24 Apr 2004
Getting Auto Lease Harder as Carmakers Fear Risks

Shakespeare had a solution for New York: "The first thing we do, let's kill all the lawyers." [Henry VI, Part 2].

The 1924 law establishing "vicarious liability" was intended to hold livery owners responsible when their penniless drivers caused damage they could not pay for. In recent years, however, lawyers have figured out how to use the statute in cases involving leased cars.

Since 1924 was well before insurance was mandated, the law was originally intended to act as a "insurer of last resort" kind of thing ... but how are they using it now?

In 1999, Mark Chilberg of Youngstown, N.Y., ran over and severely injured his 15-year-old daughter, Amber, while she was sunbathing in the driveway. Last year a jury awarded Amber $1 million in damages and, on the principle of vicarious liability, decided that most of that sum had to be paid by the company that had leased Mr. Chilberg his car, the Ford Motor Credit Corporation.

If this wasn't so freaking outrageous, I'd have to put it in the humor category! How in the world could any reasonable person find a credit company liable for this?

A law that holds owners of vehicles responsible for any accidents is proving too much of a financial risk for car companies.

(link) [New York Times: NYT HomePage]

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