Zack Hutchins
Director of Communications

For Release — Monday, July 16, 2007


ALBANY—A new bill designed to help trial lawyers determine how much insurance defendants carry would give those lawyers a "fishing license" to sue, increase business costs in New York, and damage the state's attractiveness as a location for new businesses, Business Council President Kenneth Adams said in a letter to Governor Spitzer in which Adams urged a veto.

The bill would let plaintiffs in liability lawsuits get a court order to determine before trial the extent of the insurance coverage the defendant is carrying that would cover the claim.

The effect and sole purpose of the bill "will be to assist the plaintiff's bar in the filing of more, and more expensive lawsuits," Adams argued.

"The purpose of the trial in a lawsuit is to determine on a factual basis the extent of the liability, if any, and the remedy required. The existence and extent (or non-existence) of insurance coverage have absolutely no connection whatsoever to the merits of the case," he wrote.

"[This proposal] is a fishing license, and nothing more. Its purpose is to enable plaintiffs' attorneys to determine, at a very early stage in a case, how much it might ultimately yield — and thereby to determine the resources their side should put into the case, the terms of a settlement that they might pursue, and/or the relief to seek from a jury."

Adams also criticized a second provision of the bill, which would change requirements on the timelessness of notices of claim—a change in those standards that would " effectively make them meaningless."

"New York law protects policyholders who can provide a reasonable justification for the delay," Adams wrote.

Giving plaintiffs another weapon to use in suing businesses "is the very last thing New York's business community and the cause of economic development could possibly need," Adams wrote.

He noted that this month alone, growing tort costs led to a 14 percent increase in average medical malpractice insurance premiums—which are a key factor in driving up the health-care costs that Business Council members have said is their top concern among impediments to job creation in New York.

He added that the same factors apply in products liability and a wide range of other tort actions, all of them with substantial cost impacts on our economy.

"This bill will mean unnecessary new costs for those who do business in New York State - and, perhaps even more seriously, undermine New York's reputation as a place in which to do business," Adams said. "We strongly urge its veto."