Paying Off Careless People

By: Michael Seinberg

The economic and social cost of lawsuits are well-known and much discussed, especially here in New York State, where taxpayers are on the hook for over a billion dollars annually for settlements and judgments. This issue was brought into very sharp focus recently during a contentious city council meeting in Troy, NY.

The problem arose when the council voted 6-2 to settle a lawsuit for $15,000 that a resident had filed against the city. The plaintiff, one Ronald Nicholas, drove a golf cart down a fairway slope on the city’s Frear Park Golf Course in a botched effort to retrieve his ball. In his haste, he managed to flip the cart several times ejecting his passenger, who was unharmed, and injuring himself. According to published reports, Nicholas was trapped inside the cart and tore his left rotator cuff, requiring surgery. His claim was that there were no signs suggesting it was a bad idea to drive a golf cart down a steep hill on a fairway and thus, he wasn’t at fault.

As least one city council member disagreed and voted against the settlement, which was recommended by the city’s corporation council. “He was either drunk and stupid or just stupid and I’m not going to give a man $15,000 for that,” Councilman Kevin McGrath said. One of McGrath’s cohorts on the council, Bob Doherty didn’t agree, suggesting that commenting on Nicholas’ intelligence wasn’t appropriate.

Cases like this play out with alarming frequency in town halls and county legislatures across the state – claims that are technically meritorious (as defined by the law), yet utterly ridiculous. Liability may not be certain, but the settlement amount is carefully calculated to be just a tiny bit less than the city would pay to fight the case. The rational, risk-averse, town manager or city council cuts a check, and the plaintiff and his lawyer split the spoils. “Justice” is served, but are residents better off?

Is this the best way to resolve cases?  Recently, the New York Times reported that New York City is taking a different tack and fighting more of these suits. Along with other large cities, they are now instructing their attorneys to aggressively fight nuisance suits in order to send a message to the plaintiff’s bar. This approach, while costly initially, worked well for Chicago, which saw a dramatic decrease in litigation.

On the extreme opposite end of the spectrum, Yuba City, CA recently paid a “serial plaintiff” $15,000 to stop filing frivolous lawsuits. Will this approach pay off for the taxpayers? Somehow, that seems unlikely.

As taxpayers, we’re all footing the bill for these lawsuits. Troy will undoubtedly be putting warning signs on the golf course to avoid future cart-related issues. Of course, don’t be surprised when someone sues when they run into the warning signs.

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