Gusciora, Lagana Legislation to Exempt Businesses from Courts Fees in Fraudulent Lawsuits Advances in Assembly

(TRENTON) – Legislation sponsored by Assembly Democrats Reed Gusciora and Joseph Lagana to eliminate the award of attorney’s fees, filing fees, and costs of suit in cases of technical violations under the Consumer Fraud Act was released by an Assembly panel on Thursday.

“Right now, companies must still pay counsel fees and all costs of a lawsuit against them even if they won the case,” said Gusciora (D- Mercer, Hunterdon). “The legislation provides relief for first time violations where every intention was made to follow the rules of the Consumer Fraud Act and this effort is recognized by the court.”

Under the Consumer Fraud Act, an individual who suffers an ascertainable loss of money or property as a result if another person’s violation is entitled to reasonable attorney’s fees, filing fees, and costs of suit. Further, the state’s courts have held that if a person can establish a violation of the act’s accompanying regulations, that person is entitled to reasonable costs of suit, even if there were no damages resulting from the violation.

“Current law provides that companies are still liable for court fees after having proved they were not in violation of the CFA,” said Lagana (D-Bergen, Passaic). “It is an unfair practice businesses are subjected to and this legislation will put an end to it.”

This bill (A-207) specifies that attorney’s fees, filing fees, and costs of suit are not to be awarded for a technical violation of the Consumer fraud Act. A technical violation, as defined in the bill, as one in which the person held in violation made a good faith effort to comply with the provisions of the Consumer Fraud Act and the resulting violation did not impact the quality of the product or service provided or result in an ascertainable loss to the consumer. In addition, technical violations do not include a second or subsequent violations of the same or similar nature, provided the person has been notified of the original violation and has had reasonable time and opportunity to rectify others.

The bill also clarifies that its provisions in no way prevent specified fees and reasonable costs of suit from being awarded in suits brought by the Attorney General, regardless of whether they are for technical violations.

The measure was approved by the Assembly Consumer Affairs Committee.