Insurance industry leaders and trial lawyers don't often agree.However, reforming New York State's no fault insurance law issomething that both of them can get behind, though there isdisagreement on how that exactly can happen.

The New York Comprehensive Automobile Insurance Act, otherwiseknown as the "No Fault Act," was signed in 1973, a time when only62% of U.S. adults had insurance and litigation for damagesincurred in car accidents began clogging state courts.

Insurance groups and legislators tried to ease the burden andmade a compromise — that those involved in car accidents,regardless of fault, would be entitled up to $50,000 for medicaland personal injuries.

"They said what we're going to give you on the other side, we'regoing give you a system that works," Richard Binko, formerpresident of the New York Trial Lawyers Association (NYTLA), tellsPC360.

But the system has run amuck in the past decade with a number oflitigation actions that have muddied the legal waters for thoseinjured and looking to get money from insurers. There have alsobeen a number of fraud cases that insurers and government officialssay have directly raised premiums for New Yorkers.

"We in law enforcement are keenly aware that wherever there is alarge pot of money, there are criminals looking to steal it,"testified former Chief Assistant District Attorney of Manhattan,Daniel Alonso, to the Transportation Committee last year. "And oneof the larger pots of money is that mandated by New York law… nofault insurance."

In 2004, the NYPD and the Queens District Attorney's Officecharged more than 30 people in an elaborate high paying no faultfraud scheme that included lawyers, doctors and medical clinics.The ring defrauded insurance companies of over $236,000, accordingto officials.

Last year, Gov. Andrew Cuomo shut down 18 doctors and medicalproviders for abusing no fault, and at the end of2013 there were over 13,000 cases of alleged no faultfraud, according to records from New York's Department of FinancialServices (DFS).

"It's really the non-medical professionals who are running thesebusinesses," says Mary Lowenburg, supervisor of the Auto andInsurance Fraud Unit at the Queens District Attorney's Office. "Itbecomes attractive because of the fifty-thousand threshold in thelaw. Every person in that car gets a $50,000 allotment prior toeven talking about a lawsuit. They're inundating insurers and theycan't possibly investigate every claim."

Since 2003, the number of no fault fraud cases has dramaticallyfluctuated, dropping down to 14,000 cases in 2004 before rising 10%every year starting in 2006. The number of no fault fraud casesslowly decreased in 2010, but then jumped back up in 2012. Thetrend is now decreasing slightly again. Every year, almosthalf of all fraud cases brought to the state are suspected of nofault fraud.

Alex Tisch, a former associate council at DFS's fraud division,testified in front of the state's Insurance Committee in 2010 thatno fault fraud was severely problematic for the department, sayingit's, "a truly alarming trend in the number of cases."

At the center of no fault fraud is the "runner," a person whostages accidents and recruits people at all levels to send offbogus medical claims to insurance companies. But runners arenotoriously hard to catch due to legal minutiae.

"Lawmakers have been trying to pass anti runner bills for yearsto make the runner an accomplice in insurance fraud," saysLowenburg. "It's not criminal right now to pay a person to go toClinic A on Queens Boulevard, unless we can prove fraud."

And that is sometimes the hardest part.

"Patients don't want to cooperate against the runners, they'reafraid of reprisal. And the act of paying someone to go to aclinic, isn't alone, proof beyond a reasonable doubt of fraud,"Lowenburg explains. "Remember when banks used to give you the freeblender if you signed up?"

But there are those who think that the insurance industry, whohas consistently said that increased auto premium rates for NewYorkers is the highest in the nation because of rampant no faultfraud, have overblown its effects.

"Insurance companies keep making these claims but never show thedata," says Michael Hutters, who is a member of the New York StateAcademy of Trial Lawyers. "I think the trial lawyers have tried tosay for years that we'll work with you but insurers keep sayingthat it's proprietary."

Binko, at the same hearing where Tisch testified, said that theamount of money insurance companies have paid out due to no faulthas only been 3%, and urged state senators to pass an Auto SunshineBill which would force no fault insurance providers to releasetheir pricing data.

"There was a fallback position of at least opening it up tothose who are on the insurance committee," Binko says toPC360. "They have absolutely resisted."

But insurers say that they've been transparent enough, having toalready file a number of their financial activities with DFS.

"Never before in history has the price of auto insurance beenmore transparent," argues New York Insurance Association (NYIA)President Ellen Melchionni. "You can get a multitude of quotesliterally within minutes — either through an agent or by contactinga company directly."

"All insurers are required to file annual statements with astate regulatory agency," Melchionni tells PC360.

But for trial lawyers, the biggest problem with no fault isn'tthe fraud done by medical providers, instead it's the wording ofthe law that has made reimbursement for consumers tough.

In 2001, Richard Oberly, a dentist, was being transported to ahospital when the ambulance struck a curb and a pump fell on hisarm. Oberly claimed that the accident caused an injury making itimpossible for him to practice, and sued Bangs Ambulance under thetheory that the No Fault Act lists off "permanent loss" of a bodypart as a reason for paying. The courts, though, ruled that"permanent" would have to mean a 100% loss.

The ruling, Binko says, made it impossible for insurance claimsadjusters and medical doctors to do their jobs.

"It threw that whole practice out," Binko says. "It took awaythe objective ability of claims adjusters and it was confusing forboth sides. Insurance carriers had a rough time, we had a roughtime."

Trial lawyers also argue that the law is antiquated and doesn'tmake sense with how medical costs and technologies have skyrocketedsince the bill's passage.

"We haven't even changed the statute for CT scans or MRI's whichare such a daily reliance," says Binko. "We did not know what anMRI machine was in 1971. All of that was Buck Rogers sciencefiction back then."

But lawmakers and insurance groups stand by the problem that nofault is causing systemic issues within the courts.

"We chase the clinics away and they come back as anotherincarnation," says Lowenburg. "At that point you need to have awhole other investigation."

Despite their disagreements, both sides have actively lobbiedstate lawmakers in making changes with the law.

The NYIA has supported a number of bills this year includinganother anti-runner type bill, but it's unknown how far that willgo in either the senate or assembly.

It's a failed attempt, Lowenburg says.

"Every year it seems that it gets past partially but then thebills die," she says.

Binko agrees, but says that the reason for partial passage isbecause there's too much that should be fixed all at once, whichleaves the future of fixing the No Fault Act in the dust.

"We were in support of a runners bill because we don't want seethat. That's not pro-consumer, either," says Binko. "But I don'tthink one thing can pass unless there's ten things that pass at thesame time."