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Agenda Item
ASR
Control 25-000189 |
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MEETING
DATE: |
04/08/25 |
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legal entity taking action: |
Board
of Supervisors |
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board of supervisors district(s): |
All
Districts |
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SUBMITTING Agency/Department: |
County
Executive Office (Approved) |
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Department contact person(s): |
Michael
Alio (714) 285-5510 |
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Gary
Stopforth (714) 285-5515 |
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Subject: Approve
Special Project Legal Fees for Liability/Property Defense Panel
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ceo CONCUR |
County Counsel Review |
Clerk of the
Board |
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Concur |
No Legal Objection |
Discussion |
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3 Votes Board Majority |
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Budgeted: Yes |
Current
Year Cost: See Financial
Impact Section |
Annual
Cost: See Financial Impact Section |
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Staffing
Impact:
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No |
#
of Positions: |
Sole
Source: N/A |
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Current Fiscal Year Revenue: N/A
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Prior Board Action: 8/9/2022 #27 |
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RECOMMENDED
ACTION(S):
Approval of a new fee schedule for
special project legal fees assigned to current liability/property defense panel
firms effective April 8, 2025.
SUMMARY:
Approval of an
additional category of hourly rates for legal fees not to exceed $500 is
required to retain the expertise of the current defense panel firms for use in
County special projects. Specifically,
projects that arise from litigation exposure or systemic reviews that exceed
the current staffing capability of the Office of Independent Review related to
policies, procedures, and practices of various County departments.
BACKGROUND
INFORMATION:
The
Liability/Property Defense Panel (Panel) was established by the Board of
Supervisors (Board), so specialized defense counsel would be available to
protect the County's interests in the litigation process. The Panel consists of
private law firms that are selected through the Request for Proposals (RFP)
process. The current Panel was approved
by the Board on August 9, 2022, for a five-year term through August 8,
2027. CEO/Risk Management envisions a
detailed, focused review of departments by Panel counsel with oversight by the
Office of Independent Review (OIR) where opportunities for improvement may
arise from litigation discovery, systemic reviews, and judgments.
In particular, the
first review would involve the OIR overseeing a systemic review of the Social
Services Agency (SSA). The review would
focus on documentation and supervision of child welfare referrals and cases,
starting from SSA’s receipt of the initial call to their child abuse hotline
through emergency response services who investigate suspected abuse or
neglect. This systemic review was
requested due to an increase in government claims filed with the County, the
risks associated with these types of incidents, as well as the effect on County
insurance. Conducting a systemic review
will allow the County to ensure that it is following appropriate policies and
procedures, thereby reducing the risks associated with child welfare referrals
and potentially decreasing the number of future claims and lawsuits.
The County
currently defends approximately 255 open litigated cases. The following table shows the number of new
lawsuits each fiscal year and the fees charged to defend the new litigated
cases each year.
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Fiscal Year |
# of Lawsuits |
Legal Fees |
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2019-2020 |
93 |
$5,844,470 |
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2020-2021 |
140 |
$8,233,826 |
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2021-2022 |
116 |
$5,016,201 |
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2022-2023 |
129 |
$4,521,869 |
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2023-2024 |
136 |
$2,373,725 |
The current rates
have been in place with no revisions since 2022.
In 2019 CEO/Risk
Management was audited by CPS, an independent auditing firm. CPS stated, "The liability program is a
well-run and well-managed operation."
CEO/Risk Management was audited as part of an Orange County Interim
Fiscal Year 2024 Audit with external auditors, Eide Baily, in April 2024.
There are
currently four separate fee schedules in place for Panel counsel, in effect
since August 2022. It is the
recommendation of CEO/Risk Management that the County continue the current
practice of paying defense counsel at different rates based on the level of
experience and the types of litigation/legal work involved. CEO/Risk Management also recommends the
creation of a new fee schedule for special projects to recognize the expertise
needed for these cases using current Panel counsel.
At this time,
CEO/Risk Management is requesting the Board approve special project rates up to
$500 an hour. This amount was derived
from a cost request to panel counsel on special projects. The $500 an hour is the maximum rate for
special projects, but if certain projects can be done at a lower rate, staff
will attempt to do so.
FINANCIAL IMPACT:
Defense counsel
costs for the special projects are estimated to cost no more than $500,000 per
year and are included in the FY 2024-2025 Property & Casualty Risk Internal
Service Fund (294) budget and will be included in the budgeting process for future
years. Staff anticipates increased
litigation costs with the current legal environment and Airport Fire exposure.
STAFFING IMPACT:
N/A
ATTACHMENT(S):
Attachment A - Special Projects
Rate