By Marcus Rayner | The Daily Record

June 27, 2010

In recent months, school funding has been hotly debated by many sides. And the most infamous school litigation of the past two decades, Abbott vs. Burke, is routinely invoked as a major cost driver in education. Whether or not you support the New Jersey Supreme Court’s decisions, which required equalized funding between the state’s richest and poorest school districts, most of us acknowledge that school districts must look for ways to cut waste from their budgets.

What’s often overlooked is the cumulative effect non-Abbott litigation has on school budgets. Tort reform isn’t an issue for just New Jersey’s businesses and physicians. Budgeting for extensive litigation throughout New Jersey’s school districts is having an impact. Just as in the private sector, lawsuit abuse carries consequences. But when it impacts schools, the impact is felt by students and taxpayers, rather than consumers.

The average New Jersey school district allocates approximately $26,000 each school year for litigation expenses. In seven districts, this figure was higher than $500,000 for the 2009 — 2010 school year. And as one Morris County school district learned, sometimes all it takes is one bad lawyer to affect their budget priorities for years to come.

In the School District of the Chathams, for example, a dispute over a $5 million contract with a contractor to renovate Chatham Middle School resulted in the district being sued. Project deadlines were repeatedly delayed by the contractor, and the district said workmanship was sub-par. The district withheld payment until the contractor fixed his errors. Doing so resulted in the company taking the district to court.

The Chathams hired an attorney from the Morristown-based Schwartz, Simon, Edelstein, Celso & Zitomer to handle its litigation. But the district lost that suit, as well as its countersuit for subpar construction and an appeal. Filing critical paperwork on time might have turned the cases in the district’s favor and spared it of the $1.6 million it paid out in damages to the company. It also had to come up with $250,000 in legal fees and $150,000 in interest. And yes, this was public money. The Chathams — among a minority of New Jersey school districts which passed its budget this year — want it back. The District filed suit against their attorney for malpractice earlier this month in state Superior Court, Morristown.

“That money could have been spent on textbooks and teachers and field trips and fun things for kids,” said the District’s business administrator, Ralph Goodwin. “Instead it was spent on lawyers who didn’t do their jobs.”

Families will be charged a $150 “user fee” for each student who participates in extracurricular activities beginning this fall. Keep this in mind as you consider that in 2008, the Chathams allocated around $126,000 for legal reserve in their annual budget.

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