WA lawmakers face another $1B decision on lawsuit payouts

Washington needs to spend another $1.3 billion over the next two years to address skyrocketing lawsuit payouts due to state government misconduct, according to a recently filed budget request from a state agency.

This comes after the Legislature this year already put in over $1 billion to shore up the state’s liability account. 

But claims that lead to costly settlements or jury verdicts, not to mention attorney fees, continue to stream in. Often these are attempts to hold the state to account for sometimes decades-old misconduct. Issues in the cases range from government negligence that led to childhood sexual abuse, wrongful termination and deaths in prison.

As of the end of June, the state’s outstanding liability in these cases was estimated at $4.4 billion, according to an actuarial analysis. And the state liability account is still set to be $345 million in the red by the end of June 2027, despite this year’s huge infusion.

A new state panel is seeking solutions to the growing issue, which also plagues local governments, like cities, counties and school districts. But advocates for survivors who bring these lawsuits feel much of the committee’s ideas will restrict access to justice.

“It’s been concerning to see almost an exclusive focus on the budget as a mathematical problem, and not the real human suffering underlying all of these issues,” said Kelli Carson, government affairs director for the Washington State Association for Justice, a group of trial lawyers.

“The stakes could not be higher for these survivors and the lives that they have to live after suffering the kind of abuse that they suffered,” Carson added. “They did not create a budget problem, and they shouldn’t have their rights taken away to solve a problem.”

These growing costs come as the state faces another year with a budget shortfall that lawmakers will need to deal with by reducing spending or raising more revenue through taxes and fees. Gov. Bob Ferguson has said he wouldn’t propose tax increases and would lean on cuts to make ends meet. 

This past fiscal year, the state spent over $537 million resolving these claims, an all-time high. Just five years earlier, the toll was $100 million. 

In the most recent fiscal year, which ran from July 1, 2025, to June 30, 2026, Washington spent another $90 million for the attorney general’s office and outside defense attorneys to handle litigation and for related insurance. 

At the same time, claims continue to rise. 

Nearly 5,500 came in this past year, up from 4,233 the year before. The jump in recent years followed court decisions and legislation that expanded liability. In its request to Ferguson’s budget office, the Department of Enterprise Services, which manages the account that pays out the claims, said “there is no indication that this volume will decrease soon.”

Office of Financial Management spokesperson Hayden Mackley said the Department of Enterprise Services request wasn’t unexpected.

“Costs have only increased over the past year,” Mackley added in an email.

Most claims target the state Department of Children, Youth and Families, which runs Washington’s child welfare and juvenile detention systems.

The actuarial analysis estimates payouts during the next two-year budget cycle, from mid-2027 to mid-2029, will total $1.3 billion. The base funding for the liability account is $360 million, leaving a $940 million gap. This makes up most of the Department of Enterprise Services’ funding request, with the rest going toward addressing next year’s deficit, for a total of $1.275 billion.

Lawmakers this year proposed requiring arbitration for civil cases against governments, leaving the outcome to a neutral third-party in hopes of speeding up cases. But the bill stalled in the face of staunch opposition from trial lawyers who bring these cases.   

Instead, the Legislature established a new committee to recommend reforms to the legal system in hopes of keeping costs down. The group, which the state is spending $50,000 on, is tasked with delivering a report Nov. 1. Its next meeting is Sept. 23. The panel’s membership includes personal injury attorneys, victim advocates and representatives of state and local government.

Advocates for survivors who bring lawsuits against the state have been frustrated with the committee’s work, and believe its balance is tilted far in the direction of government voices who want to limit claims and awards to plaintiffs.

“The committee is very structurally set up to prioritize the concerns of state agencies and governmental entities,” said Alexander Dietz, a committee member and partner at personal injury law firm Pfau Cochran Vertetis Amala. “Survivor advocates are heavily outnumbered. There are no survivors on the committee.”

Dietz has some ideas to address the problem, without limiting damages that can be awarded at trial or capping attorney fees. 

One would increase early resolution options to end cases quicker and reduce costs. Another would ban attorneys from directly soliciting clients, like the stereotypical “ambulance chaser.” And he’d also like to restrict companies that aggregate leads to sell to law firms that bring cases.

But Dietz said he believes government representatives on the committee “do not have any intention of collaborating with survivor advocates on this committee to try and reach jointly agreeable solutions, and they’re really pushing for changes to the tort system that would reduce access to counsel for childhood abuse survivors.”

“That’s what the goal appears to be,” he added.

The Department of Enterprise Services is also seeking about $400,000 per year for additional staff to handle the rising risk management caseload.

Ferguson will propose his two-year spending plan in December. This’ll serve as a template for the Legislature when lawmakers return to Olympia in January, and plan to pass the budget by the end of April.