Although the facts vary slightly in each state, the basic problem is the same: leasing companies can be vicariously liable in a lawsuit for the actions of the driver of the vehicle. In many cases, the costs and risks were so great that companies began ceasing leasing operations in states with these archaic laws.

A recent example is Morgan Chase, which stopped making car leases in Rhode Island last October after getting slapped with a $28 million jury verdict in an accident case involving a vehicle for which it was the leasing company. The National Vehicle Leasing Association estimates that eight leasing companies in the state of New York faced $1.5 billion in litigation claims. As the exposure increased, many companies began leaving the states, resulting in fewer consumer choices to obtain a vehicle.

To preserve leasing as an option for their constituents, legislators in all three states introduced legislation to correct these antiquated laws. Rhode Island, the state that brought vehicle lessor's vicarious liability to the headlines with the verdict against Chase, passed SB 668 that effectively eliminated unlimited liability for leases twelve to thirty-nine months long. In New York, bills to address the issue are still alive. The Senate has passed one bill but the Assembly has been slow to move it forward. In Connecticut, HB 6421 died upon adjournment but the issue will certainly be back again next year.

Approximately eight states have varying degrees of archaic vicarious liability laws in need of updating, but Rhode Island, New York and Connecticut comprise the worst of the list. One of them, Rhode Island, made the necessary corrections and kept auto leasing available for its residents. New York has a chance to do the same this year. Connecticut will be addressed again in the next session.