Q&A
Increase in claims and lawsuit costs against New York City
0:34:43
·
3 min
Comptroller Lander discusses the recent increase in claims and lawsuit costs against New York City and potential factors contributing to this trend.
- The city paid out over $1.5 billion in claims in FY23 for 13,227 claims and lawsuits.
- While this is $110.9 million less than FY22, it's still well above the recent average annual payment.
- A significant factor is a 25-year-old class action lawsuit (Gallino) related to discriminatory teacher assessments, costing hundreds of millions of dollars.
- Crashes caused by city vehicles are a major source of claims, totaling $174 million in the last year, doubled from $89 million in 2014.
- Lander suggests implementing a system where agencies bear the cost of claim settlements to encourage more responsible practices.
- For the current fiscal year (through April), the city has already paid out $1 billion in claims, tracking close to the previous year's total.
Justin Brannan
0:34:43
Your office recently, released its annual claims report, showed that the city paid out over $1,500,000,000 in claims in f y 23 for 13,227 claims and lawsuits against the city.
0:34:57
This is a $110,900,000 less than what was paid out in f y 22, but it's still well above the recent average annual payment.
0:35:05
Could you talk about what's driving the increase in claims and lawsuit costs, against the city over the last few 2 years?
Brad Lander
0:35:12
Yeah.
0:35:12
Yeah.
0:35:13
So, yeah, both of those figures for the last 2 years, you know, you know, 1.45 $1,560,000,000,000.
0:35:19
That's a lot of money to be spending on on claims against the city.
0:35:23
There are some unique things.
0:35:25
I mean, a big spike each of the last 2 years is this 25 year old, class action lawsuit called Gallino, in which the city at the at the requirement of the state, use tests for teachers, that were found in court to be discriminatory.
0:35:44
And so black and Latino teachers sued the city, for using those assessments, again, which were state mandated.
0:35:53
So I still don't understand why the state is not paying this money, but the courts found the city liable, and that has been that's 100 of 1,000,000 of dollars in payouts.
0:36:03
Now there are areas that are more predictable, so we did this report on crash claims every year.
0:36:09
One of the biggest areas of claims, last year, I think a $174,000,000 was crashes caused by city vehicles, you know, whatever, sanitation trucks and police cars and DOT and parks vehicles.
0:36:25
And there is not real accountability to the agencies or the drivers of those vehicles.
0:36:31
Like, they get in a crash, somebody brings a claim, it's settled, the payout goes, and that driver's still driving, that agency.
0:36:39
So it's a lot of things.
Justin Brannan
0:36:40
Is that higher it's higher than it's been?
Brad Lander
0:36:43
Oh, yeah.
0:36:43
It doubled, I think, from I have the number.
0:36:46
Yeah.
0:36:47
From in 2014, it was 89,000,000, and in 2023, it was a 174,000,000.
Justin Brannan
0:36:53
Oh my god.
Brad Lander
0:36:54
So it has grown quite a bit, and there just is not a structure in place.
0:36:58
My office has recommended putting the cost of claim settlements on the agency that incurs them, like putting that in the budget and saying to a commissioner, look.
0:37:08
If you, you know, impose a system that gets your drivers to drive more responsibly or you put in, you know, for the appropriate vehicle speed delimiters and you reduce these claims payouts, you could keep half the savings and invest that in new programs you want to start.
0:37:25
But right now, we don't have any claims accountability at the agency level or at the, in this case, the driver level.
Justin Brannan
0:37:35
How much how much has the city paid out just overall claims?
0:37:37
How much have we paid out in the current year so far?
0:37:40
Are we on track to go higher than last year?
Brad Lander
0:37:44
So for through the end of April, we've paid out $1,000,000,000 so tracking pretty close to where we are.
0:37:52
I mean, we don't know exactly because the claims are kinda lumpy, but, yeah, I think probably on the same order of magnitude of roughly 1.5, $1,400,000,000 for the year.
