(The Center Square) – New York City is increasingly turning to a federal mafia-busting law in a crackdown on organized crime rings staging bogus auto accidents that drive up costs for consumers.
That’s according to a report released Thursday by American Tort Reform Foundation, which found that since 2024 businesses and insurers have filed nearly 300 civil lawsuits under the Racketeer Influenced and Corrupt Organizations Act – a 1970 federal statute meant to dismantle organized crime – a majority of which been filed in New York.
“New York is in a league of its own,” Tiger Joyce, president of the American Tort Reform Association, said in a statement. “Every kind of scheme shows up here: staged construction accidents, trip-and-falls, auto accidents, even fraud-driven class actions. Now even New York City is fighting back on behalf of taxpayers.”
The report’s release comes days after New York City Mayor Zohran Mamdani’s law department filed a RICO lawsuit accusing the personal injury law firm Asher & Associates P.C. rewrote clients’ accounts of how they were hurt so the city would be on the hook for the maximum payout in court.
“With so many RICO claims filed there, and no sign of slowing, the Eastern District of New York well deserves the title of ‘America’s insurance fraud court,"” Joyce added.
The foundation’s report said New York’s no-fault law makes the state a “prime target” by limiting accident victims to $50,000 in medical costs and lost income unless they can show a “serious” injury, which “gives schemers a reason to inflate injuries so they can file lawsuits seeking far larger payouts, including pain and suffering damages.”
Construction sites are a favorite target, according to the report. Contractors, insurers and reinsurers have filed at least nine RICO suits alleging that law firms staged falls to cash in on New York’s outdated Scaffold Law, an 1885 law that imposes “absolute liability” on New York property owners and contractors for injuries on construction sites, the report’s authors said.
The stakes are high for New Yorkers, who pay an estimated $2,684 per person each year in “tort tax” due to excessive litigation – the second-highest burden in the nation, according to the foundation.
New York’s legal system is consistently ranked among the worst in the nation in the American Tort Reform Foundation’s annual “judicial hellholes” report over frivolous litigation in the court system.
Meanwhile, trial lawyer groups have ramped up spending on lawsuit ads and aggressive marketing campaigns that critics say are fueling a “fraudemic” of bogus litigation.
Gov. Kathy Hochul, a Democrat who is seeking another term in office in the November elections, made auto insurance reform a key plank of her legislative agenda for the year, often tying it to broader efforts to reduce the state’s high cost of living.
In May, Hochul signed legislation that seeks to crack down on staged accidents setting limits on court-ordered damages for drivers engaging in “criminal behavior” at the time of crash, such as uninsured motorists, drunk drivers and fraudsters, with the goal of preventing “jackpot” payouts.
Tort reform advocates have welcomed the changes, but say New York needs to continue to push to eliminate laws that are contributing to bogus slip-and-fall lawsuits and staged car accidents.
“This report should be required reading for every lawmaker and enforcement agency in Albany,” said Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York. “New York sits firmly at the center of the lawsuit abuse and fraudulent activity draining working families of their hard-earned dollars.”
