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Committee reviews litigation oversight policy with tiered thresholds and independent review
Summary
The committee reviewed a proposed litigation risk-management policy that would require independent legal review beginning at $75,000, escalate council briefings at $150,000, and trigger mandatory settlement review at projected exposures above $250,000.
Watertown’s Water and Sewer bipartisan committee reviewed a proposed litigation risk-management policy at its March 16 meeting that would establish tiered oversight thresholds, require outside legal review at higher tiers and create a quarterly litigation dashboard for council oversight.
A presenter summarized the policy’s goal: "to ensure major legal decisions are made with clear financial analysis, independent legal evaluation, and appropriate governance oversight." The draft sets Tier 1 at $25,000, Tier 2 at $75,000 and Tier 3 at $150,000. The committee discussed whether Tier 1’s $25,000 level was appropriate given the town’s insurance deductibles but members generally favored keeping the thresholds to preserve transparency.
Under the proposal, Tier 2 triggers an updated exposure forecast and independent legal review by outside counsel not previously involved; Tier 3 requires a formal council briefing and updated fiscal impact analysis, and advancing litigation beyond Tier 3 would require a supermajority vote of the Town Council. The draft also calls for mandatory settlement review when total projected exposures exceed $250,000, when the probability of an adverse outcome exceeds 40%, when independent legal review recommends settlement consideration, or when estimated litigation costs exceed 50% of expected settlement value.
The policy recommends a litigation dashboard that the town attorney would present quarterly and a pre-litigation notification requirement: the town attorney must notify the council when potential claims could expose the town to $50,000 or more and provide a pre-litigation risk assessment within 30 days outlining exposure estimates, legal merit and a recommended resolution strategy.
Committee members noted the potential cost of retaining additional outside counsel but expressed that the expense could be justified to avoid costlier litigation errors. The committee discussed starting the dashboard and reporting within 30–45 days of the policy’s adoption and anticipated that the Town Council would further vet and approve final thresholds and any budget impacts.
The committee did not take a final vote on the litigation policy during the meeting; members agreed to forward the draft with these recommendations to the Town Council and to request implementation timelines and cost estimates from staff.
