Nuclear Verdicts: A Growing Threat to Commercial Fleets

In recent years, there has been an alarming rise in “nuclear verdicts” – jury awards of $10 million or more – stemming from truck accidents involving commercial fleets. These astronomical awards pose a major financial risk to transportation companies and are having ripple effects across the industry.

The Statistics

According to recent data from the American Transportation Research Institute (ATRI), the number of nuclear verdicts has increased dramatically since 2010. In 2010, there were just 3 nuclear verdicts from trucking accidents nationwide. By 2016, that number skyrocketed to 37, a over 1000% increase in just 6 years. The average nuclear verdict has also grown, from $8.8 million in 2010 to $26.4 million in 2018. Another study from ATRI found that the number of $1 million-plus settlements in trucking accident cases grew 90% from 2017 to 2018.

This upward trend has continued after 2021 as well. VerdictSearch reported 42 nuclear verdicts stemming from trucking accidents in 2021, totaling over $1 billion in damages awarded. In the first half of 2022, VerdictSearch tracked 27 nuclear verdicts totaling $685 million. At this pace, 2022 could set a new record high for both the number of verdicts and total value awarded.

It’s clear this trend poses an existential threat to commercial fleets. Nuclear verdicts show no signs of slowing down.

The Impact

Nuclear verdicts can cripple or even bankrupt trucking companies, especially small to mid-sized fleets. Even one massive jury award can exceed the policy limits of a company’s insurance coverage. This forces the company to pay the difference, draining cash reserves. Some cannot financially recover and are forced to shut down.

Those that survive are often dropped by insurance carriers who view them as too high-risk. They struggle to find affordable coverage. Nuclear verdicts also cause insurance premiums to rise across the whole industry. A 2019 Willis Towers Watson report found average premium hikes of 20-30% over the prior year.

Concerns Going Forward

If nuclear verdicts continue to rise at such a dramatic rate, it will have broad implications. Smaller fleets may be pushed out of business, reduced competition. Large fleets may cut jobs and routes to stay profitable under the financial strain. Higher insurance rates could also be passed to consumers through increased prices for shipped goods.

Attorneys are increasingly aggressive in taking accident cases to trial, refusing reasonable settlements pre-trial. Juries also seem inclined to award higher and higher damages. New solutions are urgently needed to address this mounting threat.

Risk Mitigation Initiatives

There are currently limited legal solutions on the table. Some states have proposed legislative caps on damages, but face pushback. In the meantime, commercial fleets can take steps to minimize their risk exposure:

• Enhanced driver screening and training programs
• Transition to safety technology such as blind spot, surround view vision or collision avoidance systems
• Implement telematics and dash cams to monitor and record driving history
• Conduct regular maintenance and inspections of vehicles
• Review routes and parking locations for safety
• Set higher insurance coverage limits or purchase excess liability policies

The rapid increase in nuclear verdicts from trucking accidents poses a dire threat to the commercial transportation industry. Given the trajectory, many experts warn that the situation is unsustainable – it will reach a breaking point where insurance coverage is unattainable for most fleets. This may profoundly disrupt the supply chain and economy.

While companies can take steps to minimize risks, the nuclear verdict crisis cannot be fully addressed through preventative measures alone. The legal environment that enables and encourages astronomical jury awards must be reformed. Potential solutions include legislative caps on non-economic damages, rules to discourage excessive attorney fees, sanctions for unethical attorney conduct, mandatory settlement conferences before trial, and bifurcation of trials to separate liability and damages.

The nuclear verdict crisis requires action and leadership at both the state and federal level. Doing nothing could have devastating consequences for one of the nation’s most vital industries. Transportation associations, business groups, insurance companies and other stakeholders must push for reforms. With a concerted effort, the troubling trend of nuclear verdicts can be addressed before it causes lasting economic damage.