In the nine-year period between 2010 and 2018, jury verdict awards against trucking companies grew at a rate of 51.7% per year. That’s a lot, especially when compared to an annual standard inflation-rate growth of 1.7%.
That’s just one of the findings in a recent study by the American Transportation Research Institute (ATRI) released on June 23.
Using data collected from a trucking-litigation database, ATRI studied detailed information about 600 cases between 2006 and 2019. In the first five years of the study, 2006-2010, there were 26 cases in which jury awards totaled over $1 million. In the most recent five years (2015-2019), there were 300 such awards.
In 2019, ATRI’s Research Advisory Committee identified so-called “nuclear verdicts” against the trucking industry as the highest research priority for the group. The results released today are the initial result of a continuing study.
In recent protests held by small-business truckers in Washington, D.C., and elsewhere in the country, rising insurance rates were listed by many participants as an issue the government should address. Larger carriers, including the 4,000-employee Celadon, cited high insurance costs as a reason for economic troubles. With freight rates plummeting due to COVID-19 closures and slowdowns, insurance-premium increases have been difficult for many small carriers to bear.
The ATRI study sheds some light on the reasons behind premium increases that are harming trucking businesses of every size.
As part of the research, ATRI interviewed and surveyed attorneys from both sides of litigation cases, as well as insurance and motor carrier experts. The study contained recommendations for pre-trial strategies and mediation approaches designed to help avoid large post-trial verdicts.
“Runaway verdicts are increasing in both size and numbers,” said Clay Porter, partner at Porter Rennie Woodard and Kendall. “This study documents a frequency in excessive awards that, while not surprising, tells us that the trial system has gotten completely off track. Foundational changes are needed in the way we determine noneconomic and punitive damages.”
Another attorney, Rob Moseley with Mosely Marcinak Law Group, said, “ATRI’s research on litigation provides important guidance on leveling the playing field between truckers and trial lawyers, both in and outside of the courtroom.”
Last week, small carriers were dismayed by an amendment to the proposed “INVEST in America” infrastructure bill presented by Rep. Jesus G. “Chuy” Garcia (D-Ill.) that would increase minimum financial responsibility levels from $750,000 to $2 million. The amendment passed the House Committee on Transportation and Infrastructure and was added to the bill.
The bill has since been submitted to the full House of Representatives for a vote, but it may not fare as well in the Republican-controlled Senate. Trucking groups are divided on the issue, with the Owner-Operator Independent Drivers Association (OOIDA) withdrawing support for the bill in response to the amendment while the American Trucking Associations indicated its support in a June 19 press release.
The ATRI study breaks down jury verdicts by such criteria as number of deaths, crash type, violations and even whether children were involved. The statistics were used to develop average award amounts for each category, enabling attorneys to better predict jury awards in individual cases.
A geographic analysis showed disparity between states in verdicts between plaintiffs and defendants. One example provided showed the defense winning 92.3% of cases in Alabama, while plaintiffs won 97.1% of cases tried in California.
While it may be easy to assume that the results clearly show that some states are more favorable for litigation than others, it’s important to remember than the overall numbers of cases in the study are relatively small. Still, attorney’s seeking the most favorable locations for their clients will surely pay attention.
The entire 82-page study can be downloaded from the ATRI website, truckingresearch.org.