Court Finds that Claims Under New Jersey’s Insurance Fraud Prevent Act Are Subject to Arbitration

The court found that nothing in the text or legislative history of New Jersey’s Insurance Fraud Prevent Act (IFPA) explicitly or implicitly prohibits arbitration of claims brought under the statute. Second, the court found that New Jersey’s no-fault laws allow any party to compel arbitration and that the plaintiff’s IFPA claims constituted an effort to recover medical expense benefits. Finally, the court found that pursuant to the plaintiff’s Decision Point Review Plan, there was an arbitration provision that covered any issue in connection with any claim for PIP benefits. This determination makes it extremely difficult for insurance carriers to litigate fraud in federal court.