Recent N.J. Supreme Court Decision Highlights Pitfalls Of Nonbinding Arbitration

In Vanderslice v. Stewart, No. 073362, 2015 N.J. LEXIS 54 (N.J. Jan. 29, 2015), the Supreme Court of New Jersey decided that a defendant could demand a trial de novo after a nonbinding arbitration award was entered against it, despite its failure to timely pay the required filing fee associated with the demand. This decision is a good reminder that "nonbinding" arbitration in the Superior Court of New Jersey may in fact become binding on a party under a variety of circumstances. Significantly, under Rule 4:21A-6, if a party fails to demand a trial de novo within 30 days of the arbitration award's entry, it becomes a final judgment against that party.

Under New Jersey's court rules, certain civil actions are submitted to mandatory, nonbinding arbitration after the end of the discovery period. If a party is dissatisfied with the arbitrator's decision, it may make a demand for a trial de novo by filing the required demand forms, accompanied by a check, within 30 days of