Have you had to perform the collateral source dance as a plaintiff’s and defense attorney?  The parties are ready to settle but that inevitable lien puts a halt on negotiations because plaintiff’s attorney wants to protect his or her client and the defense attorney doesn’t want his or her client to be exposed to liability from the lienholder.

The New York Senate has referred A8114-A to its Rules Committee (see text of Bill and other information on it here: Download SCAN_35301050_000.pdf ), as the New York Assembly has passed the bill.  The bill addresses the impact of collateral source payments upon  tort claims  for  personal injury,  property  damage or wrongful death, and upon related subrogation claims.  It is worth reading the Bill’s language; however, the crux of the Bill is that where the parties negotiate a settlement, it is assumed that the plaintiff has not settled in derogation of the contract between the lien-holder, and the defendant will not be subject to reimbursement for a claim from a collateral source payor, unless that payor has a statutory right to do so (i.e., a workers’ compensation lien).  The Bill also addresses how collateral sources are handled where the action goes to verdict.

Notably, this Bill is one in a series of measures being introduced at the request of  the Chief Administrative Judge upon the recommendation of his Advisory Committee on Civil Practice.  Its sponsor is Kenneth Zebrowski.