August 04, 2005

The close of an era in NY

Thanks to some guy in Missouri, vicarious liability is dead in NY. Vicarious liability ("VL") is a really interesting concept. It has to do with ownership of a conveyance -- a motor vehicle now but a carriage before. VL means that liability for the damage caused by the motor vehicle is imputed to the owner of the vehicle and not merely the operator. This meant that car companies were on the hook if a leased car got into an accident. NY was one of the only states with this law.

VL dated back quite some time and came into being when horse and carriage travel was popular. It made a lot of sense. Horses and carriages were very expensive things but they were generally driven not by the owners but by a poor and poorly compensated carriage driver. If the driver hurt someone, there was no recourse. So the NY State Legislature provided recourse to the owner of the horse and carriage, generally a person of substance.

The concept was simply carried forward to motor vehicles later.

At the time, it seems to me that VL was not particularly revolutionary. I recall from my days studying Roman Law (literally, the laws and legal system of Rome and the Roman Empire) that it provided for VL. If you threw something out of a rented apartment and hurt someone, the injured person had recourse against the owner of the apartment building, whether or not the owner had anything to do with throwing the object out the window. VL, no?

However, VL in NY has made leasing cars very, very expensive and caused all sorts of havoc in terms of insurance and in terms of indemnification of the car companies by the lessee. I know because I got involved in one of the cases once. Went all the way to the Appellate Division where we lost.

Representative Sam Graves, put an unexpected end to the issue.

The provision is in the federal transportation bill under "Title X: Miscellaneous Provisions." It states that people who rent or lease motor vehicles to others "shall not be held liable under the law of any state" for any harm their vehicles cause, as long as they are not guilty of "negligence or criminal wrongdoing."

Representative Graves's amendment passed the House in March by a vote of 218 to 201, mostly along party lines, and it stayed in the bill through the conference committee process. When the full bill went to a vote, it passed overwhelmingly, because it included billions of dollars of spending on transportation projects that lawmakers in both parties wanted for their districts.

If the president signs the bill, officials said, the federal law will take precedence, and New York's vicarious liability law will no longer apply.

No matter what you think of VL, it was the law of NY and has been hotly debated, again and again in the Legislature. For some schmuck from Missouri to come in and change NY law is, to me, an abuse of the federal system. I may not have liked the law, but I resent like hell this hick coming in and usurping the powers granted to the dysfunctional NY State Legislature by the equally dysfunctional citizens of the State of NY.

Posted by Random Penseur at August 4, 2005 10:30 AM | TrackBack

I'll see your dysfunctional State Legislature and raise you a dysfunctional State Governor. It's not that I don't like Mr Barbour, it's just that I don't care for him very much.

Posted by: Howard at August 4, 2005 10:57 AM

Oooh. Shit.

This will explain why the insurance defense side of the 'house' was quiet today and the med mal side was still percolating right along.


[Remember: I can and will attempt to inject humor anywhere. I never said it wouldn't be tacky.]

Posted by: Margi at August 5, 2005 03:56 AM

Sometimes the Feds need to step in and clean up messes left by the individual states. The NYSL should hgave thrown VL out a long time ago. Assinine law.

Posted by: Mark at August 5, 2005 07:54 AM

The major problem here is that we keep hiring people who's entire job function is to create more laws. I want a constitutional amendment that requires removing a law whenever a new one is created.

Or maybe remove two. We've got quite a backlog.

Posted by: Jim at August 15, 2005 09:33 PM
Post a comment

Remember personal info?