-- Initiatives Continue to Save City Millions--

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New York City paid out $496.4 million in settlements and judgments for personal injury, property damage and law claims in Fiscal Year 2006, a decline from $529.8 million in Fiscal Year 2005, according to Comptroller William C. Thompson, Jr. in a report issued today.

“The downward trend in claims costs reflects a number of encouraging results associated with the City’s adoption of new practices and the implementation of several innovative initiatives,” said Thompson.

The report, which can be viewed at the Comptroller’s website at www.comptroller.nyc.gov, also notes that the total number of new claims filed in Fiscal Year (FY) 2006 was 24,155, the lowest number in the last ten fiscal years. The number of claims filed represents a decrease from FY 2005, when 25,176 new claims were filed.  

Since taking office in January 2002, Thompson has created and expanded initiatives to reduce claims costs to the City. One of the most successful has been the use of Cybersettle, which not only reduces the length of time associated with settling claims, but also reduces the costs.  

From February 2004 through June 2005, the Comptroller’s Office settled 998 motor vehicle, sidewalk, school and other personal injury claims through its pilot program with Cybersettle, an Internet-based claims settlement tool that utilizes a double-blind negotiation process. In the cases when Cybersettle was successfully used, the average length of time from the filing of the claim to the settlement was 278 days and the average settlement amount was $11,252. In contrast, the average settlement time for claims that were settled by other means was 1,629 days and the average settlement amount was $38,809.

As a result of the successful pilot, the Comptroller’s Office has recently entered into a new contract with Cybersettle and anticipates an expansion of the online settlement process to include additional types of claims.

Other initiatives include:

• In FY 2006, a record $1,019,292 was collected in affirmative claims, by which the Comptroller’s Office collects money from individuals who have damaged City property.

• The creation of the Risk Management Division, which focuses on City-wide loss prevention efforts by identifying patterns in claims to implement risk prevention strategies.

• The creation of additional units to focus on other high-cost claim areas, such as the Motor Vehicle Personal Injury Division, the Medical Malpractice Early Intervention Unit, and the Police Action Early Intervention Unit.

Despite positive steps to reduce the costs of settlements, there are problematic trends in the City’s claims activity. Medical malpractice claims continue to represent the largest payouts made by the City. In FY 2006, 36 separate medical malpractice cases were settled for more than $1 million. Also troubling is the rise in claims filed against the Police Department, which saw a historical high of 5,634 claims filed in FY 2006. The Police Department, unlike every other City agency, has experienced a rise in claims during each of the last five fiscal years.

Among the other findings included in Thompson’s report:

Personal Injury Claims

• Personal injury claims, which include medical malpractice, sidewalk, motor vehicle, police action, schools and defective roadway claims, accounted for $458.5 million of the $496.4 million paid in FY 2006. During FY 2005, personal injury claims accounted for $481.3 million of the $529.8 million paid.

• 14,678 personal injury claims were filed in FY 2006.

• In FY 2006, the costliest personal injury claims category was medical malpractice, which cost the City $155.2 million for 293 cases. In FY 2005, the cost was $145.9 million for 327 cases.

• 699 medical malpractice claims were filed in FY 2006, the lowest number in the last ten years. In FY 2005, 824 medical malpractice claims were filed.

• The three hospitals for which the City paid the highest total amount for medical malpractice claims in FY 2006 were Kings County ($33.6 million), Elmhurst ($25.7 million), and Woodhull ($15.1 million).

• Three hospitals (Elmhurst, Kings County and Queens) had increases in the number of medical malpractice claims filed from FY 2005 to FY 2006.

• In FY 2006, the second costliest personal injury category was motor vehicle claims at $66.1 million. This was up from $58.8 million in FY 2005. 

• 1,351 personal injury motor vehicle accident claims were filed in FY 2006. This represents a decrease from the 1,396 claims filed in FY 2005.

• In FY 2006, the third costliest personal injury category was defective sidewalk claims, which arise from alleged cracked or uneven surfaces on public sidewalks, at $55.5 million. In FY 2005, sidewalk claims cost $68.8 million.

• 2,729 sidewalk claims were filed in FY 2006, representing the lowest number of sidewalk claims filed in ten years. This also represents a decrease from the 2,876 sidewalk claims filed in FY 2005.

• As a result of Local Law 49, which limits the City’s liability in sidewalk claims, the Comptroller’s Office disallowed 939 of the 2,729 of the sidewalk claims filed in FY 2006.       

Property Damage Claims

• Property damage claims, which allege damage to personal property or loss as a result of the City’s negligence, cost $11.1 million in FY 2006. In FY 2005, these claims cost $7.3 million.

• 8,192 property damage claims were filed in FY 2006, a decrease from the 9,017 claims filed in FY 2005.

Law Claims

• Law claims, which arise primarily from disputes concerning implied or actual contracts between City agencies and contractors, were settled for $26.8 million in FY 2006. In FY 2005, law claims were settled for $41.3 million.

• 1,285 law claims were filed in FY 2006, an increase from the 1,223 claims filed in FY 2005.

Trends

• The Department of Transportation, the Police Department, and the Health and Hospitals Corporation accounted for the highest cost of settlements and judgments for claims in FY 2006.

• In FY 2006, the agencies with the most claims filed were the Department of Transportation (25 percent), the Police Department (23 percent), the Department of Education (9 percent), and the Department of Sanitation (8 percent).

• In FY 2006, claim filings against the Health and Hospitals Corporation, the Department of Transportation, Department of Buildings, Department of Corrections, and the Department of Environmental Protection were the lowest for each of those agencies in the last ten fiscal years.

• In FY 2006, Manhattan was the borough with the highest settlement costs associated with personal injury and property damage claims, with a total of $153.5 million paid to settle 4,066 claims. The Bronx had the second highest costs, with $148.5 million paid to resolve 1,962 personal injury and property damage claims.

• In FY 2006, Brooklyn had the most personal injury and property damage claims filed with a total of 5,843. Manhattan had the second largest number of personal injury and property damage claims filed with a total of 5,646.

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