City Paid $1.45B in Settlements Last Fiscal Year, NYC Comptroller Finds in FY 2023 Claims Report

City Paid $1.45B in Settlements Last Fiscal Year, NYC Comptroller Finds in FY 2023 Claims Report

New York, NY - Today, New York City Comptroller Brad Lander released the Annual Claims Report, summarizing claims filed against and settled by the City during Fiscal Year (FY) 2023 (July 1, 2022 to June 30, 2023). In FY 2023, 13,227 claims and lawsuits against New York City were resolved for $1.45 billion - down 7% from the $1.56 billion paid out for the 12,188 claims settled in FY 2022.

"The $1.5 billion in taxpayer funds we paid last year to settle claims against the City is $1.5 billion we could have spent in our schools and neighborhoods," said Comptroller Brad Lander. "But right now, City agencies aren't held accountable for those claims, so they have no incentive to reduce them. City Hall should shift responsibility for claims payments from the City's general fund to agency budgets, in order to hold agencies accountable, encourage reforms, and save taxpayer dollars. Our Annual Claims Report identifies the agencies and activities responsible for these payouts, with the goal of helping to reduce the harms to New Yorkers and others and improving the City's bottom line."

Following are key findings from the report:

NYPD Claims Account for Largest Share of Tort Claims

In FY 2023, the City paid out $739.6 million in personal injury and property damage claims (collectively "tort claims"), a $1.8 million increase from the previous year's payout of $737.8 million. Some FY 2023 tort claims trends include:

• 6,891 claims against the New York City Police Department (NYPD), a 50 percent increase from 4,588 claims in FY 2022. FY 2023 was the first time the number of tort claims against the NYPD increased from a previous year since FY 2014.
  • NYPD settlements totaled $266.7 million, a 12 percent increase from $239.1 million in FY 2022 (but still 21 percent below the high of $338.2 million in FY 2017).

• 1,352 claims against Department of Education (DOE),a 17 percent increase from 1,153 claims in FY 2022.
  • DOE settlements totaled $92.8 million, a 12 percent increase from $82.6 million in FY 2022.
  • 19 of DOE settlements were payouts of $1 million or more - 13 of which were sexual assault cases revived by the Child Victims Act.

• 1,693 motor vehicle crash claims, a 14 percent increase from 1,480 claims in FY 2022.
  • Vehicular crash settlements payouts totaled $173.7 million, a 23 percent increase from $141.1 million in FY 2022.
  • Read more on crash claims trends over the past decade, and recommendations to reduce these claims, in the Comptroller's Wreckless Spending: The Accelerating Cost of City Car Crash Settlementsreport.

Of the ten largest individual tort claims against the city in FY 2023, six settlements were for reversed convictions, two for excessive police force, one for medical malpractice, and one because of negligent roadway design.

The NYPD ($266.7 million), DOE ($92.8 million), Department of Transportation ($91.2 million), Department of Sanitation ($75.4 million), and Health + Hospitals ($54.5 million) were the five agencies with the highest tort claim settlement and judgment costs in FY 2023.

Special Education Accounts for Largest Share of Law Settlements

In FY 2023, the City paid out $708.9 million in law claims, a 14 percent decrease from the $821.6 million in law claims paid out in FY 2022. Eighty-nine percent of all law claim settlements and judgments and 56 percent of total law claim payouts were for special education tuition and/or services reimbursement (including attorneys' fees claims) in FY 2023. The City paid out:

• $397 million in special education settlements, a 31 percent increase from the $303.5 million paid out in FY 2022 and continuing the 10-year trend of increasing payments on special educations claims.
  • When the City fails to provide legally mandated special education services to children directly, families can file "Carter claims" that can result in a legal judgment or settlement requiring the City to provide services or pay the costs to families to arrange these services.
  • Read more in the Comptroller's Course Correctionreport on special education services claims.

• $260.8 million in salary settlements - including$218.8 million resulting from judgments in the Gulino case, a 1996 class action that alleges DOE's use of two New York State mandated teacher certification examinations had a disparate impact on Black and Latino teachers.
• $44.3 million in contract settlements -98 percent ($43.2 million) stem from eight delay claim settlements, where contractors alleged the City bore responsibility for construction project delays.

The Annual Claims Report covers settlements reached on claims filed prior to litigation, as well as settlements of lawsuits against the City. Claims resolved prior to litigation are managed by the Comptroller's office Bureau of Law and Adjustment (BLA), which, under the direction of the Comptroller, the General Counsel, and the Assistant Comptroller for BLA, comprises attorneys, claims professionals, engineers, and administrative staff. Resolving meritorious claims pre-litigation results in substantial financial savings to the City and provides prompt relief to New Yorkers harmed by actions or inactions of the City.In litigation, the City is represented by the Law Department, headed by the Corporation Counsel; settlements reached through litigation must be approved by both the Law Department and the Comptroller's office.

In FY 2023, the Comptroller's office settled 2,231 personal injury claims (41% of settled claims) for $42.5 million (8% of total payouts, since more complex and larger claims are generally more likely to go to litigation); 930 property claims (65% of settled claims) for $17 million (48% of total payouts); and 6,005 law claims (95% of settled claims) for $391 million (55% of total payouts).

The full Annual Claims Report for Fiscal Year 2023 can be read here.

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