NON-STATUTORY “LIENS” NO LONGER CAN BE ASSERTED AGAINST SETTLEMENTS

NEW YORK’S GENERAL OBLIGATIONS LAW  5 - 335

This new law does not apply to a statutory right of reimbursement (such as Workers Compensation, ERISA, APIP or Medicare). Now, there is a conclusive presumption that settlement money paid in a personal injury or wrongful death action does not include compensation for the losses or expenses that were or will be paid by benefit providers, except those with a statutory right of reimbursement. This law was passed in November, 2009 and is effective immediately. Apparently, the provider may still be able to commence their own action to recover their benefits paid because the law speaks in terms of obtaining a recovery from a "settlement."

Moreover, a plaintiff in a personal injury or wrongful death action who settles with one or more of the defendants in the action will not be charged with violating any non-statutory right of a benefit provider or the provisions of any contract between the plaintiff and a benefit provider. Also, except for those payments made by a benefit provider for which there is a statutory right of reimbursement, no party that enters into such a settlement can be subject to any benefit provider’s claim for reimbursement or subrogation.

                                            NEW YORK ABROGATES INSURERS’ “LATE NOTICE”

                                                        DEFENSE ABSENT MATERIAL PREJUDICE

Effective January, 2009, New York’s Insurance Law §3420 has been amended. Insurers cannot deny coverage for “late notice” of a claim unless the insurer demonstrates “material prejudice.” The law also permits injured claimants to bring an early declaratory judgment action to determine the existence of insurance coverage where the issue is late notice.