Study: N.Y. households paying second highest tort costs
November 25th, 2024
By Ryan Whalen Buffalo – Nov. 25, 2024
BUFFALO, N.Y. — According to a recent study by the U.S. Chamber of Commerce, the national tort system, which allows businesses and individuals to seek monetary compensation for harm done to them by others, cost $529 billion in 2022.
Lawsuit Reform Alliance of New York Executive Director Tom Stebbins said consumers ultimately pay the price when businesses and insurance companies defend civil lawsuits and pay damages and settlements.
“It increases the cost of housing. It increases the cost of transportation, food, medical care and insurance. Those are things that New Yorkers pay for every day,” Stebbins said.
New York households, on average, are paying more than $7,000 a year to support the system, the second highest in the country, according to the chamber. Justin Wilcox, the executive director for Upstate United, which advocates for regional chambers and trade associations, says its the latest in series of studies that suggests the state has among the worst business climates.
“The cumulative impact is that you have a difficult and a challenging time attracting businesses to the state and probably one of the reasons that we lead the nation in population decline as well,” Wilcox said.
However, Lori Andrus of the American Association of Justice, which represents plaintiffs’ attorneys, said the U.S. Chamber is funded by large corporations that stand to benefit from a more restrictive tort system. She questioned the report’s methodology, including the way in which it calculated liability insurance premiums.
“No American is paying for the tort system,” Andrus said. “No American is paying for the civil justice system. Courts and judges are there for all of us, as Americans, to resolve disputes.”
Andrus believes measures that limit civil litigation can actually shift costs from businesses to individuals that suffer harm. Wilcox said well-intentioned consumer and worker protection laws that have gone too far have made New York an outlier.
He hopes policymakers will consider these reports when evaluating laws that could increase liability.
“What we’re really most concerned about is making sure that the Legislature takes a holistic view of these pieces of legislation, not looking at them individually but looking at the cumulative impact,” Wilcox said.
Stebbins said the state should also take steps to crack down on fraud and discourage the practice of lawsuit lending that encourages litigation while often transferring the benefits to investors.