On December 31, 2021, New York Governor Kathy Hochul closed the year by signing into law the Insurance Full Information Disclosure Act (S7052) impose drastic changes to the rules set out in Section 3101 (f) of the New York Code of Civil Practice (CPLR) regarding the disclosure of defendants’ insurance coverage in litigation At New York.
The changes are not favorable to corporate defendants in product liability litigation. They are onerous, they will prove difficult to comply with, and they will likely result in a windfall for the Complainant Bar.
Under the Act, a defendant within 60 days of filing their response must provide proof of “the existence and content of any insurance contract under which any person or entity may be required to satisfy all or part of a judgment which may be rendered in the action or to indemnify or reimburse payments made to satisfy the registration of the final judgment.This obligation may seem benign and not that different from a defendant’s obligation under the previous iteration of CPLR 3101 (f), but it is the following that should cause sleepless nights for defendants, their lawyers. and to insurers:
All major, excess and umbrella policies must be disclosed
A complete copy of all policies (including statements, conditions and exclusions) must be provided
The insurance claim is considered part of the insurance contract and must be disclosed.
It’s getting worse. Under the Act, defendants must now provide:
Contact details of the third party claims adjuster or administrator and the person within the insurance entity to which the APT is required to report
The sums still available under the insurance policy to satisfy or reimburse the judgment
Detailed information that identifies lawsuits that have reduced or eroded the limits of any available insurance
Information about the amount of any attorney fee payments that have reduced or eroded the limits of any available insurance (ie in the case of “hot limits” policies).
The law does not stop there. The law also provides:
The new obligations apply to any defendant, third party defendant or defendant to a counterclaim or counterclaim.
The new obligations are “ongoing”, so the defendant must make “reasonable efforts” to ensure that the information remains accurate and complete by providing “updated information” within 30 days of receiving the information which make the previous disclosure inaccurate or incomplete.
The above “permanent” obligations exist for the duration of the dispute and for 60 days after any settlement or entry of a final judgment, including any appeal.
Under a new section 3122-b of the CPLR, disclosure under the Act must be accompanied by two forms of “certification”: one in the form of an affidavit of the defendant and the other of the defendant’s lawyer in the form of a solemn affirmation.
The law came into force immediately and expressly applies to all pending disputes. Finally, “the information required by this law which has not been previously provided in pending cases must be provided within sixty days” from its date of entry into force.
Still dizzy? It should be.
With a typical New York defense litigator handling perhaps dozens of active cases at once, think about the amount of legwork that will be required to fully comply with some of the basic provisions of the new law. Determining whether the defendant / client has excess or umbrella policies in place (in addition to the primary policy, which can provide the defense) on their own will require coordination with the defendant / client, their internal risk management people. , its broker and the primary insurer. Identifying and accurately calculating policy boundary erosion, as required by the new law, is likely to be a mind-boggling exercise in data collection and math, especially when the claims have been paid over a period of several years.
Officially justified in the legislation to address the “often delayed” insurance disclosure in personal injury litigation and the “confusing and often contradictory” case law on the subject, the potential problems associated with the new requirements of the law and the benefits The strategies that the law offers to bar complainants in New York, are limited only by the imagination. Please come back with us in the next few weeks.