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Rice Bill To Increase Transparency Over Municipal Legal Contracts Approved

Senator Ronald L. Rice (D-Essex)

TRENTON – A bill sponsored by Senator Ronald L. Rice to increase transparency and State oversight of municipal legal contracts was approved by the Senate today by a vote of 39-0, confirming with the Governor’s conditional veto of the legislation.

“The cost of government to New Jersey taxpayers is overwhelming enough without inflated legal contracts to political cronies,” said Senator Rice, D-Essex. “This bill would create more monitoring and transparency of local legal contracts, so that politically-connected law firms aren’t enriching themselves at the expense of the taxpaying public. This is about making sure that politically-connected lawyers cannot take advantage of the system and turn frivolous lawsuits into a huge windfall for themselves and their firms.”

The bill, S-1248, with the Governor’s recommendations, would require municipalities and governmental authorities, beginning with the next fiscal year, to provide the State with information on any lawsuits in which they are a party, and in which they expect to spend more than $50,000 in legal fees or settlement costs, and in which they are not covered by a liability insurer. Under the bill, the local government or authority, prior to adopting their annual budget, would be required to provide information to the Director of Local Government Services, including: the number of lawsuits filed by or against the local unit or authority; the dollar amount awarded in those lawsuits; the number of lawsuits settled out of court; the number of pending lawsuits, with information about the attorney or law firm representing them, and the dollar amount paid to the attorney or law firm; and an explanation of the billing manner used by attorneys or law firms representing the municipality or authority in each lawsuit. Copies of the reports filed with the Director of Local Government Services would be available for a one-year period on the municipality’s Web site.

“Out of control legal contracts represent one of the biggest cost drivers for taxpayers in the State of New Jersey, and it’s about time that we expose these legal contracts to the light of public scrutiny,” said Senator Rice. “This bill ensures that large legal contracts are given the proper scrutiny and attention they deserve, by the Legislature and Governor as well as by the taxpaying public. As someone who has served in government on the local level, I know that municipalities are often party to a large number of frivolous lawsuits each year, but municipal officials have to find more cost-effective ways of defending themselves, including using lawyers already on the public payroll, rather than contracting out for expensive legal services.”

The bill now heads to the Governor to be signed into law.

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