Buffalo News: Another Voice: Grieving Families Act targets the wrong entities

By: Tom Stebbins

Gov. Kathy Hochul was right to veto legislation that would have radically expanded liability under New York law and potentially devastated the Empire State’s economy.

Prior to vetoing bill S.74A, known as the Grieving Families Act, Gov. Hochul expressed her concerns in a Daily News op-ed. She highlighted the dramatic departure from current law and “... the impact of these massive changes on the economy, small businesses, individuals, and the state’s complex healthcare system.”

Instead of creating a cost crisis for local governments and hospitals, lawmakers in Albany should work to get more money into victims’ hands by reducing the amount that personal injury attorneys take from each verdict and settlement.

Local governments strongly opposed S.74A because they are often seen as “deep pockets” and are roped into lawsuits where they have little or no connection to the underlying matter. When our cities and towns, as well as state entities like the Department of Transportation, are unnecessarily named in lawsuits and forced to settle, it burdens their finances and their ability to fund critical services – first responders, road maintenance, trash collection and public transportation. The Association of Towns, Conference of Mayors, and other organizations strongly urged Hochul to veto the measure, while those who stood to profit, namely the personal injury trial lawyer lobby, supported the bill.

Like much of the country, New York is navigating the fallout from the pandemic and record inflation. Piling on costs for New Yorkers in the form of massive increases in insurance premiums makes no sense. We have hard evidence that shows just how much the costs of litigation are already exploding in the state – and how much this bill would increase those costs. Consider that New York City spent a record $794 million in legal payments last year, a 38% increase from the previous year. Actuarial analysis from Millman Inc. finds that S.74A would only make matters worse and increase liability insurance premiums by 11%. Medical professional liability costs would skyrocket by 40%.

To her credit, Hochul proposed compromises that would have softened the blow of S.74A. If a new bill is introduced, the Legislature must work with stakeholders to craft a proposal that reduces collateral damage and works for all New Yorkers. If the Senate and Assembly truly want to get more money into the hands of grieving families, lawmakers should focus on reducing attorneys’ fees. Under current law, personal injury lawyers can take a third (33%) of the total money awarded, which they do, as a RAND study finds, 100% of the time.

The future of the state’s economy depends on thoughtful policymaking that doesn’t hike costs at a time when we can least afford it. A reduction in attorney’s fees will increase compensation for grieving families without sending insurance premiums skyrocketing.

Tom Stebbins is executive director at the Lawsuit Reform Alliance of New York.