Over the past two years, insurance rates for trucking companies have increased an average of 20 to 25 percent. Umbrella or excess liability policies have increased even more—over 75 percent—which forces most trucking companies to carry less coverage. By federal law, all commercial haulers must carry $750,000 in liability insurance, which won’t cover most jury verdicts for damages in accidents involving large trucks.
Nuclear verdicts—jury awards surpassing $10 million—have increased vastly in the past decade. The average of over $1 million per verdict involving a large truck crash has increased nearly 1000 percent from 2010 to 2018–going from $2.3 million to $22.3 million on average.
According to trucking experts, these types of verdicts are strangling the industry. Carriers struggle to keep pace; shipping rates can’t be increased enough to compensate. Something has got to give.
Lawmakers in Montana and Texas have recently been working to make it more difficult for accident victims to reap multi-million dollar verdicts against truckers. Texas, a leader in the number of crashes involving trucks and nuclear jury verdicts in civil lawsuits, had 55,000 motor vehicle lawsuits filed in 2019. That’s a 118 percent increase from 2008.
The Texas bill, HB19, has been winding its way through the bicameral legislative session and has pitted truckers against plaintiffs’ attorneys. Eight hundred public comments were generated about the bill, and 40 individuals signed up to testify at a March hearing of the Texas House Committee on Judiciary and Civil Jurisprudence.
President of the Texas Trial Lawyers Association, Jim Perdue, said the bill would damage current court practices, testifying:
“HB19 is designed to create unprecedented delays in both the process and delivery of finality of justice.” He added, “It’s a radical remaking of the civil justice system for a specific classification of defendants.”
Analysts from Texans for Lawsuit Reform had this to say about HB19:
“HB19 is laser-focused on the changes in law that are necessary to protect rights of Texans who are truly injured in a commercial vehicle accident while simultaneously reducing opportunities for some trial lawyers to mislead juries to seek millions in damages in cases where the commercial vehicle owner was not at fault or the plaintiff was not injured.”
Another group for truckers, Keep Texas Trucking Coalition, said that HB19 would make the courts fairer to truckers. In a written document concerning HB19, they wrote:
“Multi-million dollar or ‘nuclear’ verdicts grab headlines, but abuse is more frequently found in more routine settlements under a typical umbrella coverage of $1 million. Opportunity-seeking plaintiff lawyers partner with unscrupulous medical providers to grossly inflate claims, resulting in increased insurance premiums and driving trucking companies out of business.”
HB19 passed the Texas House at the end of April, recently passed the Senate, and is now on to the governor for his signature. The legislation has garnered widespread support from small businesses and the trucking industry across the state. American Trucking Associations President Chris Speers said in a statement:
“With this significant vote, Texas joins a growing number of states committed to stopping rampant lawsuit abuse by enacting measured, targeted, and prudent reforms that restore balance and fairness to the civil justice system.
Montana Governor Greg Gianforte signed a similar bill recently that reforms civil liability laws concerning damages in lawsuits. The new law deals specifically with phantom damages or inflated billing amounts. The new reforms promote tools that increase transparency to curb inflated medical damages and outline the damages recoverable from the person deemed to be at fault. The text of the legislation states:
“Damages must in all cases be reasonable, and where an obligation of any kind appears to create a right to unconscionable and grossly oppressive damages contrary to substantial justice, no more than reasonable damages can be recovered.”
Legislation that puts practical limits on liability claims affects motorists of all stripes. When nuclear verdicts occur, not only could they put an owner-operator or small trucking firm out of business, but they can also translate into higher transportation costs, which correlates to higher prices for all consumers.
At the same time, many people involved in truck accidents can have long-term health issues, and reasonable compensatory verdicts should be extended to them. This is one of the few times when legislation may be the only rational remedy.