BILL NUMBER: S5591A
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the insurance law, in relation to the collateral estop-
pel effect of issues decided by certain arbitrators
 
PURPOSE:
To eliminate the inequities in present law by giving claimants seeking
reversal of improper denials of No-Fault benefits prompt resolution of
their claims through arbitration.
 
SUMMARY OF PROVISIONS:
Amends section 5106 of the insurance law by adding a new subsection
(d) to provide that, with respect to an action for serious personal
injury permissible under section 5104, an award or decision by an arbi-
trator pursuant to a No-Fault proceeding would not constitute a collat-
eral estoppel of the issues arbitrated, but such an award or decision
may be admissible as relevant evidence by a party to an action.
 
JUSTIFICATION:
The bill would give claimants seeking reversal of improper denials the
benefit of prompt resolution of their claims through arbitration. Under
the present law, when a claimant is denied No-Fault benefits by their
insurance carrier based upon an insurer's medical examination or other
contractual justification, the attorney representing that claimant in a
third-party action for pain and suffering is extremely reluctant to
submit that denial to arbitration pursuant to Section 5106 of the Insur-
ance Law because an adverse decision would probably result in the colla-
teral estoppel of the issues arbitrated. Often, this results in extin-
guishing the third party claim entirely. Because of these consequences,
many claimants are placed in an insoluble dilemma: either delay neces-
sary medical treatment further exacerbating their medical condition, or
risk an adverse determination in arbitration that will nullify their
third party case.
For background, in 2022, the Legislature passed, and the Governor signed
into law, the Justice for Injured Workers Act, Ch 585, Sec 118-a WCL,
which provides that "no finding or decision but the workers compensation
board, judge or other orbiter shall be given collateral estoppel effect
in any other action or proceeding arising out of the same occurrence."
Both branches of government have already recognized the same perils of
applying the collateral estoppel to an abbreviated proceeding that was
created to ensure prompt compensation and treatment.
The Bill seeks to remedy the notion that collateral estoppel is an
appropriate legal doctrine to be applied to a personal injury action
from a decision, be it by an arbitrator or a court, to pay an individual
medical bill, procedure or device.
Carriers, especially those who are responsible for both No-Fault insur-
ance benefits and damages in a third-party case have been incentivized
to arbitrarily withhold No-Fault benefits since a win in an arbitration
proceeding or a court of law over an individual medical bill has the
potential to either cause a dismissal of the third-party personal injury
case or at the very least a substantial diminution of damages.
 
LEGISLATIVE HISTORY:
Previously introduced. 2017/18 - A.3533
2021-2022: S5532
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
Immediately.

Statutes affected:
S5591: 5106 insurance law
S5591A: 5106 insurance law