N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 65-4.6

Current through Register Vol. 46, No. 43, October 23, 2024

Section 65-4.6 - Limitations on attorney's fees pursuant to section 5106 of the Insurance Law

The following limitations shall apply to the payment by insurers of applicants' attorney's fees for services necessarily performed in the resolution of nofault disputes:

(a) If an arbitration was initiated or a court action was commenced by an attorney on behalf of an applicant and the claim or portion thereof was not denied or overdue at the time the arbitration proceeding was initiated or the action was commenced, no attorney's fees shall be granted.

(b) If the claim is resolved by the designated organization at any time prior to transmittal to an arbitrator and it was initially denied by the insurer or overdue, the payment of the applicant's attorney's fee by the insurer shall be limited to 20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon, for each applicant with whom the respective parties have agreed and resolved disputes, subject to a maximum fee of $1,360.

(c) For disputes subject to arbitration or court proceedings, where one of the issues involves a policy is- sue as enumerated on the prescribed denial of claim form (NYS form NF- 10), subject to this section, the attorney's fee for the arbitration or litigation of all issues shall be limited to a fee of up to $70 per hour, subject to a maximum fee of $1,400. In addition, an attorney shall be entitled to receive a fee of up to $80 per hour for each personal appearance before the arbitration forum or court.

(d) For all other disputes subject to arbitration or court proceedings, subject to the provisions of subdivision (a) of this section, the attorney's fee shall be limited as follows: 20 percent of the total amount of first-party benefits and any additional first-party benefits, plus interest thereon, for each applicant per arbitration or court proceeding, subject to a maximum fee of $1,360 . If the nature of the dispute results in an attorney's fee that could be computed in accordance with the limitations prescribed in both subdivision (c) and this subdivision, the higher attorney's fee shall be payable.

(e) Notwithstanding the limitations specified in this section, if the arbitrator or a court determines that the issues in dispute were of such a novel or unique nature as to require extraordinary skills or services, the arbitrator or court may award an attorney's fee in excess of the limitations set forth in this section. An excess fee award shall detail the specific novel or unique nature of the dispute that justifies the award. An excess award of an attorney's fee by an arbitrator shall be appealable to a master arbitrator.

(f) If a dispute involving an overdue or denied claim is resolved by the parties after it has been forwarded to the conciliation center of the appropriate arbitration forum or after a court action has been commenced, the attorney for the applicant shall be entitled to a fee, which shall be computed in accordance with the limitations set forth in this section.

(g) No attorney shall demand, request or receive from the insurer any payment of fees not permitted by this section.¹

(h) Notwithstanding any other provision of this section and with respect to billings on and after the effective date of this regulation, if the charges by a health care provider, who is an applicant for benefits, exceed the limitations contained in the schedules established pursuant to section 5108 of the Insurance Law, no attorney's fee shall be payable by the insurer. This provision shall not be applicable to charges that involve interpretation of such schedules or inadvertent miscalculation or error.

¹ Attorneys should be aware of the Appellate Division Rules prohibiting fees in connection with the collection of first-party no-fault benefits (22 NYCRR sections 603.7(e)(7), 691.20(e)(7), 806.13(f) and 1022.31(f)).

N.Y. Comp. Codes R. & Regs. Tit. 11 §§ 65-4.6

Amended New York State Register February 4, 2015/Volume XXXVII, Issue 05, eff. 2/4/2015