With encouragement from insurers led by Progressive Insurance Co. and the state’s trial lawyers, New York lawmakers last week passed a bill that should both cut down on questionable small claims lawsuits and speed up no-fault claims disputes
The bill would put “file and serve” requirements into lower courts where they currently do not exist. File and serve is a practice currently followed in the state Supreme Court, commercial and small claims courts and requires that those bringing suit in the lower courts purchase an “index number” prior to the service of process. The fee for an index number is relatively small; it will not serve as barrier to individuals bringing legitimate issues to the courts.
This move, backed by insurance companies, the state’s trial bar, business groups and consumer groups is intended to reduce the number of frivolous suits brought to the lower courts. These suits are brought primarily in automobile insurance no-fault cases and are brought by so-called “medical mills” that submit questionable auto insurance medical bills to be paid under New York State’s no-fault insurance system.
If signed into law by Governor George Pataki, the bill would also institute an “expedited hearing” process in situations where no-fault automobile insurance disputes exist.
The expedited hearing process would provide drivers with faster answers to their questions about who pays by allowing a hearing to resolve the issue. Supporters say these hearings will be particularly helpful in car crashes that occur in the course of employment or crashes involving drivers represented by several no-fault insurance carriers. While these situations are not common, they are time intensive to resolve.
“This is the result of a cooperative effort between insurance companies and the New York State trial bar,” said Jim DeVito, New York auto product manager, Progressive. “It is a win for insurance companies because it will reduce the number of frivolous and sometimes fraudulent lawsuits. However, most importantly, it is a win for consumers because it should serve to reduce no-fault fraud and will provide accident victims and their representatives faster answers about which insurance companies are responsible for their claims.”
DeVitothanked the bill’s sponsors, Senate Judiciary Chair John DeFrancisco (R-Syracuse) and Assembly Judiciary Chair Helene Weinstein (D-Brooklyn).
Organizations supporting the bill include: Association of the Bar of the City of New York and the New York County Lawyer’s Association–Joint Civil Court Committees; New York Public Interest Research Group; New York State Trial Lawyers Association; The Business Council of New York State, Inc.; American Insurance Association; Independent Insurance Agents and Brokers Association of New York; New York First; New York Insurance Association, Inc.; Professional Insurance Agents Association of New York; Property Casualty Insurers Association of America; Chubb and Son; Liberty Mutual Insurance; Nationwide; The Progressive Group of Insurance Companies; The Robert Plan Corporation and State Farm Insurance.