When a police officer is accused of excessive force, wrongful arrest, fabrication of evidence or another serious civil-rights violation, the eventual headline can sound almost backwards:
“City to pay $10 million.”
The officer allegedly committed the misconduct. The victim sued. Yet the officer usually does not write the check.
The taxpayers do.
That is not an occasional quirk of the system. It is how American police-liability financing generally works.
A landmark nationwide study of police indemnification found that governments paid approximately 99.98% of the money recovered by plaintiffs in civil-rights lawsuits against law-enforcement officers during the period studied. Individual officers personally contributed only a tiny fraction.
The reason is a combination of employment law, government indemnification policies, municipal liability rules and practical financial reality. Police officers exercise government authority while working for public agencies. When litigation arises from that work, cities, counties, insurers and public risk funds generally defend the officers and absorb resulting compensatory settlements or judgments.
But that answer creates a more important question:
If taxpayers are absorbing billions of dollars in alleged police-misconduct costs, where exactly is that money coming from—and why does the United States still not have a reliable national accounting of it?
That is where the story becomes much more complicated.
The Short Answer: Why Do Taxpayers Pay for Police Misconduct?
Taxpayers usually pay because local governments indemnify police officers—meaning the government assumes financial responsibility for civil liabilities connected to their employment.
The check might technically come from a city treasury, police litigation account, municipal insurance policy, risk-management fund or borrowed money. But all of those ultimately involve public resources.
And simply naming an officer personally in a lawsuit does not mean the officer will personally pay the damages.
Professor Joanna Schwartz’s nationwide study examined indemnification practices at 44 large law-enforcement agencies and 37 smaller and midsize agencies. Governments paid approximately 99.98% of the money recovered by plaintiffs in the cases she examined. Officers almost never contributed personally, including in circumstances where they had been disciplined, fired or prosecuted.
So the practical answer is straightforward:
Police misconduct litigation functions overwhelmingly as a governmental financial liability, not as personal financial liability for individual officers.
The complicated part is determining which part of government ultimately absorbs that liability.
How a Police Misconduct Lawsuit Becomes a Public Expense
Many civil-rights lawsuits against police officers are brought under 42 U.S.C. § 1983, the federal statute that allows people to sue government actors who, while acting under color of law, violate rights protected by federal law or the Constitution.
A plaintiff may sue individual officers. A plaintiff may also attempt to hold the municipality itself liable.
Those are legally different claims.
Under the Supreme Court’s decision in Monell v. Department of Social Services, a city is not automatically liable under § 1983 simply because it employed an officer who violated someone’s rights. Municipal liability generally requires showing that the violation resulted from an official policy, custom, practice or qualifying governmental decision.
That distinction sounds as though it should protect taxpayers.
Often, it does not.
Even where the lawsuit is technically against the individual officer, state law, municipal rules, collective-bargaining arrangements or government practice can result in the city defending and indemnifying that officer.
That is why two separate questions must be kept apart:
Who is legally named as the defendant?
and
Who ultimately pays?
They are frequently not the same person.
Indemnification—not Qualified Immunity—is the Main Reason Officers Rarely Pay
Qualified immunity is often invoked in conversations about police lawsuits, but it is frequently misunderstood.
Qualified immunity concerns whether an individual government official can be held personally liable for certain constitutional violations in the first place.
It is not the primary mechanism that causes taxpayers to pay settlements once liability exists.
Indemnification is.
An officer can lose a qualified-immunity defense, remain a defendant and still have the government pay the resulting compensatory damages.
Schwartz’s research found that officers were so routinely indemnified that they personally paid only about 0.02% of the recoveries in the jurisdictions studied.
This matters because debates about qualified immunity and debates about who pays police settlements are related, but they are not interchangeable.
Even substantial changes to qualified immunity would not automatically mean officers started personally writing multimillion-dollar checks.
The indemnification system would still exist unless it, too, changed.
Where Does the Settlement Money Actually Come From?
There is no single nationwide funding model.
Schwartz later examined the budgeting practices of 100 jurisdictions and found that police settlements and judgments were not even usually paid through a simple general-fund model. Governments instead used a mixture of departmental budgets, centralized litigation accounts, self-insurance systems, commercial insurance and other arrangements. About half of the agencies studied contributed financially in some fashion to litigation costs.
But even requiring a police department to make a nominal contribution does not necessarily mean the department feels the financial loss.
A municipality can reimburse the department, increase its appropriation or structure its budget so that litigation expenses do not reduce money available for personnel and operations. Conversely, a small police department that pays no settlement directly can still experience strong financial pressure when an insurer increases premiums or threatens to stop providing coverage.
That produces several common routes for paying a misconduct claim.
A city may simply pay the claim from a central government litigation account.
A police department may have money appropriated specifically for legal settlements.
A municipality may self-insure through a risk-management fund.
An outside insurer may cover some liability, although taxpayers still finance the premiums and public entities may remain responsible for deductibles or uncovered losses.
And in some jurisdictions, governments can borrow money to pay litigation liabilities—potentially converting one year’s police misconduct into principal, interest and financing costs that taxpayers continue paying years later.
Chicago provides a particularly revealing example.
Chicago Shows How Complicated the Accounting Can Become
Chicago’s 2025 police litigation numbers demonstrate why even apparently simple questions such as “How much did police misconduct cost taxpayers last year?” can produce more than one legitimate answer.
Chicago’s official 2025 CPD litigation report identified 266 reportable cases and approximately $360.26 million in total payouts associated with those cases. The report covers litigation seeking to hold the city responsible for alleged civil-rights violations involving current or former Chicago police officers as well as certain police-pursuit injuries.
But WTTW’s analysis of the same broader financial picture found that approximately $259 million was actually spent during 2025 resolving lawsuits alleging police misconduct.
Why the difference?
A massive settlement involving former Chicago Police Sgt. Ronald Watts and officers associated with him accounted for roughly another $101 million in liabilities approved in 2025, but most of that money was scheduled to be paid later. Had those payments actually gone out during 2025, WTTW calculated that the year’s total would have reached approximately $360.3 million.
That is an important distinction.
One number describes cases resolved or liabilities associated with the reporting year.
Another describes cash actually leaving government accounts during the year.
Both can be accurately described in headlines as “the cost of police misconduct,” yet they measure different things.
Much of Chicago’s 2025 Cost Came From Old Cases
The size of a city’s annual payout also does not necessarily tell you how much misconduct occurred that year.
According to WTTW’s review, wrongful-conviction litigation accounted for approximately $193.4 million of Chicago’s 2025 misconduct-related costs—nearly three-quarters of the total it calculated. Another roughly $54.4 million involved lawsuits alleging improper police pursuits.
Many of the underlying events occurred years or even decades earlier.
The Ronald Watts settlement alone resolved 176 lawsuits involving 180 people whose convictions were tied to alleged fabricated evidence and other misconduct surrounding Watts and his unit. The Chicago City Council approved a $90 million global settlement in September 2025.
So annual settlement totals should not automatically be interpreted as a real-time misconduct rate.
They are partly a measure of current policing and partly a measure of old liabilities finally reaching the payment stage.
The Legal Defense Itself Costs Millions
Settlement checks also understate the actual taxpayer cost.
Chicago spent another approximately $36.08 million on private attorneys defending police-related litigation in 2025, according to WTTW’s analysis of the city’s report.
That means the public expense is not merely:
compensation paid to plaintiffs.
It can also include defense lawyers, investigators, court expenses, insurance costs, administrative staffing and financing expenses.
These costs are rarely combined into a single number.
Chicago May Even Borrow to Cover the Liability
The financing problem became even more explicit in Chicago’s 2026 budget.
Chicago budgeted approximately $82.5 million for police-misconduct settlements but also authorized officials to borrow up to an additional $283.3 million to deal with the mounting litigation costs.
Authorization to borrow does not mean every dollar will necessarily be borrowed.
But it demonstrates something important about the financial architecture:
Police misconduct can become a long-term public debt problem rather than a one-time legal expense.
If settlement obligations are financed with debt, taxpayers may eventually pay not only the settlement itself but also interest and financing fees.
New York City Paid More Than $117 Million in 2025
New York provides another useful comparison.
The Legal Aid Society’s analysis of city data found that New York City paid $117,251,230.82 during calendar year 2025 to resolve lawsuits alleging NYPD misconduct. Since 2019, the organization calculated more than $796 million in such lawsuit payments.
The Associated Press reported that 1,044 police-misconduct lawsuits were settled in 2025, the largest number since 2019. About $42 million involved wrongful-conviction cases, while roughly $28 million involved incidents that had occurred more than 20 years earlier.
The NYPD therefore makes a legitimate analytical point when it warns that large current settlements involving decades-old incidents do not necessarily describe the present state of policing.
But they do describe something else:
the continuing financial cost of past policing.
A constitutional violation does not stop costing the public simply because the lawsuit takes 15 or 20 years to reach its conclusion.
Why Some New York Numbers Say $113 Million Instead of $117 Million
There is another accounting lesson hiding in New York’s numbers.
The New York City Comptroller reported that in Fiscal Year 2025, the city received 6,082 “Police Action” claims and paid more than $113 million in settlements.
Legal Aid’s calendar-year lawsuit analysis produced the approximately $117.25 million figure.
Those statistics should not simply be treated as competing estimates.
They use different time periods and somewhat different categories. The Comptroller’s system includes claims, including matters that can be resolved before formal litigation, while Legal Aid’s $117 million analysis focuses on lawsuits disposed of during the calendar year.
This is exactly why national aggregation is so difficult.
One jurisdiction may report fiscal years.
Another reports calendar years.
One includes pre-litigation claims.
Another includes only lawsuits.
One counts payments when approved.
Another counts them when paid.
Some include vehicle pursuits.
Others may classify those separately.
Some report outside counsel costs.
Most headline settlement databases do not.
Does a Settlement Prove the Officer Committed Misconduct?
No.
This is one of the most important qualifications when interpreting payout statistics.
A settlement resolves a legal dispute without requiring the court to enter a final judgment on the merits. The proposed federal Cost of Police Misconduct Act itself defines settlements separately from judgments, including agreements that resolve cases before judgment or even before a lawsuit is formally filed.
Police unions therefore object to treating every settlement as proof that an officer did something wrong.
New York City’s Police Benevolent Association has argued that the city sometimes settles lawsuits even when officers dispute wrongdoing, and that officers themselves may have little involvement in the decision to settle.
That caution is valid.
A settlement database measures government financial exposure arising from allegations involving police conduct.
It does not measure proven misconduct with perfect precision.
But the reverse mistake is equally serious.
The fact that a case settled rather than reached a verdict does not mean the underlying allegation was false. Governments settle cases for many reasons, including evidence strength, litigation risk, expected trial costs and the possibility that a jury award would be substantially larger.
Settlement data therefore need context—not dismissal.
Why Don’t Officers Simply Pay the Settlements Themselves?
There are several reasons the system developed differently.
Police officers perform governmental functions on behalf of cities and counties. Governments generally assume financial responsibility for liabilities arising from employees acting within their jobs, subject to varying statutory and policy limitations.
There is also a practical problem.
A $5 million, $20 million or $50 million judgment against an ordinary salaried employee is largely uncollectible.
If compensation for someone who was wrongfully imprisoned for decades depended primarily on the personal assets of the individual detectives involved, the legal victory could become almost meaningless financially.
Indemnification therefore helps ensure that successful plaintiffs can actually recover compensation.
It also places institutional liability on the government that hired, trained, supervised and empowered the officer.
But that arrangement creates its own accountability problem.
The Central Accountability Problem: Who Actually Feels the Financial Loss?
Civil damages are supposed to compensate injured people.
They can also create incentives to prevent future harm.
Those goals are not identical.
If a police department knows that dangerous practices will cause its insurance premiums to rise, consume its budget or trigger direct financial consequences, lawsuits can create an institutional incentive for better training, supervision and risk management.
Schwartz’s research found evidence that insurers can exert exactly this type of pressure on smaller law-enforcement agencies.
But where settlement money simply comes from a large centralized municipal account, the feedback mechanism can become weaker.
The officer may experience no personal financial consequence.
The police department may experience little direct budget consequence.
The settlement may be handled by the city attorney.
The victim receives compensation.
And the taxpayer absorbs the loss.
That does not prove that indemnification causes misconduct.
It does mean that the economic signal created by a multimillion-dollar lawsuit can become disconnected from the individual or institutional conduct that generated the liability.
That is a structural issue worth measuring.
Repeat Officers Make the Question More Important
The strongest argument for better financial tracking is not that every expensive settlement proves systemic misconduct.
It is that settlement information can reveal patterns.
After The Washington Post examined nearly 40,000 payments from 25 major police and sheriff’s departments, lawmakers Tim Kaine and Don Beyer noted that the departments had paid more than $3 billion over roughly a decade and that more than $1.5 billion involved officers associated with multiple claims. In some jurisdictions, officers with multiple claims accounted for more than 60% of settlement spending.
That kind of concentration is potentially far more informative than a city’s annual aggregate total.
A department paying $20 million because of one catastrophic wrongful-conviction case has a different risk profile from a department paying $20 million across hundreds of repeated excessive-force claims.
Yet without officer-level, allegation-level and payment-source data, those two situations can look identical on a municipal balance sheet.
So How Much Does Police Misconduct Cost American Taxpayers Nationwide?
No authoritative national total currently exists.
That may be the most important finding in this entire subject.
FiveThirtyEight and The Marshall Project obtained records from 31 cities and calculated more than $3 billion in misconduct settlements over roughly a decade, but the researchers specifically warned that inconsistent, incomplete and sometimes confusing local recordkeeping made meaningful city-to-city comparisons extremely difficult.
A later Washington Post investigation covering 25 major departments similarly identified more than $3.2 billion in payouts over a decade.
The Legal Defense Fund’s Police Funding Database, updated through April 2026, identifies more than $4.13 billion in monetary compensation across publicly reported settlements in its collection. But that database itself is a compilation of publicly available cases—not a comprehensive federal accounting system.
Those numbers prove the cost reaches into the billions.
They do not establish the national total.
We still do not reliably know it.
Congress Has Proposed Creating the Accounting System That Does Not Yet Exist
Congressional legislation introduced in January 2026 illustrates how fundamental the missing information is.
The Cost of Police Misconduct Act of 2026, introduced as H.R. 7278 in the House and S. 3731 in the Senate, would require standardized reporting of law-enforcement misconduct judgments and settlements. As of August 9, 2026, GovInfo lists the House bill as introduced and referred to the House Judiciary Committee and the Senate bill as introduced and referred to the Senate Judiciary Committee; neither is listed as enacted.
The House bill would require reporting not merely the settlement amount, but information including the type of alleged misconduct, the year of the incident, personnel actions, disciplinary responses and—critically—the source of the money used to pay the claim.
For state and local governments, the proposal specifically contemplates distinguishing money coming from:
general operating budgets, law-enforcement budgets, bonds, liability insurance, central risk-management funds and other sources.
If bonds are used, the bill would require disclosure not merely of the amount borrowed but the total future cost of the debt, including interest and fees. It would also require reporting insurance premiums and contributions to risk pools.
And it would direct the Justice Department to create a searchable public database containing the reported information.
That is striking because these are not obscure academic questions.
They are the basic pieces of information normally required to understand a financial liability:
What happened? How much did it cost? Who paid? How was it financed? Did the same problem happen before? And what changed afterward?
America currently cannot answer those questions consistently for police misconduct nationwide.
What the Real Cost Probably Includes
Even a future national settlement database would need to go beyond the face value of settlement checks to capture the true public expense.
The complete cost can include compensation paid to plaintiffs, court judgments, plaintiffs’ attorney fees where recoverable, municipal defense lawyers, outside counsel, insurance premiums, insurance deductibles, administrative expenses, bond interest and other financing costs.
There are also costs that are much harder to price: overturned prosecutions, reinvestigations, additional incarceration costs stemming from wrongful convictions, lost public trust and the personnel costs of investigations and disciplinary proceedings.
The first category can theoretically be accounted for.
The second is substantially harder.
That means even an excellent nationwide settlement database would probably produce a minimum measurable fiscal cost, not the complete economic and social cost of police misconduct.
The Unanswered Question Is Ultimately an Accounting Question
Debates about policing quickly become ideological.
This particular question does not have to.
A taxpayer does not need to take a position on abolishing police departments, increasing police budgets, defunding police, police unions or qualified immunity to ask a basic financial question:
How much public money are governments spending because of police-related civil liability, what behavior generated those costs, who ultimately paid them and did anything change afterward?
Those are normal questions in virtually every other area of public finance.
If a bridge repeatedly generated multimillion-dollar liability claims, government auditors would examine the bridge.
If a public hospital repeatedly generated malpractice claims, insurers and administrators would study the underlying incidents.
If one municipal employee repeatedly created costly litigation, risk managers would want to know.
Police litigation should be financially intelligible in the same way.
Conclusion: Taxpayers Pay Because Police Liability Is Government Liability—but That Should Make the Accounting Better, Not Worse
Taxpayers pay police-misconduct settlements because police officers exercise governmental authority and are overwhelmingly indemnified by the governments that employ them.
That system has a defensible purpose.
Victims who establish legitimate claims need a financially capable defendant. An individual officer generally cannot compensate someone for decades of wrongful imprisonment or catastrophic physical injury. And governments themselves control hiring, training, supervision, policy and discipline.
But indemnification creates an obvious accountability challenge when the financial consequences of misconduct become detached from the officer, unit or department responsible for generating the risk.
Chicago demonstrates how a single year can involve hundreds of millions of dollars in police-related liabilities, tens of millions more in legal-defense costs and even the authorization of borrowing to manage future payments.
New York demonstrates how another major city can spend more than $100 million annually while simultaneously producing multiple legitimate totals depending on whether one measures lawsuits, claims, calendar years or fiscal years.
And the federal government still lacks a mandatory, standardized national accounting system capable of telling Americans what all of this costs in aggregate.
So the most accurate answer to the original question is:
Taxpayers pay because governments indemnify police officers and treat misconduct-related civil liability as a public obligation. The deeper problem is that the United States has never built a comprehensive accounting system showing taxpayers exactly how large that obligation is, which officers and practices repeatedly generate it, how governments finance it, and whether paying those claims actually produces institutional change.
Until that information exists, Americans are not merely paying the bill.
In many cases, they cannot even see the entire invoice.
Frequently Asked Questions
Do police officers personally pay misconduct settlements?
Almost never, according to the most comprehensive national empirical research available. Joanna Schwartz’s study found governments paid approximately 99.98% of recoveries in the jurisdictions and years she examined.
Does qualified immunity cause taxpayers to pay police settlements?
Not directly. Qualified immunity determines whether an officer can face liability for certain constitutional claims. Indemnification is what generally shifts an officer’s resulting financial liability to the government.
Does a police misconduct settlement mean the officer was proven guilty?
No. A settlement resolves a dispute without requiring a final judicial determination that the allegations were true. Settlement amounts therefore should not be treated as a precise count of proven misconduct.
Can a city itself be sued under Section 1983?
Yes, but not merely because it employed the officer. Under Monell, a plaintiff generally must connect the constitutional violation to a municipal policy, custom, practice or qualifying governmental decision.
Do police settlements always come from the police department’s budget?
No. They can come from police budgets, citywide litigation accounts, general funds, self-insurance or risk pools, commercial insurance and other mechanisms. Some jurisdictions can also use borrowing to meet litigation liabilities.
Can insurance pay police misconduct settlements?
Yes, particularly in smaller jurisdictions and for certain categories of claims. Insurance does not make the cost disappear: public agencies pay premiums, and claims can increase premiums or threaten future coverage. Schwartz’s research found insurers can therefore create meaningful financial pressure on police agencies even where the agency does not directly write settlement checks.
Can taxpayers end up paying interest on police misconduct?
Potentially. When governments finance legal liabilities through borrowing, interest and fees can increase the ultimate public cost. Chicago authorized substantial borrowing capacity in its 2026 budget to address police-misconduct litigation expenses, and the proposed federal Cost of Police Misconduct Act specifically calls for governments to disclose the total future interest and fees associated with bonds used to pay settlements.
Can an officer ever personally owe punitive damages?
Yes. The Supreme Court has held that municipalities themselves are immune from punitive damages under § 1983, meaning punitive liability can fall on individual defendants rather than the city. Actual indemnification practices nevertheless vary, and Schwartz’s historical study found officers in her dataset did not personally satisfy punitive-damage awards.
How much do police misconduct settlements cost U.S. taxpayers every year?
There is currently no authoritative national figure. Investigations covering subsets of major cities have documented billions of dollars, while newer public databases have compiled billions more in publicly reported cases. Differences in local accounting, definitions, reporting periods and data availability prevent those figures from being treated as a comprehensive national total.
Is Congress trying to create a national police misconduct cost database?
Yes. H.R. 7278 and S. 3731, the Cost of Police Misconduct Act of 2026, would establish standardized reporting and a public searchable federal database. As of August 9, 2026, both bills remain at the introduced/referred-to-committee stage according to GovInfo.
References and Further Reading
- City of Chicago — 2025 Annual Chicago Police Department Litigation Report — Official reporting on CPD-related civil litigation resolved or reportable during 2025.
- WTTW — Chicago Taxpayers Spent $259M to Resolve Police Misconduct Lawsuits in 2025 — Detailed reconciliation of Chicago settlement spending, legacy cases, defense costs and accounting discrepancies.
- WTTW — Chicago Authorized Additional Borrowing as Police Misconduct Costs Rose in 2026 — Reporting on Chicago’s settlement appropriation, borrowing authorization and insurance participation.
- New York City Comptroller — A Blueprint for Department-Wide Restraint — Official analysis of NYPD complaints, claims, settlement costs and departmental risk-management systems.
- The Legal Aid Society — NYPD Misconduct Cost Taxpayers Over $117M in 2025 — Calendar-year analysis of New York City lawsuit payouts.
- Associated Press — New York City’s Police Misconduct Settlement Tab Approaches $800 Million Since 2019 — Reporting on 2025 settlements, legacy cases and the NYPD’s response.
- Joanna C. Schwartz, New York University Law Review — Police Indemnification — Foundational empirical research finding governments paid approximately 99.98% of recoveries in police civil-rights cases studied.
- Joanna C. Schwartz, UCLA Law Review — How Governments Pay: Lawsuits, Budgets, and Police Reform — Nationwide research into municipal settlement funding, insurance, police budgets and risk management.
- U.S. House Office of the Law Revision Counsel — 42 U.S.C. § 1983 — Federal civil-rights statute allowing suits for deprivation of constitutional and federal rights under color of law.
- Cornell Legal Information Institute — Monell v. Department of Social Services — Supreme Court decision defining municipal liability under § 1983.
- GovInfo — H.R. 7278, Cost of Police Misconduct Act of 2026 — House proposal for standardized misconduct, settlement, judgment and payment-source reporting.
- GovInfo — S. 3731, Cost of Police Misconduct Act of 2026 — Senate companion legislation.
- The Marshall Project — Police Misconduct Costs Cities Millions Every Year, But That’s Where the Accountability Ends — Multi-city investigation demonstrating both the scale of settlement spending and the difficulty of comparing local data.
- Legal Defense Fund — Police Funding Database: Settlements — Continuously updated compilation of publicly reported law-enforcement settlements and policy changes.
