By TOM STEBBINS //
New York’s reputation for excessive litigation and the state’s uniquely costly liability laws remain major obstacles to attracting the industries of the future, revitalizing the economy and improving affordability.
Unless that changes, our state’s innovative spirit will wither. We must fix our civil liability system. And that’s why the Lawsuit Reform Alliance of New York exists: to counter the trial lawyer lobby’s outsized influence in Albany and fight for much-needed reforms.
With means, motive and plenty of opportunity, the state has become a hotbed of excessive liability. For those looking to make a quick buck off the civil justice system, the Empire State is the place to be.
That’s a huge problem – not just for the targets of superfluous lawsuits, but for the entire economy.
A recent analysis ranks the Empire State as the third-most-litigious state in the Union, averaging a whopping 860,000 cases each year.
Tom Stebbins: Things must change in the nation’s third-most-litigious state.
That dubious designation doesn’t just clog our courtrooms – it increases costs for every New Yorker. A 2024 study from the U.S. Chamber of Commerce’s Institute for Legal Reform quantifies that price tag at $7,027 per household.
The data speaks for itself: New York’s job growth (7.3 percent) is substantially lower than the national average (12 percent) but its cost of living is considerably higher. And the state has lost 9.6 percent of its prime working-age population over the last two decades.
Folks are leaving and the economy is slipping. Why? According to a new study from the Public Policy Institute of New York State, our liability laws play a major role.
When asked which laws hold us back, stifle economic growth and limit innovation, focus group participants from across the state identified a major culprit: the only-in-New York Scaffold Law.
Enacted in 1885, the Scaffold Law is a relic of a bygone era – a statute instituted to protect construction workers of years past, before the advent of OSHA or workers’ compensation laws.
Times have changed, but the Scaffold Law remains – and we are worse off for it.
New York is the only state to hold contractors and property owners – including municipalities and the state itself – absolutely liable for “gravity-related” injuries that happen on the job. There is virtually no defense against 100 percent responsibility, even if worker negligence or unrelated factors contribute to an accident.
For New York’s politically powerful personal-injury trial lawyers, that translates to little effort to return a favorable, multimillion-dollar verdict when the defendant may have only been 1 percent at fault. And unsurprisingly, lawsuits abound.
Tort-urous: Excessive civil lawsuits cost the average New York household more than $7,000 a year. (Source: U.S. Chamber of Commerce)
Meanwhile, in recent years, a massive Scaffold Law-fueled fraud scheme involving doctors, lawyers and unregulated lawsuit funders has come to light.
This hostile liability climate raises insurance costs, drains public infrastructure budgets, deters business creation and retention, and drives away investors. It siphons funding from critical public services to support businesses and workers, too – New York City paid out $2 billion in claims last year, up from $1.5 billion the previous year. Wealthy law firms cash in. Taxpayers foot the bill.
Fearful of sky-high insurance costs and financially devastating lawsuits, innovators will flee the state for safe harbor elsewhere. The development of new technology will slow and our small local businesses will struggle to keep up. Consequently, New York will become less competitive and less attractive to companies seeking business-friendly climates.
In short, excessive litigation is a massive drain on our economy. New York’s liability ecosystem desperately needs reform. Its laws – outdated, expensive and unjust – threaten jobs and stifle innovation.
But LRANY is working to change that. A nonpartisan statewide coalition of businesses, professionals and municipalities, we mobilize advocates and amplify voices working to fix New York’s deeply flawed civil justice system.
We can’t do it alone. We need lawmakers to recognize the costs involved, understand the dangers of inaction, avoid enacting any liability-expanding proposals and work with us for a better New York.
The Empire State is a powerhouse of economic development and innovation, but we risk falling behind. Our antiquated civil liability rules will remain an albatross around our neck if we don’t act now.
Tom Stebbins is executive director at the Lawsuit Reform Alliance of New York, a nonpartisan, statewide coalition of industry associations, municipal leagues, businesses of all sizes and everyday citizens working to fix New York’s broken civil justice system.
