Chicago doles out millions on lawsuits and costs

Earlier this fall, Chicago released its 2010 expenditures for verdicts and settlements through the end of September. According to that report, the city has so far this year spent more than $33 million settling lawsuits and paying for other court judgments such as satisfactions and jury verdicts.

This figure is certain to increase in the final weeks leading up to the new year, when the city includes numbers from the last few months of 2010.

The citys police department ranks highest among all city departments in number of claims filed and largest payout amount.

Each year the City of Chicagos law department mulls over complaints against the city ranging from slips and falls, property damage, inoperable traffic signals to sexual harassment.

But complaints alleging a litany of misdeeds by the police including illegal search, false arrest, and excessive force make up the majority of city lawsuits. So far this year, the police department has paid to settle 244 claims. Its total liability for the year has already topped $15 million.

Behind the police department in amount of claims paid out for the year is the citys environment department. For only two claims, that department has paid almost $3 million worth of settlements. While there may have been only two environment claims paid out this year, there were plenty of water management suits 182, to be exact totaling more than $1.1 million.

The city department with the third-highest claim count was the streets and sanitation department. Although it had 126 claims, those claims only cost the city a little more than $500,000. Among the top five paying departments, transportation paid the least number of claims, but still paid out almost $2 million this year.

While these figures may be startling to most people, its business as usual for the city. Representatives at the city law department say that for most of these departments, high case numbers and high settlement amounts are to be expected.

As to why certain departments have higher claim rates and consequently require more settlement money, the city had a quick response.

These workers are out in the streets, they have vehicles, they arent office workers and they have lots of interaction with the public, said Jennifer Hoyle, director of public affairs for the city Law Department.

According to Hoyle, the attorneys who handle these claims frequently work with the other city departments to reduce their liability and potential exposure, but its not a foolproof process. She said recommending training and identifying patterns are two methods that have worked in the past.

As cases come in we try to notice any trends that might be developing, Hoyle said.

She said that a few years ago an increase in towing claims filed against the transportation department involving the owners of sports utility vehicles.

After close review, the individual handling these claims noticed that the manner in which the vehicles were being hooked to the tow trucks was causing significant damage to the SUVs.

The law department later determined that the towing companies needed to use flatbeds as opposed to traditional towing trailers.

Most of the time, however, the law department determines the value of individual cases and deciding whether a case should be tried or settled.

As with other municipalities, the city of Chicago has excess liability insurance to cover some claims those over the amount of $15 million but most settlements are paid for out of the citys own budget. In other words, by Chicago taxpayers.

While it is no surprise to most residents that their tax dollars are paying for settlements, most city residents might not know that the city anticipates large payouts and puts aside money for these claims each year.

The city uses what it calls departmental funding strips to pay for settlements depending on the type of claim. And the calculus for how much money the city dumps into these individual funds each year is based on a few different factors.

On a yearly basis, we look at the cases we have, the status of those cases, those scheduled to go to trial, and we try to put a value on those cases, Hoyle said. Its not an exact science.

City lawyers look at the size of the department, previous patterns in the type of litigation and their chances at trial.

We just try to come up with the best possible analysis based on the facts we are aware of, Hoyle said.

These estimates give the city budget office an idea of what it might have to spend on each case. The law department does not control the dollar amount that is awarded. Corporation counsel has the authority to approve settlements up to $100,000, but approval is required by the city council.

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