News Alert

Fabiola Vieites, Matthew P. Moccia, Matthew Hughes

As part of her 2026 Executive Budget, Governor Hochul proposed broad legislative reforms targeting fraud and consumer costs related to auto insurance and motor vehicle accident litigation. Over the last weeks, the Governor rallied in support of these reforms with leaders and advocates, attempting to coalesce support. Governor Hochul’s proposed reforms include amendments to the civil practice law, aimed at reducing frivolous litigation and excessive verdicts and verdict allocations to pass resulting cost reduction to New York’s auto insurance customers.

While Governor Hochul is rallying for support for the amendments, the Senate and Assembly recently submitted revised versions of the proposed legislation omitting the Governor’s provisions entirely. The Governor is nonetheless pursuing these amendments as a significant part of her agenda and they may be re-introduced for legislation in the near term. The Citizens Budget Commission (CBC), a nonpartisan fiscal think tank, also recently submitted testimony in support of the Governor’s reforms suggesting potential for growing momentum behind them.

Should these amendments take effect, it would significantly impact litigation strategy and pretrial practice. As such, we have provided a more in-depth discussion on the key amendments as well as potential practical effects for practitioners.

Tightening the “Serious Injury” Threshold

The existing no-fault framework in New York permits plaintiffs with a “serious injury” to sue for pain and suffering. However, as currently defined, “serious injury” has often been interpreted as permitting plaintiffs with minor and non-permanent injuries to pursue damages beyond the no-fault limit. Governor Hochul’s proposed amendments are aimed at redefining “serious injury” using stricter, objective medical standards. For instance, the Governor proposed to eliminate the “90/180” category of serious injury entirely, intending to reduce the number of spurious or marginal personal injury claims clogging state court dockets. The 90/180 category allows accident victims to sue for pain and suffering when a non-permanent injury prevents them from performing “substantially all” daily activities for at least 90 of the 180 days following an accident.

It is not clear to what extent this amendment would immediately reduce the number of cases filed involving marginal injuries as plaintiffs often file complaints alleging 80/180 injuries in combination with more severe injuries. These types of complaints would be unaffected by the elimination of the 90/180 category.

Investigating the true extent of an injury early in litigation will be even more critical should the amendment pass. Additional amendments tightening the evidentiary standards for establishing objective medical proof of such claims may be needed for the litigation system to experience the full benefit of the Governor’s “serious injury” amendment.

Barring Any Recovery Where Plaintiff is Mostly at Fault

New York is with a minority of jurisdictions that allow a plaintiff to recover in litigation even where the plaintiff is primarily at fault for causing their injury. To address this, the Governor proposed to modify CPLR § 1411 to implement a modified comparative fault standard, precluding MVA claimants from recovering any damages if their culpable conduct is greater than that of the defendants.

This is one of the most significant and potentially impactful amendments proposed by the Governor and would bring New York in line with a majority of states. However, this amendment is expected to face the most opposition from the plaintiffs’ bar and affiliated lobbyists.

Should this amendment pass, it would significantly change the calculus for settlement and trial. In cases where the plaintiff has a substantially provable share of the liability, plaintiff’s counsel may be more willing to come to the table for reasonable settlement negotiations knowing the risk of essentially a defense verdict if a jury were to assign their client 51% of the fault.

Elimination of Joint and Several Liability Exception for MVAs

Gov. Hochul’s proposed amendments also included the wholesale repeal of CPLR § 1602(6), which exempts MVA cases from joint and several liability. Eliminating this exemption would ensure that defendants in an MVA case are only liable for damages in proportion to their fault so long as they are less than 50% at fault.

Eliminating joint and several liability in auto cases would have the effect of significantly redistributing risk between co-tortfeasors, with profound implications for litigation strategy and settlement allotment. It could result in plaintiffs’ attorneys being more willing to engage in reasonable settlement discussions with low fault defendants knowing that the defendant will only ever be liable for their proportionate share of liability. Moreover, in cases with multiple tortfeasors plaintiffs will face defendants providing proofs against other entities whether named in the litigation or non-parties. However, this amendment will also implicate indemnification issues. Generally, this amendment will create a barrier to plaintiffs’ customary attempts at pursuing recovery from deep pocket entities in lieu of minimally insured or insolvent entities/individuals who have higher shares of fault for the accident.

Sequencing Liability and Threshold Determinations

Gov. Hochul’s proposal would also effectively structure the order in which liability and threshold determinations are made, amending Insurance Law § 5104(a) to require that:

No liability for non-economic loss shall be fixed unless and until the trier of fact has determined the existence of a serious injury […] the trier of fact shall not determine the question of whether an injury is a serious injury until the trier of fact has determined the party or parties at fault.

This proposal is likely intended to streamline jury trials (thereby reducing litigation costs, with hopeful downstream cost savings for purchasers of insurance) by requiring first that the factfinder identify who is “at fault” for the accident before deciding whether plaintiff’s injuries meet the serious injury threshold. In considering this amendment in relation to the comparative fault amendment, in a case where a plaintiff is found more than 50% by the jury, deliberations would end and the jury would presumably not get to the questions of serious injury or damages.

Key Takeaway:

The Legislature has signaled that it does not accept these proposed amendments in their initial form. However, Gov. Hochul has signaled that these amendments are a priority and has suggested in interviews that she expects the amendments to be reintroduced. In the event the amendments or a negotiated version are signed into law, LCBF is prepared to advise clients on how claims investigation and management, litigation defense strategy, trial strategy, and coverage positions are impacted.