Fleet legal settlements of under $1 million on the rise

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Nuclear verdicts of more than $10 million can cripple fleet finances after a collision, but trucking companies also appear to be digging deep when settling cases involving lesser payouts.

In a follow-up to its 2020 Impact of Nuclear Verdicts on the Trucking Industry report, the American Transportation Research Institute (ATRI) found that settlements of under $1 million are about 37.7% larger than verdict awards. Studied fleets were 393% more likely to settle after an incident involving a fatality.

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(Photo: iStock)

Incidents involving a severe injury were also 217% more likely to involve a settlement and 199% more likely to lead to payments of more than US $600,000, ATRI added.

The findings emerge from an analysis of more than 600 cases that led to a settlement or verdict award.

“This analysis proves a theory that I have always had. There are two markets as to the value of cases – the settlement market and the trial market,” said attorney Doug Marcello of Marcello and Kivisto, and a frequent contributor to trucknews.com.

The number of verdicts and settlements worth less than $1 million has also been rising over the past 20 years, ATRI said in the report. It cited reasons including loose state tort laws, negative public attitudes about trucking, tighter legal restrictions in other industry sectors, litigation fraud, and coordinated plaintiff attorneys.

“Increasingly, attorneys participate in ‘ambulance chasing’ and structure plaintiff firms as ‘settlement mills,’” the report concluded.

Ambulance chasers are attorneys that actively solicit clients shortly after a crash, while settlement mills are personal injury firms that often operate volume-based business models, sometimes with hundreds of open cases at a time.

“A majority of cases processed by settlement mills are minor vehicle crashes. Minor incidents have led to requested payment amounts five times greater than the true medical cost for soft-tissue non-severe injuries regardless of fault,” ATRI said.

Payments linked to cases in California, Michigan, New Jersey and North Carolina were about 50% higher than the national average.

Fleet practices to limit payouts

A fleet’s business practices also play a role in the payouts.

Cases that cited poor driver history saw average payments of $680,333. “Poor driver history and other alleged carrier infractions can prove especially costly because they spark additional jury sympathy on the basis of corporate ethics and culture,” the report said.

Issues trailing that included phone use ($629,375), Hours of Service violations ($564,531), asleep at the wheel ($543,343), equipment failures ($503,641), and recklessness ($493,673).

“Carriers should make the elimination of these issues a top priority in order to lower litigation payments,” ATRI said.

The institute stressed the value of documenting programs that involve all levels of driver training; corporate safety culture processes; detailed safety technology investment plans; and clear, consistent hiring and onboarding procedures.

“Recognizing that this information is discoverable, it is critical that all aspects of the Defensible Driver program are implemented, monitored, and continuously evaluated,” it added.

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John G. Smith is the editorial director of Newcom Media's trucking and supply chain publications -- including Today's Trucking, trucknews.com, TruckTech, Transport Routier, and Road Today. The award-winning journalist has covered the trucking industry since 1995.

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