New York lands in “Legislative Limbo” in the American Tort Reform Association’s 2026 Legislative HeatCheck report, as Gov. Kathy Hochul signed the state’s most significant lawsuit reforms in more than 20 years, lawmakers kept pushing liability-expanding bills in Albany.
“Gov. Hochul delivered real, measurable progress for New Yorkers this year, and that deserves credit,” said Lauren Sheets Jarrell, ATRA’s vice president and counsel for civil justice policy. “Over the objections of a reluctant legislature in ‘limbo,’ Gov. Hochul showed up as a ‘Tort Reform Trailblazer.’”
ATRA’s report notes that Gov. Kathy Hochul receives the special designation of a “Tort Reform Trailblazer” governor due to her diligence and tenacity in pushing for reform in the Empire State, while the legislature earns the “Legislative Limbo” notation.
“By pushing back against Albany’s most powerful special interest and delivering historic liability reforms, Gov. Hochul has shown what true leadership — and what a real affordability agenda — looks like,” said Tom Stebbins, executive director for the Lawsuit Reform Alliance of New York. “The Legislature should follow her lead by modernizing New York’s outdated, lawsuit-friendly laws instead of protecting the billboard lawyers’ business model. New York will never be affordable for working families as long as it remains a Judicial Hellhole®, and a haven for fraudsters and profiteering attorneys.”
As part of the state budget signed into law May 27, Hochul secured a package of auto liability and anti-fraud reforms lawmakers had resisted for years.
The new law moves New York from pure to modified comparative fault in motor vehicle claims, tightens the legal definition of a “serious injury” that lets a driver sue beyond no-fault benefits, and limits noneconomic damages to cases involving serious injuries. It caps noneconomic damages at $100,000 for drivers who were driving drunk, fleeing a felony or driving uninsured at the time of a crash. On the fraud side, it makes it a crime to hire, recruit or orchestrate someone else into staging a car accident, and bars health care providers with a history of misconduct from treating workers’ compensation patients or performing independent medical exams.
“These reforms strike directly at New York’s ‘fraudemic,’” Sheets Jarrell said. “For years, unscrupulous lawyers and the medical providers working with them made staged accidents and inflated injury claims a business model. This law finally gives prosecutors and insurers the tools to go after everyone involved, not just the driver behind the wheel.”
New York drivers pay about $4,000 a year on average for auto insurance, nearly $1,500 above the national average, and the state had the nation’s second-highest number of staged car crashes in 2023, with 1,729 reported.
“But one strong budget deal doesn’t erase New York’s status as a perennial Judicial Hellhole,” Sheets Jarrell said. “Lawmakers are still sitting on bills that would pile even more lawsuits onto a system that’s already failing families.”
ATRA notes that while the budget fight took up much of the oxygen in Albany in 2026, fewer problematic bills were given attention this year. However, lawmakers are expected to return in 2027 with a liability-expanding agenda. One such bill — SB 9533, which was sponsored by Democratic Sen. James Skoufis — would have let plaintiffs collect an unsatisfied judgment directly from a third-party defendant found liable for contribution or indemnification, even if that third party wasn’t liable to the plaintiff directly.
“Opening the door for plaintiffs to recover damages from third parties just incentivizes bad actors to target perceived ‘deep pockets’ and encourages litigation,” Sheets Jarrell said.
Another proposal responsible for New York’s “Legislative Limbo” status is the so-called “Sunshine in Litigation Act,” which ATRA notes is, in reality, a threat to confidential settlement agreements. SB 9765 and AB 7473 sought to prohibit settlement agreements which conceal a broadly defined “public hazard.”
“New Yorkers are still paying the price for years of lawsuit abuse, and bills like these would only add to that burden,” Sheets Jarrell said. “They can’t let one good budget deal become an excuse to expand liability everywhere else.”
Excessive litigation costs New York families nearly $10,740 a year in a “tort tax” for a family of four, or $2,684 per person — the second-highest tort tax of any state — and enough to buy roughly 52 average-priced Knicks tickets, according to ATRA’s report. Excessive tort costs also contribute to the loss of 446,616 jobs and $53.3 billion in economic output statewide each year, along with $2.7 billion in lost state government revenue.
New York’s reforms come against a backdrop of longstanding dysfunction. New York City ranks No. 2 on the American Tort Reform Foundation’s 2025-2026 “Judicial Hellholes®” list, driven by a “fraudemic” of staged accidents, fabricated injuries and no-fault insurance fraud, and New York has landed on the Judicial Hellholes® list 11 times since the report began in 2002, spending the last nine straight years in the No. 2-to-4 range. Its Legislature has separately been named a “Lawsuit Inferno” in ATRA’s Legislative HeatCheck two years running, in 2024 and 2025.
The New York Legislature joins California, Michigan and Ohio in “Legislative Limbo,” a category ATRA renamed this year from “Heat Watch,” in the 2026 Legislative HeatCheck. The full report is available at heatcheck.atra.org.
