OLYMPIA, WA – Washington spent roughly $500 million last year in settlements and jury verdicts in cases involving government misconduct.
The skyrocketing lawsuit payouts are hamstringing state and local government budgets.
Lawmakers pitched one way of dealing with the issue Tuesday. They want to make these civil claims subject to arbitration to reduce costs. For one, legal fees often stack up in these cases, which can end with jury verdicts that reach tens of millions of dollars in damages.
Legislators also face a budget question, as the state agency that handles these payments is asking for hundreds of millions of dollars to address the rising costs. Legislators punted on dealing with the budget concerns last year.
“What has been happening to the budgets of our school districts, our cities, our counties and the state are untenable,” said state Sen. Manka Dhingra, D-Redmond, lead sponsor of the bill requiring arbitration. “We are simply at the point in time that we cannot continue to do fiscal management and responsibility without addressing tort liability.”
Dhingra’s bill, if passed into law, won’t be a silver bullet. It’s unclear how much money it would save, but it likely wouldn’t make a huge dent in the surging payouts.
Lawyers who bring these claims are opposed to the bill. They say the state doesn’t have the infrastructure to support arbitration in all these cases and that it would be an obstacle to justice for people harmed by the government.
The state is self-insured, meaning the legal payouts come from agency funding that would otherwise go toward services. Legislation and court rulings have expanded liability in recent years, exposing the state to more lawsuits.
Payments have continued apace after last year’s record. In the first half of the current fiscal year, which began July 1, the state paid nearly $237 million, according to the Department of Enterprise Services.
The costs represent accountability for the state as it grapples with decades of alleged misconduct, from wrongful terminations to deaths in prison and mishandled child welfare cases. The deluge of lawsuits in recent years shows no signs of slowing down.
The state has also paid roughly $36 million in legal expenses, $13 million of which is going to the state attorney general’s office, which represents state agencies. The rest is going to outside firms that provided contracted legal services to the state.
Lawyers representing people who sue the government can also collect court-ordered legal fees when the state loses a case.
Last year, the state Department of Enterprise Services warned that without a more permanent fix to funding the state’s self-insurance fund, its deficit could grow to more than $1.3 billion by mid-2027. By mid-2029, the gap could be anywhere from $2 billion to $3.2 billion.
Gov. Bob Ferguson’s budget plan, released last month, puts $955 million toward addressing the problem. He said last month that on any shortlist of budget challenges the state is facing, tort liability would be there.
The legislation
Senate Bill 6239 looks to deal with the growing liability through civil arbitration for tort claims against the state and local government entities.
This means a neutral third-party could make a decision on how much plaintiffs win in their cases outside of court. The cases could still go to a traditional jury trial.
The legislation wouldn’t limit monetary damages or attorney fees that could be ordered, but would provide an option to resolve cases early, said Dhingra, who chairs the Senate Law and Justice Committee. The two sides would likely split the cost of the arbitration.
The bill is scheduled for a committee vote Thursday. If passed by the Senate and House and signed by Ferguson, it would take effect immediately.
Currently, arbitration is required in civil lawsuits in county superior courts claiming less than $15,000 in damages, or if a judge approves, up to $100,000. Under the measure, all claims against governments would be subject to arbitration.
The issue looms over not just the state but its local governments, which are similarly dealing with rising liability.
Cities, counties and school districts are in lockstep in support of the legislation. Pierce County has received 140 claims seeking a total of over $320 million related to alleged abuse in the 20th century at the county’s juvenile detention center, County Executive Ryan Mello told lawmakers on Tuesday. So far, the county has paid out more than $9 million.
The size of the claims threatens to undermine the county’s funding for core services like elections and criminal justice, Mello said.
On the other side of the debate, Gabriel Galanda, an influential Indigenous rights attorney in Seattle, called the arbitration bill an “assault on civil rights protection.”
“State juries do justice,” Galanda told senators. “State juries bring daylight to situations the government tries to hide from daylight. The fact is, facts are learned in front of juries that cannot be learned in any other process.”
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