Prohibits persons, firms, or corporations whose interests are adverse to that of a person who received personal injuries or death as a result of an action by such person, firm or corporation from negotiating any contracts or settlements releasing such person, firm or corporation from liability for the tortious or potentially tortious act within thirty days of such act.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8706
SPONSOR: Walker TITLE OF BILL:
An act to amend the civil practice law and rules, in relation to prohib-
iting certain entities from negotiating any contracts or settlements
releasing such entities from liability for a tortious or potentially
tortious act within thirty days of such act
PURPOSE OF BILL:
This legislation will allow tort victims to void a legal settlement
releasing a tortfeasor from civil liability that is negotiated or
entered within thirty days of the date of the tortious or potentially
tortious act.
SUMMARY OF PROVISIONS:
Section one of this bill states the title of this bill is the "Unfair
Settlement Timing Act" (USTA).
Section two amends the Civil Practice Law and Rules (CPLR) by adding a
new section 5003-c stating that no person, firm or corporation whose
interest is adverse to that of a person receiving personal injuries or
death as a result of a tortious or potentially tortious act may negoti-
ate any contract, written or oral, or any settlement to release such
person, firm or corporation from liability, within thirty days from the
date of the tortious or potentially tortious act.
The new CPLR section 5003-c also provides that any contract, settlement
or release obtained in violation of this paragraph shall be voidable at
the option of the releasor.
Section three sets the effective date.
JUSTIFICATION:
This bill addresses the unfair situation where defense and insurance
lawyers rush to contact and pressure a tort victim to settle a potential
civil action in the immediate wake of an accident or civil offense. Such
victims may not have had the time to understand the nature and extent of
physical injuries that they sustained and will not have had adequate
time to contemplate hiring an attorney and then actually hiring one.
Indeed, the reason tortfeasors or insurers -- who are represented
through counsel -- rush to immediately contact a victim after an acci-
dent or tort, and rush to immediately draft and negotiate a settlement,
is specifically to prevent the victim from (1) understanding the true
nature of their injuries and/or (2) acquiring counsel that can negotiate
a fair and adequate settlement.
The result of this high-pressure tactic is too often as follows:
victims, in the immediate wake of an injury, are pressured to accept a
low-ball settlement. Later, some of these victims seek out an attorney,
who, because of that settlement, is incapable of filing an action to
obtain the compensation that the victims and their families not only
deserve - but need for medical care.
The bill addresses this unfair tactic by preventing settlement negoti-
ations during a 30-day period after an accident or other tortious or
potentially tortious act and giving the victim the option to void an
unfair settlement that is negotiated and entered into in violation of
this ban.
The fairness of giving a tort victim a month before he or she can be
pressured to sign a settlement is reflected in the practice of other
states, including Connecticut and Virginia. Indeed, Virginia imposed a
similar 30-day timeline 25 years ago. See Va. Code Ann. § 8.01-425
(30-day period); see also Conn. Gen. Stat. § 52-572a. (15-day period).
High-pressure settlement negotiations within 30 days of an injury or
other wrongdoing that result in inadequate and unfair settlements should
not be allowed.
LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
8706
2025-2026 Regular Sessions
IN ASSEMBLY
June 2, 2025
___________
Introduced by M. of A. WALKER -- read once and referred to the Committee
on Codes
AN ACT to amend the civil practice law and rules, in relation to prohib-
iting certain entities from negotiating any contracts or settlements
releasing such entities from liability for a tortious or potentially
tortious act within thirty days of such act
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. This act shall be known and may be cited as the "unfair
2 settlement timing act (USTA)".
3 § 2. The civil practice law and rules is amended by adding a new
4 section 5003-c to read as follows:
5 § 5003-c. Fair settlement timing. Notwithstanding any other law or
6 rule, no person, firm or corporation whose interest is adverse to that
7 of a person receiving personal injuries or death as a result of a
8 tortious or potentially tortious act may negotiate any contract, written
9 or oral, or any settlement to release such person, firm or corporation
10 from liability for such act within thirty days from the date of the
11 tortious or potentially tortious act. Any contract, settlement or
12 release obtained in violation of this section shall be voidable at the
13 option of the releasor.
14 § 3. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13180-01-5
