Elizabeth speaks out against insurance fraud at a press conference in Brooklyn.
BTEA President Elizabeth Crowley was quoted in a recent Engineering News-Record article “Immigrants, Accidents and Lawsuit Loans: Does NY Need New Rules?”, which delves into the dubious practice of third-party lawsuit loans as an enabler of insurance fraud.
“Since 2010, the cost insure a $100-millon project has tripled, from 4% in 2010 to 8.5% in 2020, and to a staggering 12% in 2024,” said Elizabeth, putting into context the damage being done to the building trades industry as a result of a “fraudemic” of faked worker injuries on construction sites. (WABC-7 did an investigative report a year ago exposing some particularly egregious examples of fraudulent claims.)
The ENR article digs into the multi-billion-dollar business of third-party legal funding, where lenders advance money to injury lawsuit plaintiffs for medical treatment or living expenses and pay fees to their law firms in exchange for a significant percentage of any money won in the case. The article points out the lack of regulation in New York State governing the practices of litigation lenders, who charge high interest rates and have a financial incentive to “prolong cases in search of massive awards.”
There are troubling accusations of abuse by these lenders. A former vice president of Cartiga, one of the country’s biggest pre-settlement lenders, maintained in a recent court filing that he was terminated from his job in 2023 because he notified senior managers within the company that Cartiga was funding fraudulent claims. The former employee’s case against the company is ongoing.
The BTEA is pushing back against the “fraudemic” by supporting a bill proposed by New York State Assemblyman David Weprin that would make faking or staging a construction accident a felony. The aim is to pass this legislation in 2025.