On September 29, NJCJI joined the Insurance Council of New Jersey (ICNJ) in filing an amicus curiae brief with the New Jersey Supreme Court in Crystal Point Condo. Ass’n v. Kinsale Insurance. The Appellate Division’s opinion in that case eschewed New Jersey’s strong public policy in favor of arbitration and allowed the plaintiff, a third-party beneficiary to an insurance contract, who was suing the carrier through a direct action, to avoid the policy’s explicit arbitration provision.
In issuing its decision, the appellate panel asked more of the arbitration provision than it would an ordinary contract. This contradicts New Jersey and federal strong public policy in favor of arbitration agreements, which requires courts to apply traditional state-contract law standards to arbitration agreements. The panel appeared to require explicit mutual assent between a third-party beneficiary and an insurer. This is an unprecedented and improper burden to place on parties agreeing to arbitrate in this context. Placing such burdens on arbitration provisions will also result in unpredictability in enforcing arbitration provisions, resulting in more litigation, increased costs and higher insurance premiums. NJCJI and ICNJ have asked the Court to restore arbitration to its status as a preferred dispute resolution method and to remind New Jersey courts of the traditional principles governing arbitration agreements.
On October 22, the Supreme Court issued its order granting NJCJI and ICNJ’s motion to participate as amici curiae and accepted the joint brief for filing.
A copy of the brief can be found below: