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Municipal Liability:. A Discussion of Liability Exposures During Difficult Economic Times. The World We Live In. Local aid cuts hit staffing, services – Boston Globe 7/5/10.

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Municipal liability

Municipal Liability:

A Discussion of Liability Exposures During Difficult Economic Times


The world we live in
The World We Live In

Local aid cuts hit staffing, services – Boston Globe 7/5/10

“An analysis of state budget cuts released Friday says area towns are feeling the effects of reductions that have curtailed most of the services the government provides, including education, health care, public safety, environmental protection and safety net programs.”

“Statewide, unrestricted local aid is down by 34 percent” – Metrowest Daily News, July 31, 2010”

“Cities and towns have been hammered by the deepest local aid cuts in state history, causing cutbacks in vital community services from public safety to education, forcing thousands of layoffs of teachers, police officers, firefighters, librarians and other key workers, and increasing local reliance on the regressive property tax,” Geoffrey Beckwith, Executive Director, MMA, August 8, 2010


The continuing challenge
The Continuing Challenge

Municipalities will continue to have to do more, with less

The demand and expectation for public services will NOT decrease during tough economic times.

Financial pressure on individuals will cause greater efforts to transfer to, or recover expense from, third parties - including municipalities


Risk management
Risk Management

  • Understanding sources of risk and managing their severity are critical to effective financial management

In what ways can a municipal entity be at risk for claims or litigation?


Common areas of litigation
Common Areas of Litigation

General Negligence

“Unique” Negligence

(streets and roads, public land)

Employment Related


Municipal liability

General Negligence – Chapter 258

  • creates the mechanism by which a municipality can be held responsible for damages due to injury or loss of property or personal injury or death.

  • specifies that an individual cannot be held liable

  • creates a $100,000 cap of monetary awards

  • The statute contains several unique defenses which a municipality can raise in order to claim immunity from liability.


Municipal liability

Chapter 258 - Section 10 – Key defenses

(b) any claim based upon the exercise or performance or the failure to exercise or perform a discretionary function or duty on the part of a public employer or public employee, acting within the scope of his office or employment, whether or not the discretion involved is abused;

(d) any claim arising in respect of the assessment or collection of any tax, or the lawful detention of any goods or merchandise by any law enforcement officer;


Chapter 258 section 10 key defenses
Chapter 258 - Section 10 – Key defenses

  • (e) any claim based upon the issuance, denial, suspension or revocation or failure or refusal to issue, deny, suspend or revoke any permit, license, certificate, approval, order or similar authorization;

  • j) any claim based on an act or failure to act to prevent or diminish the harmful consequences of a condition or situation, including the violent or tortuous conduct of a third person, which is not originally caused by the public employer or any other person acting on behalf of the public employer. This exclusion shall not apply to:


Municipal liability

The Major Defenses - “Discretionary Function” and “10(j)”

Discretionary Function

The so-called “Stoller Test”

Based on “Stoller v Lowell” case in which it was first applied

  • When examining a municipal decision under the “Stoller test:”

  • did the governmental agent have any discretion at all as to what course of conduct to follow?

  • 2) does the decision which was made rise to the level of public policy or planning?


Discretionary function
Discretionary Function “10(j)”

  • (The immunity only intends to extend to decisions of public policy or planning)

  • If the decision in question is the result of discretion used in setting public policy, the municipality enjoys complete immunity. If the decision fails to pass the “Stoller test,” a claim for negligence against the municipality may be presented.


Key discretionary cases
Key Discretionary Cases “10(j)”

  • Barrett v Lynn

  • Greenwood v Easton

  • Street Light Cases


The 10j defense
“The 10J Defense” “10(j)”

  • In Summary, if the municipal defendant was not the original cause of the action which lead to injury

The municipal defendant is immune from liability


Important 10j case
Important 10J Case “10(j)”

  • Brum v Dartmouth

Still the controlling case for 10J filings


Municipal liability

“Unique” Negligence “10(j)”

MGL Chapter 21 Section 17C,

The “Recreational Use” statute

If land or facilities are used for “recreation”

AND there is no “fee” charged

The landowner is immune from liability


Recreational use statute
Recreational Use Statute “10(j)”

Relevant cases:

Ali v Boston

Whooley v Commonwealth


Unique negligence
“Unique” Negligence “10(j)”

Streets and Roads, Public Ways, Public Parks, Public Land all create areas of exposure which are unique to municipalities.

MGL Chapter 84


Chapter 84
Chapter 84 “10(j)”

  • $5,000 cap on damages

  • Does NOT apply to fatal losses

  • Claimant MUST give proper notice in 30 days

  • Town MUST have had prior notice of defect


Employment compensation claims
Employment Compensation Claims “10(j)”

Drivers for Workers Compensation and Lost Time claims


What drives the increase
What Drives the Increase? “10(j)”

  • Increase in claims reported upon announcement

    • Non-specific ailments; no defined injury

      • Soft tissue

      • Musculoskeletal Disorders

    • Conversion of medical treatment previously handled as non-occupational

    • Respiratory and hearing loss claims


Worker compensation
Worker Compensation “10(j)”

  • Rationale

    • Aging workers have symptoms not specifically tied to event

      • Had continued to work with them in past

    • No deductible or co-pay for WC

      • Financially attractive

    • Higher benefits under WC than STD/LTD or unemployment

    • Potential lump sum settlement


What drives the increase1
What Drives the Increase? “10(j)”

  • Reopening of prior closed claims

    • Similar to newly reported claims

    • Employers/insurers rarely deny re-opening

  • Higher reserves for like claims

    • Return to work policies no longer in effect

    • Reserves are adjusted for probable outcomes without RTW in sight

    • Reserves increase as settlements may be less appealing


What drives the increase2
What Drives the Increase? “10(j)”

  • Claims filed after layoff or facility closure

    • Trends:

      • Following announcement

      • Final workday approaches

      • Upon termination of non-occupational benefits

  • Lack of available jobs

  • Lack of ongoing employer presence


What can employers do
What can employers do? “10(j)”

  • Establish comprehensive strategy

  • Examine claim history

  • Evaluate management staff

  • Enforce safety practices

  • Report claims with details timely

  • Document job exposures

  • Communicate often and clearly

    • Provide job assistance

    • Benefits to be paid or continued

    • Healthcare


Strategy panel
Strategy Panel “10(j)”

  • Human Resources

  • WC Attorney

  • Claim Service Provider

    • WC Adjuster

    • Nurse Case Manager

    • Senior Management

  • Employment counsel

    • Know the statutes

  • Safety Manager

  • Operations Manager

  • Medical Provider Liaison


Claim history
Claim History “10(j)”

  • Do we have employees with a history of multiple claims?

  • Do we have claims that closed without full resolution of the case?

  • Do we have employees with “permanent restrictions”?

  • Do we have employees who are currently on modified duty?

    Each of these situations require a specific strategy

    • Panel review

    • Use of external experts

    • Coordination of severance and WC settlement

    • Financial impact



Municipal liability1

Municipal Liability: “10(j)”

A Discussion of Liability Exposures During Difficult Economic Times