Cost of misconduct

Despite increasingly frequent settlements in use of force civil lawsuits, there is still shockingly little publicly available information about who pays those settlements. The prevailing conception, likely drawn from prominent cases in the news, is that individual police officers almost never pay any portion of their settlements. Based on the few sources available, this conception appears to be fairly accurate and consistent with the history of civil lawsuits against law enforcement officers. The questions of who actually pays the settlements and who should pay the settlements are far more difficult to answer.

This article reviews what we know about who pays settlements and touches on who should be paying them. There is some nuance to this question, since at the end of the day, it actually does not make sense for individual officers alone to pay their own settlements. For a start, in the overwhelming majority of civil suits, police departments are not legally required or prohibited from indemnifying the officer (paying his settlement). The department is allowed to decide, and legislating otherwise would be extremely difficult. Secondly, an officer paying his own settlements may punish him financially, but will have no effect on his employment status or the practices of his department. Another party holding the power of financial incentive over the officer and his department can require the department to fire the offending officer and make their policing safer and fairer. Last, an officer alone will not be able to pay the plaintiff the settlement he deserves, and money from the police department, city, or an insurance company, really all traces back to taxpayers. So the question becomes less about who bears the cost, and more about how the cost can be used to incentivize departments to incur fewer lawsuits.

The legal history of suing police officers is somewhat involved (see Legal Crash Course: Policing for details), but suing a police officer effectively became possible in 1961. It first became legal with the passage of the 1871 Civil Rights Act, the relevant section of which is now Title 42 section 1983 of the U.S. code. However, due to court interpretations of the language of section 1983, bringing a civil suit against a police officer did not actually become feasible until 1961 when Supreme Court Case Monroe v Pape allowed for a broader definition of situations in which it was appropriate to sue a law enforcement officer.

Data on how early settlements were paid is practically non-existent, with University of Buffalo Law School dean Louis L Jaffe writing in 1963 (just two years after civil lawsuits against police officers started) “[I]t appears that the indemnity practice is so irregular that its function as a ‘conduit to governmental liability’ is fortuitous at best.” However, according to Jaffe, it seems that even in the first few years of civil suits against police officers, “the action against the officer is, due to indemnity, effectively one against the treasury.”


Though the way in which damages are paid has remained largely the same since the 60s, camera footage and changing public opinion are affecting the frequency and size of settlements, according to Dallas civil-rights lawyer Don Tittle. Tittle says, “up until recently, when it came to civil lawsuits, there were two groups that had a distinct advantage, where you had to knock them out to win. And that was doctors and cops…. But with the advent of video, and the changing perception of society, I don’t think police are held in the same regard.” Former Long Beach and LA city lawyer Robert Shannon shares Tittle’s view, saying that in the ‘70s, the public assumed “the police officer was correct in what he was doing.” Now, he says, “things have changed substantially.” More settlements, larger settlements, and more public interest have brought the budgeting behind damages into the spotlight.

To date, there is only one extensive study into how police departments pay settlements. Obviously more research is necessary to paint a fuller and more accurate picture, but the one existing study (by UCLA law professor Joanna C. Schwartz) is fairly thorough—it looks at 81 departments of all sizes from all over the country.

According to Schwartz’s study, departments’ settlements are typically paid in one of four ways: from the city’s general fund, from the police department’s budget, from a central fund into which the police department pays, or by a private insurer. Interestingly, the actual financial burden borne by the department itself has little correlation to which of the four payment structures it has. Before going forward, it can be helpful to know that cities usually get around 30% of their funds from the state and the remaining 70% comes from property taxes, sales taxes, fees, etc (in some way from residents).

In the first case, settlements are paid directly from the city’s general fund. Settlements have no effect on the police department’s current or future budget and records of the payment are not obviously tied to the police department. This setup creates no financial incentive to departments to lower their risk of civil suits.


In the second case, departments pay settlements from their own budget. This situation breaks down further into two subcategories. In the first, departments are given a certain amount of money to use for settlements. If they do not use it all, it goes back to the general fund. If they go over, they can just ask for more money. While this situation is effectively the same thing as the city just paying from the general fund, it at least provides a clearer record of settlements. In the second subcategory, departments are allotted money for settlements, but they have the power to move money around within their budget. So, if they do not use all of the settlement money to pay damages, they can use it for other things. If they need more money for settlements, they have to cut back somewhere else. This scenario creates some financial incentive to lower the risk of civil suits.

In the third case, police departments pay into a central risk fund managed by the jurisdiction to pay settlements. Some jurisdictions determine how much a department has to pay based on its number of employees, which does not create any incentive to lower the risk of civil suits. More frequently, payments to the central fund are calculated based on past claims, so lower litigation costs lead to lower premiums. That particular setup can put varying amounts of financial pressure on police departments. In some cases, the city or county will give police departments exactly the amount they need to pay into the central risk fund, so there is no cost to the department if its premiums go up. In some places, that pattern does not occur formally, but every possible step is taken to cover increases in premiums without lowering other areas of the law enforcement budget. Similarly to the second case discussed above, there are some jurisdictions in which departments have to cover premium increases from other areas of their budget, which does provide some incentive to lower the risk of civil suits.

In the fourth case, jurisdictions rely on public entity risk pools (PERP) or outside insurance. A PERP is a group of government entities who all pay into a fund to finance a risk, like employee healthcare, for example. Unlike a central risk fund within a single jurisdiction, where the municipality is in control of department budgets and in control of the central risk fund, a PERP includes multiple jurisdictions, so the municipalities which pay into it do not control it. This arrangement makes PERPs more similar to private insurers than to central risk funds. Private insurance for police departments generally works like car insurance, where you pay a premium every month and then the insurer pays for most repairs from a crash. Just like with the other cases, actual financial impact on police departments who buy into a public entity risk pool or have outside insurance varies. In some cities, premiums are paid out of the general fund. In others, premiums are paid by the police departments and can affect other areas of their budgets. In the case of private insurance, external oversight is arguably more influential than financial incentives.

Shwartz found a variety of ways in which public entity risk pools seek to reduce members’ liability. The first manner in which pools reduce risk is by providing resources to all of their members. One pool equips its members with model policies written by a group consisting of police chiefs, a law enforcement specialist, and a defense attorney. Another has both mandatory and voluntary training on law enforcement issues.

The second manner in which private insurers or public entity risk pools reduce risk is by threatening to alter coverage or costs. Sometimes insurers or pools have specific requests, like asking a department to make personnel or policy changes that would reduce liability. Research in this area is limited, but Shwartz found that 36 of 44 counties insured by one pool complied with a jail policy change request. It is likely that the remaining eight jurisdictions were simply unable to meet the pool’s demands. Sometimes, demands are more ambiguous—pools simply notify a jurisdiction of increased claims and require them to alter that trend however they see fit.

The third, and by far the rarest, route risk pools or private insurers can take is revoking coverage. Losing coverage typically results in relatively small departments being disbanded. When that happens, the city or town left without a police department contracts with a nearby department, regional department, or county sheriff to cover their law enforcement needs.

A few things are clear from the existing research into who pays police settlements. First, more research needs to be done to identify what is and is not effective and logistically feasible. Second, it is possible to use settlements as an incentive for police departments to decrease their liability risk, but the practice is currently fairly rare. While there is currently not enough data to argue for one perfect way forward, it is likely that through a combination of private insurance and self-insurance adopting some private insurance practices, civil lawsuits against police officers could have a positive impact on police conduct.

Sources (click to expand)