Rise in ‘nuclear verdicts’ in lawsuits threatens trucking industry

From CNBC.

This year should be smooth sailing for Mike Card, president of Combined Transport. The trucking company his dad started in 1980 is busier than ever — trying to meet the nation’s ravenous demand for delivered goods amid a pandemic.

But with some 500 trucks on the road across the nation, Card is constantly thinking about highway safety because just one bad crash could put his company on the brink of bankruptcy.

“If someone wins $20 million from the jury, my insurance companies only pay the first $5 [million]. I would have to pay the next $15 million. We couldn’t afford that. We’d have to shut our doors.” Card said. It’s not a unique worry.

According to data analyzed by the National Safety Council, just over 5,000 large trucks were involved in fatal crashes in 2019, a 43% increase from 2010. The number of injuries associated with truck crashes rose 7% that year to 160,000, with the majority being occupants of other vehicles.

Jury awards for crashes are also skyrocketing. When considering verdicts of more than $1 million, the average size increased nearly 1,000% from 2010 to 2018, rising from $2.3 million to $22.3 million, according to a study last summer by the American Transportation Research Institute.

US Xpress has about 7,000 trucks. CEO Eric Fuller told CNBC that for comparable accidents, verdict sizes have increased as much as 10 times over the last three or four years.

“When you get into jury trials, there’s very much a feeling of somebody has to pay for this. And it’s often it’s the big pockets,” Fuller said.

The insurance industry calls them “nuclear verdicts” — jury awards that surpass $10 million. Liberty Mutual Insurance blames corporate mistrust, litigation financing and social pessimism, a sense that the system is broken, for excessive jury awards.

In lawsuits that went in favor of the plaintiffs, hours-of-service violations, lack of clean driving history and fatigue were commonly cited factors.

See the complete article online at CNBC.