Wrongful Convictions – A Billion Dollar Liability For States

In the growing debate around public safety and criminal justice reform, an issue with significant financial implications is the staggering financial cost of wrongful convictions. While often discussed in legal and ethical terms, wrongful convictions also impose considerable fiscal burdens on state and local governments.

These public dollars drained from state coffers include cost of civil litigation settlements, incarceration expenses, retrials, and increases in municipal liability insurance premiums — costs borne by taxpayers.

The Wrongful Convictions Litigation Database: Chicago—a first-of-its-kind report produced by the Truth, Hope and Justice Initiative in partnership with Ropes & Gray LLP, the Law Firm Antiracism Alliance, and Aon Corporation—analyzes over 300 Section 1983 civil rights lawsuits brought by wrongfully convicted individuals in Chicago. It offers a comprehensive look at the financial, racial, and systemic dimensions of these cases. As civil rights attorney Andrew M. Stroth, founder of the Truth Hope and Justice Initiative, explains:

“Chicago is the wrongful conviction capitol of America, and our data analysis highlights the disproportionate impact these cases have in Black communities and the staggering costs to taxpayers. Taking a data-driven approach and leveraging technology will enable us to measure risks, better evaluate outcomes and work to advance police reform throughout the country.”

The report’s findings underscore the intersection of fiscal responsibility, racial justice, and systemic accountability—reinforcing why wrongful convictions must be treated not just as moral failures, but as costly public policy concerns.

The Financial Cost (The Emotional Cost)

These protracted battles not only drain public resources but also retraumatize the very individuals the system failed to protect. 

Alexa Van Brunt, Illinois Director of the MacArthur Justice Center, has litigated numerous wrongful conviction cases over the past decade and emphasizes how litigation delays compound the injustice:

“Wrongful conviction damages suits are expensive and the litigation can last a long time… Most of the cases I have litigated have taken at least five years to resolve. As a result, people who have already served years of unjust incarceration have to wait years longer to receive compensation—and some justice—for what they endured.”

Van Brunt also identifies a disturbing pattern across cases she’s handled—one that implicates both racial injustice and systemic police misconduct:

“All of my clients have been Black or Hispanic… Time and again, Chicago police arrested and coerced confessions from teenagers who were alone, didn’t understand their rights, and were uniquely susceptible to coercion.” She adds that, “It’s no secret that Illinois, and Cook County in particular, has led the nation in exonerations”

Illinois leads the nation in exonerations and has paid over $500 million in wrongful conviction settlements.

In 2025, a jury awarded $120 million to John Fulton and Anthony Mitchell, two men wrongfully convicted of a 2003 murder in Chicago. 

From 2019 to 2023, the City of Chicago paid $384.2 million in settlements related to police misconduct, not including defense costs or the rising cost of liability insurance.

These costs are not just fiscal—they are indicators of system failure. Cases such as the “Dixmoor Five” and “Englewood Four” highlight how unreliable evidence, particularly false confessions, has led to wrongful imprisonment and, ultimately, multimillion-dollar payouts. Jarrett Adams, attorney, author, and co-founder of Life After Justice, emphasizes the hidden toll behind every settlement:

“The cost of litigation is extremely high and time consuming. 1983 claims can range from 3 to 5 years and sometimes longer than that. The cost to litigate can easily reach over $100K and there is also the emotional cost to the exonerated who has to relive the case until it has concluded.”

These protracted battles not only drain public resources but also retraumatize the very individuals the system failed to protect.

The Human Cost: The Englewood Four And Dixmoor Five

In 1991, five teenagers—Robert Taylor, Jonathan Barr, James Harden, Robert Lee Veal, and Shainne Sharp—were convicted of a brutal rape and murder in Cook County. The convictions were based on confessions obtained through coercive tactics, despite pretrial DNA evidence that excluded them. The confessions, though legally “voluntary,” were later shown to be unreliable. The men collectively spent 95 years in prison before being exonerated.

Terrill Swift, one of the Englewood Four, experienced a similar fate. At age 17, Swift falsely confessed under pressure to a crime he did not commit and served more than 15 years in prison. DNA later cleared him and identified the real perpetrator, who remained free while Swift was incarcerated. The case resulted in a $31 million settlement. Both cases reveal a critical gap in evidentiary standards: Illinois law has required judges to evaluate whether confessions were voluntary—but not whether they were reliable.

Charlie Linehan, who served as Deputy Chief of the Public Corruption Unit at the Manhattan District Attorney’s Office and later led a dozen exonerations as Chief of the Conviction Review Unit in Brooklyn, underscores the deeper systemic flaws behind these cases:

“There are roughly eight to 10 reasons cases go wrong. At the heart of every wrongful conviction case is some combination of three or four of those reasons. The single biggest cause of wrongful convictions, in my view, is substandard investigative work, which obviously includes investigators falling victim to tunnel vision. We like to tell ourselves that we have this finely calibrated justice system, where two equal but opposing forces do battle and the truth comes out. But that’s a lie. In the typical homicide case, the defense is fighting with one arm tied behind their back, whether because they are overwhelmed with other work or lack the necessary investigative skills or resources to do their job. If we gave the defense the resources to conduct robust investigations starting at arraignment, we could prevent nine out of 10 wrongful convictions.”

Linehan, now co-founder of NEWIRTH LINEHAN PLLC—a firm focused on wrongful conviction litigation—emphasizes that justice system reforms must go beyond courtroom procedure and address the investigative stage, where many wrongful convictions are set in motion.

The Quiet Cost: Insurance And Risk

In addition to direct legal costs, wrongful convictions increase municipal insurance premiums. Cities with frequent misconduct claims face stricter policy terms or even loss of coverage. This risk-based pricing model—similar to auto insurance—creates a financial incentive for departments to reduce liability through reform.

Some insurers now require departments to adopt early warning systems, improve interrogation protocols, or demonstrate compliance with best practices as a condition of coverage. 

Research by Professor John Rappaport at the University of Chicago Law School has suggested that some insurers are beginning to take a more active role in encouraging policyholders—such as police departments—to adopt risk-reduction practices. These actions may include recommending policy changes, requiring reforms as conditions of coverage, or using claims data to identify areas of potential liability.

Much like personal car insurance, municipal liability insurance uses a risk-based model. Cities that demonstrate poor internal controls, repeated claims of misconduct, or lack of reform face skyrocketing premiums, stricter policy terms, and even denial of coverage. In Chicago, the city covers a portion of its liability through self-insurance but relies heavily on excess liability insurance policies—which are increasingly expensive due to the volume and severity of claims.

This dynamic creates a powerful and often overlooked incentive for reform: reduce risk, and you reduce cost. Insurance providers, much like in the automotive world, reward entities that implement risk-reduction strategies. These can include adopting best practices, improving oversight and training, or installing early warning systems to monitor problematic behavior.

The model is familiar: a reckless driver faces higher premiums, frequent policy reviews, and potential cancellation. A driver with a clean record enjoys discounts and favorable terms. The same logic is now being applied to police departments. According to research by Rappaport, insurers are increasingly acting as de facto regulators, encouraging police departments to implement safer practices and penalizing those that fail to do so. Insurers track claims data, require or recommend policy changes, and in some cases, demand structural reforms as conditions for continued coverage. This form of market-based accountability can be as powerful—if not more so—than internal disciplinary systems, which often fail due to conflicts of interest or political resistance.

Legislative And Fiscal Considerations

In light of these costs, some policy analysts and lawmakers have suggested that state and local governments may benefit from improved financial tracking of legal settlements, litigation costs, and insurance premiums. Publishing this information regularly, similar to how education or public health spending is reported, may enhance transparency and inform future budgeting decisions.

Additionally, viewing wrongful convictions as a fiscal issue—as well as a legal one—may provide a broader framework for assessing proposed reforms. While reform measures often arise in response to high-profile cases, there is increasing recognition that reducing errors in the justice system may also yield financial benefits, particularly by avoiding high-cost litigation. Jarrett Adams argues that these prolonged legal proceedings are unsustainable—not just for exonerees, but for the public:

“The settlements and judgments are taking an unnecessary toll on the taxpayers who would rather see these funds being put toward resolutions that prevent wrongful convictions and bring cases to pre-suit settlements.”

Adams’ point reflects a growing consensus: preventing injustice upfront is far less costly—morally and fiscally—than paying for it afterward.

Legislative Responses From States

Illinois House Bill 3521: False Confession Preventions Illinois has had 135 known false confession-based exonerations—30% of the national total. To address these issues, Illinois lawmakers introduced House Bill 3521 in 2025. The bill mandates that courts assess the reliability of custodial confessions before they can be admitted into evidence. As Laura Nirider, former Northwestern Law professor and widely known wrongful conviction attorney, explains:

“Now that interrogations are recorded in Illinois and many other states, we can see inside the interrogation room for the first time. We can identify red flags — like confessions that don’t match the evidence, or like fact-feeding — that suggest that confessions may be unreliable. Currently, though, the law doesn’t allow confessions to be thrown out before trial on the basis of being false or unreliable. That’s why judges still have no choice but to admit all kinds of questionable confessions, like that of our sixteen-year-old, intellectually disabled client Brendan Dassey — a videotaped confession that millions of people watched on Netflix and immediately saw was unreliable. This legal gap, which to many observers defies common sense, is a big driver of wrongful convictions in false confession cases.”

Nirider notes that HB 3521 builds on earlier reform efforts, including Senate Bill 15, introduced in 2003 by then–State Senator Barack Obama. That law required electronic recording of custodial interrogations in homicide cases but did not define standards for reliability. HB 3521 seeks to close that gap and reduce the risk of future wrongful convictions by addressing reliability at the pretrial stage.

Indiana Senate Bill 141: Eyewitness Identification Reform

Eyewitness misidentification is another leading cause of wrongful convictions. In Indiana, over a third of such cases have involved misidentifications, contributing to 245 years of wrongful incarceration. In response, Indiana lawmakers introduced Senate Bill 141 in 2025.

The bill mandates statewide standards for police lineups, including:

• The use of lineup fillers that match the eyewitness’s description.
• Prohibiting suspect inclusion based solely on facial recognition software.
• Requiring documentation of an eyewitness’s level of confidence.

Leon Benson, who spent 24 years in prison for a crime he didn’t commit, was wrongfully convicted based largely on eyewitness misidentification. His exoneration helped drive support for SB 141. The Innocence Project, which supported the bill, has noted that mistaken identifications contribute to 70% of wrongful convictions later overturned by DNA.

Kansas House Bill 2131: Informant Reform

In Kansas, lawmakers have turned their attention to the use of jailhouse informants—another common factor in wrongful convictions. House Bill 2131, the Pete Coones Memorial Act, introduces transparency requirements to ensure that informant testimony is thoroughly vetted before it reaches a jury.

HB 2131 would:

• Require prosecutors to disclose any benefits offered to informants.
• Track informant testimony across multiple cases.
• Make information about an informant’s criminal history and inducements available to defense counsel.

The bill is named after Pete Coones, who was exonerated in 2020 after spending 12 years in prison due largely to informant testimony later shown to be unreliable. He died just three months after release, highlighting the life-altering consequences of such errors.

Rob Warden, co-founder of the National Registry of Exonerations at the University of Michigan Law School and a longtime leader in criminal justice reform, has spent decades exposing wrongful convictions and advancing innocence litigation. He highlights a lesser-known but significant barrier to truth in the courtroom:

“Another reform that’s needed but not widely understood pertains to recantations by prosecution witnesses. Currently recanting witnesses face prosecution under state laws allowing perjury convictions solely upon showing that materially conflicting statements have been made under oath—without regard to which is true.”

This chilling effect discourages individuals from correcting false testimony, even when driven by conscience. Warden concludes:

“In the interest of justice, we should encourage—not chill—truthful recantations. Reforming perjury laws to require proof that a recantation is knowingly false could unlock new paths to exoneration and prevent ongoing miscarriages of justice.”

Broader Implications

These legislative efforts—Illinois’s HB 3521, Indiana’s SB 141, and Kansas’s HB 2131—share a common thread: They aim to address the root causes of wrongful convictions before they lead to incarceration and financial liability. By focusing on evidence integrity—whether through interrogations, eyewitness lineups, or informant disclosures—states are increasingly treating criminal justice reform as a matter of both principle and cost containment.

While policy debates often divide along ideological lines, there is growing bipartisan agreement around the need to prevent wrongful convictions—not only to protect individual rights but also to reduce taxpayer exposure to massive legal claims. Evidence from cities like Chicago and reports from organizations such as the Innocence Project and district attorney review units suggest that the financial costs associated with these cases are substantial.

Cases like those of the Dixmoor Five, Terrill Swift, Leon Benson, and Pete Coones underscore how unreliable evidence can derail lives—and drain public coffers. As states assess the long-term impact of wrongful convictions, these legislative efforts may serve as models for improving accuracy, reducing costs, and restoring public confidence in the justice system.

This post was originally published in Forbes.