New Report Claims Chicago Spent $809 Million on Judgements and Settlements From 2010–2018

Chicago paid more than double what it had budgeted for on judgements and settlements during a nine year period from 2010–2018.
The City Council Office of Financial Analysis released it’s report on Monday analyzing Chicago’s spending on judgements and settlements (J&S). The study was done at the request of Alderman James Cappleman (46).
Studying a nine year period from 2010–2018, COFA found that Chicago “spent $809 million on judgements and settlements, an average of $90 million per year.”
Many of the J&S were covered in the media throughout the nine year period. The Marshall Project keeps a curated list that includes many of the articles involving police misconduct.
The report compared Chicago’s spending on J&S to other large cities and offered reforms based on best practices.
Included in the report was a study from Governing Magazine that concluded over a 3-year period only San Francisco ($67.88), Washington D.C. ($82.75), and New York ($83.84) had a higher “per capita average” than Chicago’s $56.32.
COFA notes that “Governing (Magazine) did not present the data on a per-capita basis. COFA calculated the per-capita figures using the 2016 Census estimates.”
However, “Figures for New York City and the District of Columbia are higher in part because those cities have a far wider range of responsibilities, including public schools, mass transit, parks and public hospitals,” the report says, “Medical malpractice accounts for a quarter of New York’s J&S costs” the report said.
That figure shocked Ald. James Cappleman, who asked COFA to produce the study.
“It jumped out,” especially “how it compares to other cities. I mean, we were pretty high up in a per capita average.” he said.
While spending an average of $90 million annually, the report says “Chicago has consistently underbudgeted for J&S.” In some years the City spent over $100 million more than it had budgeted for and in no year budgeted enough to cover the costs.
“Not a single year. So how can we really look at what the costs are when you’re just way, way underbudgeted.” Cappleman said, “My frustration is not just that we’re underbudgeted, but what systems were in place so that we could get the needed data to see how can we reduce lawsuits?”
In her proposed 2020 budget Mayor Lightfoot is budgeting $142 million for J&S. About $100 million more than former Mayor Emanuel did in 2019.
Cappleman said “The City of Chicago needs a much better process of gathering data so that we can do better risk management. I certainly want to give kudos to Mayor Lightfoot for hiring a Chief Risk Management Officer on her staff.”
Cappleman will use the COFA’s findings to hold the Mayor accountable.
“That will be one of my questions in the budget hearing. I certainly want to make sure that there is sufficient budget available to fund this, because this office will save us money.” he said.
As in all “high cost cities” police misconduct accounts for the majority of all J&S in Chicago. Claims against the Chicago Police Department accounted for $434,937,150 million, 53.7% of the total, and motor vehicle accidents involving CPD accounted for another $53,741,202 million, 6.6% of the total.
COFA’s attempt to place police misconduct J&S into distinct categories was made “especially difficult, because the descriptions in the downloadable data was often unclear, and many cases overlapped multiple sub-categories”.
COFA offered a “best guess” estimate that Use of Force/Wrongful Death settlements cost the City $162,680,645 million, 37.4% of the police misconduct total.
If grouped together, “false arrest, malicious prosecution and reversed conviction” J&S would account for another $168,420,690 million, or 39%. The three categories all are related to pursuing the wrong suspect.
Cappleman noted that the report recommended the City fully implement the Consent Decree.
“How far have we progressed at implementing this consent decree? Which again, will save us all money, but it’s also the right thing to do.” he said.
Last month, WBEZ reported that the City has “failed to meet at least a third of the deadlines in the first six months” of the Consent Decree.
Outside of police misconduct, the report singled out the Chicago Fire Department as having an exceptionally poor record in employment related matters.
“The Fire Department cost the City $88 million in employment-related payouts during the nine-year study period” it said.
$75 million of that total came from one case, a 2012 verdict against the Department stemming from a 1998 racial discrimination class action suit.
However, “even excluding that verdict handed down in 2012,” the report states “the Fire Department accounts for the majority of the remaining employment-related payouts.”
COFA cited an “absence of data” in determining if the Fire Department has made improvements.
Highlighting an investigation from the Better Government Association and the Sun-Times, the report said “a key question for the City’s Risk Manager is whether CFD employment practices are sufficiently reformed to protect the City from large future costs.”
Cappleman said he’s been “immersed in this whole use of evidence based best practices” since his time as a social worker.
He has been frustrated at meetings of the Committee on Finance — where J&S are voted on — when he has brought up the idea of evidence based best practices.
“We would always ask, and I would too, what are we doing to learn from this? It sounds like a lot more needs to be put in place so that we really could learn from this.”
The report makes eight suggestions based on best practices at work in other cities;
- Better “track claims and payments and analyze the data to identify problem areas.” While the city offers claims data in it’s Data-Portal, COFA says “basic data analysis” was very difficult, and “detailed analysis impossible.”
- Increased staffing in the Dept. of Law’s Torts Division. This would allow for “more aggressive litigation strategies and fewer settlements,” and “less reliance on outside counsel.”
- “Full implementation of the Chicago Police Department’s Consent Decree.”
- “Continuous monitoring of the Chicago Fire Department’s human resource practices.” Citing an investigation from the Better Government Association and the Sun-Times, the report says “a key question for the City’s Risk Manager is whether CFD employment practices are sufficiently reformed to protect the City form large future costs.”
- “More expeditious Shakman-compliant hiring practices for attorneys.”
- 34 states have tort-laws that limit judgements against local governments. The report says Chicago should lobby Springfield to become the 35th.
- While there may be “legal barriers to Chicago doing so,” the City should deduct debts owed to the City from any J&S awarded.
- By obtaining private insurance for “exceptionally large judgements” and establishing a “Judgement Reserve Fund” like NYC and D.C. have done, Chicago could isolate the Corporate Fund “from the risk of very large judgements” and “improve budgeting.”
The report was released Monday, as Police Superintendent Eddie Johnson answered questions from Alderman on the Departments 2020 budget request.
Cappleman said the report “certainly gives me great questions that I can ask in the budget hearings and I’m hoping that my colleagues also look at this too, so that we can do everything we can to fight for all Chicagoans.”
The full report:
