ATRI’s White Paper: Understanding the Impact of Nuclear Verdicts on the Trucking Industry
In June 2020, the American Transportation Research Institute (“ATRI”) released an 80-page report summarizing its comprehensive research into large “nuclear verdicts” over the past 15 years. The study, “Understanding the Impact of Nuclear Verdicts on the Trucking Industry,” analyzes litigation data from over 600 cases between 2006 and 2019. The data was collected from multiple sources in the industry, including a litigation database firm. In sum, the data reveals that jury verdicts against trucking companies are increasing at an alarming rate.
According to the study, in the first five years of the data (i.e., 2006-2009), there were only 26 cases with jury verdicts over $1M. From 2012 to 2019, there were nearly 300 cases with jury verdicts over $1M – a 335% increase. The number of verdicts greater than $1M but less than $2M increased by 300% in the same period. Further, the number of verdicts over $10M doubled in the last five years of the data.
ATRI’s research revealed that the average verdict between 2006 and 2019 was $3.16M, with a large standard deviation of $7.19M. However, the average size of verdicts from 2010 to 2018 increased from $2,305,736 to $22,288,000 – a 967% increase.
While it is often argued that nuclear verdicts reflect real-world cost increases, the data shows that the verdict’s size has far exceeded standard inflation and healthcare cost increases. From 2010 to 2018, mean verdict awards increased 51.7% per year, in contrast to inflation and healthcare costs, which on average grew 1.7% and 2.9% per year, respectively.
In addition to data analysis, ATRI interviewed defense attorneys, plaintiff attorneys, insurance agency brokers, insurance executives, and underwriters. The interview subjects identified six categories which they deemed to influence large verdicts: 1) prevention; 2) crash-related details; 3) post-crash/pre-litigation stage; 4) litigation strategies; 5) unfavorable practices; and 6) additional factors. The data analysis confirmed that the type of injury, number and type of parties involved, and even vehicle types had a statistically significant impact on verdicts.
Ultimately, ATRI concluded that a “comprehensive and multifaceted program” is required to reign in the nuclear verdict trend. Such a program must address state and federal litigation landscapes, modified approaches to trial preparation, new safety compliance standards, broader fraud investigations, and expanded strategy and information-sharing among the defense bar.