SENATE WOMEN'S ISSUES, CHILDREN AND FAMILY SERVICES COMMITTEE

STATEMENT TO

SENATE, No. 1464

with committee amendments

STATE OF NEW JERSEY

DATED: NOVEMBER 18, 1996

      The Senate Women's Issues, Children and Family Services Committee favorably reports Senate Bill No. 1464 with committee amendments.

      As amended, this bill requires that upon the resolution of a lawsuit, civil judgement, arbitration or worker's compensation case where a party is entitled to receive a settlement, judgement or award, a lien be placed on the net proceeds payable to the prevailing party, if the party is found to be a child support judgement debtor.

      Under the provisions of the bill, prior to the distribution of the net proceeds of any award, judgement or settlement to the prevailing party, the prevailing party would be required to provide the attorney or insurance company responsible for the final distribution of the funds with a certification that includes the prevailing party's name, mailing address, date of birth and social security number. The bill would require an attorney, insurance company, or in the case of a civil lawsuit where neither party is represented by an attorney, the party bringing the lawsuit, would be required to initiate a child support judgement search using a private judgement search company. The search would be used to determine whether or not the prevailing party is a child support judgement debtor. The private judgement search company would provide the attorney, insurance company or party bringing the lawsuit with a certification of the results of the search. In the case of a civil lawsuit, the party bringing the lawsuit would be required to provide the court with a certification 10 working days prior to the trial or at the time of the settlement or dismissal of the lawsuit. In the case or a worker's compensation action, the insurance company shall initiate the judgement search prior to distributing the net proceeds to the prevailing party.

      If a child support judgement is not found, the net proceeds of the settlement, judgement or award would be distributed to the prevailing party immediately. If a child support judgement against the prevailing party is found, an attorney or insurance company would be required to contact the Probation Division of the Superior Court and arrange for the satisfaction of the judgement prior to the disbursement of any funds. In the case of a civil lawsuit where there are no attorneys involved and it is determined that the prevailing party is a child support judgement debtor, the party bringing the lawsuit would be required to satisfy the judgement with the Probation Division. The opposing party would also ensure that any judgement related to the lawsuit reflect the Probation Division's claim to the funds.

      The bill also limits the liability of an attorney or insurance company when satisfying a judgement from the net proceeds of a settlement, judgement or award. Also under the provisions of the bill, an attorney would not be required to challenge a child support judgement unless retained by the prevailing party to do so. The bill also prohibits a private judgement search company from using the any information provided by an attorney or insurance company for purposes other than determining if the prevailing party is the debtor of a child support judgement; and preparing a certification as required pursuant to the provisions of the bill.

      The bill provides the Supreme Court with rule-making authority in promulgating rules to effectuate the purposes of the bill.

      Finally, the bill repeals P.L.1995 c.334 (C.2A:17-56.37 et seq.) which provides for the withholding of awards in civil lawsuits to pay past due child support amounts. The provisions of that law are obviated by this bill.

      The committee amended the bill to require that, prior to the distribution of the net proceeds of any award, judgement, or settlement to the prevailing party, the prevailing party must provide the attorney, or insurance company responsible for final distribution of the funds with a certification that includes the prevailing party's full name, date of birth and social security number.

      The bill was amended by committee to require that in a worker's compensation action, an insurance company shall initiate a child support judgement search prior to distributing the net proceeds of an award to the prevailing party.

      The committee also amended the bill to limit the liability of an attorney or insurance company when distributing net proceeds to the prevailing party based on the results of a judgement certification if it is later shown that the prevailing party provided inaccurate personal information on the initial certification to the attorney or the insurer.

      Finally, the bill was amended by the committee to prohibit a private judgement search company from using any information provided by an attorney or an insurance company for any other purpose than determining if the prevailing party is the debtor of a child support judgement or preparing a certification as required by the provisions of the bill.