This bill amends existing New Jersey law to clarify that a municipality or municipal corporation can be deemed a nonprevailing party in civil actions where a judge finds that the party's complaint, counterclaim, cross-claim, or defense is frivolous. The bill specifies that the term "nonprevailing person" is replaced with "nonprevailing party" to ensure clarity in legal proceedings. It also outlines the criteria a judge must consider to determine if a claim is frivolous, including whether it was initiated in bad faith or lacked a reasonable basis in law or equity.

The legislation is a response to the New Jersey Supreme Court's ruling in *Borough of Englewood Cliffs v. Trautner*, which established that municipalities could be subject to sanctions for engaging in frivolous litigation. By formalizing this definition and the conditions under which litigation costs and attorney fees may be awarded, the bill aims to promote accountability among municipal entities in legal proceedings. The act is set to take effect immediately upon passage.

Statutes affected:
Introduced: 2A:15-59.1