New York courts urged to crack down on fraudulent injury lawsuits

(The Center Square) — A legal watchdog group is calling on New York's top judicial officer to crack down on fraudulent injury lawsuits it claims are fleecing taxpayers and exploiting the state's court system.

In a letter to Chief Administrative Judge Joseph A. Zayas, the Lawsuit Reform Alliance of New York calls on his office to work with state leaders to crack down on rampant fraudulent injury claims "to protect the civil justice system from bad actors."

"The trend of organized crime syndicates leveraging the courts to finance their illegal activities is likely to gain momentum with each successful operation," Tom Stebbins, the group's executive director, wrote in the letter. "These criminal operations drive up costs for businesses and taxpayers while eroding public trust in the legal system."

Stebbins cited recent news investigations and testimony in Racketeer Influenced and Corrupt Organizations Act, or RICO, cases that have highlighted how "unethical lawyers, doctors, and litigation funders, who have ties to MS-13 and Russian mobsters, enrich themselves at the expense of vulnerable plaintiffs."

"The reports depict a concerning portrayal of a justice system that is vulnerable to manipulation by criminal elements," he wrote. "Protecting the integrity of our courts should be paramount."

Many of the reports detailed how plaintiffs enlisted by organized criminals are subjected to "unnecessary and painful surgeries to artificially inflate the value of staged construction site accident claims."

"This indicates a systematic misuse of the legal system that could have serious repercussions for both businesses and legitimate claimants," he wrote.

He urged Zayas to work with Gov. Kathy Hochul and legislative leaders "to craft policies that will ensure New York’s Unified Court System is no longer treated as a venue for racketeering and profiteering on the backs of the most vulnerable among us."

The New York City Law Department has submitted comments to the OCA advocating for oversight and regulations for the litigation financing industry, emphasizing the necessity for transparency in all court actions within the state, Stebbens noted.

At least 21 other states have taken steps to crack down on personal injury runners by updating statutes, he wrote, and the OCA "should work with lawmakers to ban the practice in New York, too."

New York City is the number one city in the country for questionable slip and fall claims, according to the National Insurance Crime Bureau. The agency said the fraudulent claims are causing insurance premiums to rise for building owners who are passing on the higher costs to tenants, homeowners and consumers.

Overall, New York state's legal system is consistently ranked among the worst in the nation in the American Tort Reform Association's annual "Judicial Hellholes" reports. New York, New York City or Albany have been included among those named "Judicial Hellholes" for nearly 15 years, according to the association.

The group has singled out efforts by Democratic lawmakers to expand damages available in wrongful death suits, which it argues would "perpetuate New York’s lawsuit abuse crisis and would make the state an outlier on wrongful death liability."