What Is Third-Party Liability and Why Does It Matter?

Nationwide, about one driver in eight has no auto insurance at all. This problem may be even worse in New York. The Empire State also has one of the lowest auto insurance minimum requirements in the country. So, many drivers are either uninsured or dangerously underinsured. If the wreck caused catastrophic injuries, the tortfeasor (negligent driver) may not have enough insurance coverage to provide fair compensation.

Fortunately, New York also has very broad vicarious liability (third-party liability) rules. These doctrines give victim/plaintiffs an additional source of recovery in these situations. That could be the difference between fair compensation and settling for less.

Fair compensation in a New York car crash usually includes money for economic losses, such as medical bills, and noneconomic losses, such as pain and suffering. Additional punitive damages may be available as well, in some extreme cases.


Alcohol Provider Liability

New York is one of the few jurisdictions which still has a very broad dram shop law. Such laws protect victims in alcohol-related collisions. According to New York law, restaurants, bars, grocery stores, and other commercial providers are liable for car crash damages if:

  • Minor tortfeasor: If the provider sold alcohol to a minor who later caused a car crash, the provider may be liable for damages as a matter of law. Many traditional defenses, like the “s/he looked older” defense, usually do not hold up in court.
  • Obviously intoxicated tortfeasor: Victim/plaintiffs may use circumstantial evidence to establish obvious intoxication at the time of sale. Such evidence includes bloodshot eyes, slurred speech, and unsteady balance.
  • Foreseeable crash: Finally, there must be a logical relationship between the sale and the crash. Foreseeability is easy to establish if the provider was a bar or restaurant. If the provider was a grocery store or convenience store, foreseeability is more difficult, but not impossible, to prove.

Party hosts and other social hosts who provide alcohol to guests may also be vicariously liable for damages, especially if the guests were under 21.


Employer Liability

If the tortfeasor was an Uber driver, taxi driver, truck driver, or other commercial operator, the respondeat superior rule probably applies. Employers are liable for the negligent acts of their employees if:

  • Employee: For tax purposes, employees are usually workers who receive regular paychecks. But for negligence purposes, anyone the employer controls is an employee. This definition includes owner-operators, independent contractors, and even unpaid volunteers.
  • Scope of Employment: Similarly, any act which benefits the employer in any way is within the scope of employment. This definition includes things like driving an empty vehicle with the company logo around town. The free advertising benefits the employer.

If respondeat superior does not apply, another employer liability theory, like negligent hiring or negligent supervision, may fit.


Owner Liability

Drivers under 18 cannot own property as a matter of law. So, these drivers always borrow someone else’s vehicle. Likewise, roommates and friends often loan their cars to other people. If an owner allows an incompetent driver to use a vehicle, and that incompetent driver causes a crash, the owner may be liable for damages. Evidence of incompetency includes:

  • No drivers’ license,
  • A safety-suspended drivers’ license,
  • Operating in violation of a license restriction (e.g. driving without required glasses), and
  • A poor driving record.

Enterprise Rent-a-Car and other commercial negligent entrustment claims work differently, because of the Graves Amendment.


Partner with an Aggressive Attorney

The tortfeasor may not be the only party liable for damages. For a free consultation with an NYC car accident lawyer, contact Michael J. Redenburg, Esq. P.C. We do not charge upfront legal fees in negligence cases.