A study released by the U.S. Chamber of Commerce Institute for Legal Reform (ILR) on May 30 found that "nuclear" verdicts, or verdicts larger than $10 million, are contributing to rising car insurance costs.
According to the report, these large verdicts are called "nuclear" due to the "devastating" effect they can have on "businesses, entire industries, and society at large." Nuclear verdicts can "undermine fundamental fairness and predictability in the rule of law" while also making goods and services more expensive. Nuclear verdicts also make insurance more expensive and, in some cases, make insurance coverage harder to attain.
The ILR found that there has been a steady increase in the number of nuclear verdicts per year between 2013 and 2022, excluding the period when courts were closed due to the pandemic. The mean size of nuclear verdicts during the study period was $89 million. Plaintiff’s attorneys use "tactics" to win larger verdicts, including "anchoring" a large monetary amount in jurors’ minds and engaging in extensive advertising campaigns to attract more plaintiffs to mass tort cases. The plaintiffs’ bar also lobbies for state laws that make it easier to win outsized verdicts, such as expanding available damages.
Earlier this year, a judge approved a $125 million settlement for a case in which individuals who use the federal judiciary’s Public Access to Court Electronic Records (PACER) system were overcharged, Reuters reported. The plaintiff’s lawyers, including attorney Deepak Gupta, were awarded $23.9 million of the settlement and $1.1 million to cover their fees. Plaintiffs in the case were given up to $350 per person as reimbursement for being overcharged to use the PACER system.
Gupta has expressed opposition to a proposed ballot initiative in Nevada that would limit the amount of money an attorney can take from a settlement or award to 20% of the total award, Reuters reported. The Nevada Justice Association also opposes the cap. The initiative could appear on Nevadans’ ballots in November.
The ILR advocates for a "fair legal system" that supports opportunity and economic growth, according to its website. The ILR is headed by acting president Stephen Waguespack.