Arbitration is an alternative method of dispute resolution often used to resolve consumer and employment disputes. With arbitration, parties agree to resolve their dispute outside of the court system, selecting a neutral third-party to issue a binding and enforceable decision. This results in a faster, more streamlined process for resolving disputes than lawsuits.
Arbitration works better for almost everyone, including plaintiffs, people being sued, and the court system (by reducing the number of cases it must resolve). The only people arbitration does not work for is plaintiffs’ lawyers, who stand to make more money if a case has the potential to be more drawn out and difficult, which is typical when a case proceeds in court. That is why plaintiffs’ lawyers support efforts in both the legislature and courts to ban arbitration.
NJCJI counters those efforts by testifying against all anti-arbitration legislation and participating in court cases that challenge the rights of parties to agree to arbitration. In doing so, NJCJI emphasizes the existence of federal law protecting arbitration rights and highlights the benefits of arbitration as a more efficient and cost-effective alternative to the court system. Some of NJCJI’s recent advocacy work in this area includes:
- In New Jersey Civil Justice Institute v. Grewal, Civ. No. 19-17518 (Mar. 25, 2021), NJCJI and the United States Chamber of Commerce successfully challenged an amendment to the New Jersey Law Against Discrimination that subjected arbitration provisions in employment contracts to “uncommon barriers,” therefore violating the Federal Arbitration Act.
- In Skuse v. Pfizer, 244 N.J. 30 (2020), NJCJI joined an alliance of trade and commerce organizations as friends of the court. They successfully persuaded the New Jersey Supreme Court that the plaintiff’s proposed test for assent for determining the validity of an arbitration clause violated the Federal Arbitration Act.
- In 2022, NJCJI and the Insurance Council of New Jersey (ICNJ) jointly participated as friends-of-the-court on the prevailing side ofCrystal Point Condo. Ass’n v. Kinsale Co. NJCJI and ICNJ persuaded the New Jersey Supreme Court to acknowledge that when a plaintiff’s rights against an insurance carrier are derivative of the insured’s rights under an insurance policy, the plaintiff is held to all of the terms of the insurance policy, including any arbitration provisions. The Court unanimously agreed with NJCJI and ICNJ.