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March 5, 2003

Senate approves bill to repeal 'vicarious liability'

The state Senate has approved a bill that would enact a top tort-reform priority of The Business Council: repeal of the state's "vicarious liability" laws.

Under vicarious liability, companies that lease cars can be held liable for unlimited monetary damages if the cars are involved in accidents, regardless of fault. Only New York, Rhode Island, and Connecticut have such laws, the Senate said in a release. More than 225,000 vehicles are leased in New York each year, which is more than 30 percent of new vehicles, the release added.

Bruno said "our 'sue first' society" drives up business costs, taxes, and consumer costs. He added: "This bill would address one component of tort reform that needs to be enacted immediately or there will be serious consequences for consumers in New York."

"Ultimately, the consumer loses when there are fewer opportunities to lease a car," said Senator Owen Johnson (R-C Babylon), the sponsor of the bill. The Assembly sponsors is Ron Canestrari (D-Albany County).

The Business Council strongly supports the bill.

"As a result of this antiquated law, judgments and court costs have skyrocketed for companies in this market have skyrocketed," said Business Council President Daniel B. Walsh. "These companies can no longer find insurance coverage to help offset these costs. Many have left the state or gone out of business."