On June 14, the New Jersey Supreme Court held that plaintiffs are no longer required to demonstrate a “serious life impact” from injuries sustained in an automobile accident in order to recover for pain and suffering when the limitation on lawsuit threshold applies.  The Court’s holdings in DiProspero v. Penn  and Serrano v. Serrano  resolved a long-standing controversy over the appropriate interpretation of the 1998 Automobile Insurance Cost Reduction Act (AICRA). 

Since its inception, New Jersey courts have interpreted the statute to require plaintiffs to meet a substantial evidentiary burden to establish a right to seek damages for pain and suffering, resulting in mass dismissals of otherwise valid damage claims. 

In the early 1990s the New Jersey Legislature first began to introduce a series of bills designed to limit an individual’s right to sue for damages for injuries sustained in an automobile accident.  These tort reform packages included changes in the way we now purchase our automobile insurance.  Each time we receive a renewal notice from an automobile insurance company, we are asked to make an election of whether we want the limitation on lawsuit option (at a lower premium) or the more expensive no-limitation policy.  When the no-limitation or “tort threshold” option is elected, individuals involved in car accidents can only sue for pain and suffering when they suffer one of the following categories of injury:  (1) death, (2) dismemberment, (3) significant disfigurement or significant scarring, (4) displaced fractures, (5) loss of a fetus, or (6) a permanent injury within a reasonable degree of medical probability, other than scarring or disfigurement.  After a lawsuit is filed, a plaintiff must file with the court an affidavit from a physician that the injuries sustained from the accident fall within one of the six enumerated categories. 

When a category 6 type injury is claimed, courts have required plaintiffs to not only establish permanency (which is accomplished through physician testimony), but also that the injury resulted in a serious life impact to the plaintiff, despite the fact that the statute does not require that additional burden of proof.  The serious life impact element is determined by a judge on motion and often results in dismissals of claims of individuals who suffered permanent injuries. 

The insurance industry has long supported the additional requirement of a “serious life impact” to automobile personal injury claims, touting it as a cost-cutting measure that would result in the dismissal of “frivolous” litigation with savings being passed on to the consumer in the form of lower insurance premiums.  Even with the courts favoring the insurance industry’s interpretation of the statute, automobile insurance rates have continued to rise.

Attorneys representing injured plaintiffs have continuously sought the Supreme Court’s recent rulings striking down the “serious life impact” standard, arguing that it is a requirement that was purposely excluded by the New Jersey Legislature when it enacted AICRA.  The plaintiffs bar has argued that the extra burden inappropriately limits the rights of injured persons.  The Supreme Court agreed.  Now, plaintiffs need only establish they suffered a permanent injury as a result of an automobile accident.

The insurance industry and tort reformists, however, are not sitting still in the wake of the recent rulings.  Almost immediately after the rulings were reported, a bill was introduced in the New Jersey Legislature to add the “serious life impact” requirement to the existing statutory language.  With attorneys and insurance companies on opposite sides, it will be interesting to see how the legislature deals with this hotly contested issue.