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Zack Hutchins
Director of Communications

August 2, 2007

Governor vetoes trial lawyer 'fishing license' bill

In a victory for The Business Council, Governor Eliot Spitzer has vetoed a bill that would have given trial lawyers a fishing license to identify "deep pockets" in lawsuits.

The bill would have 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,” Business Council President and CEO Kenneth Adams told Governor Spitzer in July veto urging the Governor to veto the bill. That, Adams argued, would increase business costs in New York and damage the state's attractiveness as a location for business.

"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 more weapons 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.