In Allstate New Jersey Ins. Co. v. Lajara, the Appellate Court was faced with the question as to whether the Insurance Fraud Protection Act (IFPA) provided the litigants with the right to a jury trial.

The defendants allegedly concocted an elaborate scheme to defraud the plaintiff insurers of millions of dollars in personal injury protection (PIP) benefits through treatment of bogus injuries and staged automobile accidents.  Upon discovering the scheme, the insurers filed suit under the IFPA.  Although the original complaint contained a demand for a jury trial, it was subsequently amended, dropping the demand.  The defendants, however, asserted a right to a jury trial, arguing that, though not expressly stated, the right is implicit under the New Jersey constitution.  The trial court denied defendants’ claim, resulting in appeal.

In upholding the lower court’s decision, the Appellate Court looked to the specific language of the IFPA and the legislative intent.  The Court determined that, as with other statutes, if the legislature had intended to create a right to trial by jury, it would have been included in the Act’s construction.  Importantly, the Court highlighted that the IFPA was designed in part to help insurers control the cost of fraud  — and that jury trials were not necessary to help with that goal.

Thanks to Emily Kidder for her contribution to this post.  If you would like more information please write to Mike Bono.