Torts, Insurance and Compensation Law Section
NEWSLETTER

August, 2008

Letter from the Section Chair,
Daniel W. Gerber

I am pleased to report that your Section's Executive Committee met in early July at Niagara on the Lake with a full agenda. Many legislative issues were addressed, including the Section proposing an amendment to the Insurance Law which would require an insured demonstrate prejudice in order for an insurer's untimely denial of coverage to be deemed invalid. An ad hoc committee of both counsel for policyholders and insurers has been formed. The Executive Committee will consider this committee's proposed legislation at our next in-person meeting on October 7, 2008 at the Bar Center in Albany. 

The October meeting should be an exciting one because it will be the first time that any Section of the New York Bar has webcast its Executive Committee meeting. Since this is our first time out, we intend to webcast the first hour of that meeting. Further information for watching the meeting will be available in the near future on the Section homepage.

Your Executive Committee also is continuing to work to develop a strategic plan. As part of that plan, we hope to energize our substantive committees, and create substantive opportunities for involvement in the Section. We are also focusing on growing our membership through young and diverse members. The Section has created 25 diversity scholarships for our Diversity Chairs to utilize. These scholarships allow waiver of the first year of Section dues. We have also created a law school writing contest to raise Section awareness on campus. More information on this scholarship will soon be available on the Section homepage.

While we want to continue to improve in the areas of youth and diversity, we certainly want to make sure to continue to offer the benefits that our current members enjoy. We recently surveyed our members, and the results overwhelmingly show that the key benefits of Section membership are our publications and CLE. The Section Journal, newsletters, and educational programs keep our members plugged-in to the latest changes in the law. We will continue our emphasis and dedication to these items.

We also will focus on re-energizing our Divisions. Both the Construction and Surety Division and Worker's Compensation Law Division have new chairs. We are working together to make these Divisions active and beneficial to our members, including appointing more Worker's Compensation Law Lawyers to our Executive Committee.

Daniel W. Gerber
Chair

Webcast

Watch the Section’s Executive Committee in action October 7, 2008 at 11:00 a.m.  The first hour of the Executive Committee’s fall meeting will be webcast.  Check the Section’s webpage for information closer to that date.

Save the Date

Meet fellow Section Members at the January 28 and 29, 2009 at the New York Marriott Marquis in conjunction with the NYSBA Annual Meeting.  Chaired this year by Dennis McCoy and John Snyder, the program will feature dinner the evening of January 28 at the elegant Cipriani Wall Street restaurant, located at 55 Wall Street, the former home of the New York Merchants Exchange, New York Stock Exchange and U.S. Customs House.  http://www.cipriani.com/cipriani/Locs/wall.htm

Letter From the Worker's Compensation Division Chair

Dear Members,

The Workers’ Compensation Law Division of TICL presently consists of 100 or so attorneys who represent injured workers, employers, insurance companies and other entities before the New York Workers’ Compensation Board and the New York courts. 

I became Chairman at the Division’s spring 2008 meeting in Albany.  My practice is located in Saratoga County and I handle workers’ compensation matters primarily within the Albany District.

I would like to thank past chairmen – Bill Crossett and Ron Balter for their dedication and service to the division and look forward to working with them as part of the division and on the TICL Executive Committee.

On March 13, 2007 Former Governor Spitzer fulfilled a campaign promise and signed into law reforms to the NYS Workers’ Compensation Law.  This new law was the result of years of negotiations between legislators, former executives, labor organizations, the business community and other stakeholders who sought to increase benefits while simultaneously decreasing workers’ compensation costs.  Will the new legislation achieve its stated goals?  Will all stakeholders be satisfied with the statutory reforms as enacted?  Will stakeholders be satisfied with the reforms as applied by the Workers’ Compensation Board?  Will the stakeholders be satisfied with the reforms as ultimately interpreted by the Courts?  Only time will tell!

The 2007 reforms present a challenging opportunity for attorneys practicing Workers’ Compensation Law.  Through our participation in the administrative process and through representing our clients at hearings and appeals, Workers’ Compensation practitioners are uniquely qualified to shape the future of the NY Workers’ Compensation System.  Nevertheless, while an individual attorney can make “new law” or change procedure by championing a client’s position, an active, vocal Bar is a more effective mechanism for ensuring that our ideas and the ideas and concerns of our client’s are made known and considered by the Board.

As a result of the 2007 reforms, the Board is busy fashioning new regulations and guidelines interpreting and bringing to life the new legislation.  Committees have been formed, and focus groups have been polled.  But what have we done as Workers’ Compensation practitioners to ensure that our voice and the voices of our clients have been heard?  Have we done enough?  Can we do more?  I think we can. 

So, GET INVOLVED!!  Join the Division, submit an article, attend a meeting, or refer a lawyer friend you think might be interested in becoming a member.  As a larger, cohesive group it is more likely that the Board will sit up and take notice of our input and suggestions.

I have heard practitioners muse over the years that “the WCL Division of TICL has no “juice” within the TICL Section, so why get involved?”  Well now is your chance to get involved, to make a difference.  The TICL Chairman, Daniel Gerber has asked for input from our Division to determine what the Section can do to make it more meaningful for the Workers’ Compensation Bar.  He has also suggested that there is always room on the Section Executive Committee for attorneys interested in getting involved.  Why not increase the number of “Compensation” lawyers on the TICL Executive Committee, so that the perception the WC Division “has no juice” becomes a mis-perception.

If you have any input, questions or are interested in joining TICL, the WCL Division or becoming a member of the TICL Executive Committee please feel free to contact me at:

Christopher R. Lemire, Esq.
DIVISION CHAIRPERSON – WORKERS’ COMPENSATION LAW DIVISION
email: lemirelaw@nycap.rr.com

Current Issues from the Workers' Compensation Division

Ronald Balter
Caruso, Spillane, Leighton, Contrastano, Ulaner & Savino, P.C.

Extend Filing Periods for World Trade Center Exposure Cases

As a result of the aftermath the attacks at the World Trade Center on September 11, 2001 many people were exposed to toxins with unknown consequences.  Some of the consequences were readily determinable.  However, some of the medical problems that occurred as a result of the toxins in the area took years and in some case may not yet of manifested in the workers who participated in the rescue, recovery and cleanup at the World Trade Center site.*

Because of the nature of the employment of many of the people who spent hours at the World Trade Center site in 2006 the legislature enacted Article 8-A of the Workers' Compensation Law.  This provision of the Workers' Compensation Law was enacted so that workers who develop problems because of their work at the World Trade Center site will not be barred from filing claims if and when they become disabled in the future.  Many of the potential claims that could be filed would be barred as untimely under traditional workers' compensation jurisprudence.

In order to qualify to file a claim under Article 8-a a person must have been a volunteer or an employee of a company and worked at the World Trade Center between September 11, 2001 and September 12, 2002.  They then must file a form with the Workers' Compensation Board to register.  The Workers' Compensation Board will then notify the employer of the registration.  The filing of this form is not the official filing of a claim for a person.  The must still file a regular claim form to proceed with a case.

The provision of Article 8-A of the Workers' Compensation Law do not cover all injuries sustained at the World Trade Center site.  It will only protect a worker for conditions that are a “latent disease or condition resulting from hazardous exposure during participation in World Trade Center rescue, recovery or clean-up operations.”  Although rescue and recovery operations are relatively easy to define, the phrase clean-up is subject to broad interpretations and has yet to be interpreted by the Appellate Division – Third Department.

When originally enacted all filings for registration under Article 8-A had to be done by August 14, 2007.  The deadline has been extended twice and is now set as September 11, 2010.  In the same bill that extended the registration deadline to 2010 the legislature has removed §18 (Notice of Claim to the Employer) and §28 (Statute of Limitations) as defenses to all covered claims.  Additionally, it directs the Workers' Compensation Board to reconsider all cases which had been disallowed by either section where the date of disability is between September 11, 2003 and September 11, 2008.  The bill was signed August 7, 2008 by Governor Patterson.  The full text of the bill is available at: http://assembly.state.ny.us/leg/?bn=A11730&sh=t

Livery Drivers to be Protected by the Workers' Compensation Law

One of the biggest drags on the entire workers' compensation system has been cases involving livery car drivers.  The Workers' Compensation Board has taken the position that the Workers' Compensation Law mandates that the employer is the owner of the car.  However, many livery drivers own their own cars.  This means that they have no coverage under the Workers' Compensation Law because they do not buy their own workers' compensation policy.

The reality is that livery car drivers are now and for years have been working for a “base” or car service company that assigns them to pick up fairs.  Almost every single base in New York City as well as the rest of New York State does not have workers' compensation coverage claiming that the drivers are independent contractors.  This leads to endless litigation that many times involves payments being made from the Uninsured Employers Fund, a fund created to pay injured workers when their employers fail to obtain workers' compensation insurance as required by law.

To resolve this matter in July Governor Patterson signed new legislation to require the bases to maintain workers' compensation insurance to protect the drivers.  The new law will set up a new fund, similar to the Black Car Fund that was set up to cover the drivers of the limousines that are dispatched by similar type bases.  The bill will define when livery drivers are employers and when a base is an employer requiring it to protect its drivers.

With the enactment of this bill the drivers will now be entitled to workers' compensation benefits for their injuries as well as providing benefits to their families if they are killed in the course of their employment.  The benefits available under the Workers' Compensation Law are greater that those that can be obtained through No-Fault policies as there are no limits to as to the amount of medical benefits to be paid, and there are more generous provisions as to how long a person can collect workers' compensation benefits.

This will also end the litigation that bogs down the workers' compensation system with claims that are filed to be “lost” so that people can collect No-Fault benefits, and will end a good proportion the Uninsured Employers Fund litigation in the system.  The law takes effect over time from the date of enactment with the final provisions of the bill becoming effective on January 1, 2010.

Rocket Docket

As part of the reform package that was enacted in March 2007 the Workers' Compensation Board is undertaking an attempt to expedite the resolution of those cases that are controverted by the employer and/or the workers' compensation carrier.  The Workers' Compensation Board is engaging in the Rule Making Process in creating what is known as the “Rocket Docket”.

Despite its stated purpose the Rocket Docket, which has provisions that in some cases defy logic and place onerous burdens on attorneys for both injured workers and the employers and workers' compensation carriers of New York State, may be totally unnecessary.  The Workers' Compensation Board has many rules in place, that if followed, clearly allow the Workers' Compensation Board to resolve these controverted cases in an expeditious manner without any new regulations and burdens on the bar.

One part of the proposed rules deals with the conduct of medical testimony in depositions.  The proposed rules will prevent the attorneys from putting into evidence a direct case with their medical witness.  Testimony will be limited to cross-examination of the witness by the other side’s attorney.  Any testimony to be obtained by the attorney from whose side the doctor is testifying will be limited to re-direct within the scope of the cross-examination.  Although this may not be a problem in a civil case, because there is the right to call the doctor at trial and put your claim in, you cannot do that before the Workers' Compensation Board.  At the Workers' Compensation Board this does not happen because instead of being used a discovery tool under CPLR Article 31 and Workers' Compensation Law §121, this discovery tool has become the trial over the last decade or so.

In June the Chair of the Workers' Compensation Board issued a press release in which he trumpeted the fact that 88% of all controverted cases are now being resolved in 90 days.  This was down from the 200 days that the Workers' Compensation Board stated was the average prior to its use of the its existing Rules and Regulations.

This raises the question, if you have for all intents and purposes reached your goal, why do you need new rules to accomplish what you have already accomplished?  The Rocket Docket was published in the State Register on July 30, 2008 and now under-going its comment period.  There is opposition to the implementation of the Rocket Docket from some members of the bar that regularly appear before the Workers' Compensation Board.  Only time will tell as to whether or not the Rocket Docket is actually put into place by the Workers' Compensation Board.

*The World Trade Center or Ground Zero area was defined basically as the area south of Canal Street in Manhattan, the area around the Medical Examiners Office in Manhattan, barges that went between the West Side of Manhattan and the Fresh Kills Landfill and the Fresh Kills Landfill in Staten Island.

Insurance Practice Alert: New York Becomes a Notice-Prejudice State

The new law.  On July 21, the Governor signed into law a bill that bars a liability insurer from denying coverage on the ground of late notice unless the insurer has been prejudiced by the delay.  The bill amends Insurance Law Section 3420.  Prejudice is defined as impairment of the insurer’s ability to investigate and defend the claim (3420 (c) (2) (c)).  There is a rebuttable presumption of prejudice if notice is given more than two years after “the time required by the policy,” and an irrebuttable presumption of prejudice if the case was resolved by settlement or by judgment before notice was given (3420 (c) (2) (b)).  Separate provisions address claims-made policies.

The legislation further gives the injured party or other claimant the right to bring a declaratory judgment action upon the insurer’s disclaimer of coverage on late notice grounds, without having to first obtain a judgment against the insured.  (3420(a) (6); CPLR 3001).  Additionally, the law sets deadlines for the insurer’s confirmation of the existence and amount of coverage after receipt of a written request from the injured party or other claimant. (3420(d) (1) (b) and (c)). 

Section initiative.  The notice-prejudice legislation marks a dramatic change.  The common law rule in New York has been that a liability insurer need not demonstrate prejudice in order to deny coverage to an insured due to the insured’s failure to comply with its contractual obligation to provide reasonably timely notice of an accident, claim or suit.  Argo Corp. v. Greater New York Mut. Ins. Co., 4 N.Y.3d 332, 794 N.Y.S.2d 704 (2005). The new law changes that, making New York’s approach consistent with that of most other states.  However, New York remains unique in one respect:  New York Insurance Law Section 3420(d).  Under Section 3420(d), an insurer must give written notice of a disclaimer of coverage based on late notice (or a coverage exclusion) “as soon as is reasonably possible” after the insurer learns of the grounds for the disclaimer of liability, or risk being estopped from asserting late notice as a defense to coverage. First Fin. Ins. Co. v. Jetco Contr. Corp., 1 N.Y.3d 64, 769 N.Y.S.2d 459 (2003) (insurer’s 48-day delay in disclaiming coverage based on late notice was untimely as a matter of law).  Under Section 3420(d), the burden is on the insurer to demonstrate that its delay in disclaiming coverage was reasonable; the insured need not show prejudice.  In view of case law holding very brief delays in disclaiming coverage to be untimely under the statute, some members of the Section have expressed concern that Section 3420(d) in its current form encourages insurers to disclaim coverage precipitously without appropriate investigation, and its continued presence in the statute would therefore undermine the intent of the notice-prejudice legislation described above.  The Executive Committee therefore has appointed a task force to address language that might add a “prejudice” requirement to 3420(d) while encouraging insurers to investigate and defend claims in good faith.

Empowering the Appellate Division: En Banc Rehearing

An intermediate appellate court in New York presently lacks authority to overrule a decision of a prior panel of that court.  According to a recent report by the New York City Bar Association Committee on State Courts of Superior Jurisdiction, that situation fosters confusion as the Court of Appeals tends not to focus on intra-departmental conflicts.    The Committee has asked the New York State Bar Association to endorse proposed legislation to permit the Appellate Division departments to conduct rehearings en banc.    A copy of the proposal is available by clicking HERE http://www.nysba.org/EnBanc.  Your comments would be welcome:  Please post them on the TICL Section Blog. http://nysbar.com/blogs/TICL/

Survey Question

What is the biggest challenge facing practice in your area of law, and how might that challenge be addressed by legislation?  Please provide your responses to the Newsletter to JGerbini@woh.com. 

Newsmaker

Paul S. Edelman, Co-Editor of the TICL Journal, was honored by the Seamen’s Church Institute with the Silver Bell Award on June 12.  Paul, a leading advocate of injured seamen and their families, is the first plaintiff’s lawyer to receive the award. 

Law School for Insurance Professionals

The Section is again hosting the Law School for Claims Professionals.   The Law School is a unique program involving direct interaction between New York's top insurance and defense attorneys and the industry they serve.  Now in its third year, the Law School for Claims Professionals has been a great success, drawing rave reviews.  More than 450 people attended last year.  Stephen Lazare, Lisa Berrittella and Louis Cristo have put in a tremendous effort to make the program a success again this year.   

Final dates and locations:

Friday, September 5     (Sheraton Syracuse University, Syracuse, NY)
Friday, September 19   (NYS Nurses Association, Albany, NY)
Friday, September 19 (Ramada Hotel, Amherst, NY)
Friday September 19 (Hyatt Regency, Hauppauge, NY)
Thursday, September 25 (Westchester Marriott, Tarrytown, NY)
Friday, September 26 (NYS Insurance Fund Auditorium, New York, NY)

Your firm’s name in lights… Your firm has an opportunity to showcase its involvement with cutting edge issues by serving as an official sponsor of the Law School for Claims Professionals at a venue near you.  For information about sponsorship opportunities, please contact Stephen Lazare (slazare@lpgk.com).

Law Student Writing Contest

This year’s law students are next year’s leaders in our field.  To encourage their intellectual efforts in the areas of torts, insurance and workers’ compensation law, and to introduce them to the benefits of Section membership, the TICL Section has established a writing competition for law students.  Each of five winners will receive a $250 prize, free registration to the TICL Section’s meeting at the Bar Association’s Annual January Meeting in New York City, and an acknowledgement at the breakfast meeting of the Section at that event.  One selected entry will be published in the TICL Section Journal.  Details will be posted on the TICL webpage—or contact the TICL Journal Editors, Paul S. Edelman (pedelman@kreindler.com) or David A. Glazer (dglazer@shaferglazer.com)  This is a great opportunity for law students to build their resumes and their business networks.    

Request for Submissions—TICL Journal

The section Journal comes out twice a year. We are always interested in articles, particularly on new important cases in the tort and insurance fields. Please contact Paul Edelman, 212 687 8181 and pedelman @ kreindler.com. Your name and city of practice should appear under the title. E mail your submission or put it on a disc.
                        – Paul S. Edelman (pedelman@kreindler.com)
                        – David A. Glazer (dglazer@shaferglazer.com)