The American Transportation Research Industry (ATRI) released its study of “less than nuclear” verdicts and claims on Nov. 18. The result provides insights as to the evaluation of these far more frequent claims. While individually less catastrophic than nuclear verdicts, these claims hemorrhage our industry on a daily basis. So, what are the key takeaways from the report?
Be willing to try cases
The looming specter of a nuclear verdict has created a fear to take cases to trial. Statistically, even before this nuclear era, only 5-10% of lawsuits were decided by trial. I believe it even less now.
‘Trial trepidation’ is the product of concerns that a runaway verdict will close a trucking company or end an insurance career. In fact, The Reptile Theory espouses a mediation tactic of confronting an insurance adjuster with the career-ending impact of misevaluating a case and failing to settle.
Are trials a risk? To an extent, yes. Should all cases go to trial? Not necessarily.
But must all cases settle before trial? Absolutely not. Doing so will send a message that you will cave, no matter how outrageous the demand. And, as we know, word gets around.
Takeaway: The trial/settle decision must be the result of an analysis of the risk and value based on data and experience. The ATRI study contributes a source of data to consider.
What does the data show?
The study shows that settlements were higher on average than verdicts. Payments over US$500,000 occurred in 50.3% of settlements compared to 31.5% of verdicts. While payments between $100,000 and $500,000 were about the same, the majority of cases concluded for less than $100,000 were the product of verdicts.
Granted, higher settlements may be the product of resolving cases with higher risks. However, the study did not include cases resolved in favor of the trucking companies, such as defense verdicts.
Let’s add another element beyond the data of the report: reluctance or discomfort of many plaintiff attorneys to take a case to trial. They have their own downsides, including limited or no recovery. If the case is a referral from another attorney, they bear the burden of providing a good result so as to keep those referrals coming.
Additionally, in the words of Conway Twitty, ‘Don’t call him a cowboy until you’ve seen him ride.’ Just because they call themselves trial lawyers doesn’t mean they can try a case…or have tried one.
I had a case several years ago where an aggressive plaintiff attorney was associated with a real trial lawyer. When that trial lawyer withdrew late in the case, the aggressive plaintiff attorney beseeched the court for a continuance…so he could get someone else to try the case.
It is a sad commentary on my line that I took such pleasure in opposing the motion, while displaying the plaintiff attorney’s website and the claims of his trial prowess. And even more pleasure when the court denied the motion.
Takeaway: Don’t fear trial. Evaluate risk and value. Consider costs. If you can settle within this valuation, great. If not, that is why we have courthouses.
Don’t chintz, invest
Be willing and prepared to invest in the defense. Consider the ROI of engaging experts to reduce the verdict or settlement in a case.
The ATRI study found that the use of defense experts was significant in predicting lower verdict awards. This confirms that defense experts do in fact help defense attorneys that choose to hire them. In fact, the study found where the defense used an expert, the verdict was 25.5% lower than average.
From a strategic standpoint, you have sent a message to the plaintiff attorney that is not “hit a truck, get a check.” You’re serious. Moreover, you send a clear message that, absent their reasonableness, you are ready and willing to try the case.
Also, doing so puts pressure on the plaintiff attorney to incur the added cost to engage a responsive expert at the risk of not recovering that money. You have raised the stakes.
Takeaway: Invest in experts if it helps the case. Don’t chintz.
The ATRI study provides an analysis of potential risk based by analyzing the key factors: type of injuries and the alleged infraction. This is a valuable resource in performing your evaluation as to the value and risk of going to trial.
So, what did ATRI find? The highest average payments, not surprisingly, were in death cases. These payments were 42% higher than for non-fatal accidents.
However, this was followed by plaintiffs with pre-existing conditions and claims of lower extremity foot and leg injuries. The susceptibility to increase injury and medical expenses of the pre-existing condition can account for this finding.
In terms of alleged infractions, a poor prior driving history yielded the highest average payment. In today’s tight driver market, this is particularly challenging.
This was followed by phone use, HoS violations, and asleep at the wheel. All of these are the types of infractions that engender the most reaction and correlate to the general misconceptions of jurors that these are rampant in our industry contrary to the facts and reality. Or at least their fear that they are. And the argument that these can only be prevented by a large verdict plays right into the Reptile Theory argument.
Takeaway: Use the data in making your evaluation of risk and value. Are the injuries claimed among those that were found to result in the higher payments? Is the alleged infraction by your driver or your company accelerators of payment amounts, as per the study?
There is no absolute in evaluating cases. There are no guarantees. But equipped with data and experience, you can improve the quality of your evaluation and minimize your risk.
And, reduce your payment.
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