Here's a press release we just received from New York City Comptroller Bill Thompson 's office:
THOMPSON: CITY PAID MORE THAN $560 MILLION TO SETTLE CLAIMS IN FISCAL YEAR 2008
New York City Comptroller William C. Thompson, Jr. today reported that
"While my office has been successful in implementing creative strategies to reduce claim settlement costs, these costs still account for more than half a billion dollars of the City's budget each fiscal year," Thompson said. "My office will continue to work with agencies to find new ways to further mitigate claims costs."
The report, which can be viewed at www.comptroller.nyc.gov , also notes that the total number of new claims filed in Fiscal Year (FY) 2008 was 26,798, which represents the second highest number of claims filed since 1999. The increase in the filings appears to be due to a large number of property damage claims filed as a result of two storms that caused significant sewer overflow-related damage.
In FY 2007, 27,565 new claims were filed, the highest number in the last ten years. The high number of claims was due to the filing of more than 4,000 claims related to injuries claimed by those working at or near the
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 early settlement of meritorious claims, which has resulted in savings to the City by avoiding costly litigation and unpredictable outcomes. As a result of early settlements, the City saved nearly $30 million in costs in FYs 2007 and 2008.
One of the means used to settle claims early is Cybersettle, an internet-based settlement tool that matches monetary offers between claimants and the City. Cybersettle not only reduces the length of time associated with settling claims, but also reduces costs.
Other initiatives include:
* The office has successfully piloted data-mining techniques to anticipate claim outcomes. The development of a geographically-based data-mining initiative has allowed the Comptroller's Office to identify claims activity by locality, and to better track and analyze trends.
* In FY 2008, more than $1.2 million was collected in affirmative claims, by which the Comptroller's Office collects money from individuals who have damaged City property.
* Through the Comptroller's Recovery Program, more than $8 million annually was collected in FYs 2007 and 2008 from claimants with outstanding obligations to the City and/or their families.
The report also identifies claims patterns that are cause for concern. Three agencies - the New York City Health and Hospitals Corporation (HHC), the Police Department (NYPD) and the Department of Transportation (DOT) - continue to account for the largest portion of settlements paid by the City. These three agencies accounted for 61 percent of the total claims payout in FY 2008.
Since FY 2001, HHC has focused on risk and litigation management with a decrease of 17 percent in claims filed during this period. In FY 2008, 696 medical malpractice claims were filed against HHC, representing the second lowest number in ten years. In FY 2008, the City paid $145.3 million, the second lowest payout in the last ten years.
From FY 2002 through FY 2008, however, the number of claims filed against the NYPD has increased by 32 percent. In FY 2008, a historical high of 6,274 claims were filed involving NYPD activities, representing a rise of 22 percent over the last ten years.
"I have long advocated that agencies be held fiscally accountable for their own claims," Thompson said. "Tying claims to an agency's budget would go a long way to mitigating claims settlement and judgment costs."
"Given the success of the HHC strategy, the City should implement a pilot program to hold certain agencies, such as the Department of Transportation and Department of Education, fiscally accountable for their claim costs," Thompson said.
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 $513.7 million, or 90 percent of the $567.9 million paid in FY 2008. During FY 2007, personal injury claims accounted for $525.9 million, or 94 percent of the $558.3 million paid. Also,
14,653 personal injury claims were filed in FY 2008. 18,104 personal injury claims were filed in FY 2007.
* In FY 2008, the costliest personal injury claims category was medical malpractice, which cost the City $145.3 million to settle 292 cases. In FY 2007, the cost was $155.7 million for 296 cases. Also, 696 medical malpractice claims were filed in FY 2008, the second lowest number in the last ten years. In FY 2007, 655 medical malpractice claims were filed.
The hospitals for which the City paid the highest amounts for medical malpractice claims in FY 2008 were
Five hospitals (Coney Island,
* In FY 2008, the second costliest personal injury category was defective sidewalk claims, which cost the City $54 million. This was down from $71.3 million in FY 2007. Also, 2,374 defective sidewalk claims were filed in FY 2008. This represents a decrease from the 2,545 claims filed in FY 2007.
As a result of Local Law 49, which limits the City's liability in sidewalk claims, the Comptroller's Office disallowed 745 of the 2,374 sidewalk claims filed in FY 2008. The Office disallowed 829 of the 2545 sidewalk claims filed in FY 2007.
* In FY 2008, the third costliest personal injury category was motor vehicle accident claims involving City vehicles at $53 million. In FY 2007, motor vehicle accident claims cost $54.3 million.
* 1,476 motor vehicle accident claims were filed in FY 2008. This also represents an increase from Fiscal Year 2007 when 1,373 motor vehicle accident claims were filed.
Property Damage Claims
* Property damage claims, which allege damage to personal property or loss as a result of the City's negligence, including motor vehicle accidents (non-personal injury), watermain breaks and sewer back-ups, cost $14.3 million in FY 2008. In FY 2007, these claims cost $8.7 million. Also, 9,981 property damage claims were filed in FY 2008, an increase from the 7,988 claims filed in FY 2007.
Law Claims
* Law claims, which arise primarily from disputes concerning contracts between City agencies and their contractors or employees, were settled for $39.9 million in FY 2008. In FY 2007, law claims were settled for $23.7 million. Also, 2,164 law claims were filed in FY 2008, an increase from the 1,473 claims filed in FY 2007.
Trends
* The DOT and the NYPD accounted for the highest number of new claims filed in each of the last ten years.
* In FY 2008, the NYPD, the Department of Environmental Protection (DEP), the Department of Corrections (DOC) and the Department of Education (DOE) experienced the highest number of new claim filings for the ten years covered by the report.
* The Department of Housing Preservation and Development (HPD) and the Department of Sanitation (DSNY) had decreases in the number of claims filed in FY 2008. In FY 2008, the claims filed against HPD were the lowest in the last ten fiscal years.
* Ten agencies had increases in the number of claims filed in FY 2008. Among them were: the Department of Buildings (DOB) with a 304 percent increase, the DEP with a 191 percent increase, and the Human Resources Administration (HRA) with a 34 percent increase.
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