The Relationship of SCDOT Damage Claims and Lawsuits to Roadway Engineering Safety Issues
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The Relationship of SCDOT Damage Claims and Lawsuits to Roadway Engineering Safety Issues

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    Final report.
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    Tort liability is of concern to public agencies, especially transportation agencies, because money spent defending tort claims and lawsuits and compensating victims is money that is not able to be spent improving the safety of the state highway system. Consequently, it is of importance how state transportation agencies manage risk relating to claims and lawsuits filed against them for crashes on their highway systems. The South Carolina Department of Transportation (SCDOT) processes approximately 1000 such damage claims per year and is engaged in about 100 lawsuits per year. Of the 3000 closed claims analyzed in this project covering the last 3 years, the total payout to settle the 990 or 33% of claims that were paid was $524,706. During the same period of time, SCDOT paid $9,893,507 to resolve 164 or 55% of lawsuits (shown in Figure 1). The payout amounts do not include expenses related to researching, processing and defending against damage claims and lawsuits by SCDOT employees and legal staff. Nor does it include expenses associated with Insurance Reserve Fund employees, private attorneys on contract to represent SCDOT, independent engineering experts and employees from other state agencies. These individuals expend significant effort on each claim and lawsuit, which further detracts from day-to-day management and operation of the statewide transportation infrastructure. It is estimated that SCDOT processing costs $440.30/claim and thus, over $1.3 million have been expended by the SCDOT in labor for the handling of damage claims over the last 3 years – nearly three times the amount spent on payouts. While the SCDOT has been successful keeping claim payouts low, our report recommends several strategies be implemented that would reduce the indirect costs incurred through the handling of the claims. In addition, claim payouts could be further reduced through the implementation of standard procedures across the state that would reduce current handling and decision inconsistencies regarding claims. It is estimated that it costs SCDOT $569,290 for its staff to assist the IRF and its attorneys in handling approximately 300 lawsuits over the same 3 year period, or $1,916.80/lawsuit. This does not include the costs that the IRF incurs from outside counsel, expert witnesses, etc. While the Insurance Reserve Fund manages lawsuits brought against SCDOT, it is in the best interest of the SCDOT to remain involved throughout this process to ensure the most favorable outcome for long-term SCDOT risk management goals.
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