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San Diego City Taxpayers on the Hook for $27M in ’05, ’06 for Cost of Lawsuits

San Diego taxpayers spent $27 million on legal settlements, awards and outside counsel in 2005 and 2006, according to a report issued by California Citizens Against Lawsuit Abuse.

CALA, a nonprofit watchdog over the courts, found that litigation against the city cost taxpayers $11 million in verdicts and settlements in 2005 and another $3.7 million in outside counsel fees. In 2006, verdicts and settlements reached nearly $5 million and outside counsel cost another $2.7 million.

In 2005, litigation against the county cost $3.8 million for verdicts and settlements and for outside counsel. In 2006, verdicts and settlements cost taxpayers $1.1 million and outside counsel $400,000.

Lorie Zapf, president of CALA’s San Diego chapter, said local government is often the subject of frivolous or abusive lawsuits.

“As a result, it is the taxpayers who pay and the community who suffers,” said Zapf.

She said the $27 million spent on litigation could have been available for other critical services.

“San Diegans don’t pay taxes with the understanding that these monies will be used to defend against unwarranted or unscrupulous lawsuits,” she said. “Our legal system should not be a tool for those who would seek to abuse it for undeserved gain.”

CALA made inquiries to Los Angeles, Orange and Sacramento counties and the cities of Anaheim, Los Angeles and Sacramento. Each was asked for the amount the city or county spent on verdicts, settlements and outside counsel for 2005 and 2006. CALA also examined city and county budget documents.

In 2006, CALA reported $97.7 million in litigation, awards and outside counsel costs from these four cities, including San Diego, and another $79.2 million in 2005. In the four cities, CALA found litigation, awards and outside counsel costs topped $49 million in 2005 and $47 million in 2006.

Zapf added that the totals do not reflect all costs associated with city and county legal cases. The counsel costs reported do not include the time and money that staff attorneys on the public payroll of the cities and counties spend fighting lawsuits.

“The San Diego numbers sound too low to me,” admitted Zapf.

She said there are no doubt legitimate claims against cities and counties, but attempts to request additional information about the settlements and awards were not answered by the city. Zapf said she requested information from the city several weeks ago but has not heard back from the risk management department.

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Voluntary Pledges:

The San Diego County Bar Association released a voluntary pledge late last month to serve as a guideline for fostering diversity among its 10,000 members. The pledge was written to re-focus efforts to promote diversity in hiring, retention and advancement of attorneys within local law firms and corporate legal departments.

“Greater diversity allows for varied perspectives, backgrounds, talents and interests, which ultimately furthers the success of our law firms, corporate legal departments and legal organizations,” said Jill Burkhardt, president of the SDCBA. “It is our hope that each law firm, legal department and legal organization in San Diego supports the diversity pledge by becoming a signatory.”

The SDCBA’s ethnic relations and diversity committee modeled its pledge after those adopted by the Los Angeles County Bar Association and the Association of the Bar of the City of New York.

The pledge recognizes diversity in age, color, disability, ethnicity, gender, gender identity, national origin, race, religion, and sexual orientation.

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Outside Counsel Use Increasing:

Nearly half of attorneys polled in a recent study said their legal departments have increased their use of outside counsel in the past year.

Robert Half Legal, the legal staffing division of Robert Half International, found that 45 percent of legal professionals responding to the survey stated there has been an increase in their use of outside counsel. Robert Half Legal released the results Aug. 1. The survey also found that 39 percent of respondents said there was no change and 12 percent said there was a decrease.

Lawyers were also asked what types of projects were assigned to outside counsel. Litigation support topped the list of reasons corporations recruit outside counsel. In addition, those surveyed said outside help was also sought for compliance and regulatory matters, and patent issues.

“Corporate legal departments are looking to outside counsel as they continue to face resource and staffing constraints,” said Charles Volkert, executive director of Robert Half Legal, in the report. “With the growth of litigation caseloads and even more complex regulatory and compliance requirements, outside support can play a pivotal role in helping busy legal departments and companies meet their business needs.”


Send law news to Michelle Mowad at

mmowad@sdbj.com

. She may also be reached at (858) 277-6359, ext. 3109.

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