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Home / Washington Business - July/August 2004 / PRO-CON: Court Decisions Are Clobbering Cities |
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PRO-CON: Court Decisions Are Clobbering Cities |
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Written On: July/August 2004 |
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Written By: By Stan Finklestein |
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Washington’s cities are responsible for providing the essential services our residents and communities need to be vital, safe and strong. Local elected officials know that the resources cities need to provide these services come directly from local taxpayers. City officials balance the provision of services with that tax burden. Some of these services carry significant risk, including fire protection, law enforcement, land use decisions, and jail management, yet cities are required to provide these services either because citizens expect them or the state mandates them.
When something goes wrong, local governments should be held accountable, just like every other organization, business or individual. Whether a public or private entity, though, accountability must be limited to those actions over which some control may be exercised. Under current state law, however, one party in a multi-party lawsuit can be required to pay 100 percent of the damages even if they have been found legally responsible for 10 percent or less of those damages. Joint liability allows an injured person who sues two or more defendants to collect the entire award from the defendant who is able to pay – the one with the “deep pockets.” So, even if government’s actions contributed only in a minor way to the overall damages, as the deep pockets, they may be required to cover the entire cost. And when cities are required to pay those damages, it’s the taxpayers that pay – whether as a result of government actions or those of uninsured, underinsured or financially irresponsible individuals.
Borrell v. City of Fife is an Example
For example, the case of Borrell v. the city of Fife. On a rainy November morning, Ms. Borrell was struck and killed by a car as she was in the road, avoiding pooled water. Her estate alleged that the City of Fife was negligent in its maintenance of the storm drains in the vicinity of this accident, allowing the water to pool and making it difficult for her to use the sidewalk. The jury awarded $2.7 million for her wrongful death. Because the driver of the car had only minimal insurance, and the city was jointly liable for damages, the city bore the majority of this wrongful death judgment. While this was clearly an unfortunate accident, $2.1 million was eventually paid from taxpayer’s funds because the city allegedly failed to clear a storm drain.
With payouts like this, the cost of insuring against claims — warranted and frivolous — continues to take up increasingly larger portions of our cities operating budgets. In 2001, property and liability assessments and deductibles represented as much as 16 percent of one city’s operating budget. And since 1999, liability premiums for cities in the risk pool managed by the Association of Washington Cities have increased 32 percent. For most cities, these unnecessary costs include annual insurance assessments and deductibles as well as court costs and staff time associated with claims.
Cities do everything possible to reduce liability through highly aggressive risk management. Three risk pools in Washington provide the majority of Washington’s cities with group self-insurance, minimizing each city’s risk by spreading that risk throughout pool membership. Our cities participate in rigorous loss prevention training, including training for handling disability claims, adhering to the employers’ duty to accommodate, as well as effective land use decision-making and harassment issues training. Additionally, participating cities are subjected to loss control visits and assessments, report cards monitoring progress, and have access to personnel and land use attorneys to improve decision making.
Cities Want Proportional Fault
Still, these efforts only reduce risk under circumstances that are within a city’s control. As the case cited above illustrates, unforeseen events may create liability over which government has little influence. One way to address this issue is through reforming joint and several liability.
Last session, the Association of Washington Cities supported limiting joint liability to the “percent at fault” so an organization or individual is held accountable only to the degree that they are actually responsible. This should apply to all organizations and individuals, and it is especially critical for governments. As cities strive to consistently and responsibly provide critical services to local communities, taxpayers’ dollars should be used responsibly in liability claims – applied only to those situations in which local governments had the ability to control the outcome and to the degree for which they are actually responsible. This solution, for one, provides an incentive to all parties to act responsibly and represents a fair and balanced approach to liability reform.
Remedies to Help Control Costs
Other remedies that would help government better control costs include:
• Limiting liability for providing an accurate, good faith reference when requested of a former employee. A prospective employer, such as a city parks and recreation department, should be able to rely on information provided by a former employer about job performance, on-the-job conduct, or other work-related information, rather than being limited to basic information because of potential liability issues.
• Strengthening the protections of the public duty doctrine by having the Legislature, not the courts, define when government is liable for its actions.
• Admitting seatbelt information so that a jury may know whether or not a plaintiff was wearing his or her seatbelt at the time of the auto accident in question.
Stan Finklestein is Executive Director of the Association of Washington Cities.
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