Legislative Update: Three States Take the Lead in Vicarious Liability

In Connecticut, New York and Rhode Island, automobile manufacturers have taken the lead, along with rental companies, in attempting to push Bills through Congress that would affect state vicarious liability laws in different ways. The bills are considerably different in their approaches.

Connecticut. House Bill 6421 has been introduced in Connecticut, which would repeal § 14-154a Conn. Gen. Stat. and thereby eliminate vicarious liability for vehicle rental companies. Since § 14-154a applies to all rented “motor vehicles,” vicarious liability would be lifted for companies renting autos, RVs, trucks and motorcycles.

New York. Albany is taking a different approach to the issue of vicarious liability. There, the state legislature is considering Senate Bill 397, which would amend § 388 of the NY Vehicle and Traffic Law thereby eliminating unlimited vicarious liability and substituting limited vicarious liability. The limits for rental vehicles (rentals for less than one year) and leased vehicles (leases for 12 months or more) would be $100,000/300,000/50,000 plus an additional $500,000 in economic damages arising out of the use or operation of the rented or leased vehicle. This would put New York rental companies on identical footing with Florida rental companies.

Rhode Island. This legislature now has competing bills to choose from. The first alternative, House Bill 5714, is a disappointing alternative for vehicle rental companies. RI House Bill 5714 would relieve only lessors in leases of 12 months or more from vicarious liability for injury to third persons or their property, but would leave rental companies in rental agreements of 12 months or less jointly and severally (and, therefore, vicariously) liable with the renter for injury to third persons. Under the Bill, rental companies would retain the right to shift primary liability to the renter by placing such a disclosure on the face of the rental agreement form.

Senate Bill 902 was recently introduced, however, in the Rhode Island state legislature, and the bill is much more favorable to rental companies than House Bill 5714. Like New York SB 397, Rhode Island Senate Bill 902 would cap vicarious liability for vehicle rental companies by making rental companies vicariously liable for damages caused by a renter only up to the current state minimum financial responsibility levels of $25,000/50,000/10,000.

Note: Additional information about these Bills and Bills being considered in State legislatures across the country is available in the members-only section of the ACTIF Website (www.actif.org) or by becoming an ACTIF member. Call Maggie Tatton, ACTIF Associate Director, at (888) 200-2795 for more information.  

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