(The Center Square) — New York City has retained its No. 2 ranking among the nation’s top “judicial hellholes,” according to a new report, which says the city’s “fraudemic” of bogus lawsuits continued this year.
The American Tort Reform Foundation ranked the city second on its annual list for a second year in a row, citing lawsuit abuse under the Americans with Disabilities Act, rampant abuse in RICO filings, “nuclear” verdicts, abusive food and beverage litigation, and the state’s outdated scaffold law. The Big Apple moved up from fourth place two years ago.
“The Big Apple has a big problem — fraud has been allowed to run rampant in its court system,” the report’s authors wrote. “From trip-and-fall schemes to staged accidents and fake construction injuries, New York judges have permitted plaintiffs’ lawyers to cash in, and small businesses and unknowing residents are left to pick up the pieces.”
The report singled out New York state’s no-fault insurance system — which holds insurers liable regardless of fault — for creating a “fertile ground” for judicial abuse. There were nearly 39,000 reports for suspected no-fault fraud cases and 42,000 suspected healthcare fraud reports in 2024, nearly double the number in 2020, according to the report, which cited data from the New York Department of Financial Services.
“We’re seeing staged car crashes, slip-and-fall schemes, and even unnecessary medical procedures — all orchestrated by unethical lawyers and corrupt doctors who prey on vulnerable people,” Tiger Joyce, president of the American Tort Reform Association, said in a statement. “When judges allow these practices to flourish and lawmakers refuse to act, honest New Yorkers foot the bill for the city’s Judicial Hellhole reputation.”
Likewise, law firms are spending millions in ads to recruit more clients, according to the report. In 2025, spending on nearly local 239,039 services TV ads across New York state media markets exceeded $70 million, with the spending concentrated in New York City, the report noted. Law firms have also spent millions of dollars on campaign contributions to maintain the status quo, the report’s authors noted.
Overall, the report’s authors estimated the economic impact of excessive tort costs on New York City at $2,534.85 per person, every year, with an estimated $30 billion a year in “lost” impersonal income, citing a recent report by the Perryman Group. That report estimated that at least 427,794 jobs are lost yearly because of lawsuit abuse.
New York state’s legal system is consistently ranked among the worst in the nation in the association’s annual “heat check” report, which has labelled the state a “lawsuit inferno” over frivolous litigation in the court system.
The “judicial hellholes” report said lawmakers in Albany pursued several “problematic” bills in 2025, including proposals “that would drastically expand wrongful death liability and significantly increase meritless consumer class action lawsuits.”
“Rather than address the rampant lawsuit abuse wreaking havoc on the state’s civil justice system, New York legislators exacerbate it,” the report’s authors said.
Watchdog groups are urging Gov. Kathy Hochul to amend a Democratic-led tort reform bill, sent to her desk by state lawmakers Monday night, to require the disclosure of litigation funding contracts, which they say will provide more transparency in the process and give judges and defendants a full picture of the financial incentives working behind the scenes.
“To maintain the integrity of our civil justice system and to properly equip judges and parties in litigation with the facts, Gov. Hochul and the legislature must come to an agreement and subject lawsuit funding contracts to discovery, and disclosure to the court,” Tom Stebbins, executive director of the Lawsuit Reform Alliance of New York, said in a statement. “As the saying goes, ‘sunlight is the best disinfectant.'”
