Nuclear verdicts, those of $10 million or more, in personal injury and wrongful death cases are on the rise, according to a new analysis.
A recent report from the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) found that nuclear verdicts quickly returned to pre-pandemic levels in the third quarter of 2021.
In 2022, the number of reported nuclear verdicts was shy of the record highs set in 2016 and 2018.
The analysis found a median verdict of $21 million but an average of $89 million, impacted by the most extreme awards.
“Nuclear verdicts consist primarily of awards of noneconomic damages, such as pain and suffering. This means that the lion’s share of nuclear verdicts during the 10-year study period are attributable to subjective damage assessments by jurors that have inflated over time,” the ILR said in its report.
A variety of factors inside and outside the courtroom are fueling mega-verdicts.
In the courtroom, plaintiffs’ lawyers employ tactics to inflame jurors’ emotions and use noneconomic damages to “send a message.” Another tactic is to engage in “anchoring,” in which lawyers suggest a specific sum during the closing arguments to a jury.
Outside of court, the public is inundated with ads suggesting verdicts and settlements in the hundreds of millions or billions of dollars are normal. Additionally, third-party litigation funding is rising as outside investors back lawsuits in return for a portion of any recovery.
Nuclear verdicts affect the costs of goods and services, including higher insurance costs. According to the report, nuclear verdicts are partially responsible for rising insurance premiums for medical professionals and the trucking industry.
According to data from the Medical Liability Monitor, premiums for doctors in some areas known for nuclear verdicts, including counties in Illinois and Georgia, have substantially increased.
“Nuclear verdicts adversely affect society,” the ILR wrote. “The prospect of a nuclear verdict makes it more difficult to fairly resolve claims, leading to unnecessary litigation and appeals. Nuclear verdicts can threaten the viability of a business or the availability of a needed product or create insurability problems for an entire industry.”
Methodology: The Chamber’s ILR analyzed 1,288 verdicts between Jan. 1, 2013, and Dec. 31, 2022.
The bottom line: “The consequences of allowing nuclear verdicts to continue to proliferate will be increasingly felt throughout society.” The ILR says legislative solutions are needed to reduce the likelihood of excessive damage awards before they occur.
Go deeper: Read all the findings of “Nuclear Verdicts: An Update on Trends, Causes, and Solutions.”
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