New York Personal Injury News & NYC Legal Current Events

Governor Signs Anti-Subrogation Law

NYSTLA achieved an extraordinary legislative victory when Governor Paterson signed into effect new General Obligations Law §5-335 on November 12, 2009. This law now bars any benefit provider, such as an HMO or private health insurer, from seeking any reimbursement or subrogation against any settling party to a personal injury or wrongful death action with respect to benefits it may have paid or is obligated to pay. The only exceptions are for claims for which there is a statutory right of reimbursement (e.g., Medicaid, Medicare, workers' compensation) and subrogation claims to recover excess no-fault benefits.

This new law directly overrules two problematic Court of Appeals decisions, Teichman v. Community Hosp. Of Western Suffolk, 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (2009), to the extent they recognized non-statutory rights for reimbursement or subrogation against a settling party.

Moreover, this law takes effect immediately and applies both to future actions and all pending cases that have not settled or gone to trial as of today.

This law is a major victory in protecting our injured clients against the proliferation of unwarranted claims for windfalls by way of subrogation and reimbursement asserted by health insurers in recent years. It will significantly facilitate the prosecution of our cases and remove major obstacles to their resolution.

The bill also eliminates the exception under CPLR §4545 that barred a public employer sued by its employee from reducing a future lost earnings award by the amount of future pension benefits that plaintiff will receive (Iazzetti v. City of NY, 94 N.Y.2d 183, 701 N.Y.S.2d 332 [1999]). Under this new law, a public employer sued by its employee will now be entitled to the same collateral source setoff for future benefits as all other defendants are already entitled to receive. Even here, NYSTLA effectively rebuffed the City of New York's overreaching attempts to have the law changed not only for new actions but also all those now pending. Thus, unlike the new GOL §5-335 above, this amendment to CPLR §4545 applies only to actions commenced on or after its effective date.

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