Fairness for professionals; protection for consumers
Thousands of licensed professionals help New Jersey residents resolve problems every day, whether they are turning to a certified public accountant (CPA), lawyer, dentist or engineer. These professionals also are a huge part of their communities and drivers of the state's economy.
But, many report that they often struggle to meet overhead expenses one of the most costly, but important, is professional liability insurance. Assembly Speaker Vincent Prieto introduced A-1982, which a coalition of professionals, including the New Jersey State Bar Association (NJSBA), believes would provide critical stability and predictability to professional malpractice cases, protect consumers and put all professionals on a level playing field.
Support for A-1982 is strong.
A chorus of professional organizations, including those representing thousands of dentists, opticians, landscape architects, electrical contractors, CPAs and lawyers back the bill.
Nearly every county bar association in New Jersey from Cumberland County to Sussex County has adopted a resolution stating the measure is the right thing to do for licensed professionals and consumers.
Insurance companies, associations and civil justice organizations also support professional malpractice reform to help make New Jersey more competitive.
What Does A-1982 Do?
The measure is meant to reform professional malpractice matters in an effort to give a critical boost to New Jersey's small businesses and preserve important protections for consumers.
It would:
Provide stability to the cost of doing business;
Reduce the statute of limitations to bring a malpractice claim against a professional to two years similar to what it is for doctors and what it is for professionals in New York and Pennsylvania;
Give consumers two years from the date they reasonably discover a problem to file a malpractice claim;
Make New Jersey a more competitive place to do business for insurance companies;
Eliminate fee shifting in legal malpractice claims; and
Protect citizens by making professional liability insurance more accessible and more affordable to professionals.
Widespread Support for Change
Support for the measure includes the following:
New Jersey State Bar Association
Associated Builders &Contractors of NJ, Inc.
NJ Society of Municipal Engineers
Opticians Association of NJ
Fuel Merchants Association of NJ
Garden State Heating Cooling Contractors Association
NJ Independent Electrical Contractors Association
American Society of Landscape Architects
Atlantic County Bar Association
Bergen County Bar Association
Burlington County Bar Association
Camden County Bar Association
Cumberland County Bar Association
Essex County Bar Association
Hudson County Bar Association
Hunterdon County Bar Association
Mercer County Bar Association
Middlesex County Bar Association
Monmouth County Bar Association
Morris County Bar Association
Ocean County Bar Association
Passaic County Bar Association
Salem County Bar Association
Somerset County Bar Association
Sussex County Bar Association
Union County Bar Association
Warren County Bar Association
American Insurance Association
CNA Insurance
New Jersey Civil Justice Institute
What it Means for Attorneys
Of approximately 25 insurance companies the state Department of Banking and Insurance authorizes to write legal malpractice coverage, just five are actually writing and renewing policies, according to findings of a NJSBA working group that studied the professional malpractice issue.
The base rate for a New Jersey lawyer to get coverage starts 49 percent higher than in New York and 33 percent higher than in Pennsylvania, according to insurance officials. And because of the state's six-year statute of limitations, New Jersey has the highest number of claims in the region and exceeds the national average.
Meanwhile, New Jersey has fewer private practice attorneys than either of those neighboring states.
Two key issues contribute to make the New Jersey insurance market restrictive: a statute of limitations for professional malpractice claims that is longer than the neighboring states and fee shifting.
The result is a restrictive insurance market and higher malpractice insurance rates for lawyers most of whom work in solo or small firms that form the backbone of their communities and fuel local economies, according to the working group.
Advocates say A-1982 would bring the statute of limitations in line with neighboring states and eliminate fee shifting in professional malpractice matters, which would make the New Jersey insurance marketplace more attractive, would protect consumers, and would mean small business owners could get affordable coverage.
To find out more about legal malpractice data, the New Jersey small business community, and the findings of the NJSBA working group, visit njsba.com's Government Affairs page.
The Capitol Report is a weekly status report from the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters. To learn more, visit njsba.com.
