NEW YORK, Sept 22 (Reuters) - Citing the "astronomical price" New York City pays in legal settlements and judgments, Corporation Counsel Michael Cardozo said Thursday that the state's "anti-government" tort laws must be reformed to maintain the city's economic health.

In a speech to the Citizens Budget Commission, a nonprofit government-reform group focusing on city and state finances, Cardozo said that the city paid out $561 million in tort and related cases in the 2011 fiscal year, up from $21.4 million in 1978.

"In a time of financial crisis and budgetary cuts, $561 million is not just a huge number -- it represents an unacceptable trade-off in favor of individual plaintiffs at the expense of providing needed services to New Yorkers," Cardozo said.

Unlike most states, New York has no cap on pain-and-suffering damages, Cardozo said. And under the law of joint-and-several liability, the city often must pay for all of a plaintiff's damages, including pain and suffering, even if the city is only one-percent responsible for an accident, Cardozo explained in an interview.

Sanford Rubenstein, a well-known personal-injury lawyer, defended the liability law and said, "It would be much better for the people of the city if, instead of trying to take their rights (away) when they become victims of wrongdoing of the city, that the city correct those problems that exist."

Cardozo, who said he was not suggesting the city should escape liability, told the budget commission that convincing the legislature to pass tort reform is a "difficult task."

By capping pain-and-suffering damages at $250,000, changing the liability rule, and implementing other reforms, Cardozo said the city would save $100 million a year.

"The tort laws must be changed to even the playing field," he said.

(Reporting by Noeleen Walder)

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