Cities, counties and lawsuits: a costly mix
| Thursday, Nov 12 2009 05:31 PM
Last Updated Thursday, Nov 12 2009 05:31 PM
Bakersfield and Kern County have been included for the first time in an annual report on litigation costs affecting large California cities and counties -- and the local numbers aren't too bad, comparatively speaking.
In Bakersfield, for example, costs for verdicts, settlements and outside lawyers during a two-year stretch ran about $5.3 million, according to a report by Sacramento-based California Citizens Against Lawsuit Abuse, or CALA, a group opposed to frivolous litigation.
Even accounting for population differences, Bakersfield's total is much less than the $136.8 million paid by the city of Los Angeles during the same period, fiscal years 2007-08. City officials there told the Los Angeles Daily News its legal department would more aggressively pursue fees and costs from filers of frivolous suits.
CALA's survey was compiled by information supplied by the jurisdictions included. The report, which can be found at www.cala.com, says municipalities can be viewed as deep-pocketed entities that some plaintiffs sue to try to get rich quick.
The group tallied $500 million paid by the state's biggest cities and counties in the two-year period.
Tracy Leach, head of CALA's central California office, said in a release it is "disheartening that vital programs" in Bakersfield and Kern "get cut while litigation costs continue to run unchecked."
Bakersfield City Manager Alan Tandy said in an e-mail the number of suits varies from year to year "but the long-term trend gets ever worse."
He called costs of defense litigation "a great burden on the city."
While people disagree on which suits are frivolous, Tandy added, "the legal system rarely, if ever views a case as 'frivolous.' I often ask about recovery and I am usually told: It is not going to happen!"
Kern County Counsel Theresa Goldner said litigation is "an anticipated expense" officials try to budget for the best they can.
Frivolous suits "are indeed a problem, because they force us to use limited resources" for unnecessary legal expenses, she said, and costs have tended to trend upward slightly of late.
Kern County's costs for the two-year period were pegged by CALA at about $2.4 million.
Susan Orr, the county's risk manager, said such costs are complex.
The county has general liability insurance that, these days, has a per-event deductible of $2.5 million. The annual premium is about $532,500.
Kern also has separate malpractice insurance for Kern Medical Center with a $294,000 annual premium. The deductible was recently reduced, from $5 million to $3 million, due to KMC's good record, Orr said, though it brought up the premium cost.
In-house and outside legal costs are generally applied to the insurance deductible. Some legal costs are recovered.
The big liability suits -- the ones that can push premiums up -- are "really unpredictable," she said.
Take the county's $5.5 million settlement in September of a federal suit filed by John Stoll, who spent nearly 20 years behind bars before a faulty molestation conviction was overturned in 2004. Though recent, the settlement was applied to the county's 1984-85 coverage, when the deductible was $250,000.
Large settlements like Stoll's can drive up premium costs, Orr said, but not always.
"It's an art," she said.
