent increase from FY 2003.

• The number of property damage claims filed in FY 2004 was 8,929, an increase of six percent from the 8,398 filed in FY 2003.

• Law claims, which arise primarily from disputes concerning implied or actual contracts between City agencies and their contractors or employees, accounted for $16.6 million in FY 2004. This represents a 40 percent decrease from FY 2003.

• The number of law claims filed in FY 2004 was 1,169, an increase of seven percent from the 1,088 claims filed in FY 2003.

• In each of the last ten Fiscal Years, more claims were filed against the Department of Transportation (DOT) than any other agency. Claims against DOT consist primarily of personal injury claims due to sidewalk trip and fall accidents, or personal injury or property damage due to defective roadways, defective traffic signals, or motor vehicle accidents involving DOT vehicles. In FY 2004, the 6,991 claims filed against DOT accounted for 28 percent of all new claims filed, representing a two percent increase from the 6,841 claims filed against DOT in FY 2003.

• Six agencies showed a decrease in the number of claims filed in FY 2004. The Fire Department experienced the greatest decrease, 33 percent, followed by the Department of Sanitation, with an 11 percent decrease. The Departments of Housing Preservation and Development, Corrections and Parks, and HHC, all had decreases in new claims filed.

• Three agencies showed significant increases in the number of claims filed in FY 2004. The Department of Buildings witnessed a 26% increase, the Department of Education had a 12% increase, and the Department of Environmental Protection had a 9% increase.

• For FY 2004, the borough with the greatest number of personal injury claims was Brooklyn (3,918). The greatest number of property damage claims was Queens (2,051).

• In FY 2004, the Bronx had the highest amount of personal injury payouts with a total of $147.8 million, and Manhattan had the highest amount of property damage payouts with a total of $17.3 million.

The report also includes preliminary results of claims activity for FY 2005. Because this data is preliminary, any comparison between these results and prior year results would be inaccurate and misleading. These preliminary results show that 25,081 personal injury, property damage and law claims were filed. The preliminary results also show that 10,719 settlements and judgments were paid for personal injury, property damage and law claims for a total of $523.1 million..

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