Automobile insurers in New York are required to pay attorney fees when a no-fault claim is settled or resolved through an award or judgment in favor of the health provider. Insurers that want to use EUO and IME as no-show defenses should be prepared to pay higher attorney fees. A no-fault lawyer in New York can guide you on whether using these defenses is in your best interests. 

When there is a dispute between the claimant and the insurance provider, the claimant can be asked to participate in an Examination Under Oath (EUO). An EUO is a formal court proceeding where the policyholder or the insured party, under oath, can be questioned by a lawyer or any legal representative nominated by their insurance provider regarding matters related to the claim. 

In approximately 12 states of the U.S., no-fault insurance is required by all drivers. No-fault insurance, also known as personal injury protection (PIP), covers the cost of medical expenses for the driver and passengers regardless of who was at fault for the accident. 

Generally, insurance companies can demand that the insured or policyholder testifies at an Examination Under Oath (EUO) in a no-fault claim. In addition, insurance companies can ask for independent medical exams (IMEs) performed by a physician of the insurance adjuster’s choice. 

According to 11 NYCRR 65-1.1, the plaintiff or policyholder must comply with the insurance company’s reasonable demands and submit any medical examination reports as many times as requested by the defendant or insurance company’s legal representative. Complying with this condition is a binding precedent for the plaintiff to receive any compensation from the insurance company.  

In New York, when any no-fault action is finalized or resolved, whether through a verdict or settlement, the auto insurance companies should pay attorney fees according to the Insurance Law Article 51. This law has subsections stating the amount of attorney fees payable and how to determine them. 

If a dispute that can lead to arbitration or a court hearing involves a policy issue such as the ones enumerated on the NYS form NF-1 or claim form, the insurer would have to pay their attorney as much as $70 per hour or a maximum cap of $1400 for any subsequent litigation or arbitration. If the attorney makes an appearance before the arbitration form or at the court hearings, they can be entitled to about an $80 per hour fee. 

However, for any arbitration forum or court proceedings that do not involve a policy issue, the attorney can be entitled to a fee of 20 percent of the sum of the principal and interest payable to the healthcare provider. 

There seems to be a loophole in the system that allows a plaintiff to easily get an adjournment from a court hearing using IME or EFO. To make matters worse, no maximum limit on the number of adjournments can be required. This means the IMEs and EUOs can be used indefinitely to postpone the court hearings. 

The plaintiff can use this as a tactic to get extra time to build up their case for the no-fault claim. Unfortunately, this also means the insurer will suffer additional costs, including attorney fees. Therefore, there is a need to update no-fault regulations and requirements for a “no-show” defense, and until that happens, this issue is unlikely to end.