For truck fleets operating in the U.S., the dangers of a courtroom can be more crippling than dangers on the highway itself.
So-called “nuclear verdicts” – the awards of more than $10 million – have become a particular threat to those involved in U.S. crashes. The American Transportation Research Institute (ATRI) determined the average verdicts over $1 million increased about 1,000% from 2010-18.
They’ve bankrupted fleets and pushed insurance rates higher. In some cases, insurers are leaving truck-related markets altogether.
But juries want businesses to pay a steep price for the harm they caused.
“Motor carriers just make a better villain.”– Sarah Hansen, Burden, Hofner and Hansen
“Nuclear verdicts are generated by an emotional response,” explained Sarah Hansen of Burden, Hofner and Hansen in Buffalo, New York. In the wake of a crash, lawyers rely on “reptile theory” to tap into a juror’s survival instincts, arguing that steep awards against one company will ensure the losses won’t happen again.
“Motor carriers just make a better villain,” she said during a conference on transportation law hosted by Toronto-based Fernandes Hearn.
Many of the underlying arguments come down to the “Dirty 5”, Hansen added. Lawyers will focus on signs of driver fatigue, distracted driving, driving under the influence of alcohol or drugs, a lack of equipment maintenance, or inexperienced and improperly trained drivers.
“If you see these five,” she said, “be prepared that you’re going to be getting some reptile arrangements.”
$1 billion verdict
Such issues clearly played a role in several high-profile verdicts.
In one Florida case, for example, a jury awarded US $1 billion in damages after a Montreal truck driver with Kahkashan Carrier crashed into stopped traffic at 70 mph, killing college student Connor Dzion. But that 2021 award largely focused on AJD Business Services, whose tractor-trailer had flipped and brought traffic to a standstill in the first place. Its driver didn’t have a valid CDL, had exceeded Hours of Service, and was distracted by a phone before crashing. They also had a long history of violations including rear-end crashes, following too closely, and speeding.
In another 2018 trial, a jury awarded US $89.7 million for a Texas crash where a family vehicle lost control on an icy road, crossed a 42-foot median, and collided head on with a Werner Enterprises truck. A mother and her two children were severely injured, and her son died. But the verdict came after the truck driver denied conditions were icy despite witness reports. They also had not completed training in winter driving, and their trainer was in the sleeper, Hanson said.
A third case saw a Texas jury award US $730 million to the family of a 73-year-old great grandmother who was killed in a 2016 collision with a Landstar Ranger truck hauling an oversized load in the form of a submarine propeller. The fleet in that case settled for $50 million before trial, and the business operating the rear escort vehicle settled for $1 million. But 2 A Pilot Cars faced the steeper damages after it went to trial and its driver impeached themselves 14 times, Hanson said.
Protecting fleets from nuclear verdicts
There are steps fleets can take to protect themselves.
Verdicts tend to be smaller in cases when the defense presents an expert witness even though the plaintiff does not, she said, suggesting juries might see such situations as a sign that defendants are taking a case seriously.
Fleets also have to be strategic in their defenses, said Seubert and Associates transportation practice leader Brandon Guiliani, during a Truckload Carriers Association webinar on the same topic.
Insurers can outsource the handling of individual claims, he said as an example, suggesting fleets should always investigate the experience of the individuals who are handling a claim. Rather than leaving insurance agents to submit forms to underwriters, he would rather see fleets connect with them directly to establish a collective agreement.
There might even be a risk if the driver involved in a crash has a spotless record. Plaintiff attorneys will simply look across an entire fleet to look at all drivers, Guiliani said. It means all policies, procedures, documents, and hiring and retention practices need to be in order.
Think twice before hiring any candidate who fails to meet pre-established guidelines, he added.
Looking beyond compliance
Hayden Cardiff, founder and chief innovation officer at Idelic, stressed the need to look beyond compliance and use all available data because everyone is using such data to formulate opinions about the operations. If a fleet deactivates a truck’s cameras just because staff are not available to monitor underlying issues, a case is essentially being handed to plaintiffs on a platter, he said.
It means providing drivers with comprehensive personal development plans, engaging drivers in safety meetings, and ensuring all departments are focused on the same goals. To create a true safety culture, ensure operations teams own safety outcomes. Insurers themselves will look for signs that fleet departments that are not talking to one another.
As important as fleet practices will be, even geography can play a role in verdicts. States including California, Georgia, Philadelphia, Illinois, Louisiana, and South Carolina – along with New York City and St. Louis, Mo. – are known as “judicial hellholes”, Hansen said. States including Florida, Colorado and Texas are now on a watchlist, too.
To compound matters, punitive damages are not insurable in 14 states, she said.
“Know your jurisdiction.”
Fleets that operate exclusively in Canada may avoid at least some of the legal worries, though.
“It’s not like that here in Canada,” said Fernandes Hearn partner Kim Stoll, referring to trends in nuclear verdicts. Canadian juries tend to be very conservative, and the top amounts paid for pain and suffering here is now capped at about $350,000, she said.
“That’s the worst-possible scenario you can think of.”
- With files from Leo Barros
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