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Article written by Margaret Finlay, President, California Joint Powers Insurance Authority and Chair, Coalition to Protect Community Services
If you follow the news, you are aware that civil jury verdicts against California public entities have been reaching record levels. Large multi-million-dollar awards that once seemed extraordinary are increasingly common, and the trend shows no sign of slowing. What you may not know is how damaging this situation has become for local government agencies and how it hinders their ability to provide local services.
Under California’s joint and several liability rule, a local government agency found just 1% at fault can be forced to pay 100% of a plaintiff’s economic damages—when the other responsible co-defendants can’t pay. Every dollar consumed by disproportionate liability judgments and inflated settlements is a dollar unavailable for community services that residents rely on: police and fire protection, roads and infrastructure maintenance, parks, libraries, senior services and youth sports programs.
Establishing proportionate liability means that local governments named in lawsuits would be required to pay only their actual share of fault, as determined by the court. Not only is this fairer and more equitable, but it would help to solve a rapidly escalating problem—a fiscal crisis of runaway liability costs that severely limits taxpayer funding for much needed public services.
Here are six key reasons why this reform is both necessary and urgent:
- Democratic Accountability Over Judicial Taxation
Elected officials, not juries or plaintiffs’ lawyers, should decide how limited public tax dollars are prioritized and spent. When a jury imposes a multi-million-dollar judgment, it effectively raises taxes and reallocates resources without any accountability to voters. Local governments already operate under intense democratic oversight through elections, public hearings, and transparent budgeting. Allowing plaintiffs to override those democratic decisions through litigation undermines representative government and the public’s right to set its own priorities.
- Underfunding Not Indifference
Most dangerous conditions on public roads, sidewalks, and in public spaces stem not from willful indifference but from chronic underfunding and limited staffing. When local agencies are forced to pay multi-million-dollar settlements and judgments far exceeding their actual share of fault, those dollars reduce funding for maintenance, road repairs, and public safety programs. This process does not improve safety — it actually depletes the very resources needed to prevent future injuries. Proportionate liability would help break this self-defeating cycle.
- Private Market Logic Does Not Apply to Public Entities
Private corporations can raise prices, cut product lines, pass costs on to consumers, or declare bankruptcy. Local governments, on the other hand, have none of these options to deal with rising costs. They are legally obligated to maintain roads, operate parks, and provide essential services with constrained budgets funded by taxpayers. Applying the same unlimited liability rules designed for profit-driven businesses to local government agencies, creates a fundamental mismatch that requires reform.
- Deep Pocket Targeting Under Joint and Several Liability
Each party responsible for contributing to an injury should bear liability in proportion to their actual share of fault—not based on which defendant happens to have the deepest pocket. Local government agencies should not be forced to subsidize damages caused by drunk drivers, underinsured motorists, careless contractors, or criminal actors who bear primary responsibility. An equitable system ensures that responsibility follows conduct, and that no single party is unfairly targeted simply because they have the ability to pay.
- Law of Diminishing Returns in Public Property Maintenance
Most California local governments operate within significant budget constraints. After reasonable steps have been taken to maintain infrastructure, additional millions spent on marginal claims produce diminishing safety returns. The current system pretends that governments have infinite resources and can guarantee perfect safety — an economic and practical impossibility. Proportionate liability simply acknowledges reality: we must balance ambitious safety goals against what taxpayers can realistically afford.
- Broad Benefits Over Concentrated Windfalls
Public funds are meant to serve the entire community. When a jury returns a large verdict or a large settlement is reached prior to trial, taxpayer funds are redirected away from the public at large, and concentrated in the hands of one plaintiff, or a small group of individuals and their attorneys. Funds that could have maintained a park, staffed a library, or repaired a road for thousands of residents, instead flow to a small group of people. Joint and several liability not only strains local government budgets, but diverts scarce resources intended to provide broad public benefits into the hands of a few, defeating the purpose for which the tax dollars were originally collected.
California’s local governments are not asking for blanket immunity. We are merely asking for sound public policy — proportionate liability that is fair to injured parties and provides them with meaningful compensation, while also ensuring that public funds are protected and used for broad public benefit.
The Coalition to Protect Community Services is actively working with the Legislature and the Administration to advance targeted and practical reforms. California residents deserve safe communities and solvent local governments that can deliver the services they expect and deserve.
Margaret Finlay has served on the Duarte City Council for 34 years, including seven terms as Mayor. A dedicated public servant and community advocate, she’s expanded senior transportation services and helped reduce local crime rates. Her leadership extends beyond Duarte, with roles including President of the California Contract Cities Association, President of the California Joint Powers Insurance Authority, and Board Member of the Southern California Association of Governments. Margaret holds degrees from St. Mary’s College and Cal State Long Beach, completed doctoral work at Claremont Graduate University, and attended Harvard’s Senior Executives in State and Local Government Program. An international speaker and adjunct professor, Finlay has also been recognized for her work with the San Gabriel Valley Regional Housing Trust, helping create housing opportunities for underserved populations.