For Release — Wednesday, May 6, 1998
BUSINESS COUNCIL HAILS
TORT REFORM BILL, URGES PROMPT PASSAGE
ALBANY Comprehensive civil justice reform proposed in new legislation sponsored by Senator Dale Volker and Assemblyman Joseph Morelle "is an important step in the effort to sustain and expand New York's emerging economic comeback," said Daniel B. Walsh, President of The Business Council.
Tort reform is one of the highest policy priorities identified by New York State's business community, Walsh noted, adding that The Business Council strongly supports the Volker-Morelle bill.
"The legislation introduced today would bring many benefits to all New Yorkers and would do so in many ways," Walsh noted. "The best measure of this bill's benefits is the breadth of support for the bill. Those asking for tort reform include big and small businesses that want predictable and reasonable liability, municipal governments that don't want to raise taxes to cover liability costs of their playgrounds, and even not-for-profit organizations."
"These changes will preserve a core value of our judicial system that all parties, including businesses, are liable for their fair share of damages," Walsh noted. "At the same time, it will cut down on incidences of blameless businesses and municipalities being dragged into lawsuits solely because they are perceived to have deep pockets."
"This is wrong," Walsh added. "It leads to increased product costs for consumers and higher property taxes. It stifles innovation for manufacturers. And it makes small businesses less productive."
Walsh noted that the Public Policy Institute of New York State, the research arm of The Business Council, has thoroughly documented the abuses of the lawsuit industry in a report released this spring entitled An Accident and a Dream: How the Lawsuit Lottery is Distorting Justice, and Costing New Yorkers Billions of Dollars Every Year.
An Accident and A Dream argued that tort-based civil justice in New York has degenerated into "lawsuit lottery," a trial lawyer-driven erosion of justice that encourages lawsuits against defendants with "deep pockets" regardless of fault. The report shows that this lawsuit industry costs New Yorkers $14 billion each year while stifling innovation and undermining the competitiveness of both the state and its businesses, the report concludes. The report urges New York to follow the lead of other industrial states by enacting sweeping tort reforms "de-emphasizing the role of lawyers and returning the power of real choice to consumers."
Walsh cited several specific provisions of the Volker-Morelle bill that The Business Council supports:
- Repeal of joint and several liability: Currently, businesses found to be 1 percent responsible for an injury can be held responsible for 100 percent of the damages. This provision would prohibit businesses from being held responsible for more than their proportionate share of damages.
- Establishment of a statute of repose: A New York State manufacturer now can be held liable for the safety and performance of products they manufacturer as long as the products are in use. In some cases, today's small manufacturers worry about liability for products that their grandparents made using technology that has long since been improved upon. A statute of repose would establish a time period after which the manufacturer could not be sued for injuries resulting from the use of its products.
- Capping all non economic damage awards at $250,000: Currently, there is no rational way to apportion non-economic damages to injured parties. That is why a jury or judge could award millions of dollars in non-economic damages for an injury, while another jury or judge may choose to award a much smaller amount. These types of damages should be reasonably capped in order to apportion damages fairly and consistently.
The Business Council is New York's largest broad-based business group, representing over 4,000 member companies large and small across the state. Based in Albany, it lobbies for a better business climate, and offers cost-cutting services to its members.