NJ Advances Bill To Shorten Legal Malpractice Time Limit

Law360 — March 18, 2019

By Ama Sarfo

New Jersey lawmakers advanced a bill Monday that would tighten the window for filing malpractice lawsuits against licensed professionals such as attorneys, despite pushback from plaintiffs' lawyers who argued the legislation would harm consumers.

The state Assembly Judiciary Committee voted to move forward Assembly Bill 4880, which would reduce the six-year statute of limitations to sue attorneys, accountants, architects and engineers to two years. Proponents such as the New Jersey State Bar Association say the bill would put Garden State lawyers on a level playing field with professionals such as doctors who are already subject to a two-year statute of limitations, and could lower malpractice insurance rates, which are cheaper in neighboring states where the laws allow litigants less time to file such suits.

Solo practitioners and small firms comprise the "backbone" of the New Jersey State Bar Association's 18,000 members, group President John E. Keefe Jr. told the committee Monday before its vote. Young lawyers saddled with student loans and senior attorneys wanting to come out of retirement and carve out a small practice are among those the bill would help, Keefe said.

"For these small firms, the ability to purchase malpractice insurance is of paramount importance," testified Keefe, of Keefe Law Firm.

Keefe said the bill serves as a consumer protection measure because it would result in more malpractice coverage for aggrieved plaintiffs, but opponents such as the New Jersey Association for Justice said there was no guarantee it would lower insurance rates.

Association President Lynne M. Kizis, a shareholder with Wilentz Goldman & Spitzer PA, called the bill "profoundly unbalanced, fundamentally unfair and unjust," and noted the personal and professional "disaster" that malpractice can cause its victims.

"In our view, this is a bill that tips the scales of justice away from the consumers of our state," Kizis told the committee.

Kizis was joined by the association's immediate past president, Eric G. Kahn of Javerbaum Wurgaft Hicks Kahn Wikstrom & Sinins PC, who said the bill "unlevels the playing field for victims of professional malpractice."

Prior to voting in favor of advancing the legislation, Assemblywoman Annette Quijano, D-Union, said she would continue to meet with those who have issues with the bill. Quijano and Assemblyman Benjie E. Wimberley, D-Passaic, are the sponsors of the proposal, which was introduced in January.

The bill drew support from trade organizations and business advocacy organizations such as the New Jersey Chamber of Commerce and New Jersey Civil Justice Institute, as well as Philadelphia-based professional liability insurance provider USI Affinity.

Malpractice insurance policy rates are "significantly" higher in New Jersey compared with Pennsylvania and New York, according to testimony by Mike Mooney, USI's senior vice president and professional liability practice leader.

"By passing this bill, it will improve the profitability of carriers," Mooney told the committee.

Currently, the "broken" system in New Jersey includes 25 carriers authorized to provide legal malpractice insurance but only seven willing to do so, Keefe said, noting the bill would expand the Garden State market for these policies.

As is, the New Jersey insurance market discourages entrepreneurs from setting up small businesses, according to attorney Evelyn Padin, a solo practitioner in Jersey City.

In her more than 25 years in business, Padin said, she has seen her malpractice insurance rates go "up, up, up and up." She noted that Jersey City businesses are already saddled with city's new out-of-town employee payroll tax, which a court upheld Friday.

"We really need the relief," said Padin, a trustee of the Hudson County Bar Association and member of the Hispanic National Bar Association.

The Asian Pacific American Lawyers Association of New Jersey Inc. is another minority trade group that supports the bill. Testifying before the committee, association President Jack Chan panned the state's "extremely high malpractice [insurance] rates."

But the proposal won't necessarily fix that problem, others said. New Jersey Citizen Action, which fights for social, racial and economic justice, according to its website, is "vigorously opposed" to the bill, said Associate Director Dena Mattola Jaborska.

"There is no guarantee [the bill] would reduce insurance costs," Jaborska testified.

— Editing by Aaron Pelc.

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