On December 31, 2021, New York Governor Kathy Hochul signed legislation intended to streamline personal injury litigation. The law will have the opposite effect. The “Comprehensive Insurance Disclosure Act” amends the Civil Practice Laws and Rules to require extensive policy and underwriting information that will extend litigation delay to gather information that is not needed or relevant for most cases. The Act applies to pending cases (expanded disclosures due by March 1, 2022). For future cases, the disclosures are due within 60 days of serving an Answer to the Complaint.
The Act requires disclosure of:
- all primary, excess and umbrella policies or insurance contracts (including the application for insurance);
- the contact information of a claim adjuster or third-party administrator;
- the amounts available under the insurance policies;
- any lawsuits that have or may reduce or erode the amounts available under the insurance policies, including contact information for the attorneys for all represented parties in such other lawsuits; and
- the amount of payment of attorney’s fees that have reduced the face value of the policies (as well as the contact information for any attorney who received such payments).
Additionally, required insurance disclosure must be sworn to in a certification by the defendant and defense counsel.
For most cases, this information is not needed. Typically, a plaintiff needs to know simply that the defendant has insurance and the amount available to pay a judgment, if obtained. Requiring defense counsel and insurance providers to gather additional information, often written years prior to the existing policies, is burdensome and does nothing to advance the litigation. Unfortunately, there is no provision in the Act for any exceptions to the new disclosure requirements. Time will tell, but we predict this Act will further complicate and delay the resolution of personal injury actions in New York.
Most incredibly is that the Act, requires disclosures “during the entire pendency of the litigation and for 60 days after any settlement or entry of final judgment in the case inclusive of all appeals.” Updated information must be provided within 30 days of receiving information that renders the prior disclosure or incomplete in whole or part.
This provision is especially burdensome and problematic, as it invites uncertainty in settled cases which are presumably final resolutions regardless of changes in insurance.
Carriers and claims handlers will soon be flooded with disclosure obligations that they will struggle to locate and provide in a timely fashion. This legislative ‘solution’ will undoubtedly exacerbate the current litigation backlog.
Please consult with counsel regarding the impacts of this new law. Please reach out to the authors for more information or contact a member of the Gordon & Rees Insurance practice group for additional information.