Certain New Jersey businesses have a hard time appealing verdicts against them because it is simply too expensive to do so. The cost comes not just from the expense of hiring attorneys, but from having to post a bond for the full amount of an adverse verdict before being allowed to appeal. In this day and age, eye-popping jury verdicts are not uncommon, but financial regulations and the nature of certain businesses makes it challenging to get funding for appeal bonds.
This issue was highlighted in a recent article in the business newspaper NJBIZ. The article points out that professional services firms, technology companies, and other businesses that lack hard assets they can use for appeal bond collateral are being priced out of the market for justice.
New Jersey is one of a handful of states that has taken action to make appeal bonds fairer, but only for the tobacco industry.
“We think the cap that industry enjoys should be extended to all businesses,” Rayner said. “Companies should be able to appeal up to the Supreme Court and their bank account shouldn’t be a limiting factor.”
An example Rayner believes demonstrates its potential impact is a 2007 case involving BDO International, an accounting firm that has a United States arm with an office in Woodbridge. The firm was held liable for $522 million in a Florida court ruling that was later overturned at the state’s Supreme Court level.
The firm, which had around 2,700 employees, was able to appeal with a bond capped at $50 million instead of the full $522 million due to legislation that had been enacted in Florida only the previous year.
Ralph Thomas, CEO and executive director at New Jersey Society of CPAs, said firms in similar situations in New Jersey would likely have been closing the doors instead of getting their day in court.