Excessive Litigation is Driving Up Costs in New York
New York has the second-highest cost of litigation and claims paid in the country, averaging $7,000 per household each year compared to about $4,200 nationally.
As a result, insurance premiums are 15% higher than the U.S. average, including 12% more for health coverage and 52% more for auto insurance.
These hidden costs ripple through the economy, raising rents, pushing up construction budgets, and making it harder for small businesses to survive.
One striking example is the Scaffold Law. Enacted in 1885, it imposes absolute liability on property owners and contractors for gravity-related injuries, regardless of workers’ negligence. No other state has such a law. Research shows it inflates construction costs by about 7% and consumes nearly $800 million in excess insurance and legal costs — funds that could otherwise support more housing construction and more jobs.
Excessive litigation is unsustainable and preventable. State lawmakers can modernize liability laws, limit third party financing of lawsuits, and crack down on fraud. The question is whether Albany will take action or force New Yorkers to keep footing the bill.
By the Numbers
$7,000
Annual Cost of Litigation and Claims per NY Household
PFNYC, 2025
15%
Higher Average Insurance Premiums vs. U.S.
PFNYC, 2025
7%
Extra Cost Added to NY Construction Projects
CBC, 2020
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It means New York has more lawsuits and bigger payouts than almost anywhere else. Outsized jury awards, high attorney fees, staged accidents, and fraud all make the problem worse — and everyone pays the price.
Partnership for New York City: Excessive Litigation Is Driving New York’s Affordability Crisis
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These costs impact New Yorkers whether they ever step foot in court or not. On average, excessive litigation costs each household about $7,000 a year. It shows up in higher rent, more expensive insurance, and bigger bills at the store. Taxpayers also end up paying more when the government has to cover insurance and legal costs with funds that could otherwise support housing construction, schools, and job growth.
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A state law that makes contractors and property owners fully liable for gravity-related workplace injuries, even if workers were negligent. This is just one example of the antiquated laws that contribute to New York’s environment of excessive litigation.
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