ISSUE IN BRIEF: Vicarious LiabilityStaff Contact:
Every sector of New York's economy, including manufacturers, is adversely affected by the virtually open ended liability created by the state's current tort laws.
The cost of doing business in New York State is being driven up by frivolous lawsuits forcing companies to pay excessive damages, which are often baseless, irrational, and unpredictable.
The Business Council, as a long standing member and active participant of the statewide tort reform coalition "New Yorkers for Civil Justice Reform", supports a comprehensive reform program that will restore fairness and balance to the state's tort system while protecting the rights of injured victims to recover damages.
The option to lease a vehicle has increasingly become popular for both consumers and small businesses owners to satisfy their need for transportation. It not only provides financial benefits, it also allows individuals the frequent ability to replace their cars with newer and safer vehicles for a reasonable price.
Under vicarious liability in New York State, companies that lease automobiles can be held liable for unlimited monetary damages if the cars are involved in accidents, even if the company is in no way at fault.
In New York State, when a vehicle is purchased, the owner is entirely liable in the event of an accident. When a vehicle is leased and is in an accident, the lessee is liable but the leasing company is also sued because their name is on the vehicle title.
As a result of this antiquated law, business costs for companies in this market have skyrocketed. These Companies are struggling to find insurance coverage to help offset these costs. However, the unacceptable losses have forced companies to leave the state, or worse, go out of business entirely.
New York now stands alone as the only state with this unlimited vicarious liability. Previously, Rhode Island and Connecticut were also affected by similar laws, but have rectified their situations by repealing their vicarious liability laws in 2003.
S.1410/A.2620, jointly sponsored by Senator Owen Johnson and Assemblyman Ron Canestrari, is a reform bill that provides the lessor of a motor vehicle, for a term of more than one year, shall be deemed to be the owner of such a vehicle for the purposes of civil liability for the damage caused by the use of such motor vehicle. The Business Council supports this bill.
The Business Council of New York State, Inc. supports repeal of the state's unique "vicarious liability" law or a compromise that would ease leasing companies' liability burden. The goal being to protect leasing companies, small business, and consumers around the state as well as bringing New York's statute more in line with the rest of the country.