For Release — Tuesday, February 2, 1999
BUSINESS COUNCIL HAILS
LAFAYETTE BILL TO CRACK DOWN
ON AMBULANCE CHASERS
ALBANY—Business Council President Daniel B. Walsh today praised Assemblyman Ivan Lafayette, D-Queens, for introducing legislation that would impose criminal penalties on anyone who solicits lawsuits at the scene of an accident.
Assemblyman Lafayette's bill, A.2022, would create a Class A misdemeanor for "unlawful solicitation of a tort victim." The proposed law would apply to cases in which "a person, with the expectation of compensation, knowingly solicits the victim of a tort at the scene of any accident that may result in a civil action, criminal action or claim for tort damages."
Walsh said the explosive growth in lawsuits is the key reason that consumers pay higher-than-average costs for auto insurance in New York State. In a letter to Assemblyman Lafayette, he said that lawyers' fees now eat up 12 percent of the cost of auto insurance premiums in the state one-third more than is paid out for all the costs of medical care for accident victims.
With the number of lawyers in New York growing 26 times as fast as the state's population, trial lawyers are pushing for business with increasingly flamboyant advertising, billboards and personal solicitations.
The result: Lawsuits over auto accidents increased by 89 percent between 1988 and 1997, even as the number of personal injury accidents declined by nearly 10 percent. One out of every five personal injury auto accidents in the state now results in a lawsuit despite the existence of a no-fault system of auto insurance.
"Your bill would begin the process of imposing some reasonable standards of conduct on trial lawyers," Walsh said in his letter to Assemblyman Lafayette.
Ironically, the Lafayette bill comes amid reports that the wealthy trial lawyers' lobby is pressuring members of the Assembly to sign a pledge to resist any and all tort reform legislation during the 1999 legislative session.
The "no-reform" pledge is being pushed to counter the efforts of a growing coalition of businesses, municipalities, professional organizations and other groups calling for legislation to set reasonable guidelines for juries in dealing with lawsuits. The Business Council is a member of that coalition, New Yorkers for Civil Justice Reform.
An October 1998 report by the Public Policy Institute, The Business Council's research arm, found that the care and feeding of the lawsuit industry now adds a total of $400 a year to the average cost of insuring a car in New York State. The Empire State is now the nation's third most costly auto insurance market.
Total liability costs in New York exceed $14 billion a year, or $800 per capita 28 percent ahead of the national average. Lawsuits add $600 a year to the cost of having a baby in New York State. They subject individual citizens to risk, threatening personal financial ruin for volunteer leaders of everything from Little League to the PTA. They add hundreds of millions to property taxes, to pay for suits over things like potholes, sledding incidents, and drunks falling on subway rails.
The number of lawyers in the state grew by 40 percent in the last 10 years, even as the state's total population barely grew at all. Compared to population, New York's cadre of lawyers is 66 percent above the national average.
Trial lawyers themselves admit this surplus pushes them into increasing efforts to solicit business. As Daniel Santola, president of the Albany County Bar Association, told the Albany Times Union last year, "There are hundreds and hundreds of lawyers admitted to the bar each year. There are insufficient jobs to accommodate all of them."
The Business Council is New York's largest broad-based business group, representing some 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.