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Caviglia v. Royal Tours of America2/19/2004
amage caused by their vehicles. N.J.S.A. 39:6B-1.
That statute is intended to ensure that automobile accident victims are not left without the means to recover financially for their injuries from a judgment-proof tortfeasor. State v. McCourt, 131 N.J. Super. 283, 286 (App. Div. 1974). Every policy also must provide a package of "personal injury protection benefits" that guarantees, without regard to fault, medical expense benefits to the named insured and his family household members in the event they suffer bodily injury in an automobile accident. N.J.S.A. 39:6A-4. This system of first-party self-insurance through PIP benefits was enacted pursuant to the New Jersey Automobile Reparation Reform Act (the No Fault Act) and is commonly referred to as no-fault insurance. L. 1972, c. 70; N.J.S.A. 39:6A-1 to -35; see also Fu v. Fu, 160 N.J. 108, 121 (1999) (describing transition from fault-based system to system of first-party coverage).
The No Fault Act was intended to serve as the exclusive remedy for payment of out-of-pocket medical expenses arising from an automobile accident. Roig v. Kelsey, 135 N.J. 500, 503, 512 (1994). Moreover, the act contained restrictions on the right to sue. For example, an injured driver with a standard liability policy was barred from suing the tortfeasor for the very PIP benefits reimbursable through his own insurance carrier. Sotomayor v. Vasquez, 109 N.J. 258, 261-62 (1988).
The act also precluded an injured, insured motorist or passenger from suing an insured tortfeasor for economic or non-economic damages (pain and suffering) unless the injury was of a permanent nature or the medical costs of treatment of the injury were valued at $200 or greater. Oswin v. Shaw, 129 N.J. 290, 295-96 (1992) (citing L. 1972, c. 70, ยง 8). The restriction on the right to sue in those instances was deemed the trade-off for lower premiums and prompt payment of medical expenses. Roig, supra, 135 N.J. at 511-12.
A common thread throughout the evolution of the no-fault scheme has been the periodic inclusion of additional conditions on the right to sue in automobile accident cases. The No Fault Act was enacted in response to a long and widely held belief that the traditional court-oriented "fault" system had failed badly in providing prompt compensation for accident victims, whose medical bills and other accident-related costs remained unpaid for years while their lawsuits lumbered through an overburdened court system. Roig, supra, 135 N.J. at 502-03; Gambino v. Royal Globe Ins. Cos., 86 N.J. 100, 106-07 (1981). The Legislature had four objectives in reforming the automobile accident tort system: (1) providing benefits promptly and efficiently to all accident injury victims (the reparation objective); (2) reducing or stabilizing the cost of automobile insurance (the cost objective); (3) making insurance coverage readily available for automobile owners (the availability objective); and (4) streamlining judicial procedures involved in third-party claims (the judicial objective). Gambino, supra, 86 N.J. at 105-06 (citing Automobile Insurance Study Commission, Reparation Reform for New Jersey Motorists at 7 (December 1971)).
Although the No Fault Act may have been successful in meeting its first goal of providing speedy recovery of medical costs, lost wages, and other such expenses without making the victim await the outcome of protracted litigation, the act fell short of its other objectives. Oswin, supra, 129 N.J. at 296; Rybeck v. Rybeck, 141 N.J. Super. 481, 492 (Law Div. 1976), appeal dismissed, 150 N.J. Super. 151 (App. Div.), certif. denied, 75 N.J. 30 (1977). The act failed to curb increasing insurance costs and to relieve congestion of court cale
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