NJBIA strongly supports legislation that would bring greater transparency in civil liability litigation by requiring disclosure to all parties if a private equity firm or hedge fund is paying a plaintiff’s lawyers to sue a New Jersey business.
Bill A-5566 (Pintor Marin, D-29; Park, D-37) was on the Assembly Financial Institutions and Insurance Committee’s agenda Thursday morning but was held due to ongoing work on amendments.
“This bill addresses a challenging trend where private equity firms use the civil justice system as an investment vehicle by funding numerous lawsuits, brought on by unrelated parties in exchange for a share of the plaintiff’s monetary award,” said NJBIA Chief Government Affairs Officer Christopher Emigholz.
Emigholz said that without certain transparencies, third-party funded litigation prevents the proper evaluation of potential conflicts of interest by obscuring who is behind the litigation.
He also said it creates an environment that ties up defendants and courts in prolonged and costly legal battles.
“NJBIA represents thousands of businesses, small and large throughout the state, and we hear from them that New Jersey is too expensive,” Emigholz said. “We hear from them that there are too many regulations and it’s not easy to do business here. We also hear from them that our legal costs are excessive and it’s a problem for New Jersey’s business climate.”
Protection from excessive litigation against business is listed as one of the key priorities in NJBIA’s Blueprint for a Competitive New Jersey, released earlier this year for state lawmakers and gubernatorial candidates.
Emigholz said passage of the bill is also a particular priority for the manufacturing sector.
“We want more things made in New Jersey, invented in New Jersey and researched and developed in New Jersey,” Emigholz said. “There are inherent risks in discovery and innovation that, if unchecked, threats of non-transparent litigation could stifle -- especially in competitive industries.”
The Senate version of the bill, S-4374, (McKeon, D-27; Lagana, D-38) was released by the Senate Commerce Committee in June.
