New York trial lawyers, and the lawmakers who drool for their donations, see a fresh chance to cash in big on the coronavirus crisis with two horrific pro-lawsuit bills slithering through the Legislature that would wallop taxpayers, businesses and consumers.
One bill, which zoomed through two Assembly committees last week, would let private lawyers sue insurers based on vaguely defined “bad faith” claims and provide fat rewards if they prevail. It also invites third-party plaintiffs to sue.
That opens the doors to “every kind of damages that one could think of,” warns the American Property Casualty Insurance Association. The bill would also force insurers to pay the plaintiff attorneys’ fees and other costs.
This would lead to a mad rush of new cases — that’s the point. And because the bill contains no safeguards against meritless suits, insurers might simply pay bogus claims or bump up payouts just to avoid expensive lawsuits that risk costing them even more.
Indeed, “every two-bit lawyer will tack on one of these lawsuits to every insurance claim,” predicts Tom Stebbins of the Lawsuit Reform Alliance.
Don’t think insurers alone will bear the extra tab: They’ll pass most of the costs on to the people and businesses they insure — in the form of higher premiums. Opponents cite research projecting a jump of at least $7 billion a year.
A similar third-party bad-faith law in Florida boosted bodily-injury costs 30 percent. In California, following a court ruling allowing such suits, premiums rose by between 32 percent and 53 percent.
And the hit would come at a time when many New Yorkers are already suffering under the COVID-socked economy.
Meanwhile, policyholders who feel cheated by insurers already have the right to file claims with the state’s Financial Services commissioner.
The other bill’s just as bad: It would make it easier to target government agencies in class-action lawsuits — in which lawyers truly clean up — and boost allowable awards. With state and local tax revenues ravaged by the pandemic, this will mean new tax hikes or service cuts, or both.
If either of these bills passes, Gov. Cuomo will surely veto it pronto — if, that is, he puts the interests of average New Yorkers over those of greedy lawyers.
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July 19, 2020 at 07:06AM
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Legal sharks looking to feed off New York's COVID-19 pandemic - New York Post
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