Op-Ed | Calling everything fraud: How repealing the Scaffold Law became a strategy, not a reform

For years, the insurance industry warned that New York’s civil justice system was broken. Now it claims the system is fraudulent. Every accident is suspicious. Every injured worker is a potential scammer. Every plaintiff’s lawyer is part of a “scheme.”

This sudden moral panic has a name, the “fraudemic.” And like most panics, it says far more about the people spreading it than the problem itself.

No serious lawyer denies that fraud exists. It always has. But what insurers are now doing is something very different. They are rebranding the entire personal injury system as corrupt in order to justify sweeping changes they have wanted for decades, most notably the repeal of the Scaffold Law and a significant weakening of workers’ rights.

The convenient amnesia of the insurance industry

The irony is hard to miss. For decades, the same insurers now claiming outrage quietly tolerated, and often profited from, the very practices they now condemn. Staged accidents, questionable medical providers, and inflated billing, were all open secrets in parts of the system. Everyone knew where the bad actors were. Premiums were collected anyway, cases settled, and insurance paid. Why? Because the system was predictable and profitable. And delay is the most valuable asset insurance companies can have.

Now, after years of quiet acceptance, insurers have invented a new narrative. Not that some cases are fraudulent, but that the system itself is fraudulent. This is a powerful shift because it can be argued that if the entire system is corrupt, then no individual claim deserves trust. No worker deserves the benefit of the doubt and the laws protecting workers should no longer be on the books.

How discovery delay works in real life

Watching the current “fraudemic” coverage, one would think insurers are desperate for immediate truth-finding. Investigative segments like those by Kristin Thorne on ABC7 which highlight allegedly staged construction claims and identity-theft style workers’ compensation cases reinforce the idea that the central problem in this system is dishonesty by claimants and lawyers. This is often far from the truth.

In theory, insurers say they want fast investigation and early truth-finding. In practice, they do exactly the opposite.

When an accident happens, my firm moves immediately. We identify proper parties, file suit, and serve them within three days. Not to be aggressive, but because time matters as evidence and witnesses disappear and surveillance footage gets erased. Victims need access to no-fault and workers’ compensation which have strict filing deadlines. Delays mean untreated injuries, worsened conditions, and sometimes surgeries that could have been avoided with immediate care.

What happens next is almost always the same. The insurance company receives the summons and complaint and immediately asks for a 30 to 60-day extension to answer. This is so normalized that refusing it makes you the unreasonable one, even though there is rarely any investigation happening during that time and your clients call you every minute frustrated as to “what is taking so long.”

Having spent some time on the defense side early in my career, I know exactly what happens during those months. The assigned associate, often fresh out of law school, writes a “report” to the carrier. It is based on almost nothing. No depositions. No site inspections. No meaningful witness interviews. Just a summary of the complaint, some photographs, and an evaluation of the plaintiff’s counsel.

That report is used to set the reserve which is the number that determines how much the insurer “expects” to pay. And it is done before the case is even answered or thoroughly investigated.

After the answer is filed, the parties wait for a judge to be assigned. In some downstate counties, that can take up to eight months. During that period, nothing meaningful happens. There is no serious investigation or any discussion as to a reasonable early resolution. Just time passing, evidence decaying, and accident victims depleting their resources to survive.

Unfortunately, it appears that this is not a flaw of the system but how the system is designed to function.

Absurdity as a litigation strategy

Even years into a case, the delays become more surreal.

In serious accident cases with multiple defendants and multiple carriers, we always send HIPAA-compliant authorizations to every defense firm at the same time so they can timely obtain our client’s medical records prior to any deposition. In theory, this should expedite the case. In practice, one firm might actually process the authorizations while others simply do nothing at all.

Months later, on the eve of depositions that were scheduled long in advance, we will suddenly hear that some defense counsel never requested any records, never followed up, and are now not “ready” to proceed because they do not have the plaintiff’s medical records. Meanwhile, hospitals and other medical facilities in New York already take months to respond even when records are requested immediately. As such, the delay compounds itself.

The authorizations did not get lost or get rejected. They just sat on someone’s desk. And then that lack of effort becomes the justification for postponing testimony that everyone agreed to months earlier, all while a gravely injured plaintiff is in pain and starving.

This is the same system that later complains about fading memories, lost evidence, and suspicious gaps in the record.

Too many cases, too little system

To be fair, insurance tactics are only part of the problem because courts are genuinely overwhelmed.

Anyone who regularly appears in jury trial parts can see it with their own eyes. The calendars are dominated almost entirely by personal injury cases. It is rare to see a seven-year breach of contract case heading to voir dire. It is not rare at all to see catastrophic injury cases that have been pending for most of a decade.

The system simply does not have the processing bandwidth to handle the volume. Not enough judges and law clerks. Not enough uniformity or enforcement.

But instead of fixing that infrastructure problem, lawmakers are being pressured to attack the claims themselves by limiting categories of recovery, excluding certain plaintiffs, or punishing people with no insurance. Liability rules are to be narrowed all in the name of “fighting fraud.”

That approach treats court congestion as if it was a moral failure. It is a mere engineering failure.

Federal courts show this does not have to be the norm

The clearest proof that these systemic issues are fixable is federal court.

Even multi-party complex cases in crowded jurisdictions are resolved in three years or less. Discovery moves and deadlines matter because judges remain involved and intervene as necessary. This is thanks to uniform rules and real consequences for delay.

In state court, there is no such discipline. Rules vary by county, by part, and by individual judges. Deadlines are aspirational and adjournments are almost always automatic. And because the system tolerates delay, it also rewards clever abuse of delay. Both sides learn to play the same procedural games, not because they want to, but because the system encourages it.

If lawmakers want to reduce fraud and restore public confidence, the most effective reform is not repealing substantive rights. It is fixing and updating the rules of civil procedure by creating uniform discovery rules with real timelines and actual enforcement.

The real casualties are injured workers and small firms

The loudest voices in the fraud debate are insurers and national defense firms. The quietest are the people actually being crushed by the system. These are injured workers and small to mid-sized plaintiff firms.

Mega-firms can survive seven-year cases. They have financing, marketing pipelines, and national portfolios. Small and mid-sized firms cannot survive this way. They rely on steady cash flow to pay staff, experts, and rent. Delay does not just hurt their cases but renders their existence virtually impossible.

The result is a slow consolidation of the plaintiffs’ bar where only massive firms can sustain prolonged litigation and injured workers are increasingly forced into impersonal “verdict factories” and “litigation loans” to help them survive. This is not consumer protection but market engineering.

Calling everything fraud is not justice

Fraud should be investigated and real criminals should be prosecuted. No serious participant in the civil justice system disputes that. However, calling everything fraud is merely a way of reshaping public perception so that injured workers are viewed with suspicion and lawyers are framed as greedy.

It allows insurers to avoid meaningful procedural reform while weakening worker protections and shrinking their own exposure, all under the banner of “fighting fraud.” The result is not a cleaner system, but one where fewer people are protected, fewer claims survive, and the only problem that ever gets solved is the one insurers actually care about – paying LESS.

Nicole Brenecki is a founding partner at Jodre Brenecki LLP