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The Bumpy Road: Tort Reform in New Jersey
In the late 1990s, the New Jersey Legislature sought to curb what was viewed as excessive and often frivolous litigation in New Jersey. Over a series of several years, legislation was enacted to reduce the perceived prevalence of, first, medical malpractice and, then, automobile accident lawsuits.
In 1995, the legislature passed the Affidavit of Merit Statute (AOM), N.J.S.A. 2A:53A-26 et seq. The first real challenge to an interpretation of this new AOM Statute did not occur until 1998, the same year in which the legislature passed the 1998 Automobile Insurance Cost Reduction Act (AICRA), N.J.S.A. 39:6A-1.1 to 35. The latter legislation significantly enhanced the requirements for personal injury plaintiffs to breach the limitation-on-lawsuit threshold, or verbal threshold, in order to recover for personal injury/non-economic damages. This statute had the desired effect of substantially limiting the number of lawsuits filed. Therefore, while not necessarily decreasing the costs of insurance (those costs held steady), it increased competition and created greater choice in the marketplace by developing an atmosphere that permitted both new insurers to enter the marketplace and old insurers who had left to return to the marketplace.
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The DOJ's Corporate Enforcement Policy: One Year Later
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