Location:
INSURANCE - MOTOR VEHICLE; LIABILITY, LEGAL;
Scope:
Connecticut laws/regulations; Background;

OLR Research Report


December 7, 2010

 

2010-R-0460

-Revised-

BILLS CONCERNING VICARIOUS LIABILITY

By: Janet L. Kaminski Leduc, Senior Legislative Attorney

You asked for a history of bills concerning vicarious liability brought before the legislature in the last 20 years, including who proposed them, who opposed or supported them, and why.

SUMMARY

Vicarious liability is a theory of liability under which public or social policy has determined that one person should be liable for the act of another (e.g., contractors may be held liable if subcontractors fail to finish a job). The doctrine is most commonly recognized in agency situations where a principal or employer is liable for a tort (wrong) committed by his or her agent or employee within the scope of employment.

Based on an online search, there have been 11 bills concerning vicarious liability introduced since 1988, most recently in 2005 (SB 337). All of the bills pertained to car rental companies. Six of the bills had public hearings and one became law (PA 03-250, HB 6546). The remaining bills died in committee without public hearing. PA 03-250 provided exceptions to the law that makes an individual or business entity that rents or leases an automobile to another vicariously liable for any property damage or personal injury caused by the operation of the vehicle (CGS 14-154a). The exceptions are generally for long-term leases (e.g., lease terms of one year or more).

Since PA 03-250 became law, there have been five attempts to eliminate the statutory vicarious liability for car rental companies. The Insurance and Real Estate Committee held public hearings on two of the proposed bills: HB 6862 (2005) and HB 5546 (2004). The committee reported the bills favorably to the House, which referred them to the Judiciary Committee, where they died.

The Connecticut Trial Lawyers Association opposed both bills, saying that letting car and truck rental companies “off the hook” for collisions caused by rental drivers would unfairly shift the costs to Connecticut citizens who were injured through no fault of their own. The Insurance Association of Connecticut opposed HB 5546 (2004) because it believed that shifting the liability from the rental company to the individuals could increase uninsured and underinsured motorist claims, resulting in increased automobile insurance premiums for all drivers.

Rental car companies supported both bills, saying that the companies take reasonable actions to ensure their renters are properly licensed and insured, but cannot regulate the renter's driving activity. Despite this, rental car companies bear the burden of financial responsibility, which can put them out of business.

For more information, see the Insurance and Real Estate Committee's JF reports at http://cgalites/2005/jfr/h/2005HB-06862-R00INS-JFR.htm and http://cgalites/2004/jfr/h/2004HB-05546-R00INS-JFR.htm.

Due to the time constraint on this report, we have provided a limited analysis. If you require a more in-depth analysis of any of the information presented, please contact us.

BILLS CONCERNING VICARIOUS LIABILITY

Table 1 lists the bills introduced since 1988 concerning vicarious liability. The table includes the bill year, number, title, and proponent; whether there was a public hearing; and the last action on the bill.

Table 1: Bills Concerning Vicarious Liability, 1988 - 2010

Year

Number

Bill Title

Bill Proponent

Public Hearing

Last Action

2005

SB 337

An Act Concerning (AAC) Removal of Vicarious Liability for Car Rental Companies

Senator Thomas Gaffey

No

Died in Judiciary Committee

2005

HB 6862

AAC Vicarious Liability for Car Rental Companies

Insurance and Real Estate Committee

Yes

Died in Judiciary Committee

2004

HB 5546

AAC Vicarious Liability for Car Rental Companies

Insurance and Real Estate Committee

Yes

Died in Judiciary Committee

2003

SB 524

AAC Vicarious Liability for Car Rental Companies

Senator Joseph Crisco

No

Died in Insurance and Real Estate Committee

2003

SB 268

An Act Eliminating Vicarious Liability for Motor Vehicle Rental Companies

Senator Joseph Crisco

No

Died in Transportation Committee

2003

HB 6546

AAC Vicarious Liability for Persons Renting or Leasing Certain Motor Vehicles

Environment Committee

Yes

PA 03-250

2003

HB 6421

AAC Liability of Persons Renting or Leasing Motor Vehicles

Banks Committee

Yes

Died on the House calendar

2002

HB 5530

AAC Liability for Car Rental Companies

Transportation Committee

Yes

Died in Transportation Committee

1999

SB 926

An Act Imposing Vicarious Liability on an Owner of a Motor Vehicle Used for Meretricious or Illegal Purposes

Senator Thomas Upson

No

Died in Judiciary Committee

1996

HB 5439

AAC Vicarious Liability

Insurance and Real Estate Committee

Yes

Died in Insurance and Real Estate Committee

1995

SB 613

AAC Liability for Car Rental Companies

Senator William Nickerson

No

Died in Transportation Committee

PA 03-250

Procedural History

PA 03-250 began in the Environment Committee as An Act Concerning Third-Party Liability for Contaminated Property. The committee (1) held a public hearing on the raised bill on March 14, 2003 and (2) favorably reported a substitute bill to the Judiciary Committee on March 28, 2003. On April 11, 2003, the Judiciary Committee favorably reported a substitute bill. Neither committee's substitute bills dealt with rental car companies.

The House adopted an amendment and passed the bill as amended on May 21, 2003. On June 3, 2003, the Senate adopted an amendment that replaced the underlying environment bill with provisions concerning vicarious liability for people renting or leasing certain motor vehicles. The House passed the bill in concurrence on June 4, 2003.

Public Act Summary

Under certain circumstances, PA 03-250 provides an exception to the law that holds anyone who rents or leases a motor vehicle that he or she owns to another person liable for personal or property damage caused by the vehicle's operation to the same extent the operator would have been had he owned the vehicle (CGS 14-154a).

The act exempts from the law people who lease private passenger vehicles to others, if the total lease term is for one year or more and the vehicle is insured for bodily injury liability for at least $100,000 per person and at least $300,000 per occurrence when the damages are incurred. The exemption applies to:

1. private passenger cars,

2. station wagons,

3. campers,

4. truck-type vehicles with a gross vehicle weight of less than 10,000 pounds that are (a) registered as passenger cars or passenger and commercial vehicles or (b) used for farming purposes, and

5. commercially registered vehicles as defined by law.

(The act specifically excludes from this exemption (1) motorcycles and (2) motor vehicles used as public or livery conveyance.)

The act also exempts from liability people who rent to others trucks, tractor trailers, and tractor trailer units with a gross vehicle weight of 10,000 pounds or more if (1) the lease or applicable contract term is for one year or more and (2) the loss or claim is insured by any combination of coverage, through an insurer, for at least $2 million.

The act exempts from double or treble damages the owner of a rental or leased motor vehicle who was not operating the vehicle when the damages occurred (CGS 14-295). By law, a court can award double or treble damages if an injured party has pleaded that another party has deliberately or recklessly operated a motor vehicle in any of the following ways, and that the violation was a substantial factor in causing injury, death, or property damage:

1. traveling unreasonably fast,

2. speeding,

3. driving recklessly,

4. operating under the influence of drugs or liquor or while having an elevated blood alcohol content,

5. illegally driving in the wrong lane,

6. passing in a no-passing zone,

7. illegally driving across a highway dividing strip,

8. driving the wrong way on a one-way street or rotary, or

9. failing to drive a reasonable distance apart.

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