(The Center Square) – New York’s liability laws are fueling excessive lawsuits and higher costs, according to a new report, which is renewing calls in Albany for reforms to the legal system.
The Empire Center for Public Policy’s report found the state’s legal climate exposes residents and businesses to greater liability than most other states, fueling higher insurance premiums, high healthcare costs, driving up the cost of housing and infrastructure projects and the price of everyday goods and services.
New York families are paying a “hidden tax” with the second-highest tort costs in the nation – estimated at more than $7,000 per household annually, according to the report’s authors.
“New Yorkers pay a steep price for the state’s costly liability environment,” Zilvinas Silenas, the center’s president and CEO, said in a statement. “As this report shows, expansive liability laws act as a hidden tax on businesses and every household in the state.
“If Albany is serious about improving affordability, strengthening the economy, and keeping the state competitive, liability reform must remain part of the conversation,” he said.
The report said New York’s litigation environment is “out of touch” with the rest of the nation with nearly every category of insurance coverage – from healthcare to construction – insurance premiums – and losses that drive them – higher than other states.
New York’s doctors and hospitals consistently face the highest medical liability payouts per capita and highest total payouts in the country, affecting the availability of affordable healthcare, the report’s authors said. The state also allows unlimited noneconomic and punitive damage awards, leading to a high number orf “nuclear verdicts,” payouts of $10 million or more, they said.
The report calls on state lawmakers to take steps to modernize New York’s liability laws, reduce costs, and improve the state’s competitiveness with several recommendations, including damage limits preventing plaintiffs who are primarily responsible for their own injuries from recovering huge sums of money.
It also renewed calls to “fix” New York’s “scaffold law” which requires “absolute liability” for New York property owners and contractors for injuries on construction sites. Critics of the law, which dates back to 1885, say it has caused commercial insurance rates to skyrocket in recent years.
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.
But tort reform groups are pressing for change in Albany with Gov. Kathy Hochul expressing support for liability reforms as part of her ‘affordability’ agenda, including a package of auto insurance reforms aimed at cracking down on fraud that she pushed through the legislative process this year.
“The Empire State is well known as the lawsuit capital of the world and every New Yorker pays the price for our laws that incentivize profiteering and fraudulent claims,” said Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York. “Gov. Hochul made liability reform a priority this year. Albany should finish the job by building on those reforms and making New York more affordable.”
