Litigation Drains City Budgets

Self‑insured cities are paying rising lawsuit bills driven by broadened liability statutes, poor infrastructure maintenance, and a habit of settling rather than trying cases. California’s 2018 single‑incident harassment law helped trigger internal‑employee claims (LAPD paid $68.5 million in five years), while neglected sidewalks and streetlights generate multimillion‑dollar injury payouts. New York and Chicago show the same pattern, with payouts exceeding budgets and crowding out core services. — If litigation incentives and governance failures quietly dominate urban finances, reform must target liability rules, maintenance backlogs, and settlement policies to restore fiscal capacity.