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    32.880
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    6.2%
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    125.000
    -1.000
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Driver issuesNewsTruckingTrucking Risk & ComplianceTruckload

Make it stop: Confronting the nuclear verdict threat to trucking companies

(From l. to r.: Dan Murray, ATRI; Clay Porter, outside counsel for Schneider; Charli Morris)

If a theme came out of a well-attended panel on nuclear verdicts at the recent Truckload Carriers Association meeting in Florida, it’s this: the problem isn’t likely to go away anytime soon.

There was one self-described silver bullet from panelist Clay Porter, the outside counsel for Schneider National Carriers: tort reform. But that’s a long slog and isn’t going to stop the trend  that keeps catching carriers and shutting their doors.

Rather than providing solutions, the four-person panel identified a lot of shortcomings in the trucking industry’s approach to dealing with lawsuits and the nuclear verdicts that can explode if the litigation doesn’t go well. (The precise definition of a nuclear verdict was not made clear but assume anything above $5 million is a nuclear verdict. That’s open for debate.)

Chief among those issues: Defense attorneys for the trucking sector are woefully unprepared to deal with the seemingly unlimited resources of the attorneys serving plaintiffs. 

“There is a huge business model disconnect between the defense and the plaintiff,” said Dan Murray, senior vice president of the American Transportation Research Institute. ATRI is the research arm of the American Trucking Associations and is wrapping up a report on nuclear verdicts to be issued in the coming weeks.

“The plaintiff puts everything into it,” Murray said. “The defense does cost minimization.”

Porter brought a similar observation down to a more granular level. He laid out a scenario in which a company’s insurer says to the defense attorney, “I want you to defend this case, but here’s your budget for doing this.” A limit on taking a deposition might allow the attorney four paid hours to get the job done, whereas the plaintiff’s lawyer is taking three weeks, Porter said.

“The insurance industry has taught defense lawyers to do the minimum,” he added. Meanwhile, attorneys for plaintiffs are running full-blown mock trials to prepare for a case.

(You can read about a FreightWaves Intelligence report on nuclear verdicts here.)

The general sentiment was that the trucking industry just doesn’t “get it,” though nobody actually used that term. There is a fundamental advantage that plaintiffs’ attorneys have in that they are representing people who may have gone through a terrible medical ordeal or lost a loved one. “The messaging must change,” Murray said.

In response to those very human-based arguments, he added, trucking companies are putting up experts who are talking about braking distances and other technical factors — dry arguments unlikely to sway a jury.

“We need to make the jury understand the trucking company is a good steward, has a great safety culture and is a job creator,” Murray said.

But Charli Morris, a legal communications consultant, disagreed. Her conclusion: “It doesn’t work.”

“I have seen opening and closing arguments on that, and it just hasn’t worked,” Morris said. “So we need to get to the bottom of that.”

Instead, she recommended gathering more data on what sways jurors  and more research on that data. “I don’t think the trucking industry has captured all the data that would tell us more,” she said. Morris also expressed concern that within the trucking industry, that lack of data leads to “confirmation bias” in discussions of “where did the jury get it wrong” — confirmation bias defined usually as a self-absorbed group of individuals all saying the same thing and effectively assuring themselves that they’re right and everyone else is wrong.

“We are going to have to do more and do it differently to have more data at our fingertips rather than whacking the mole one case at a time,” she said.

In case there was any doubt whether nuclear verdicts are growing, Murray did show data being put together for the ATRI report that indicated clear growth in the size and number of verdicts in recent years. Porter also cited data showing much the same thing, and noted that it seemed to begin in 2012.

“The deck is kind of stacked against us” was the observation of Doug Rennie, a partner at  Montgomery, Rennie & Jonson.

A newer threat is that trucking is increasingly the target of litigation financing. Murray referred to it as a form of gambling in which a source of capital puts money into a pool to finance litigation against any of several industries, with the hope that the financing will result in a series of lawsuits that generate big payouts, recouping the investment — and then some. It isn’t legal everywhere, Murray said, “and we may want to look at the states on this issue.”

Porter quoted a dictum: “Verdicts are fictions and settlements are real.” He noted that verdicts often get reduced, such as the $280 million verdict against a steel hauler — generally believed to be the biggest ever against a trucking company. It was one of the rare statements on the panel that maybe things weren’t quite as bad as they seemed. Porter noted that the judge later lopped $100 million off that verdict.

Settlement offers can backfire sometimes. For example, Murray cited two cases in which trucking companies came in with settlement offers that were “so low they insulted the plaintiffs, who walked out.” The ultimate jury verdict in those cases was 10 times the settlement offer “because a reasonable offer was not extended at the beginning.”

Beyond the suggestion of tort reform to end nuclear verdicts, Murray offered up what he described as a radical solution: an insurance surcharge. It would work much like a fuel surcharge, tacked on to the per-mile rate and fluctuating with the price of insurance. It would help the entire supply chain “have an iron in the fire” dealing with the volatility and the impact of rising insurance costs.

John Kingston

John has an almost 40-year career covering commodities, most of the time at S&P Global Platts. He created the Dated Brent benchmark, now the world’s most important crude oil marker. He was Director of Oil, Director of News, the editor in chief of Platts Oilgram News and the “talking head” for Platts on numerous media outlets, including CNBC, Fox Business and Canada’s BNN. He covered metals before joining Platts and then spent a year running Platts’ metals business as well. He was awarded the International Association of Energy Economics Award for Excellence in Written Journalism in 2015. In 2010, he won two Corporate Achievement Awards from McGraw-Hill, an extremely rare accomplishment, one for steering coverage of the BP Deepwater Horizon disaster and the other for the launch of a public affairs television show, Platts Energy Week.

7 Comments

  1. Nine time of ten the four wheeler is at fault. And they all ways fault the trucker. Most of the time truckers will go to the trees or a ditch trying not to hit a four wheeler.

  2. The general public does not like or understand the trucking industry or truck drivers. Educate the public, have commercials on TV& radio, the lawyer do. Cap cash verdict. Most just see the $ . Be more open with the cost of operation ,with your employees & the public.Show a face & family to jury’s . Educate, educate, educate

  3. The trucking industry has brought this upon itself. Year after year of not raising rates and unable to pay drivers enough to keep them is the problem. With the large fleet carriers loosing ninety percent of their drivers each year, they are guaranteed to have green dangerous drivers behind the wheel. Pay is key to retaining professional drivers like me. Raise your rates and pass it on to drivers!

    1. Avatar Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU'LL PROSPER ! IMHO says:

      I repeat ! If truck drivers UNITED and created an Alliance which had a trading division which trades the markets they would crush the competition , diminish shipping rates and gain market share while increasing their profits .

      The cost of fuel for a transportation trucking company(ie; Truck Driver Alliance Conglomerate Co-Op) should be zero + put them in the green on the commodity . So rather than a cost on fuel they would be booking a profit on it .

      But hey now , we wouldn’t want truckers to know that now would we , LOL !

      If you could eliminate the cost of fuel plus reverse the cost into a profit , what effect could you have on rates ?

      That’s just one simple element that could be used to “conquer” and obtain market share over your competition while eliminating your competition . You use that diminished cost & increased profit to increase truck driver pay while slashing rates and gaining market share .

      This industry desperately needs to be reorganized & restructured !

      In my humble opinion .

      Note: Noble1 “suggests” SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU’LL PROSPER ! IMHO

  4. Trucking companies safe driver awards are pathetic. Drive for a year with no chargeable accident and the company gives you a patch and a card to put in your wallet. There is no incentive to try to avoid an accident. Then you have shippers putting unrealistic transit times on carriers. Truckers rarely have an 8 hour day ever. Combine that with ridiculous sleep patterns of drivers. Sometimes you sleep in daytime some time night some time little of both not well and not longer enough. Then if you do need to stop go and try find a place where you won’t be interupted by law enforcement telling you to move on. All these factor contribute to accidents. After 37 years trucking I retired just my own personal observation.

  5. As a bailiff for many years, I participated in hundreds of jury trials and thousands of settlement conferences. I handled the day to day needs of jurors and attorneys. Jurors are put in a position of listening to the evidence, applying the law, and determining guilt, responsibility, and proper remedy or compensation if appropriate. Now, as a trucking carrier for the last couple of years I’m able to apply my courtroom experiences with my trucking experiences. I believe nuclear verdicts have always been their, but are increasing because information overload in the trucking industry is available to plaintiff attorneys. Plaintiffs will try to prove something was egregious in one or more of the following: Your speed, your routes traveled, your hours, your braking, your collision avoidance notices, your following distance notices, your safety inspections and training, your DOT medical information, your weigh station inspections, your drivers license record, vehicle maintenance records and most importantly in my opinion, DETENTION TIME! EXTENDED DETENTION creates stress, and stress creates poor decisions. Poor decisions create accidents and liability! I believe shippers and receivers could do much more on improving EXTENDED DETENTION TIMES and help drivers who are held accountable for every minute. This would help reduce unnecessary stress, which would help reduce accidents and liability for all.

  6. Things aren’t as bad as they seem when a judge “lops $100m off a $280m settlement” is a sad statement.

    Best way to control these claims are to not have a crash. Investment in technology, training and company culture will have tremendous ROI.

    An insurance surcharge would be an interesting way to get shippers engaged as it is only a matter of time before plaintiff attorneys make the jump from the trucker to the shippers insurance limits.