New York State's out-of-control lawsuit industry has grown in recent years, putting the state "on a collision course with a crisis over liability," Business Council President Daniel B. Walsh warned today.
At a Capitol press conference Walsh renewed The Council's calls for sweeping tort reform to emphasize appropriate compensation for victims, not the interest of trial lawyers. The event was timed to coincide with an annual lobbying day organized by trial lawyers, whose association staunchly opposes any reform and lobbies instead for new opportunities for new lawsuits.
The event was organized by New Yorkers for Civil Justice Reform, which includes The Council and more than 1,100 other members united by a common commitment to advocating tort reform. Coalition members include associations representing small businesses, cities, doctors and other professionals, the construction industry, the auto-leasing industry, and many others.
"People just sense that there is too much litigation today, and with over 80,000 civil suits filed each year, and they're right," said Mark Alesse, state director of the National Federation of Independent Business (NFIB) and chairman of the reform coalition.
In New York City, the total value of tort settlements and judgments has skyrocketed from $78 million in 1978 to $557 million in 2001, Michael Cardozo, corporation counsel to New York City, said. That increase of 2500 percent contrasts with an increase in the cost-of-living index of 175 percent over the same period, he added.
He cited one case in which the city was forced to pay an entire judgment of $18 million in a case in which it was found slightly liable, but in which the driver injured in the auto accident had consumed both heroin and cocaine and was largely at fault.
The Public Policy Institute of New York State, The Council's research affiliate, outlined a compelling case for tort reform in its 1998 report entitled An Accident and a Dream'. That report showed that:
- The lawsuit industry costs New Yorkers $14 billion each year, or almost $800 per person, and adds hundreds of millions of dollars every year to the property tax burden, because of runaway lawsuits against municipalities.
- Tort filings in New York jumped 58 percent between 1988 and 1996, the third highest jump in the nation. A surge in motor vehicle claims in this period came despite a sharp drop in injury accidents, the presence of no-fault insurance and slow overall population growth.
- The lawsuit industry is being driven in part by a population of lawyers in New York State that is growing 26 times as fast as the state's overall population.
The full report is available at www.bcnys.org/ppi/acccont.htm.
Proposed reforms: The Business Council supports a broad range of civil-justice reforms designed take the emphasis of our system off the needs of trial lawyers and return it to fair and sensible compensation for legitimate victims. Specific reforms supported by The Council include:
- A cap on non-economic damages awarded in tort cases.
- A repeal of "joint and several liability," under which a defendant can be forced to pay all of the damages awardedeven if the defendant's liability is assessed at only 1 percent.
- A "statute of repose" to limit the period in which a manufacturer can be held liable for damages attributable to its product. The provision would limit liability to 10 years after the product leaves the manufacturer's control unless there is an express warranty to the contrary. Currently, manufacturers' liability never expires, regardless of how many times the product has been re-sold or modified.
- A measure to allow contractors and employers to defend themselves against lawsuits over worksite injuries by introducing evidence that the plaintiff's own negligence was a factor. Contractors now are strictly liable for an employee's worksite injury even if there is contributory negligence on the employee's part.
- A limit on contingency fees. New Yorkers for Civil Justice Reform argues that contingency fees, which can be up to one-third of damages awarded, effectively encourage more lawsuits and are a major reason why less than half of all money spent on the liability system winds up compensating victims.
National momentum for tort reform: The campaign for tort reform is gaining momentum nationally. Earlier this month, a new bipartisan organization, Liberal Democrat George McGovern and conservative Republican Alan K. Simpson laid out the case for a change in this culture in an April 17 op-ed piece in the Wall Street Journal.
Simpson and McGovern argued that New York's education and health care systems are failing, not because of a lack of resources, but because of a stultifying fear of litigation that has changed the "can-do" attitude of schools, hospitals, and courts to "can't-do."
They wrote: "A healthy system of law should make people comfortable doing what's right, and nervous doing what's wrong. Today, law makes people nervous in doing practically anything."