In New York, Lawyers Rule

Is it just another tax? Or is it just the price of living in the Big Apple? One might note that it is a singularly regressive tax, just what a city that has enormous wealth disparity doesn't need.

What is it? It’s the cost of civil lawsuits, brought against the city and against businesses. Those of us who live in the city pay it. It adds a cost, like a tax, to everything you buy in the city, from cheeseburgers to condos. It even increases taxes.

It's a pass-along economy. When your physician pays exorbitant malpractice insurance premiums he simply raises his fee to you. When the drugstore pays high liability premiums it passes the cost along to you... in the price of toothpaste.

The New York Post editorializes:

Wonder why New York pays through the nose for everything from health care to construction projects to auto insurance — and taxes? A new report from the Empire Center has a one-word answer: lawsuits.

State laws here “encourage a proliferation of civil suits,” notes the report’s authors, lawyers Cary Silverman and Mark Behrens. They peg statewide liability costs at $20 billion a year, or more than $2,700 per household.

That gets passed on to the public in the form of higher taxes and prices, especially for health care and insurance; fewer buildings, bridges, schools and other projects; and less government service.

Pro-lawsuit statutes also cost the state business and jobs. This year’s US Chamber of Commerce “legal climate” survey ranks New York 29th nationally — and sinking: In just the past five years, the rank plunged 11 places; it’s now at its lowest in the survey’s 15-year history.

After noting that construction companies must pay liability insurance rates that are three to six times higher than those in other states, the Post continues:

•  New York also “encourages” lawyers to target defendants with the most money, even if they’re the “least to blame.”
•  In slip-and-fall cases, property owners must “prove a negative” — that they had “no notice of hazardous conditions” before an accident.
•  The state has no cap on non-economic and punitive-damage awards.
•  Its no-fault auto-insurance system fuels fraud and drives up rates.
•  It lacks “reasonable limits” on medical-malpractice awards.
•  Its asbestos-litigation court favors plaintiffs, attracting cases from all over the country. (Credit for that largely goes to Assembly ex-Speaker Shelly Silver and his “of counsel” job at Weitz & Luxenberg, a firm specializing in, yep, asbestos cases.)

Call it what it is: a tax on all business. A tax that everyone pays. Lawyers like to call it the rule of law. It looks more like the rule of lawyers, a city whose business life is being sucked dry by a parasitic class that pretends to be defending everyone equally but that is making it increasingly difficult to do business in the city.