Highway Bill to End RAC Vicarious Liability

WASHINGTON D.C. --- The U.S. Congress last week approved legislation aimed at ending the practice of holding vehicle renting and leasing companies liable for the accidents of their customers or lessees.

After years of unsuccessful reform efforts, car rental companies can finally celebrate the end of vicarious liability -- a policy that has cost the industry more than $100 million each year in civil suit settlements and jury awards.

The legislation, promoted aggressively by the vehicle renting and leasing industries, is an amendment in the long-delayed federal highway bill. President Bush has promised to sign the $286.4 billion bill.

Congressman Sam Graves (R-Mo.) introduced the amendment. When the bill is signed into the law, Graves' amendment will supersede all state vicarious liability laws pertaining to vehicle renting and leasing. The law would take effect immediately.

A coalition of vehicle renting and leasing companies, formed by the Truck Renting and Leasing Association (TRALA) in 2003, spearheaded the reform effort. Known as the Vehicle Renting and Leasing Fairness Alliance, the group includes Cendant Car Rental Group, Enterprise Rent-A-Car, Hertz Corp., Vanguard Car Rental and Dollar Thrifty Automotive Group.

"This has been a long-fought battle," said TRALA President and CEO Peter J. Vroom. "We have been successful in reforming vicarious liability laws at the state level for many years. But with the interstate nature of our national rental and lease fleets, federal action was essential to create uniformity that no state can impose vicarious liability. This is simply common-sense tort reform. Renting and leasing companies should not be held liable for actions over which they have no control."

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