Too many lawsuits in NJ? Critics say this is costing us all big bucks
With so many lawsuits constantly being filed, the civil justice system in New Jersey has been ranked as one of the most costly in the nation.
The American Tort Reform Foundation put the Garden State on the Judicial Hellhole watch list.
“They’re concerned that some of the changes in the political environment could lead to an increase in lawsuits and abusive litigation,” Anthony Anastasio, the president of New Jersey Civil Justice Institute, said about that report.
Because there are so many lawyers filing lawsuits in New Jersey, Anastasio said public policy tends to favor private lawsuits as a way to resolve all sorts of problems — and the legal system tends to favor plaintiffs over business interests and local governments.
He said this increases the incentive for lawyers to pursue lawsuits.
“More lawsuits drive up operating costs for businesses and local governments, and in the end, those costs are passed on to you and me in the form of higher prices and higher taxes.”
The report finds “the plaintiffs’ bar now wields unprecedented power and influence in New Jersey’s Legislature because the new Senate President (Nick Scutari, D-Union) is a practicing plaintiffs’ attorney. New Jersey’s recently reelected governor (Murphy) has shown no interest in civil justice reform priorities and the new makeup of the New Jersey Supreme Court may result in a shift toward activism and expansion of liability.”
ATRF lists a number of legislative initiatives by Scutari that have the potential for lawsuit abuse, particularly a law that was signed by Murphy to expand “bad faith” liability for auto insurance carriers.
The report concludes there is concern that this new law will lead to a significant increase in meritless claims against insurance carriers, which could force many of these companies to stop writing policies in New Jersey, eliminating competition and raising rates for state drivers.
A recent report by the U.S. Chamber of Commerce Institute for Legal Reform ranked New Jersey 4th in lawsuit costs of $5,059 per household in 2020.
In a separate report, New Jersey was ranked 8th in the nation for "nuclear verdicts" of at least $10 million.
A lottery system of justice
“The concern there is you end up with a lottery system of justice: lawyers bringing these cases rely on shaky expert evidence, emotional appeal to divert the juries attention from the laws," Anastasio said.
He said everyone in New Jersey should be concerned about what’s happening because in the end “it’s just going to squeeze consumers, families, employers, and make it harder to do business and harder to survive and live a regular lifestyle.”
The U.S. Chamber Institute for Legal Reform report estimates every state’s tort cost as a percentage of state gross domestic product and per household cost. Tort system costs in the most expensive states are up to 2.7 times larger than in the least expensive states.
The U.S. Chamber Institute for Legal Reform’s Nuclear Verdicts: Trends, Causes, and Solutions report analyzed almost 1,400 verdicts in personal injury and wrongful death cases across the nation.
According to Harold Kim, the president of the U.S. Chamber of Commerce Institute for Legal Reform, “nuclear verdicts have spun out of control and should concern every policymaker, business, and consumer because of the real-world impact on the price of everyday household products, services, and insurance. Moreover, nuclear verdicts can threaten the viability of a business.”
“While some might feel that a huge verdict is ‘sticking it’ to a business, the reality is that nuclear verdicts add uncertainty and layers of cost throughout our economy that we all pay and undermine the rule of law in the process.”