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$5.00 rule
Attorney fee

$5.00 rule

By Jason Tenenbaum 8 min read

Key Takeaway

Civil Court rules providers can collect no-fault insurance interest under $5 despite regulatory language, ensuring statutory penalty provisions remain effective.

This article is part of our ongoing attorney fee coverage, with 21 published articles analyzing attorney fee issues across New York State. Attorney Jason Tenenbaum brings 24+ years of hands-on experience to this analysis, drawing from his work on more than 1,000 appeals, over 100,000 no-fault cases, and recovery of over $100 million for clients throughout Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, and the Bronx. For personalized legal advice about how these principles apply to your specific situation, contact our Long Island office at (516) 750-0595 for a free consultation.

Medalliance Med. Health Servs. v Allstate Ins. Co., 2013 NY Slip Op 23156 (Civ. Ct. Queens Co. 2013)

A prompt letter reminding the carrier that it owes interest in an amount less than $5.00 moots the argument that collection of interest in an amount that is less than $5.00 is categorically prohibited.

The arguments raised in this case are questionable, but somebody had to raise them.  In the end, Civil Court came to the inescapable conclusion that the provider was entitled to its interest and its attorney fee.

“On this motion and cross motion, as well as other motions that are pending, the issue is whether the plaintiff is entitled to recover overdue interest when it does not exceed the sum of five dollars indicated in 11 NYCRR 65-3.9 (a). The defendant contends that the regulation limits overdue interest to an amount exceeding five dollars that is to be paid, without demand, upon payment of the overdue claim. The plaintiff claims that the regulation does not preclude the applicant from demanding overdue interest below five dollars. There are prior orders in Civil Court, Queens County that have decided this issue in cases involving different parties. These orders, some of which are signed by this Court, have held that collection of overdue interest of less than five dollars is not precluded by regulation 11 NYCRR 65-3.9 (a).”

“The interest which accrues on overdue no-fault benefits at a rate of two percent per month is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply (citations omitted)” (East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d at 210). The construction of 11 NYCRR 65-3.9 (a), that is advocated by the defendant, would preclude overdue interest of less than five dollars. This would conflict with the statutory language of Insurance Law §5106(a) which imposes interest on “all overdue payments.” The change would also tend to increase the delay in compensating low cost medical benefits that accumulate minimal overdue interest. Such a construction of the statute [*5]conflicts with its primary aims and violates the legislative intent.

The legislature was entitled to enact a limitation on the overdue interest in Insurance Law §5601(a), as it did by expressly eliminating interest of “less then two dollars” in Insurance Law §3224-a (c) (1). However, the legislature did not exempt the overdue interest of less than five dollars, that is sought by the defendant. The Superintendent of Insurance also did not preclude the collection of overdue interest that is less than five dollars, if it is demanded. This Court will not now prevent the collection of such interest.

Accordingly, the plaintiff’s motion for summary judgment is granted and the plaintiff is awarded judgment, pursuant to Insurance Law §5106 (a), for the overdue interest and attorney fees alleged in the complaint. The defendant’s cross motion to dismiss the action is denied.”

By the way, as and for the attorney fee, is 65-4.6(b)(3) applicable?  For disputes involving interest only, the attorney fee shall equal the amount of interest up to $60?


Legal Update (February 2026): Since this 2013 post, the regulatory framework governing no-fault interest calculations and the “$5.00 rule” under 11 NYCRR 65-3.9(a) may have been subject to amendments or clarifications through Department of Financial Services updates. Additionally, subsequent case law may have further refined the interpretation of when carriers must pay interest amounts below the $5.00 threshold, and practitioners should verify current regulatory provisions and recent judicial decisions when advising on small interest claims.

Legal Context

Why This Matters for Your Case

New York law is among the most complex and nuanced in the country, with distinct procedural rules, substantive doctrines, and court systems that differ significantly from other jurisdictions. The Civil Practice Law and Rules (CPLR) governs every stage of civil litigation, from service of process through trial and appeal. The Appellate Division, Appellate Term, and Court of Appeals create a rich and ever-evolving body of case law that practitioners must follow.

Attorney Jason Tenenbaum has practiced across these areas for over 24 years, writing more than 1,000 appellate briefs and publishing over 2,353 legal articles that attorneys and clients rely on for guidance. The analysis in this article reflects real courtroom experience — from motion practice in Civil Court and Supreme Court to oral arguments before the Appellate Division — and a deep understanding of how New York courts actually apply the law in practice.

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Common Questions

Frequently Asked Questions

How are attorney fees awarded in no-fault cases?

Under 11 NYCRR §65-4.6, if a no-fault claimant prevails at arbitration or in court, the insurer may be required to pay attorney fees. The fee schedule is set by regulation — typically 20% of the first $2,000 recovered and 10% of amounts above that, with a minimum fee. These fees are separate from and in addition to the benefits recovered.

Can I recover attorney fees in a personal injury lawsuit?

In New York, each party typically pays their own attorney fees (the "American Rule"). Exceptions exist in certain statutory claims — for example, employment discrimination cases under federal or state law may include fee-shifting provisions. In personal injury cases, the attorney fee is usually a contingency percentage agreed upon with the client.

What is the fee schedule for no-fault arbitration?

The fee schedule under Regulation 68 (11 NYCRR §65-4.6) provides for a reasonable attorney fee based on the amount recovered. The schedule is designed to ensure claimants have access to legal representation while keeping fees proportional to the recovery. Disputes over the amount of attorney fees can be resolved by the arbitrator or court.

What statutory interest applies to overdue no-fault claims?

Under 11 NYCRR §65-3.9, overdue no-fault claims accrue interest at 2% per month from the date the claim became overdue. A claim is overdue if not paid or denied within 30 days of the insurer receiving proof of claim.

When does interest begin to accrue on a no-fault claim?

Interest begins on the 31st day after the insurer receives all requested verification (or the date verification was due if the insurer failed to request it timely). If the insurer fails to pay or deny within 30 days, 2% monthly interest accrues automatically.

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Attorney Jason Tenenbaum

About the Author

Jason Tenenbaum, Esq.

Jason Tenenbaum is the founding attorney of the Law Office of Jason Tenenbaum, P.C., headquartered at 326 Walt Whitman Road, Suite C, Huntington Station, New York 11746. With over 24 years of experience since founding the firm in 2002, Jason has written more than 1,000 appeals, handled over 100,000 no-fault insurance cases, and recovered over $100 million for clients across Long Island, Nassau County, Suffolk County, Queens, Brooklyn, Manhattan, the Bronx, and Staten Island. He is one of the few attorneys in the state who both writes his own appellate briefs and tries his own cases.

Jason is admitted to practice in New York, New Jersey, Florida, Texas, Georgia, and Michigan state courts, as well as multiple federal courts. His 2,353+ published legal articles analyzing New York case law, procedural developments, and litigation strategy make him one of the most prolific legal commentators in the state. He earned his Juris Doctor from Syracuse University College of Law.

24+ years in practice 1,000+ appeals written 100K+ no-fault cases $100M+ recovered

Disclaimer: This article is published by the Law Office of Jason Tenenbaum, P.C. for informational and educational purposes only. It does not constitute legal advice, and no attorney-client relationship is formed by reading this content. The legal principles discussed may not apply to your specific situation, and the law may have changed since this article was last updated.

New York law varies by jurisdiction — court decisions in one Appellate Division department may not be followed in another, and local court rules in Nassau County Supreme Court differ from those in Suffolk County Supreme Court, Kings County Civil Court, or Queens County Supreme Court. The Appellate Division, Second Department (which covers Long Island, Brooklyn, Queens, and Staten Island) and the Appellate Term (which hears appeals from lower courts) each have distinct procedural requirements and precedents that affect litigation strategy.

If you need legal help with a attorney fee matter, contact our office at (516) 750-0595 for a free consultation. We serve clients throughout Long Island (Huntington, Babylon, Islip, Brookhaven, Smithtown, Riverhead, Southampton, East Hampton), Nassau County (Hempstead, Garden City, Mineola, Great Neck, Manhasset, Freeport, Long Beach, Rockville Centre, Valley Stream, Westbury, Hicksville, Massapequa), Suffolk County (Hauppauge, Deer Park, Bay Shore, Central Islip, Patchogue, Brentwood), Queens, Brooklyn, Manhattan, the Bronx, Staten Island, and Westchester County. Prior results do not guarantee a similar outcome.

Jason Tenenbaum, Personal Injury Attorney serving Long Island, Nassau County and Suffolk County

About the Author

Jason Tenenbaum

Jason Tenenbaum is a personal injury attorney serving Long Island, Nassau & Suffolk Counties, and New York City. Admitted to practice in NY, NJ, FL, TX, GA, MI, and Federal courts, Jason is one of the few attorneys who writes his own appeals and tries his own cases. Since 2002, he has authored over 2,353 articles on no-fault insurance law, personal injury, and employment law — a resource other attorneys rely on to stay current on New York appellate decisions.

Education
Syracuse University College of Law
Experience
24+ Years
Articles
2,353+ Published
Licensed In
7 States + Federal

Discussion

Comments (3)

Archived from the original blog discussion.

C
caveman
I remember years ago some firms would serve complaints with hundreds of causes of action for pennies from overdue interest, with a corresponding cause of action for attorney fees. Recently, I came across a term that I believes describes this behavior: (From Wikipidia) Barratry (pron.: /ˈbærətri/ ba-rə-tree) is a legal term with several meanings. In common law, barratry is the offense committed by people who are “overly officious in instigating or encouraging prosecution of groundless litigation” or who bring “repeated or persistent acts of litigation” for the purposes of profit or harassment.[1] It is a crime in some jurisdictions. Litigation for the purpose of profit is referred to as “Ambulance chasing”: If for the purpose of harassment, for example to silence critics, it is known as a strategic lawsuit against public participation (SLAPP). Jurisdictions that otherwise have no barratry laws may have SLAPP laws.
CA
Captain America
Let us see. Five dollars times all of the claimants a big insurance company like GEICO can steal it from adds up to a nice chunk of change. I thought the owner of GEICO was a multi Billionaire. What do you call Billionaires who cheat widows out of a few dollars — creeps. What do you call a lawyer who wants to deprive another lawyer of his fee — a loser that inhabits a small cubicle amongst thousands of cubicles in a brightly lit massive chamber.
KL
Kurt Lundgren
Captain, as usual you hit the nail on the head – e.g. Shady Grove v Allstate. Of course, Scalia eventually rewarded Allstate for ripping off consumers of millions of dollars. That Class Action suit was over the interest not paid to New York State claimants, a penny at a time. I don’t recall the word barratry being used in that lawsuit. Then again, ripping off consumers is so easy even a caveman can do it. Scalia seemed to agree.

Legal Resources

Understanding New York Attorney fee Law

New York has a unique legal landscape that affects how attorney fee cases are litigated and resolved. The state's court system includes the Civil Court (for claims up to $25,000), the Supreme Court (the primary trial court for unlimited jurisdiction), the Appellate Term (which hears appeals from lower courts), the Appellate Division (divided into four Departments, with the Second Department covering Long Island, Brooklyn, Queens, Staten Island, and several upstate counties), and the Court of Appeals (the state's highest court). Each court has its own procedural requirements, local rules, and case-assignment practices that can significantly impact the outcome of your case.

For attorney fee matters on Long Island, cases are typically filed in Nassau County Supreme Court (at the courthouse in Mineola) or Suffolk County Supreme Court (in Riverhead). No-fault arbitrations are heard through the American Arbitration Association, which assigns arbitrators throughout the metropolitan area. Workers' compensation claims go to the Workers' Compensation Board, with hearings at district offices across the state. Understanding which forum is appropriate for your case — and the specific procedural rules that apply — is essential for a successful outcome.

The procedural landscape in New York also includes important timing requirements that can affect your case. Most civil actions are subject to statutes of limitations ranging from one year (for intentional torts and claims against municipalities) to six years (for contract actions). Personal injury cases generally have a three-year deadline under CPLR 214(5), while medical malpractice claims must be filed within two and a half years under CPLR 214-a. No-fault insurance claims have their own regulatory deadlines, including 30-day filing requirements for applications and 45-day deadlines for provider claims. Understanding and complying with these deadlines is critical — missing a filing deadline can permanently bar your claim, regardless of how strong your case may be on the merits.

Attorney Jason Tenenbaum regularly practices in all of these venues. His office at 326 Walt Whitman Road, Suite C, Huntington Station, NY 11746, is centrally located on Long Island, providing convenient access to courts and offices throughout Nassau County, Suffolk County, and New York City. Whether you need representation in a no-fault arbitration, a personal injury trial, an employment discrimination hearing, or an appeal to the Appellate Division, the Law Office of Jason Tenenbaum, P.C. brings $24+ years of real courtroom experience to your case. If you have questions about the legal issues discussed in this article, call (516) 750-0595 for a free, no-obligation consultation.

New York's substantive law also presents distinct challenges. In motor vehicle cases, the no-fault system under Insurance Law Article 51 provides first-party benefits regardless of fault, but limits the right to sue for non-economic damages unless the plaintiff establishes a "serious injury" under one of nine statutory categories. This threshold — codified at Insurance Law Section 5102(d) — requires medical evidence showing more than a minor or subjective injury, and courts have developed detailed standards for each category. Fractures must be documented through imaging studies. Claims of permanent consequential limitation or significant limitation of use require quantified range-of-motion testing with comparison to norms. The 90/180-day category demands proof that the plaintiff was unable to perform substantially all of their usual daily activities for at least 90 of the 180 days following the accident.

In employment discrimination cases, the legal standards vary depending on whether the claim arises under state or local law. The New York State Human Rights Law employs a burden-shifting framework: the plaintiff must first establish a prima facie case by showing membership in a protected class, qualification for the position, an adverse employment action, and circumstances giving rise to an inference of discrimination. The burden then shifts to the employer to articulate a legitimate, non-discriminatory reason for its decision. If the employer meets this burden, the plaintiff must demonstrate that the stated reason is pretextual. The New York City Human Rights Law, by contrast, applies a broader standard, asking whether the plaintiff was treated less well than other employees because of a protected characteristic.

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