New Jersey’s civil justice system has been identified as one of the most expensive in the United States, according to three recent independent reports from the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) and the American Tort Reform Foundation (ATRF).
Concerns have been raised about how these costs impact both businesses and consumers in the state. “Both businesses and consumers should be deeply concerned by New Jersey’s terrible rankings because we are all footing the bill for a civil justice system that invites questionable and abusive litigation. At a time when inflation is at record levels, the costs of the state’s lawsuit-friendly policies are piling on and making everything even more expensive, from everyday products to insurance costs. NJCJI will highlight the findings of these reports in its advocacy on behalf of the business community,” according to a statement from New Jersey Civil Justice Institute.
The ATRF report placed New Jersey back on its Judicial Hellhole Watch List this year, citing factors across all branches of government that could contribute to increased litigation abuse. The report stated: “The state’s civil justice system faces a triple threat – the plaintiffs’ bar now wields unprecedented power and influence in New Jersey’s Legislature because the new Senate President is a practicing plaintiffs’ attorney. New Jersey’s recently reelected governor is a progressive stalwart who 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.”
According to ATRF, legislative initiatives led by Senate President Nick Scutari could open opportunities for lawsuit abuse. Additionally, concerns were raised about actions by Governor Murphy’s administration regarding public nuisance law.
A separate ILR report calculated each state’s tort cost as a percentage of gross domestic product (GDP) and per household. The analysis found that total tort costs across the country amounted to $443 billion—or 2.1% of national GDP—in 2020, averaging $3,621 per household nationwide. In comparison, New Jersey was ranked as having the fourth highest tort system cost among states at an average of $5,059 per household.
Another ILR study examined trends related to so-called “nuclear verdicts”—jury awards generally valued at $10 million or more—and found their size and frequency increasing nationally. The same study ranked New Jersey eighth highest among states for such verdicts.
