City litigation racks up fees

The news: Chicago is expected to face its largest budget deficit ever with a shortfall of more than $650 million.

Behind the news: Litigation against the city is contributing to Chicago’s financial woes. During the first nine months of 2010, the city has settled more lawsuits filed against its departments and paid heftier fees than it did during the same period in 2009–”despite a new policy that reduced the number of settlements from the Chicago Police Department.

The city departments, including the police department, settled 737 lawsuits in 2010, up 26 cases from 2009, and paid $22 million in payouts, according to data from the Chicago Department of Law.

The increase came at a time when the police department’s aggressive litigation strategy has reduced the number of settlements by 33 percent, from 364 in 2009 to 244 in 2010. Fewer settlements also reduced the payouts by $3.2 million, a 17.7 percent decrease.

Stephan Landsman, a DePaul University law professor and an expert on the civil jury system, said that if the city wants to reduce litigation fees, it should correct any behavior that produces more lawsuits while adopting a more aggressive approach to potential litigants. And, he added, the city should consider implementing a tactic similar to what the insurance industry does to anticipate future claims.

“You just pump right into your instant mediation program and you try to get [cases] resolved as quickly as you can without the apparatus of the court,” he said.

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