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Congress does what the state legislature could not and quashes the arcane vicarious liability law
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The recent federal highway bill passed by Congress will put an end to New York’s vicarious liability law for car leasing and car rental firms. The law had passed high-scale liability to car rental and leasing companies, rather than the driver and their insurance. New York was the last remaining state with such a law on the books."Every sector of New York's economy, including manufacturers, is adversely affected by the virtually open ended liability created by the state's current tort laws," the Business Council of New York wrote in its description of the issue. "The cost of doing business in New York State is being driven up by frivolous lawsuits forcing companies to pay excessive damages, which are often baseless, irrational, and unpredictable." New York’s Trial Lawyers Association was not pleased with the legislation and is hoping to challenge its validity. They warned visitors to their Web site that "this could be the last day you can file a case against an automobile lessor or rental agency for liability based on ownership." The RBA, along with the Chamber Alliance of NY, fought for repeal of this law. "It’s unfortunate that we had to rely on an act of Congress to rid New Yorkers of this antiquated piece of legislation," noted Al Samuels, President/CEO of the RBA. "It just exemplifies some of the anti-business attitudes that the chamber community must constantly address," he added. Federal lawmakers ban New York's antiquated vicarious liability law
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The federal highway bill also banned vicarious liability of rental cars. Vicarious liability forces companies that lease cars to assume liability for unlimited monetary damages if the cars are in accidents, even if the company is in no way at fault. In 2003, New York became the only state to allow unlimited liability of car leasing and rental companies after Connecticut and Rhode Island repealed their vicarious liability laws. The Alliance of Automobile Manufacturers and the Greater New York Automobile Dealers Association said last year that the law cost consumers more than $130 million each year and led to a 36 percent decline in the number of vehicles leased in the state each year. A repeal of vicarious liability has long been a priority issue of the Council’s. The New York State Trial Lawyers Association immediately criticized the bill and warned visitors to its Web site that "this could be the last day you can file a case against an automobile lessor or rental agency for liability based on ownership." The Association said that it would seek ways to challenge the ban. More Stories
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