DRIVE TO CHANGE LEASING LIABILITY RESTARTS:

Auto leasing interests in New York are renewing their battle against the state’s vicarious liability law that they say has demolished the car leasing industry in the state. The United Auto Workers, New York State Automobile Dealers Association, Greater New York Automobile Dealers Association, and Alliance of Automobile Manufacturers are re-launching a campaign to reform New York’s vicarious liability law. The New York State Bar Association, American Automobile Association and banks and finance companies are also supporting reform.

The same groups attempted to convince lawmakers to amend the law last year. New York is the only state in the nation with an unlimited vicarious liability law. Connecticut and Rhode Island repealed similar laws in 2003. The law allows lessors of cars to be sued along with the lessee if the lessee gets into an accident.

According to the leasing industry, the vicarious liability law raises car leasing firms costs by more than $130 million a year and has led to a 36 percent decline in the number of vehicles leased in New York each year. The groups said that vicarious liability has contributed to the closing of 70 leasing companies.

The groups are supporting legislation that would eliminate leaser liability in the case of a negligent driver, for whom the leasing company is not responsible. The same legislation would ensure the lessor does remain liable for defective parts. The state Senate has passed the changes but thus far the Assembly has refused.

Trial lawyers refute the claim that vicarious liability is a major issue. They claim that although there are more than 700,000 leased vehicles in New York, there were only 216 vicarious liability lawsuits pending in January 2003.