De-Escalating Nuclear Verdicts

According to a quote by George J. Church from a 1986 Time Magazine article titled, “Sorry, Your Policy is Canceled,” “The nation, once proud of its frontier individualism, has gradually adopted a no-risk mentality based on the belief that if anything bad happens, someone should be made to pay. But as damage awards lose any connection to actual damages and insurance companies flail around anxiously, that someone is turning out to be everyone.”

Edward Solensky, Jr., partner, Freeman Mathis & Gary, LLP, read the quote, which was meant to alert Americans about the rise in $1 million jury verdicts at the time, during the CLM 2024 Annual Conference session, titled, "Nuclear De-Escalation: Strategies in the Battle Against High Dollar Verdicts and Bad Faith Cases.” He then juxtaposed this with nuclear verdicts from within the past few years, in which multi-billion-dollar plaintiff awards were granted.

Solensky, along with fellow speakers Floyd Cottrell, partner, Rawle & Henderson LLP; Mary Ann Vorndran, regional casualty claim director, EMC Insurance Companies; and Carey Bond, head of claims, Americas, Lloyd’s of London, posed the questions, “How did we get here?” and, “What can we do about it?”

How Did We Get Here?

“The 24-hour news cycle is something else, isn’t it?” Asked Bond. “When you think about where we’ve come from…when you think about the time you got into a legal or insurance career, and as you look at it over time, the availability of immediate news has had an impact."

He added, “When you think about it, folks [who] are injured; folks [who] have had tragedies in their lives—what are they doing? ...[T]hey’re watching TV, and what research shows is that, normally around the time Jerry Springer comes on, you will see ads for plaintiffs’ firms. And what do you know, that influence that you get with—I’ll call it what it is, crap—that you see on Jerry Springer, it ties to people who are actually watching it. I think we’re seeing that impact in jury verdicts.

"To desensitize what and who’s involved in the entire process, whether plaintiff or defendant, it becomes so impersonal; it becomes a game of, ‘Well, they can afford it.’ ...We like to think that we investigate thoroughly, gather all the facts, and make sound judgments and decisions, but that’s what we’re competing against…. In my opinion, we got here because of the availability of quick, unsubstantiated information.” Defense counsel, then, must learn from it and form strategies to combat it, Bond concluded.

Vorndran concurred, adding, “I think what happened with COVID…people were angry and…the attitude toward institutions changed…. There’s increased polarization, [and] litigation funding that’s driving up the damages. The plaintiffs’ bar has been smart. They’ve educated their attorneys on what they need to do to hit big…. I’ve had a couple cases where…they knew what questions and what themes to hit on that would inflate the jury [award]. So, they’ve been very organized.”

Cottrell gave his opinion on how the industry got here as well, which he believes is due to three reasons. He described commercials from a plaintiffs' firm in New Jersey, which shows someone who appears “young and healthy and robust going on and on…about how the insurance company offered $50,000 and [the plaintiffs' firm] got them $8 million. And this…has an effect on the jury pool, because they’re watching TV, and at some level, possibly subliminally, when they get to court, they think about these commercials when they’re in the jury box and they start to say, ‘Well, maybe that’s the baseline. Someone who’s injured but not disabled and looks OK; maybe $8 million is what they get.’ They don’t know. They don’t live in the trenches like we do when we put a value on a torn meniscus or a diskectomy, because of course we’re dealing with attorneys and judges when we settle a case. I think that has its effect.” As a result, juries think that since a healthy-looking person with an injury gets $8 million, then a severely injured or disabled person might deserve multiple millions more.

Second, according to Cottrell, is that the plaintiffs’ bar holds seminars and programs focused on skills. “When you look at our programs—and they’re great programs, don’t get me wrong—they’re markedly less skill-focused, and I think, over time, that shows. And the trouble with that is, I think the plaintiffs’ bar is much more willing to share information than the defense attorneys. I think plaintiffs are just tuned in to think, ‘Well, if I sign up a plaintiff, that’s a one-shot deal, I could make a lot of money if I hit big.’ I think defense lawyers, for better or worse…view each other a little bit as competitors, and maybe not as willing to share information, especially within their jurisdictions.”

The last factor, according to Cottrell, is social inflation. “What I mean by social inflation is, going back to the bank bailouts in 2010 or so...people hear about…all this money being generated, and I think that skews their perspective on the value of money. So, you put all these things together, and we’re kind of in a bad place.”

What Can Be Done About It?

“You want the jury to understand that you’re not talking about this faceless corporation that was negligent. We’re talking about real people who are trying to do their jobs to the best of their ability,” said Cottrell.

“What about changing the rules about insurance and putting it out there?” Asked Vorndran. “Everyone knows it’s there. So, could that actually work in our favor in these cases with Nuclear Verdicts when the jury gets to find out exactly how much insurance is there? Because they think it’s endless. They think there’s just all of this money out there and they don’t understand that there is a limit on policy.”

Furthermore, all the speakers agreed on the importance of focusing on training and educating young professionals in the industry in order to retain them and prepare them to combat plaintiffs seeking to cause Nuclear Verdicts.