Editor’s Note: This story originally appeared in November 2019 and has been reprinted with updated information.
By Al Muskewitz
Everybody laughs at those loud, often obnoxious television ads from lawyers going on about how much money they can win for their clients involved in an accident with an 18-wheeler.
Mark Colson isn’t laughing. In fact, those ads get his hackles up.
Litigation against trucking companies is big business. Monetary judgments against them are increasing and on the rise and the rising insurance premiums they create are causing some companies to rethink their approach to the business or forcing them out of business altogether.
Colson, the president and CEO of the Alabama Trucking Association, told Wright Media in an interview this summer his membership has, frankly, grown weary of the way they’re portrayed in plaintiff trial attorney advertising.
“We’re a safe industry and if you look on TV and listen to plaintiff trial attorneys talk about our companies or go to any of their websites it’s how do you sue a trucking company,” Colson said. “I’m not arguing against justice of what’s fair, but many times the way our industry is being characterized is unfair.
“That said, if there are issues that need to be litigated and all that we have a justice system for that, but I think that’s another major issue for our membership. Candidly, they’re sick of it. We’re sick of it, because it’s not how we operate. It’s not who we are as an industry. It’s disrespectful to the men and women who work in our industry to characterize our industry that way.”
A completely random view of lawyer ads in one Alabama market recently has shown the volume of the rhetoric being toned down, but the message is the same: Big trucks are dangerous; get involved in an incident with a truck and we can get you a big check.
According to research compiled by data company CaseMetrix for a piece published in November by FreightWaves, the average verdict in a trucking case in its Southeast reporting area this year has been about $17.5 million. That’s an increase of $600,000 from last year and $10 million just two years ago. It’s more than double the 2015 average and about eight times more than the average in 2012.
The average award was impacted by two nine-figure verdicts last year, CaseMetrix CEO Alan Pershing told FreightWaves.
While the average was astonishing, the median award was $2.88 million, down from the $3.5 million median last year, the website reported. Not all lawsuits are won by the plaintiffs, but the big awards get the biggest headlines.
A study conducted by the American Transportation Research Institute released June 23 found that from 2010 to 2018 the size of verdict awards grew 51.7 percent annually at the same time that standard inflation grew 1.7 percent and healthcare costs grew 2.9 percent. Based on the analysis of a database of 600 cases between 2006 and 2019, in the first five years of the data there were 26 cases over $1 million. In the last five years that number has grown to nearly 300.
A leading trial lawyer group disputed the report, saying it misleads and misinforms.
The Academy of Truck Accident Attorneys says not one motor carrier has declared bankruptcy after a nuclear verdict, as insurance pays the claim. It’s bad trucking companies that are “strangling” the industry, it says, using American Trucking Association president Chris Spear’s word, not nuclear verdicts. That insurance minimum limits haven’t been updated in decades is the “real problem,” the group said.
An earlier ATRI study found the big verdicts have brought an increase in general liability insurance rates. They jumped 12 percent in 2018 and have nearly doubled the past few years, and it’s squeezing companies, especially smaller ones, out of business.
One Alabama company was involved in an accident and the insurance fallout forced it to shutter its operation. Some owner-operators and small independent fleets have taken to signing on with larger companies just to fall under their insurance coverage.
“It’s becoming one of the biggest cost drivers for our industry, increasing insurance premiums,” Colson said this week. “You see that in every aspect of the industry, especially general liability insurance rates. We’re asking those questions, why is this the case, and one of the reasons is the threat of nuclear verdicts.
“In the past medical malpractice has been the issue du jour for the plaintiff’s attorneys. These days … they try to find a reason to loop (trucking companies) in because typically it’s the deep pockets. The insurance rates are a big problem. Can you correlate that to the amount of settlements that are occurring in district court, circuit court? I don’t know if there’s enough research on that, but it’s certainly one of the drivers.”
Colson takes exception to the attorney advertising that characterizes the trucking industry as unsafe and reminds them these companies provide hundreds of thousands of the jobs nationwide to American families. He says data indicates the industry is safer than it has ever been – in Alabama and across the country.
Tort reform is one of the 10 most critical issues facing the trucking industry among motor carriers, according to a survey conducted by the ATRI released in October, and a top tier issue for state trucking associations nationwide.
“The business community in Alabama and in America has to be united on this front,” Colson said. “We cannot be distracted. We have to have a long-term commitment to … playing defense and playing offense against the trial bar. They make a living off suing our members.”
Al Muskewitz is Editor-in-Chief of Wright Media Corp.