AALA Scores Legislative Victory on Vicarious Liability
ALEXANDRIA, VA – The American Automotive Leasing Association (AALA) scored a major legislative victory this week as the House of Representatives gave final approval to H.R. 3, the Highway Reauthorization Bill (TEA-21). Included in the bill is a provision that, for the first time, uniformly eliminates antiquated laws – known as “vicarious liability” laws – that subject non-negligent vehicle leasing and rental companies to unlimited liability for injury and property damage solely because they are owners of the vehicles. The Senate is scheduled to pass the bill later this afternoon, and President Bush will sign it over the weekend.
In a multi-year lobbying effort, AALA, together with other vehicle leasing and renting companies and organizations, carefully crafted legislation that creates a national standard to clearly exclude non-negligent vehicle leasing and renting companies from liability for the actions of a customer operating a safe vehicle. It would not exempt leasing and renting companies from liability if those companies are found to be negligent.
AALA estimates that onerous and antiquated state vicarious liability laws have resulted in hundreds of millions of dollars in awards and settlements against vehicle leasing companies every year, this in spite of the fact that there is no allegation of fault on the part of the company that owns the leased vehicle. Moreover, the negative impact of these laws has resulted in increases in insurance costs, consumer rental and lease costs, and commercial transportation costs.
The success of this legislative effort represents a major business and legislative victory for the fleet leasing industry.