Claims management in response to shock verdicts

Shock verdicts remain on the rise nationwide. They are generally recognized as awards in excess of $10 million that often defy reason in relation to actual damages. These nuclear verdicts tend to occur in jurisdictions considered judicial war zones, such as Nevada, Pennsylvania, Georgia, Illinois, California, New York City, and others. Yet their impact resonates across the country. A corollary to the increase in shock verdicts, especially after the COVID-19 pandemic, is the significant escalation of settlement amounts.

Various factors are at play in increasing shock verdicts and increasing settlement costs. These include economic and social inflation (I coined “billion is the new million”), distrust of authority, anti-corporate sentiment, widespread media coverage, and increasingly effective tactics by plaintiffs’ lawyers such as the extensive use of the Reptile Theory. Effectively managing litigation from its earliest stages and seeking early resolution is critical to mitigating potential shock verdicts and shock settlements. Furthermore, everyone involved in litigation must use the latest technology and resources to level the playing field with the plaintiff’s bar.

The plaintiffs’ bar is well organized nationally and continues to use recent significant verdicts as leverage for settlement. Lawyers pick and choose the “right” cases to take to trial in order to obtain a substantial verdict; cases typically have bad facts, weak defense witnesses, and credible, likeable, likable plaintiffs. Successful verdicts are then leveraged on similar matters to achieve meaningful resolution. In Nevada alone, there have been four verdicts over $10 million since 2021 and two matters where the amount awarded was more than ten times the actual damages.

There have been nearly 1,400 nuclear verdicts over the past 10 years, with half of them garnering verdicts between $10 million and $20 million, a third achieving between $20 million and $50 million, and the remaining verdicts exceeding $50 million, with 105 decisions exceeding 100 million dollars. Given these trends, it is anticipated that shock verdicts will continue to increase in number and damages awarded, providing more ammunition for the bar of plaintiffs seeking high settlements.

Plaintiffs Bar Tactics and the Reptile Theory

Along with tactics and techniques to instill fear in the jury to obtain significant awards, including the Reptile Theory, the plaintiffs’ bar seeks to establish the potential for adverse inferences and other discovery sanctions to further hinder defendants’ ability to stand trial. Examples include motions to suppress evidence that is not available when discovery begins, often made years after the incident, and motions for premature disclosure of evidence even though discovery is ongoing and the plaintiff has not explicitly requested the evidence.

Another tactic is to regularly and quickly file motions to compel, to try to show the defendant’s lack of cooperation. This motion practice may result in minor sanctions, such as a restraining order and monetary penalties, which may escalate to case-closing sanctions.

The best way to avoid these tactics is to proactively manage claims. The process should begin as soon as an incident occurs, even if medical assistance is denied. (It is not uncommon for claimants to seek medical treatment later in the day after an incident, especially in car accident cases.) If an injury is claimed at the scene, an attorney should be retained to assist in the investigation and to ensure that all samples are obtained from the beginning and preserved properly.

Guidelines for investigating incidents

The incident takes place

Get contact information for all witnesses in addition to a statement.

• Statements obtained at the scene of the incident are often inadmissible as evidence. It is imperative that you can contact witnesses to give live testimony. Locating witnesses years later can prove impossible if not correctly identified.

Get all video and photos of the incident as soon as possible.

• Even if the insured has surveillance and on-board video, other images or videos must be identified. Examples include dash cams, witness phones, local businesses and neighbors, and traffic camera footage that may contain vital information that can be lost or deleted.

Get data downloads for all vehicles involved as soon as possible.

• Most vehicles today have data download capabilities that can be lost over time. Don’t make any guesses about the downloaded data during the repair process. Also, if a vehicle is not damaged and will continue to be used, any pertinent data may be lost. In addition, further inspection may reveal post-accident damage, the timing of which may be difficult to demonstrate. So an essential first step is to ensure that the vehicle is not used until the data download is complete, along with an inspection of the vehicle documenting any damage.

Get the relevant insured documents:

• Policies and procedures relevant to the complaint (driver training, cleaning procedures, etc.).
• Employee records, including training and disciplinary actions of any employees involved in the incident.
• Information about similar incidents that occurred up to five years before the incident.

Complaint filed and attorney retained

Respond promptly to a request to preserve evidence.

• Counsel should ensure that all potentially relevant evidence is preserved, avoiding the standard plaintiff bar tactic of sending a preservation letter but later claiming that the items were not adequately preserved and seeking sanctions for spoliation of evidence.
• To prevent further spoliation claims, the advisor can respond and advise on potential issues and the need for immediate item inspection.

Respond to a request that limits policies.

• Another tactic of the plaintiffs’ bar is to request policy limits, which will later be used to obtain a settlement above the policy limits.
• Responses should be detailed, explain the inappropriateness of the request and provide the information necessary to evaluate the request.

It is imperative that you follow the above steps early in your claim to demonstrate diligence, counter tactics designed to undermine defenses, and mitigate future issues that plaintiffs may attempt to exploit to obtain a larger settlement or verdict .

By taking these proactive steps, the attorney can assess liability, causation, and damages early. This allows settlement to be pursued in the preliminary stages, putting pressure on claimants to settle immediately for a reasonable amount, rather than waiting years for litigation to begin and discovery to continue before compensation.

Bringing the plaintiff to the table early, faced with real money versus the stress and uncertainty of litigation, removes the significant leverage that the plaintiffs’ bar obtains through discovery tactics and lifting the jury’s prior verdict when seeking a settlement. Additionally, early mediation can prove helpful because the neutral can educate the claimant about the benefits of settling a claim sooner rather than later.

If claims are not settled early and litigation begins, the defense is encouraged to litigate proactively, not reactively. When it comes to discovery and trial preparation, it is critical to case development and ongoing settlement evaluation that the defense use focus groups and “big data” as plaintiffs do nationwide.

Although these resources and exercises are time consuming and expensive, they are essential to ensure a level playing field in high exposure cases. They also allow for significant determination of future matters to be tried that are likely to obtain favorable defense verdicts and counter nuclear verdicts.

Bashor is a partner at the law firm Wilson Elser in the complex tort and general accident practice. She focuses on crisis management and high exposure catastrophic cases. She is based in the company’s Las Vegas office. Email: [email protected]

Wyatt is of counsel to the law firm Wilson Elser. She defends clients in litigation ranging from premises liability to commercial transportation, professional malpractice and auto accidents. She is based in Las Vegas. Email: [email protected]