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Attorney General Brings Action Against Five Insurance Companies Regarding No Fault Insurance Law


This is a case being heard in the Supreme Court of Kings County. In this case the five petitioners state that they are medical professional corporations that are organized and incorporated in the state of New York under the Business Corporation Law. The petitioners are seeking to show cause through a verified petition to have six grand jury subpoenas issued by the New York State Attorney General quashed.

Case Background

The subpoenas in question in this case were part of an investigation made by the Attorney General into the activities of several medical clinics that specialize in treating claimants from motor vehicle accidents under the No Fault or Personal Injury Protection insurance law under the state of New York.

The No Fault law requires all owners of vehicles registered in the state of New York to carry insurance that will cover economic losses including medical and other injury related expenses that are sustained by the occupants of a vehicle or a pedestrian that is involved in a motor vehicle accident. The maximum amount is up to $50,000 with out regard to who’s fault the accident is.

The purpose of the no fault law was to ensure compensation for losses that are incurred by accident victims without regard to fault or negligence and to reduce the burden on the courts. However, the no fault system has proved to be extremely vulnerable to fraud.

Attorney General’s Case

The Attorney General has describe an typical no fault insurance scheme as one where the “steerers” solicit victims of automobile accidents or people that are willing to pose as an accident victim to seek treatment at a corrupt no fault medical clinic in return for a fee. The clinics will then submit a claim to the insurance company for providing medical services to the patients. These services may or may not have been necessary and in some cases no services are performed at all. The “patients” are instructed to seek medical care for at least three months in order to establish that they have a serious injury under the no fault statutory definition. The patients may also be referred to an attorney and paid a fee to pursue lawsuits that are also fraudulent.

The Attorney General has investigated the medical institutions in this case and has revealed that there is evidence in each of the cases to support that these institutions have been involved in this type of scheme.

Court Discussion and Decision

The court has carefully reviewed the case at hand and finds that the District Attorney has supplied evidence in the cases to support the claims that have been made against the medical institutions. The court is ruling in favor of the district attorney. The petition that is made by the medical institutions is denied and the petitioners are ordered to comply with all of the directions that are made by each of the subpoenas.

Stephen Bilkis & Associates can help you through any type of legal case that you may have. Contact one of our New York City offices to speak with an experienced attorney today. We offer free consultations to any client that visits our offices for the first time.

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