Uptrend of Nuclear Verdicts in the Trucking Industry
Written by Evidence Solutions Inc. (ESI)
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According to a report by the American Transportation Research Institute (ATRI), "Nuclear Verdicts" (defined as awards exceeding 10 million dollars) have been on a sharp rise over the last ten plus years. Not only have the number of these verdicts increased, the average award per case has also been skyrocketing.
There are several hypotheses surrounding the reason behind this dramatic increase. Some have posited that the rise in medical costs necessitates these higher dollar awards, while others claim these increases have happened independent of other financial factors. The ATRI ranked this subject as one of its top research priorities back in 2019. They dove into the issue by looking at hundreds of cases from 2006 to 2019 within the newly created trucking litigation database. They looked at the growth of awards on average, and then did a statistical analysis in which they controlled for the other factors known to influence settlement size.
Generally, settlements against companies have been on a sharp rise since the 1977 Supreme Court decision that legalized Legal Advertising. The years 1985 to 1994 saw a 90% increase in the average settlement award. One of the most famous large-scale settlement awards came in 1994, when McDonald's was sued for selling hyper-boiling coffee. This 2.86 million dollar verdict captured the attention of the population at large. That same moment for the trucking industry came years later, in 2011, when 40 million dollars was awarded to victims of a trucking accident. The award was particularly high due to the plaintiff arguing that they lost nearly 30 million dollars in future earnings, based on an un-started business venture.
The impact of these nuclear verdicts on the trucking industry is palpable. Higher accident awards lead to higher insurance premiums on carriers, causing several to have shut their doors - citing this as the reason. Increases of over 100% have been reported. These increased costs may also be passed along to the consumers of the goods that truck drivers haul. However, it is also leading to a renewed seriousness with which safety training and regulations are adhered to, as the best way to prevent a "nuclear verdict" is to avoid the accident ever happening in the first place.
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