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The State of New Jersey adopted the No Fault Act in 1972. One of the purposes of the statute, the “reparation objective,” was to provide personal injury protection coverage for the payment of medical expenses, income continuation, essential services and death and funeral expenses. N.J.S.A. 39:6A-4. This package of first-party PIP benefits is available to the named insured (the policyholder and resident family members), occupants in the insured vehicle and pedestrians struck by the insured vehicle, regardless of who was at fault for the accident � hence, the name “No Fault.” Another purpose of the No Fault Act, the “cost objective,” was to reduce the expense of automobile insurance by limiting the common law rights of an accident victim to recover compensatory damages for pain and suffering. As a result, an injured party would not be permitted to pursue a third-party liability claim against a negligent driver unless the injuries met a statutory threshold. N.J.S.A. 39:6A-8. As initially enacted, the act barred civil suits for all soft-tissue injuries unless medical expenses exceeded a monetary threshold. In 1988, the statute was amended to replace the monetary threshold with a “verbal threshold,” a definition in words of the type of significant or permanent injury that would permit an accident victim to recover damages from a negligent driver. As of Jan. 1, 1989, the owner of an automobile was required to elect either the basic tort option � the verbal threshold � or the alternative tort option � no threshold. The verbal threshold provided that the owner or operator of an automobile (the defendant) would be exempt from tort liability for noneconomic loss (pain and suffering) sustained by a person who is entitled to receive PIP benefits (the plaintiff) arising out of the ownership, operation, maintenance or use of an automobile in New Jersey unless the plaintiff’s injuries fell within one of the nine types set forth in the statute. In other words, a claimant who is subject to the verbal threshold would not be entitled to recover damages for pain and suffering unless the injuries included one of the following: Type 1. Death. Type 2. Dismemberment. Type 3. Significant disfigurement. Type 4. A fracture. Type 5. Loss of a fetus. Type 6. Permanent loss of use of a body organ, member, function or system. Type 7. Permanent consequential limitation of use of a body organ or member. Type 8. Significant limitation of use of a body function or system. Type 9. A nonpermanent injury which impairs the performance of substantially all of the usual and customary daily activities for 90 of the first 180 days. In contrast, a claimant who is subject to “no threshold” is entitled to recover damages for all noneconomic loss sustained as a result of an automobile accident. In 1998, the Legislature adopted the Automobile Insurance Cost Reduction Act for the purpose of preserving “the no-fault system, while at the same time reducing unnecessary costs.” The statute amended the No Fault Act by creating a basic automobile insurance policy, establishing medical protocols with care paths, adopting a new dispute resolution procedure and revising the verbal threshold. The new “limitation on lawsuit” option became effective for all policies issued or renewed on March 22, 1999. Thereafter, the negligent owner or operator of an automobile would be exempt from tort liability for noneconomic loss unless a claimant who is subject to the verbal threshold sustained one of six types of injury: Type 1. Death. Type 2. Dismemberment. Type 3. Significant disfigurement or significant scarring. Type 4. Displaced fractures. Type 5. Loss of a fetus. Type 6. A permanent injury within a reasonable degree of medical probability. Since 1972, the courts have published 75 opinions dealing with the verbal threshold. The cases published from 1991 to 1993 were reviewed in the April 25, 1994 supplement to the New Jersey Law Journal, 136 NJ.L.J. 1608; the 1994 cases in the April 24, 1995 supplement, 140 N.J.L.J. 236; the 1995 cases in the April 22, 1996 supplement, 144 N.J.L.J. 316; the 1996 cases in the Jan. 20, 1997 supplement, 147 N.J.L.J. 182; the 1997 cases in the Jan. 12, 1998 supplement, 151 N.J.L.J. 80; the 1998 cases in the Jan. 25, 1999 supplement, 155 N.J.L.J. 332; the year 2000 cases in the Jan. 22, 2001 supplement, 163 N.J.L.J. 243; the 2001 cases in the Jan. 28, 2002 supplement, 167 N.J.L.J. 285; and the 2002 cases in the Jan. 27, 2003 supplement, 171 N.J.L.J. 257. There were no cases published in 1999, see Jan. 2, 2000 supplement, 159 N.J.L.J. 265. There have been about 1,000 unpublished opinions relating to the verbal threshold. These opinions are digested each year and reported in this annual Law Journal supplement.

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