State of Liability

| Reports

By Cary Silverman and Mark Behrens

New York State laws encourage a proliferation of civil suits seeking damages for various kinds of alleged wrongful actions, known in legal terms as “torts.” The resulting liability costs have been estimated at $20 billion a year—or more than $2,700 per household.

New York’s litigious environment isn’t helping the state’s image among employers. A U.S. Chamber of Commerce survey of lawyers and executives for major businesses ranked New York’s legal climate 29th in the country in 2017, plummeting 11 spots over the past five years to its lowest level in the survey’s 15-year history.

The Empire State’s tort liability system is a positive for at least one industry, however. New York’s legal profession is larger than ever, with more than 177,000 lawyers actively practicing in the state. That’s one lawyer for every 112 residents—the most of any state and more than twice the national average. Over the past decade, the number of lawyers actively practicing in New York has climbed 20 percent, fully 10 times the state’s rate of population growth.

All these lawyers need to make living—and, as this report shows, the tort system provides one for those in the plaintiffs’ bar. Other New Yorkers pay the price, in the form of higher auto insurance rates, higher health care costs and higher taxes, to name just three impacts. The high cost of our tort system hinders infrastructure renewal and economic growth in a state that desperately needs more of both.

As shown in this report:

  • New York is one of only a dozen states that allow people to recover damages even when they are found primarily responsible for their own injuries.
  • When several people or businesses share responsibility for an injury, New York law encourages plaintiffs’ lawyers to target the defendant with the most money—even if it is least to blame.
  • Property owners in New York must prove a negative—that they had no notice of a hazardous condition—if they want to avoid trial in a “slip and fall” lawsuit.
  • New York is among a minority of states that have taken no action to reform laws governing product liability, which is especially important to manufacturers.
  • New York allows unlimited noneconomic and punitive damage awards, and imposes an interest rate on judgments that significantly exceeds inflation, creating a risk of particularly high awards.

This report identifies aspects of New York’s tort system that have fallen out of balance and provides solutions to fix them. It first examines New York’s general liability laws, those that apply to a wide range of civil claims. In comparison to other states, New York allows significantly greater liability and lacks the types of commonsense constraints adopted by other states.

The report then closely explores specific problem areas, including:

  • New York’s antiquated, unique-in-the-nation “Scaffold Law” that imposes “absolute liability” on property owners and contractors for nearly any worker fall on a construction site, regardless of a worker’s own culpability.
  • The lack of reasonable limits on medical malpractice awards or safeguards to avoid meritless claims and hired-gun expert testimony, which ultimately pushes up health care costs and leads to provider shortages in some specialty areas.
  • The state’s ineffective no-fault auto insurance system, which drives up auto insurance rates.
  • A court created specifically for asbestos litigation that attracts claims from across the country because of procedures and laws that put defendants at a disadvantage.

Needed liability reforms would create a more balanced legal environment, reduce costs for those who live and work in New York and improve the state’s economy. This report offers a blueprint for achieving these goals.

Click here to read the full report.