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Unholy Trinity
Auto Leasing Company to Leave Connecticut
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Business New Haven
5/12/2003
By: BNH
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Along with New York and Rhode Island, Connecticut is one of just three states with so-called unlimited vicarious liability laws on the books. These allow accident victims to sue automobile leasing and rental companies for damages when, for example, the driver at fault is un- or under-insured.
In response to lawsuits seeking tens and even hundreds of millions of dollars, auto-leasing companies in particular are ceasing operations in Connecticut. Recently Chase Manhattan Automotive Finance Corp. has threatened to pull out of the state by July 1 if the law is not amended. Others are hiking fees.
A bill approved by the Judiciary Committee would exempt companies from liability only when leases are for 12 months or longer. Rental companies would get no relief at all.
While opponents of changing the existing statute point out, correctly, that drivers sometimes fail to carry enough insurance to compensate victims in serious accidents, the bill addresses that by requiring drivers who lease automobiles to carry insurance of $250,000 per person and $500,000 per occurrence.
Trial lawyers oppose changing the law because they naturally want to be able to sue the parties with the greatest ability to pay. That shouldn't be reason enough to forestall reform.
In addition to being morally and logically dubious, forcing car-rental and leasing companies to foot the bill for the misdeeds of drivers is yet another example of a law that discourages companies from doing business in Connecticut. We hope lawmakers will fix it, and soon.
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