New York's novel mandatory disclosure requirement is more extensive than what is required by its federal counterpart, mandating the disclosure of a litany of "information and documentation," accompanied by affidavits from a defendant and its defense counsel, within 60 days of service of an Answer in New York state court civil lawsuits.
The Federal Rules of Civil Procedure have long required certain insurance information to be automatically disclosed in federal court actions. New York's Comprehensive Insurance Disclosure Act (the "Act"), signed into law by Governor Kathy Hochul on December 31, 2021, adds to those disclosure requirements in a significant shift in New York state court discovery requirements imposed on defendants.
The Act obligates defendants to disclose, within 60 days of service of an Answer, to plaintiffs a bevy of "information and documentation," including:
- All primary, excess, and umbrella insurance policies or insurance contracts (including applications for insurance);
- The contact information of a claim adjuster or third-party administrator;
- The amounts available under each applicable insurance policy;
- Any lawsuits that have or may reduce or erode the amounts available under each applicable insurance policy—including contact information for the attorneys for all represented parties in such other lawsuits; and
- The amount of attorney's fees paid that have reduced the face value of the insurance policies (as well as the contact information for any attorney who received such payments).
Additionally, the disclosures must be accompanied by a sworn statement by both the defendant and its defense counsel certifying the information disclosed.
This new disclosure requirement regarding insurance information mandated by the Act is not imposed as a one-time preliminary requirement in litigation, but rather as a continuous obligation that exists "during the entire pendency of the litigation and for sixty days after any settlement or entry of final judgment in the case inclusive of all appeals." In a practical sense, the extent of New York's new disclosure requirement likely translates to an onerous, administrative burden on litigation defense teams. A defendant, its defense counsel, and a defendant's insurers will need to keep continuous communication channels open so the defendant remains in compliance with these mandatory disclosure requirements.
The upshot is that the dual requirements of sweeping disclosure obligations and mandatory affidavits, throughout (as well as after) the pendency of the lawsuit, places a notably greater burden on New York state court defendants than the Act's federal counterpart set forth in F.R.C.P. 26(a)(1)(A)(iv). The Act will not merely govern new lawsuits, but also necessitates that any required disclosures not previously provided in pending cases be provided within 60 days of the Act's effective date, which is March 1, 2022. As with the federal court automatic disclosure requirements, defense counsel should consider attempting to reduce the new burden by agreement with plaintiff's counsel.
