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SIU Spotlight

Top 10 Recommendations for Addressing Fraud in NJ PIP Arbitration: A DRP’s Perspective

May 15, 2026

by Gary T. Lesser

New Jersey’s no fault PIP system presents a unique blend of statutory requirements, arbitration procedures, and evolving fraud schemes. For carriers, counsel, and SIU professionals, navigating this landscape effectively requires more than familiarity with the rules — it demands an understanding of how Dispute Resolution Professionals (DRPs) evaluate evidence, credibility, and patterns of abuse.

Drawing on more than a decade as a Forthright PIP arbitrator and extensive experience investigating staged losses and systemic fraud, I offer ten practical recommendations for strengthening fraud detection and improving outcomes in PIP arbitration.

1. Understand the NJ PIP Landscape

New Jersey’s PIP framework is unlike any other. Arbitration, not Superior Court, is the primary forum for resolving disputes, and Forthright’s DRPs adjudicate cases based strictly on the evidence presented. Appreciating the procedural nuances — including timelines, evidentiary expectations, and the limits of DRP authority — is essential for building a defensible case.

2. Spot the Red Flags Early

Fraud often reveals itself in the details. Early indicators include:

  • Overutilization of treatment
  • Templated or boilerplate medical reports
  • Conflicting timelines
  • Identical documentation across unrelated claimants

Identifying these patterns at the outset allows carriers to intervene before questionable treatment escalates.

3. Investigate Policy Level Fraud

Fraud doesn’t always begin with the accident. Policy level misrepresentations  — such as false garaging locations, unlisted household residents, or misrepresented vehicle use — can undermine coverage entirely. Scrutinizing these issues early can support dismissal applications under the PIP rules.

4. Use the PIP Arbitration Rules to Your Advantage

Rule 35 of the New Jersey No Fault PIP Arbitration Rules provides a mechanism for pre hearing dismissal when coverage requirements are not met. As the document notes:

“If any party contends that… there is no coverage or Forthright lacks subject matter jurisdiction, such party may apply for an Order dismissing the case prior to hearing.”

A well supported dismissal application — including policy provisions, factual support, and documentation — can resolve a dispute before it reaches a hearing.

5. Analyze Treatment Records for Patterns

Fraud rarely occurs in isolation. Comparing CPT codes, treatment patterns, and provider behavior across multiple cases can reveal systemic issues. Reviewing prior arbitration awards involving the same providers can also uncover recurring credibility concerns or previously identified irregularities.

6. Use SIU Strategically

SIU involvement is most effective when timed to coincide with treatment phases and targeted to specific concerns. Preparing SIU investigators with focused questions and clear objectives enhances credibility assessments and strengthens the evidentiary record.

7. Leverage the EUO Effectively

Examinations Under Oath remain one of the most powerful tools in the investigative arsenal. Choosing between recorded statements and EUOs depends on timing and strategic goals. Records should be used to challenge inconsistencies in patient testimony and to test the reliability of the claimant’s narrative.

8. Prepare Your Arbitration Submission Thoughtfully

A strong submission clearly identifies:

  • The legal issues
  • The evidence supporting your position
  • How the facts align with your defense theory

While written submissions are important, oral hearings often make the difference. DRPs value clarity, organization, and a well articulated argument.

9. Coach Your Witnesses

Witness credibility can make or break a case. Preparing witnesses for cross examination ensures they present confidently and consistently. DRPs evaluate demeanor, clarity, and the ability to explain complex issues without overreaching.

10. Understand DRP Limitations — and Read Between the Lines

DRPs decide cases based on the evidence presented, not investigative instincts. The civil burden of proof and limited credibility assessments shape outcomes. However, award language often contains subtle cues that can guide broader fraud detection efforts. Arbitration outcomes should be treated as investigative leads, not endpoints.

Conclusion

Fraud in New Jersey PIP claims continues to evolve, and carriers must adapt accordingly. By understanding the arbitration process, identifying red flags early, and presenting well supported cases, insurers can more effectively combat fraudulent activity while ensuring legitimate claimants receive the benefits they are entitled to.

These ten recommendations reflect a DRP’s perspective — one grounded in thousands of cases, systemic investigations, and a deep understanding of how fraud manifests in the PIP environment. With thoughtful preparation and strategic execution, carriers can significantly improve their ability to detect, challenge, and prevent fraudulent claims.

Firm Highlights

Event

CLM 2026 Focus Conference

Allison joins three insurance industry leaders to discuss how cyber coverage disputes, the growing impact of social inflation on bodily injury claim valuation, and the use of artificial intelligence are reshaping the bad faith landscape. The panel will examine emerging sources of extra-contractual exposure, including evolving cyber insurance coverage issues and the challenges of accurately valuing bodily injury claims. Practical approaches to claim evaluation using AI, along with defense strategies designed to help prevent or successfully defend against bad faith litigation, will also be addressed. 

Thought Leadership

The Search-Incident-to-Arrest Doctrine Does Not License Strip Searches

In Beatty v. Gardner, No. 25-2860 (3d Cir. Sept. 16, 2026), Kyle Beatty sued police officers Clinton Gardner and Calvin Irvin under 42 U.S.C. § 1983 after they stopped, arrested, and searched him three times during a drug investigation in Williamsport, Pennsylvania. The officers initially smelled marijuana coming from the car in which Beatty was sitting and observed marijuana residue, giving them probable cause to arrest him. Beatty consented to the first pat-down, and the second search was conducted incident to his lawful arrest; neither search uncovered weapons or contraband. The officers then transported Beatty to the police station solely to strip-search him, but the strip search also revealed nothing. The District Court granted the officers summary judgment, concluding that the initial stop, arrest, and first two searches were reasonable and that qualified immunity protected the officers from liability for the strip search. The Third Circuit affirmed, but held that the strip search itself violated the Fourth Amendment. The court concluded that the search-incident-to-arrest doctrine does not automatically permit officers to strip-search an arrestee outside the jail or prison setting. Because strip searches are highly intrusive and the traditional justifications for searches incident to arrest (officer safety and preservation of evidence) did not justify the search of Beatty, the officers generally needed either the arrestee’s consent, exigent circumstances, or a warrant supported by probable cause to believe that a search beneath the clothing would reveal weapons, contraband, or evidence. Here, the officers had none of those justifications. Nevertheless, the court held that qualified immunity barred damages liability because, at the time of the search, the right against a warrantless strip search of an arrestee outside the institutional setting was not clearly established by Supreme Court or Third Circuit precedent. The court likewise upheld qualified immunity on Beatty’s First Amendment retaliation claim and affirmed summary judgment for the officers.

business meeting photo

Result

Summary Judgment Obtained in Insurance Coverage Case

Four Marshall Dennehey Attorneys Selected 2026 “Top Lawyers” by Delaware Today Magazine

News

Four Marshall Dennehey Attorneys Selected 2026 “Top Lawyers” by Delaware Today Magazine

Marshall Dennehey Welcomes Special Counsel David Farkouh and Michele P. Rannie to New York City Office

News

Marshall Dennehey Welcomes Special Counsel David Farkouh and Michele P. Rannie to New York City Office

Defense Victory Obtained in Workers’ Compensation Case

Result

Defense Victory Obtained in Workers’ Compensation Case

Thought Leadership

Two Tracks, No Preclusion: Ohio Supreme Court Preserves Separate Damages Claims After Chapter 2506 Appeals

The Supreme Court of Ohio has clarified that an administrative appeal under Ohio Revised Code Chapter 2506 does not bar a separate action for damages and declaratory relief that could not have been pursued in the administrative appeal. The Ohio Supreme Court considered Sheetz, Inc. v. Centerville (2026-Ohio-3531) as a result of a certified question from the Southern District of Ohio. The question was whether Sheetz, the gas station/convenience store brand, was barred from seeking damages in a separate action since damages were not sought in their administrative appeal. Ultimately, the Ohio Supreme Court ruled that res judicata does not bar a separate action for damages after ruling on an administrative appeal because R.C. Chapter 2506 is limited to judicial review and cannot grant affirmative relief. The case arose after Centerville’s city council rejected a site plan proposed by Sheetz, Inc. that had received unanimous approval from the City’s planning commission. Sheetz filed an administrative appeal pursuant to R.C. 2506 in the Montgomery County Court of Common Pleas, and two months later filed a complaint for damages and declaratory relief under 42 USC § 1983 as a takings action with the city, city council, and other objectors as improper takings and a violation of due process, as well as interference with business and contractual relationship. The city and city council removed the § 1983 action for damages to federal court. Montgomery County Court of Common Pleas reversed the city council’s denial, and allowed the Sheetz project to move forward. Upon that ruling, the federal court issued a show-cause order questioning whether the § 1983 action was barred by the doctrine of res judicata via claim preclusion (which includes all theories of recovery).  Sheetz argued that Ohio courts of common pleas do not have authority to award damages or declaratory relief as party of the R.C. Ch. 2506 appeal, therefore res judicata could not be triggered to apply to the § 1983 action. Additionally, Sheetz moved to certify the issue to the Ohio Supreme Court, citing differing results between the second and sixth districts on this same issue. Centerville approached the question, not from a claim preclusion standpoint, but from the holding in Grava v. Parkman, Twp which states that a final judgment rendered on the merits bars all subsequent action based on the same transaction or occurrence.  In yet another approach, an objector argued that claim preclusion was satisfied because Sheetz could have raised its damages claims in the administrative appeal – Sheetz disagrees. In their analysis, the Supreme Court of Ohio broke down the elements of a claim preclusion analysis: 1) a prior final, valid decision on the merits by a court of competent jurisdiction; (2) a second action involving the same parties, or their privies, as the first; (3) a second action raising claims that were or could have been litigated in the first action; and (4) a second action arising out of the transaction or occurrence that was the subject matter of the previous action. The Court held that R.C. Ch. 2506 does not permit a party to argue damages as R.C. Ch. 2506 limits the common pleas jurisdiction as if it were sitting on appeal, and therefore can only affirm, reverse, vacate, or modify the appealed order, or can remand the case to the administrative body. Further, the Court held that Grava’s conclusion that a final judgment precludes additional litigation for different relief is inapplicable under this fact pattern because it was meant only to apply to those matters in which the plaintiff brings the exact same case twice, but for new relief. The Court found Grava was inapplicable because Sheetz could have requested damages or declaratory relief in the R.C. 2506 appeal. Therefore, Grava would be nothing more than dicta if it even did apply. Going further, the Ohio Supreme Court disavowed Sixth Circuit precedent which, in reliance on Grava and other district court decisions, permitted an owner to seeking relief under 42 U.S.C. § 1983 alongside an administrative appeal. See Moore v Hiram Twp., 988 F.3d 353 (6th Cir.2021). The Ohio Supreme Court found that the Sixth Circuit had disregarded a critical decision in Community Concerned Citizens, Inc. v. Union Twp. Bd. of Zoning Appeals, 1993-Ohio-115, which clearly held that a R.C. Ch. 2506 appeal cannot be combined with a complaint seeking other claims for relief. Id. at ¶ 11. To that end, the Ohio Supreme Court has determined that the decisions Moore relied on (outside of Grava) are no longer good law, and that Moore was wrongly decided. The decision draws a clear procedural boundary: Chapter 2506 provides judicial review of an administrative decision, not a forum for independent claims seeking affirmative relief. Although Grava may place claims arising from a single transaction within the potential scope of claim preclusion, those claims are not barred unless the complete claim-preclusion test is satisfied. Because Sheetz could not have pursued damages or declaratory relief in its Chapter 2506 appeal, the separate action was not precluded. The remaining question for practitioners looking to apply or defend against this exception is when does the statute of limitations begin to run on damages and declaratory relief claims related to an administrative decision on appeal? A takings action in federal court has a 2-year statute of limitations, or as a state claim, 4 years (like the other tortious claims raised therein). Correlating this case with others, an administrative appeal will not likely toll the statute of limitations on claims based on a final decision by a municipal authority. Therefore, practitioners should look for these cases to be brought simultaneously.

Complete Victory Obtained in a Workers’ Compensation Matter

Result

Complete Victory Obtained in a Workers’ Compensation Matter

MD Selected a 2027 Best Law Firm in Multiple Practice Areas by Best Lawyers

News

Marshall Dennehey Named a 2027 Best Law Firm in Multiple Practice Areas by Best Lawyers®

Thought Leadership

Pennsylvania Supreme Court to Review Whether Legal Malpractice Claims May Be Recast as Breach of Contract Claims

The Pennsylvania Supreme Court recently granted allowance of appeal to consider whether a plaintiff may pursue a breach of contract claim against an attorney based on allegations that the attorney failed to provide competent legal services. The issue is significant in professional liability litigation because it concerns whether a plaintiff may avoid the statute of limitations applicable to professional negligence claims by characterizing the alleged misconduct as a breach of contract. Antoine Poteat retained attorneys Gary Asteak and Nino V. Tinari to represent him in a criminal matter. After his conviction was subsequently overturned through a Post Conviction Relief Act proceeding, Poteat filed suit against his former attorneys alleging that they breached their retainer agreements by failing to provide competent legal services. The attorneys argued that the claims sounded in professional negligence, rather than breach of contract, and were therefore time-barred. The trial court dismissed Poteat’s complaint, but the Superior Court, sitting en banc, reversed. The Superior Court held that the gist-of-the-action doctrine did not bar Poteat’s breach of contract claim because the alleged failure to provide competent legal services could constitute a breach of the parties’ agreement. The Court further held that a legal-services agreement contains an implied duty requiring an attorney to provide competent legal services, even where the agreement does not contain an express provision requiring such services. The Pennsylvania Supreme Court granted review in July 2026 and will consider whether the Superior Court’s decision conflicts with Pennsylvania precedent distinguishing contract and tort claims, including Bruno v. Erie Insurance Co. The Supreme Court will also address whether a plaintiff may maintain a breach of contract claim based on an implied duty to provide competent legal services without identifying a specific contractual provision that was breached. The Supreme Court’s decision could have significant implications for professional liability litigation in Pennsylvania, particularly where plaintiffs seek to characterize claims arising from alleged professional negligence as contractual claims.