A Brand New Start of It

By bringing claims management into the 21st century, Comptroller Alan Hevesi has saved New York City millions.

And in cases where prelitigation settlements are not made, the case file workup provides better litigation support to the city’s law department. “We’ve changed our employees from information gatherers to decision-makers,” says Hevesi.

Those decisions have yielded significant savings so far. In fiscal 2000, the office settled 1,241 sidewalk and school personal injury claims prior to litigation. For school-related claims, the average settlement was $3,383, $18,904 less than the average school claim payout in fiscal 1999. Altogether, the cost savings on school-related settlements were $11.7 million. For sidewalk claims, the average payout was $7,005, $13,588 less than the average payout in fiscal 1999, for a total settlement cost savings of $8.4 million.

Next on the Comptroller’s agenda is expansion of the sidewalk and school claims projects to include claims arising from car accidents as well as the scourge of every big city: potholes. After that, the city will attack city hospital malpractice claims and lawsuits arising from alleged police abuse, which, according to Newman, are “much tougher nuts to crack.” 

Russ Banham is a contributing editor of CFO.

Making a Dent

Major cost-saving initiatives.
Source: City of New York

Category Savings ($ millions)
1999 Prelitigation Settlement Initiatives
Trip-and-fall claims 7.4
Board of Education claims 10.9
Small Pilots
Early hearings 5.7
Board of Education claims 6.6
Other Initiatives
Affirmative claims 2.2
Fraud-reduction program 1.9
Recovery program 16.4
Withdrawn Cases 2.7
Salary and Administration 2.8
Total $56.6

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