Audit shows city pays $500M to settle claims

Although New York City paid nearly $30 million less in settlements and judgments for personal injury, property damage and law claims during the 2006 fiscal year than it did the previous year, it still paid out nearly $500 million in total claims in 2006.
City Comptroller William Thompson recently issued a report praising the reductions in payouts and stated that the 24,155 claims filed during the 2006 fiscal year was the lowest amount during the past 10 years.
“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,” Thompson said.
While the report shows an overall reduction in claims, it also highlighted medical malpractice suits as the largest category that the city paid out claims. During the 2006 fiscal year, the city paid out $155.2 million for 293 medical malpractice cases, however, only 699 medical malpractice claims were filed, which represented the lowest number in 10 years.
In addition, the report also showed a record-high 5,634 claims filed against the New York Police Department (NYPD) during 2006, and according to the data, the NYPD was the only city agency that saw the number of claims increase over the last five years.
Both of those categories are part of the personal injury claims, which make up $458.5 of the $496.4 million in claims the city paid out during 2006, but they are both down from the $481.3 of the $529.8 million it paid out during 2005.
Meanwhile, the report cited law claims, where the city paid out $26.8 million and property damage where it paid $11.1 million, as the next highest categories for 2006.
One of the tools Thompson credited with the reductions was Cybersettle, an Internet-based claims settlement tool that utilizes a double-blind negotiation process.
The report cited that 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 with the average settlement $11,252, whereas the average settlement time for claims that were settled by other means was 1,629 days with the average settlement $38,809.