Washington state lawsuit costs reach a record $614 million

Jim Brunner, The Seattle Times on Jul 22, 2026

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SEATTLE — Washington state's ballooning lawsuit payouts and legal costs have set another dubious record, reaching nearly $614 million in the past fiscal year.

The state forked over more than $537 million to settle lawsuits and tort claims alleging government misdeeds in the 2026 fiscal year, which ended June 30, according to new figures released by the state risk management office. That's up from roughly $500 million in 2025.

In addition, the state paid about $76 million for legal defense costs, up from about $58 million the previous year. The defense costs included $43.6 million paid to outside law firms hired to help with the overwhelming caseload.

The legal tab — largely due to an explosion in lawsuits and tort claims over alleged abuse and neglect in the state's foster-care system — is adding to the state's ongoing budget shortfalls.

Because the state is self-insured, the burgeoning lawsuit payouts are siphoning dollars that could otherwise pay for schools, healthcare, child welfare and other services.

Asked for a comment on the latest numbers, a spokesperson for Gov. Bob Ferguson said in an email the governor is "engaged on this issue" and is waiting for recommendations from a committee studying the subject.

"Sadly, it's not a surprise, and somebody should do something about it," state Sen. John Braun, R-Centralia, said Wednesday of the new numbers, pointing to majority Democrats who he said have allowed the crisis to grow.

Braun, the Senate Republican leader, said the issue isn't just a fiscal problem, but also a moral one. "Every one of those claims represents someone in the care of the state who has been damaged in one way or another," he said.

The governor and state lawmakers have been grappling with the growing liability crisis, but have not yet come up with any answers to tamp down the costs.

A proposal by Sen. Manka Dhingra, D-Redmond, to require lawsuits against the state to first go through an arbitration process died in the last legislative session amid opposition from trial lawyers and advocates for victims of sexual abuse.

Instead, a state panel is studying the issue and is expected to issue a report later this year with recommendations for possible solutions — navigating between the cost problem and the rights of people who have been harmed due to state agency misconduct.

The 14-member Tort Study Committee includes plaintiff and defense attorneys, representatives of state agencies, local governments and school districts, and advocates for abuse victims.

Meanwhile, Ferguson has directed state agencies to come up with "significant" budget cuts before the next legislative session, citing continuing projections that tax collections won't keep up with rising costs. (The new "millionaires tax" signed into law this year won't bring in money until 2029, even if it survives a lawsuit and ballot initiative fight.)

The surge in lawsuits follows court rulings in recent years that have virtually eliminated the statute of limitations on childhood sexual abuse claims. That has allowed lawsuits to be brought over decades-old allegations of abuse against foster parents or at long-shuttered group homes.

The rising costs of lawsuits is not limited to the state. Counties and school districts also are feeling the pinch and have urged lawmakers to consider caps on damages or other measures.

A new report from the Washington State Association of Counties called the financial problems "severe and accelerating," noting claims to the counties' risk pool have increased by 60% since 2021 and liability insurance premiums have risen by more than 380% in recent years.

The bulk of the lawsuits against the state are targeting the Department of Children, Youth and Families, which oversees foster care and investigates reports of child abuse and neglect.

Claims against DCYF have spiked in recent years and accounted for nearly 80% of the state's legal settlements last year. In 2025, more than 1,100 claims were filed against the agency, compared with just 13 in 2020. State actuarial reports have projected billions of dollars in additional liabilities looming, based on cases already in the pipeline.

Most of the DCYF settlements paid out in recent years stemmed from incidents that occurred before 2000, with some stretching back to the 1960s, according to a recent agency presentation to the tort study group.

Agency officials and representatives of the state attorney general's office have noted the difficulty of defending cases involving decades-old allegations, such as dead witnesses and missing documents.

But some of the largest payouts lately have stemmed from more recent cases that have spotlighted ongoing failures in the state child-welfare system.

For example, DCYF agreed in June to pay $80 million to settle lawsuits filed on behalf of two children who were left with permanent injuries, including amputations and severe burns, after being left in the care of their biological parents despite reports of abuse and neglect to the state.

"This is not a yesterday problem. This is a today problem, Braun said.

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