N.J. Stat. § 4:19-21.1
Notwithstanding any provision in P.L. 1989, c.307 (C.4:19-17 et seq.) to the contrary, the municipality and the owner of the dog may settle and dispose of the matter at any time in such manner and according to such terms and conditions as may be mutually agreed upon. Notwithstanding any provision of P.L. 1989, c.307 to the contrary, no municipality or any of its employees shall have any liability by virtue of having entered into any settlement agreement pursuant to this section, or for any action or inaction related to the entry into such agreement, for any injuries or damages caused thereafter by the dog. The municipality may, as a condition of the settlement agreement, also require that the owner of the dog hold the municipality harmless for any legal expenses or fees the municipality may incur in defending against any cause of action brought against the municipality notwithstanding the prohibition against such causes of action set forth in this section.
N.J.S. § 4:19-21.1