The Business Council of New York State, Inc., whose membership includes member companies, chambers of commerce, and associations, has reviewed the aforementioned legislation and is opposed to its enactment. The proposed legislation would mandate payment of prejudgement interest in personal injury cases.
This legislation is troubling to the business community for many reasons. First, while business is seeking reform of the current liability system to make it more equitable without diminishing the rights of legitimate claimants, this proposal goes in the opposite direction. Personal injury claims are speculative and difficult to evaluate and when they are settled the parties agree upon a sum which takes into consideration the total value of the claim at the time of settlement. It should be assumed that this sum includes interest.
Another problem with this proposal is that it could remove a plaintiff's incentive to move a claim forward because of the assurance that interest will be awarded at the conclusion of the case if the claimant is successful. Thus, while the intent of the bill is to encourage timely settlements it could actually add to settlement delays.
Furthermore, this legislation would impose a penalty on a defendant for the time period during which the responsibility for damages has not yet been established. This surely puts a defendant at a distinct disadvantage and has the further effect of depriving the defendant of their day in court by forcing settlements of claims.
Ultimately, this legislation will further hurt the business community by driving up the cost of liability insurance while accomplishing very little for the rights of claimants.
For the above stated reasons the Business Council opposes A.550 and requests its not be acted upon this session.