Large Jury Verdicts Rising Steadily, Especially for Product Liability

According to a recent report from the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR), large jury verdicts over $10 million continue to rise and take a major toll on businesses, industries and society, even when these verdicts are reversed or reduced.

Often referred to as “nuclear” verdicts, ILR said, “these extreme and fundamentally unpredictable verdicts … play an outsized role in the civil justice system.”

The organization added, “Nuclear verdicts adversely affect society. 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.”

The Chamber’s ILR analyzed 1,288 verdicts between Jan. 1, 2013, and Dec. 31, 2022, with a median verdict of $21 million and an average of $89 million. This latest report builds upon research released in September 2022.

Half of the verdicts studied fell between $10 million and $20 million, while one-third ranged from $20 million to $50 million. The last 19% exceeded $50 million, with 115 verdicts over $100 million. State courts were more likely to hand down nuclear verdicts, with California and Florida tied for the largest verdicts since 2013, followed by New York and Texas.

Personal injury or wrongful death lawsuits due to product liability, auto accident cases and medical liability comprised about two-thirds of all nuclear verdicts, according to the report. Product liability verdicts have risen 50% over the last decade, hitting a median of $36 million in 2022.

While verdicts dropped significantly in the first year of the COVID-19 pandemic, they had already rebounded to previous levels by the third quarter of 2021 and hit a record number in 2022. ILR noted that early numbers for 2023, with 129 reported nuclear verdicts suggest another record-breaking year.

ILR also examined the makeup of verdicts. About 25% of all nuclear verdicts included punitive damages, but these were “often extraordinary sums.” Economic damages, including lost income, medical costs or other expenses, account for about 10% of total awards, per the report.

“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,” said ILR in its report.

ILR outlined some of the knock-on effects for individuals and businesses due to outsized verdicts, including fewer insurance options for commercial trucking firms; higher premiums for healthcare professionals in litigation hotspots like Georgia or Illinois; and higher construction costs in New York where an 1885 “scaffold law” imposes strict liability on contractors for any gravity-related injuries to workers. The latter law, which bypasses the workers compensation system for these specific cases, resulted in a $53.5 million verdict in 2023 and a $48 million verdict in 2022.

And, the organization said, while verdicts issued by juries are often reduced, they often go unnoticed. In one 2019 product liability case, an $8 billion award over the drug Risperdal was later revised to $6.8 million and then settled out of court.

“These ‘send-a-message’ verdicts are also, in some cases, symbolic and uncollectable, particularly when imposed on an individual or small business,” said ILR. “Nevertheless, a business facing litigation must consider the cost of a lengthy appeal that will follow and the damage to its brand and harm to shareholders from adverse publicity … When a mega nuclear verdict is reduced or uncollectable, plaintiffs’ lawyers often still tout the award in television, social media and website advertising to solicit clients to bring new cases.”

ILR warned that the trends around nuclear verdicts don’t show signs of abating but added that the consequences are “reversible” with civil justice reform. The organization encouraged limiting “forum shopping,” taking aim at attorney advertising and rejecting the expansion of damages available under wrongful death laws.

“The consequences of allowing nuclear verdicts to continue to proliferate will be increasingly felt throughout society. More litigation will ensue and take longer to resolve,” said ILR. “Businesses will need to incorporate rising lawsuit costs into their products and services while simultaneously facing increasingly unpredictable liability.”

The content of this News Brief is of general interest and is not intended to apply to specific circumstances. It should not be regarded as legal advice and not be relied upon as such. In relation to any particular problem which they may have, readers are advised to seek specific advice. © 2024 Zywave, Inc. All rights reserved.