Faced with more lawsuits, Winnipeg to allow more settlement payouts without council oversight

Faced with an increasing number of lawsuits, the City of Winnipeg is poised to grant senior officials the power to settle larger legal claims made by or against the city.

In a new report to city council's executive policy committee, Winnipeg chief financial officer Catherine Kloepfer recommends tripling the dollar amount of legal settlements that can be approved without a council vote.

Kloepfer also recommends increasing the threshold for settlements that can be settled by the city solicitor, the chief financial officer or the chief administrator without requiring any form of council oversight.

"Increasing the settlement authority would reduce internal red tape and assist in expediting claims settlements," Kloepfer wrote in the report.

Changing the threshold, she said, "would in turn reduce overall costs to the city, provide for quicker closure of claims and release by claimants, and reduce the time that senior-level management is inefficiently tied up with briefing notes and approvals related to smaller claims."

Kloepfer advises the creation of a bylaw that would triple the threshold for settlements that require council approval from $250,000 to $750,000. Executive policy committee alone would be able to approve claims up to $750,000.

The bylaw would also quintuple the maximum dollar amount for claims that can be settled by the chief administrative officer from $100,000 to $500,000.

The maximum amount for settlements that can be approved by the chief financial officer would rise 2½ times, from $100,000 to $250,000. The city solicitor would be allowed to settle claims up to $100,000 in size, a tenfold increase from the current threshold of $10,000.

Kloepfer said the city was advised by the city auditor to increase the settlement thresholds in 2011. That did not happen, leaving Winnipeg with some of the lowest thresholds among larger Canadian cities, she said.

"The low settlement authority given to the public service in Winnipeg is out of step with that of other comparable Canadian cities," Kloepfer wrote, adding the burden on administrators has only increased over the past decade.

"Changes and trends in litigation and awards, as well as the higher frequency of claims and higher settlements due to easier access to media communication only underline the need for high claims settlement levels."

No city official was made available to speak about the proposed changes.

David Hill, a Winnipeg lawyer who won a $5-million lawsuit against the city on behalf of a property developer in 2023, said in an interview that anything that would result in more settlements would be beneficial.

In recent years, city council has approved major settlements that included a $21.5-million-to-$28-million payout from most of the defendants in its lawsuit over the construction of Winnipeg's police headquarters. 

Council also rejected a $1-million settlement with a towing company over what the city alleged were fraudulent courtesy tows.