On May 14th, two critically important lawsuit reform bills were introduced in the New York State senate – asbestos trust transparency reform (see issue VIDEO here) and a sliding scale for contingency fees (see issue VIDEO here).
The first bill, S.5504, was introduced by Senator Tom O’Mara (R, Big Flats). This legislation would bring transparency to the asbestos trust system, and reduce fraud and abuse. Currently, those who allege harm from asbestos products may file a lawsuit against a solvent manufacturer, and/or pursue a claim against a trust established by a bankrupt manufacturer. Shockingly, however, the law does not require plaintiffs in asbestos actions to disclose whether they previously recovered from trust funds. Often, claimants will seek recoveries from both the tort system and the trust system alleging conflicting or even outright fraudulent claims. This bill would prevent fraud by requiring the disclosure of past, pending, and anticipated trust claims when a lawsuit is filed, ensuring a more equitable and transparent system.
The second bill, S.5499, was introduced by Senator George Amedore (R, Scotia), and would apply a sliding scale to attorneys’ contingency fees on verdicts and settlements over $250,000. The goal of this legislation is to allow victims to keep a greater percentage of their final award, and reduce the soaring cost of general liability insurance.
Contingency fee scales are a tried and true approach to reducing non-meritorious litigation – in fact, New York already has such a scale for medical malpractice cases. Enacted in 1986 as a response to a crippling medical liability crisis, the fee scale was integral in stabilizing insurance premiums and preventing the loss of health care services across the state. The Greater New York Hospital Association now estimates that without a contingency fee scale, medical liability costs would be as much as 40% higher, an increase of over $600 million annually. Broadening the fee scale to include all personal injury tort actions will lower liability costs across the board, saving taxpayers and businesses millions while still ensuring victims receive the compensation they deserve.
LRANY applauds Senator O’Mara and Senator Amedore for their commitment to advancing common sense legal reforms. New York has no future as the lawsuit capital of the world, and these two pieces of legislation are an important step in the right direction.