New York's Highest Court Upholds Anti-Fraud Immunity Law Against Unwarranted Defamation Suits

ALBANY, N.Y., Nov. 21, 2019 New York's immunity law shields fraud fighters from defamation suits by medical providers who insurers report in good faith to the state medical board for suspected scams, New York's highest court ruled this week in a major victory for fraud fighters.

The important precedent has national implications. The decision could help defend against similar defamation challenges to anti-fraud immunity laws in other states. In effect, the ruling could bolster protections of fraud fighters from unwarranted defamation suits around the U.S. when they report suspected scams in good faith.

New York's highest court agreed with an amicus brief the Coalition and NICB jointly filed to defend the state's immunity law.

New York's public-health law grants explicit immunity from defamation suits involving good-faith reporting of suspected scams, the state Court of Appeals says.

"… in order to encourage increased reporting of unprofessional conduct, the legislature specifically sought to shield complainants from liability by imparting a limited immunity from civil actions commenced by regulated entities …" the court says.

Medical providers have no implied right to sue fraud fighters for defamation under New York's public-health law, the court adds. The law was not passed to protect physicians. It was passed to encourage good-faith reporting of suspected scams. Medical providers can defend themselves in any administrative proceeding and have a right of action under common law.

"Simply put, there is no indication that physicians accused of misconduct were the intended beneficiaries …" the court ruled.

The Coalition and NICB sought to support fraud fighters by defending New York's immunity law. The court's decision closely tracked the joint amicus brief the groups filed in the action.

"The Legislature decided to remove what it considered to be an obstacle to reporting — namely fear of litigation — by granting insurers qualified immunity," the two groups contended in their brief.

The amicus was drafted by Susan Phillips Reed. She's a former associate judge of the New York State Court of Appeals — the state's highest court — and now of counsel to the law firm of Greenberg Traurig.

Media Contact

If you have a question, want further information on the NICB, or to discuss insurance fraud or vehicle crime, please contact:

Joe Brenckle
Director, Public Affairs
jbrenckle@nicb.org

Chris Stroisch
Vice President, Public Affairs and Communications
cstroisch@nicb.org

If you are a reporter and have a request or question, please complete the Media Request Form.

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800.TEL.NICB (800.835.6422) or submitting a form on our website.

About the National Insurance Crime Bureau: Headquartered in Oak Brook, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to combatting and preventing insurance crime through Intelligence, Analytics, and Operations; Education and Crime Prevention; and Strategy, Policy, and Advocacy. The NICB is supported by more than 1,200 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $582 billion in insurance premiums in 2021, or more than 82% of the nation's property-casualty insurance. That includes more than 96% of the nation's personal auto insurance. To learn more, visit www.nicb.org.