LITIGATION AS A BUDGETARY CONSTRAINT - PROBLEM AREAS AND COSTS

To what extent have litigation costs affected municipal budgets? How often and to what degree does a jurisdiction have to amend its budget due to unanticipated legal costs? What factors and what types of cases have contributed most to rising litigation costs? What functional areas of the budget have been hardest bit? What has been the effect on a jurisdiction's insurance costs and bond ratings? What strategies have local governments adopted to reduce litigation costs? Susan A. MacManus and Patricia A. Turner surveyed attorneys serving as counsels to cities, counties, and special districts and found that litigation costs have indeed escalated significantly in recent years for a variety of reasons. These costs have bad major impacts on local government budget outcomes and processes, thereby forcing local governments to search for legal cost containment mechanisms. They also uncovered a vicious cycle of governments settling cases just to save money, which, in turn, increases the number of cases (often frivolous) filed against a jurisdiction.