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A05646 Summary:

COSPNSRPeoples-Stokes, Hyndman, Dickens, Simon
Amd 5106, Ins L
Enacts the "fairness for accident victims act"; provides that with respect to a serious personal injury action still permissible under the no-fault insurance system, the award or decision of an arbitrator or master arbitrator rendered in a no-fault arbitration will not constitute a collateral estoppel of the issues arbitrated.
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A05646 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  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 pronipt resolution of their claims through arbitration.   SUMMARY OF PROVISIONS: Amends seation 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 arbitrator pursuant to a No-Fault proceeding would not constitute a collateral 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 insurance benefits and damages in a third- party case have been incentivized to arbitrarily withhold No-Fault bene- fits 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; 2019/20 A.4648; 2021/22 A.3375 2021-2022: S5532   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
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