Op-Ed: Insurance Bill Would Be Fairer for Professionals, Protect Consumers

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NJ Spotlight Op-Ed, December 11, 2017 by Robert B. Hille, Esq.

New Jersey has the highest number of malpractice claims in the region and exceeds the national average, due to the lengthy statute of limitations.
Consider the number of licensed professionals you might see in the course of a year. Your lawyer. Your dentist. Your accountant. Your pharmacist. These are the people who help us through the many complicated issues that life brings our way. Their successes and failures are tied to the wellbeing of our communities, since as social and economic anchors they hire locally, use local vendors, and volunteer in the communities they serve. If they are having trouble paying the bills, the impact is felt by all of us in higher service fees, fewer jobs, and fewer options.
Unfortunately, the cost of doing business in New Jersey is greater for licensed professionals here versus their counterparts in neighboring states. A big part of the reason is the greater risk and associated costs in the malpractice insurance marketplace.
That’s why the New Jersey State Bar Association has joined with more than a dozen other professional organizations, including thousands of dentists, opticians, landscape architects, electrical contractors, and CPAs to support Assembly Bill A-1982 during the current lame-duck legislative session. A-1982 would stabilize to the cost of doing business for licensed professionals by bringing the statute of limitations for filing a malpractice claim to two years — similar to doctors in New Jersey and professionals in New York and Pennsylvania.
It would also eliminate fee shifting, which allows the party who successfully sues an attorney for malpractice to get attorney’s fees in addition to any damages the other party must pay. The practice is not used in neighboring states, and the result is that it introduces enormous instability into the New Jersey insurance market.
A dire situation
The reality is that the current state of the insurance market in New Jersey is dire for lawyers. Of approximately 25 insurance companies authorized by the state Department of Banking to write legal malpractice coverage, just five are actually renewing and writing policies.
The base rate for a lawyer in our state to get coverage is 33 percent lower in Pennsylvania and 49 percent lower in New York. Additionally, the average claim-cost per attorney in New Jersey is double that of Pennsylvania attorneys and 50 percent higher than what New York attorneys experience. New Jersey also has the highest number of claims in the region and exceeds the national average, due to the lengthy statute of limitations.
What we have in New Jersey is a restrictive insurance market and higher malpractice insurance rates for lawyers and other professionals. Contrary to popular misconception, most attorneys in New Jersey are small-business owners. They work in solo or small firms that form the backbone of their communities and fuel local economies.
A-1982 is a commonsense approach that stabilizes the cost of doing business and makes New Jersey a more competitive marketplace for insurance companies while continuing to protect consumers. The two-year statute of limitations would only begin from the date a consumer could reasonably discover a problem.
A-1982 is fair, smart legislation that will allow New Jersey’s licensed professionals to better help us all.
Robert B. Hille is the 119th president of the New Jersey State Bar Association, the largest organization of judges, lawyers, and other legal professionals in the state. He is a partner at McElroy, Deutsch, Mulvaney & Carpenter in Morristown.