Effort Launched to Reduce Costs of Liability Suits : Government: City attorney calls for reforms to curb jury awards, which cost Los Angeles $42.5 million last fiscal year.

After being shot in the face by a police officer in an abandoned apartment house, James Boulware sued the city of Los Angeles and collected $577,000.

When no signs were posted to warn Rudy Ramirez that a city street had ended, and he crashed his car, he sued and won $151,000.

After Ana Medina walked across a Hollywood street that lacked crosswalk markings, was struck by a car and left a paraplegic, she sued and got $1.6 million.

These are but three examples of liability costs that reached a record $42.5 million in the last fiscal year, which ended June 30, said City Atty. James K. Hahn. The figure will be even higher for this fiscal year, he predicted.

“Something has to be done,” Hahn said Thursday as he unveiled a new effort to reduce risks and thereby reduce claims. “There’s no magic money tree at City Hall. Every time there is a liability payout, the money comes from all of us.”

Hahn called for city departments to develop risk management plans to help avoid on-the-job injuries and lawsuits, state legislative reform to limit the amount of damages municipalities have to pay, and workers’ compensation reform to stem the spiraling costs.

In addition to costs from liability suits, compensation for workers’ injuries reached $83.8 million in the last fiscal year, up from $32.6 million a decade ago. “Workers’ compensation reform is not only needed by businesses. It’s needed by governments themselves,” Hahn said, noting that such city costs are rising about 14% annually.

Costs stemming from claims, settlements and jury verdicts, which where $11.4 million in 1982-83, had jumped to $27.7 million by 1990-91.

The increases have been caused by a combination of factors: higher jury awards and faster Los Angeles Superior Court procedures instituted over the past three years, so cases go to trial more quickly. The city is currently defending itself against 2,700 cases.

Among all city departments, the police had the largest share of liability judgments--$20.2 million, or 47.6% of the total. That figure only includes money actually paid so far, such as the $5.6 million awarded a former Coliseum groundskeeper who was wounded by an off-duty police officer and left a paraplegic.

It does not include the $9.2 million awarded by a jury last July to a teen-age girl molested by a Los Angeles police officer at her home. The city attorney is appealing that verdict. Nor does it include what the city may pay Rodney G. King in damages for his March, 1991, beating by police officers.

The Department of Transportation had the second highest share of the liability judgments, with $7.3 million. The bulk came from a $4-million judgment awarded a former Los Angeles taxicab company, Golden State Transit. The case involved a labor law violation.

To help resolve the liability problem, Hahn has increased the number of attorneys assigned to the civil liability section from 39 to 46, reducing the caseload. He said he also plans to install a new computer system next year to track cases.

And attorneys are going to communicate more with city officials, Hahn said. “As the city’s lawyers we’ve got to do more than just represent them in court. We’re going to be more active with general managers, advising them what kind of activities minimize damage to the city.”

At the Department of Transportation, two staffers help research claims filed against the department and monitor possibly unsafe conditions.

“We do a lot of risk management,” said David Royer, a principal engineer. “The problem is (that) to eliminate most of the risk, you need personnel for inspection.”

Cmdr. David Gascon, a spokesman for the LAPD, said the department is always concerned about risk factors. “We try to make sure we do the best job possible in terms of training, supervision and management,” Gascon said.

Managers should be more “aware, sensitive and accountable,” Hahn added, suggesting that departments and employees who cause lawsuits should be penalized. “Right now there’s no penalty for a verdict against them because it’s not (taken from) their budget.

“The system does not provide ways to hold individual employees accountable when they cost the city bundles of money. If we’re not going to fire that employee, we have to retrain or reassign that employee.”

City Councilman Zev Yaroslavsky, who heads the City Council’s Budget and Finance Committee, said he agrees that judgments are too high and that employees are not held accountable enough. “The way you minimize those mistakes is by having the message clearly sent out from the top that if you make a mistake you’re likely to pay for it,” he said. “The message we’ve sent out from the city is that if you make a mistake you’re likely to get away scot-free.”

City Liability Payouts

The city of Los Angeles paid out $42.5 million to settle legal claims, settlements and judgments in fiscal 1991-92. That was a jump of 54% from the previous year. Here is a breakdown of costs for city departments. Police: $20.2 (47.6%) City Attorney: $1.3 (3.1%) Recreation and Parks: $4.8 (11.3%) Fire: $0.6 (1.4%) Transportation: $7.3 (17.1%) Sanitation: $2.1: (4.9%) Street Maintenance: $4.8: (11.4%) Other: $1.4: (3.3%) Total Payouts: $42,451,170.87

Source: Los Angeles City Attorney’s Office