New York’s clogged and bloated authorized system is costing taxpayers and corporations a whopping $89 billion a yr in extreme litigation bills, in line with a report launched this week.
Lenient legal responsibility legal guidelines and lawsuit-friendly insurance policies have fostered an surroundings the place grasping attorneys could make financial institution, typically off the backs of native companies and metropolis authorities, the report, performed by the American Tort Reform Affiliation, suggests.
“The City’s courts are a playground for fraudsters and opportunistic trial lawyers, while honest New Yorkers foot the bill,” mentioned ATRA President Tiger Joyce.
Consequently, the Huge Apple ranks No. 2 on the group’s checklist of High 10 worst judicial hellholes within the nation, with the Philadelphia Court docket of Frequent Pleas and Pennsylvania Supreme Court docket tied for first.
The tort reform report cites a research performed by the financial consultancy the Perryman Group final yr to estimate the financial impression of extreme litigation. In New York, the group estimates, companies spent an enormous $88.6 billion coping with frivolous lawsuits.
“The state’s liability environment and lawsuit-friendly policies drive up costs and are a major factor driving businesses and residents to greener pastures in other states,” mentioned Ashley Ranslow, the New York State director for the small enterprise advocacy group Nationwide Federation of Unbiased Enterprise.
ATRA factors to a number of key insurance policies it says are particularly chargeable for driving up prices — together with the state’s scaffold legislation, which holds development corporations totally answerable for accidents on work websites, even when an worker was negligent.
Critics say the legislation has been weaponized by doubtful litigation lenders who entrance prices for plaintiffs — sucking thousands and thousands of {dollars} out of companies and municipal governments, lots of which settle claims as an alternative of bearing the prices of letting them languish in courtroom.
The ATRA report additionally cites New York’s excessive auto insurance coverage charges as a coverage that encourages and will increase the price of fraudulent claims.
And it notes a imprecise statute that permits folks to obtain compensation in courtroom for ambiguous and undefined “pain and suffering.”
“Lawsuit abuse isn’t just a courtroom problem – widespread fraud is an economic and social crisis that costs jobs, drives up prices, and exploits vulnerable communities,” mentioned Tom Stebbins, govt director of the Lawsuit Reform Alliance of New York.
“Lawmakers must step up by passing stricter laws to punish staged car and construction site accidents and by increasing transparency around third-party funding of lawsuits,” Stebbins wrote in a press release.
ATRA locations a considerable amount of blame for the extreme tort prices on New York’s highly effective trial legal professionals teams.
The New York Trial Legal professionals Affiliation maintains a sturdy lobbying presence in Albany. High legislation companies and political teams aligned with the affiliation have pumped thousands and thousands of {dollars} into Democrats in addition to Republican campaigns statewide.
The group — one of many largest and most sturdy trial legal professionals teams in New York — has been pushing an growth of the state’s wrongful dying statute that critics argue might be a driver of extreme litigation prices on healthcare suppliers if handed.
Additionally known as the Grieving Households Act, it might enable folks to hunt emotional damages in wrongful dying circumstances, amongst different modifications.
“If we are serious about making New York more affordable for businesses and consumers alike, tort reform is a great place to start, including a veto on the wrongful death bill,” a spokesperson for the Enterprise Council of New York wrote in a press release.
Proponents of the laws say its a well timed replace to the statute, which hasn’t been up to date in many years.
“After losing my partner in childbirth, I’ve watched insurance companies use the pain of families like mine to justify their greed. While we struggle to rebuild our lives after real, devastating losses, they cry ‘lawsuit abuse’ to defend their skyrocketing premiums and record profits. It’s not the lawsuits that are breaking the system—it’s the insatiable greed of these insurers,” Bruce McIntyre, an activist concerned within the coalition Justice for Grieving Households, wrote in a letter reported on by POLITICO, this week.
Gov. Kathy Hochul — who acquired over half 1,000,000 {dollars} from the highest legislation companies and trial lawyer PAC’s since 2017, in line with the ATRA report — has vetoed the invoice twice within the final two years.