The fate of a New York City law governing debt collections is headed to New York's highest court to answer questions resulting from Berman v. City of New York, a lawsuit brought five years ago by a collection law firm challenging the city's statute regulating collection attorney activities, CollectionsCreditRisk.com reported yesterday. The key matter at hand is whether Local Law 15, which regulates debt collection and was passed in 2007, is void when applying to law firms that happen to collect debts. The collection industry is closely watching the issue, concerned by the prevalence of nefarious so-called collection agencies and firms that practice abusive tactics. The challenge to Local Law 15 originated five years ago when Long Island, N.Y. attorney Eric Berman, who died in 2010, and 21-member Lacy Katzen LLP of Rochester, N.Y., raised the issue of whether the law should be void with regard to law firms who happen to pursue delinquencies. District Court Judge Eric Vitaliano held in 2013 that the law does not apply to plaintiff law firms attempting to collect debts. That ruling also stated the law violates a provision of the city's charter because it purports to grant the city the authority to grant or withhold licenses to practice law.
