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February 19, 1998 

Survey: Unchecked civil litigation threatens NYS competitiveness

New York State businesses consider the state's civil justice system a major impediment to competitiveness because it drives up costs and stifles innovation, a new survey of Business Council members shows.

"The need for tort reform has never been more important to businesses and their ability to compete in New York," said Brian McMahon, director of manufacturing and economic development for The Business Council.

"The threat of frivolous lawsuits and fear of unfair penalties drives up costs of products and services and makes companies less likely to assume liability risks associated with innovation," he added. "This is bad for all New Yorkers."

The survey of 107 Business Council members showed the following:

Respondents urged the state to make several essential tort reforms: repealing joint and several liability; capping non-economic damages; repealing strict liability for contractors/employers; and creating a statute of repose.

Under joint and several liability, any defendant in a multi-defendant lawsuit can be forced to pay full damages - even if that defendant's liability is only 1 percent of total liability.

Under strict liability, a contractor is fully liable for any employee's worksite injury regardless of contributory negligence on the employee's part.

A statute of repose would limit a manufacturer's liability for damages attributable to the manufacturer's product to a specified period of time 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.

"Some machining companies have proprietors who are still liable for products made by their grandfathers," McMahon said. "This is patently unfair."