Cities face a bevy of thorny legal issues: Premise liability, insurance, personal injury claims and employment disputes, to name just a few. Sometimes, it seems that no matter how carefully a public entity and its attorneys navigate these issues, a disgruntled party is bound to bring a lawsuit. Lawsuits are nightmare for cities. However, in our ever-litigious society, they seem more common than ever.
One of the biggest issues that cities have to deal with regarding litigation is cost. Defending oneself in a lawsuit can be stunningly expensive. Payouts, legal fees and insurance can run sky-high. A recent report from the website GOVERNING, which covers governing-related issues, reveals just how expensive litigation can be for cities.
Average annual costs
The website examined data from 20 of the largest cities in the country. By examining the costs of payouts, litigation and insurance, it tallied the total expense that cities incur from lawsuits. The city with the highest litigation costs was New York City, with an average annual total of over $710 million. The city with the lowest total? Fort Worth, with approximately $2 million.
These are the average annual costs of litigation from 2014-2016 in four of California’s major cities:
- Los Angeles: $113,087,290
- San Diego: $55,567,352
- San Francisco: $59,243,721
- San Jose: $11,189,148
Public entities and litigation
The report’s numbers are staggering, but the exorbitant cost of litigation will come as no surprise to public entities and their attorneys. Legal issues threaten California’s public entities every day. While some of these lawsuits may have merit, others are completely unfounded and needlessly waste a city’s resources. Most public entities choose try to resolve any issues before they become formal claims, and resolve any claims before they become lawsuits.