Illinois "deep pockets" law leaves taxpayers on hook for big settlements, despite minimal fault

By John Pastuovic | Jun 13, 2019

When Chicago Finance Committee members hesitated to make taxpayers the “deep pockets” for yet another lawsuit settlement, this one for $3.7 million, they peeled just another layer back on the expensive exploitation of taxpayers occurring under the old way that the city of Chicago does business.  But, this time, the Illinois General Assembly deserves as much discredit as former Chicago Finance Chair, indicted Alderman Ed Burke.

The exposed scheme currently costing Chicago taxpayers millions: Publicly funded settlements to lawsuits filed against the city of Chicago, where the taxpayers foot a majority of the bill.  In this particular case, in which 13 city aldermen bravely paused (possibly choked) their approval, was a paralyzed plaintiff from a 2014 drunk-driving accident where the driver was reported to have paid only $30,000 and the bar owner paid $1 million, a combined third of what taxpayers were being charged.

“How is that fair,” taxpayers must be asking. But it is the norm in Illinois, where obscure terms like "joint and several liability" and standards that are more than half that of other surrounding states leave the taxpayers holding the bill.

Joint and several liability basically refers to how much a second- or third-party in a lawsuit needs to be at fault to still be liable for 100 percent of the lawsuit verdict or settlement.  In Indiana, Michigan, Kentucky and Tennessee, defendants only pay their “fair share” – or the amount that they are at fault.  In Iowa, Wisconsin, Missouri, Ohio and Minnesota, defendants must be more than 50 percent at fault to be left paying 100 percent.


Pastuovic  

But, as we already know, “fair share” is defined much differently in Illinois.  Our state legislature has intentionally kept the Illinois standard at 25 percent of the fault to require paying 100 percent of the verdict or settlement.  This allows trial lawyers in Illinois to find “deep pockets” defendants like the city of Chicago only slightly at fault in a lawsuit, but force the city to pay millions - in this case, to avoid a trial that might end in a bill worth tens of millions.

In 2017, a civil justice study titled, “Chicago: The City That Settles” detailed that the city spent as much as $85 million in a single year settling lawsuits and was sued on average 300 times per year. A similar 2009 study found that Cook County has spent as much as $69 million in a single year.

Reducing this lawsuit tax on Chicago taxpayers could pay for more than 2,000 more police officers, or equal more than 3,000 new teachers, or fund the Chicago Alternative Policing Strategy program for more than 30 years, or resurface more than 100 miles of Chicago roads, or hire more than 2,000 new public health nurses.  Instead, the result is a boon for the lawyers, just like every other initiative born out of the stinking rot of the old Chicago Finance Committee.

Mayor Lightfoot and Governor Pritzker should take this opportunity to support reasonable reforms to the “deep pockets” liability laws in Illinois to save taxpayers real money. Moving the 25 percent standard to 50 percent - the lowest level in the rest of the Midwest - is both reasonable and a game changer for Illinois taxpayers.

John Pastuovic is president of the Illinois Civil Justice League

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