Early compensation may be tactic against premises liability suits

While no one can deny that the city of New York is showing signs of its age, important standards are in place to ensure that the city’s infrastructure is maintained. As it is, federal guidelines mandate that companies that control gas pipelines throughout the city conduct routine maintenance and assessments for pipe damage and aging. In the event that a serious premises liability incident occurs, companies can be held liable for negligent and/or otherwise dangerous conduct. Since it has been linked to a recent multi-fatality building collapse, one gas company has responded even before lawsuits have been filed.

The building explosion that occurred in East Harlem recently took the lives of eight people and left many others injured. The exact cause of the incident is still under investigation, but it is suspected that a natural gas leak contributed to the blast. And even though it was not officially confirmed that a gas leak caused the fatal explosion, the company that runs a gas pipeline in the area has already begun compensating victims.

Consolidated Edison Inc. reportedly maintains a pipeline in the neighborhood that is more than 100 years old. And since it was determined that a gas leak may have played a role in the incident, the company issued payments to 87 victims already.

Despite the fact that the gas company had yet to be identified in any premises liability lawsuits, one source suggests that the early compensation efforts are intended to relieve the company of potential damages to come. The money that victims have already accepted from the gas company would likely factor into the amount of awards they’d receive if they were to win a lawsuit. Also, some victims may be less inclined to pursue claims against the company since they have received some level of compensation.

Source: Wall Street Journal, “ConEd Paying East Harlem Explosion Victims,” Yoni Bashan, March 19, 2014