Laws must be clear to avoid any loopholes that may be used or abused by those who would try to capitalize on its flaws.
 

This is a relatively thick and confusing decision, to say the least. Its peculiar procedural posture -- with the health insurer having been allowed unopposed to intervene in the personal injury action well after the SOL for a direct claim against the doctor had run -- may limit its precedential value, however.

As I said in my post on this case (http://nycoveragecounsel.blogspot.com/2009/03/settlement-between-injured-party-and.html), unless and until the New York State Legislature addresses permissible intervention by health insurers in personal injury actions, injured parties may be better off opposing their health insurers' motions to intervene. This decision will likely prompt more health insurers to move to intervene in their insureds' personal injury actions, especially in the Fourth Department, even though the Court seemed critical of but did not rule on permissible intervention by health insurers.

If IHA had not been a plaintiff-intervenor, IHA likely would have been unable to prevent the parties' settlement from concluding the action. If a health insurer is not allowed to intervene, it can either commence its own subrogation action against the tortfeasor or attempt to recoup its medical expense payments from its insured's settlement or judgment, provided, of course, that the insured has received monies from the tortfeasor attributable to expenses the health insurer paid.

If the tortfeasor has notice of a health insurer's subrogation interest and the applicable statute of limitations for pursuing such an interest has not yet run, defense counsel must take that potential claim into account when settling for less than policy limits with the injured party. This decision states that "once a health insurer has paid a claim and the tortfeasor knows or should have known that a right to subrogation exists, the wrongdoer and the insured cannot agree to terminate the insurer's claim without its consent and such an agreement cannot be asserted as a defense to the insurer's cause of action[.]" A cause of action that still could be brought, that is.