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10 Urb. St. & Loc. L. Newsl. 1 (1986-1987)

handle is hein.journals/stlolane25 and id is 1 raw text is: Section of Urban, State and Local Government Law Vol. 10, No. I, Fall 1986 URBAN, STATE d OCAL LAW N E W S L E T ER Risk Management H: Legislative Relief for Municipalities By Stephen Rubin and Stephen ahapp- Editor's note: Risk Management is a hot topic in local government law circles in light of ever-expanding liability of municipalities and their officers. This is the second in a series of articles which identify and discuss distinct elements of risk management. Your ideas for topics and authors will be much appreciated. During the past two years, sweeping changes in tort liability principles and insurance underwriting prac- tices have converged to create an explosion of tort litigation at a time of crisis in liability insurance availability and affordability. Municipalities were among the first to experience the effects of these changes and continue to grapple with issues that in some cases are unique to public institutions. Local governments must provide services, such as police and fire protection, which are high-risk undertakings, must treat all citizens equally, and cannot escape liability judgments by the expedient of dissolution or bank- ruptcy. These problems are well-known. Local govern- ments are finding themselves sued more often, for more damages, under more theories of liability, without an adequate or affordable means to insure against cata- strophic claims or even to pay the high fees and other transaction costs of the tort system. No longer bound by traditional conventions of fault and causation, plaintiffs find the municipality's proverbial deep pocket an inducement to add local government to the roster of defendants if public facilities or services can in any way be implicated. The expanded availability of punitive damages for non-economic injury and In this the doctrine of joint and Scholar's Column ..... several liability may then Message from the Cha combine to expose the gov- Labyrinthine Ways... ernmental entity to the full weight of judgment, even Taxation of Bonds?.. when its contribution to Annual Meeting High the plaintiff's injury is Section News ......... slight. ABA Dues Waiver ... Few public entities have escaped the impact of this formula. In some instances, enormous jury verdicts or settlements threaten to over- whelm governmental finances. Moreover, state and local governments run a double gauntlet of state tort liability and federal civil rights liability, increasing fur- ther their exposure to costly litigation and large dam- age awards. The liability insurance industry, weakened by its own past underwriting practices, has been of little help. Municipalities and other political entities report that it continues to be difficult to obtain liability insurance at an affordable price and, in some instances, at any price. Local governments complain that although lia- bility insurance is once again becoming available, it costs significantly more for substantially less coverage. The magnitude of the problem confronting local government is disclosed in Municipal Liability Con- cerns: A 145 City Survey, released by the United States Conference of Mayors in July, 1986. Service cutbacks, contracting out services, and budgetary problems are the most frequently reported consequences of increased municipal liability exposure. Further service reduc- tions are anticipated by a majority of the Survey cities if the current situation does not improve. Several cities reported that tax increases issue and the resignation of pub- .2 lic officials have also been irman........ 3 by-products of the in- creased cost or unavailabil- ity of liability insurance. ................... 7 Eighteen cities in the lights ........ 11 Conference of Mayors .................. 16 Survey report that they are 21 bare and are operating (continued on page 17) Vol. 10, No. 1, Fall 1986 Section of Urban, State and Local Government Law

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