Unregulated New York litigation lending industry is causing a ‘crisis’ in real estate: Architecture & Real Estate Group

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by born golden

Two powerful building and construction groups have accused New York’s unregulated, multibillion-dollar industry of promoting dubious litigation and creating a “crisis” in the real estate world.

Associated Builders and Contractors (ABC-NYS) and the Real Estate Board of New York (REBNY) are reforming “third-party litigation financing” to promise potential plaintiffs a quick cash advance (money they don’t have to pay back). I’m looking for. If you lose, pay it back.

“What it has created is a general liability crisis,” ABC-NYS President Brian Sampson told the Post on Wednesday.

ABC-NYS and REBNY are working with Consumers for Fair Legal Funding to improve the litigation financing industry, which they and other commentators say is rife with fraud and fraud. fighting.

The coalition wants state lawmakers to take control of shady and predatory companies that fund plaintiffs in frivolous lawsuits in exchange for a cut of litigation proceeds, often at exorbitant rates of up to 200%. high interest rates will be charged.

They use New York State’s strict workers’ compensation laws and other statutes to trick workers, often immigrants, into filing lawsuits and then quickly awarding companies and public entities large settlements. They claim that the aim is to pressure the government into resolving the issue.

Subsequent reports revealed that these lender-funded lawsuits could cost Big Apple taxpayers millions of dollars each year in cases that never end up in court. became.

“We’ve created a market for fraudulent claims where an allegedly injured worker lies at work, leaves work, calls 911, and by the time they get to the hospital, they’re already seeing an attorney.” Sampson said.

“There are a lot of people who have been manipulated and neglected, and that compounds the problem we have with general liability,” Sampson added.

ABC-NYS and REBNY claim that the onslaught of lawsuits has led to higher premiums and ultimately increased insurance construction costs.

Sampson said the cost of insuring a project is about 2.5% in New Jersey, but as high as 13% in New York.

“Lawmakers need to pass legislation this Congress that prevents criminals from taking advantage of defenseless victims,” ​​said Carl Hamm, REBNY General Counsel and Senior Vice President.

“Without reform, premiums will continue to rise, making it harder than ever to emerge from our state’s deepening housing crisis.”

The coalition supports the bill sponsored by state Sen. Leroy Comrie (D-Queens). The bill would establish regulations for the litigation financing sector, including setting the maximum payout rate that third parties can obtain from legal settlements.

The group also notes that under New York’s much-maligned scaffolding law, developers and contractors are fully liable for injuries sustained on work sites, even if workers are at fault. He pointed out that he was responsible for

Previous attempts to reform scaffolding laws have faced stiff opposition, particularly from the powerful trial lawyers association.

Consumers for Fair Legal Funding touts a wide range of members, including the Alliance for Quality Education, the Bodega and Small Business Group, the Business Council, and the New York City Conference of Mayors.