A study by the American Transportation Research Institute (ATRI) in 2020 addressed the impact of the notable increase in nuclear verdicts on the trucking industry.1 In 2021, the ATRI published a counterpart to this study, which addressed the impact of small verdicts and settlements on the trucking industry. Although the smaller payouts have little effect on large trucking companies and insurance carriers, there is no doubt that these smaller settlements are increasing in both frequency and severity.2 While these reports set forth several specific conclusions related to trends in trucking litigation, namely an increase in claims and an increase in payouts, what has become clear over the past several years is that trucking lawsuit abuse reform is of growing interest in the transportation field.
One consequence of the recent increase in verdicts and settlements related to trucking litigation is the increase in "staged accidents."Research shows that commercial drivers are at fault for accidents less often than passenger vehicles.3 However, in order to take advantage of the higher coverage carried by commercial carriers, counsel portrays the motor carriers as bad actors to juries, resulting in large verdicts, which in turn encourages others to pursue litigation against the carriers as well. Therefore, although staged incidents were traditionally aimed at passenger vehicles, individuals and groups soon realized that more money could be made from trucking companies and the carriers insuring them. The ATRI reported in 2021 that fraudulent activity targeting motor carriers and commercial drivers is now a "serious and pervasive threat" to the trucking industry.4 In a recent noteworthy operation conducted by the FBI in Louisiana, over 40 individuals have pled guilty to their role in a series of staged crashes with tractor-trailers in the New Orleans area. These large claims are resulting in increasing rates and increased difficulty in obtaining coverage for carriers across the country.
Several states have taken the initiative to pass reform bills related to trucking litigation abuse. In 2021, Texas signed into law a bill that widens the admissibility of photographs and videos of a vehicle involved in a crash, and also provides for a bifurcation of trial, which results in a need to show that a driver is liable for an accident before a case can be brought against the motor carrier that employs the driver. Last year, Iowa lawmakers signed legislation limiting recovery of non-economic damages for personal injury or death in a civil case to $5 million for commercial motor vehicle owners in the case of an employee's negligence. The Iowa law also provides streamlined rules for claims of negligent hiring.
Following the lead of the various states addressing this issue, the Highway Accident Fairness Act of 2023 was introduced in the United States House of Representatives on April 27, 2023. One main goal of the Act is to prohibit staged incidents by imposing hefty fines and prison terms for any person operating a motor vehicle who intentionally causes a collision with a commercial motor vehicle, or arranges such an accident. Additionally, the Act gives federal courts jurisdiction over truck accident litigation where the matter in controversy involves interstate commerce and the claims for damages exceed $5 million. Finally, the Act would require a plaintiff to disclose any third-party litigation funding source for the lawsuit, and to provide a copy of any funding agreement.
The bill will now be heard for debate by a committee before being sent to the House of Representatives for voting. Litigators, motor carriers, and insurance companies alike will be watching the process closely for this bill due to the impact it could have on curbing lawsuit abuse in the trucking industry.
Footnotes
1. See Dan Murray, Nathan Williams & Erin Speltz, Understanding the Impact of Nuclear Verdicts on the Trucking Industry, American Transportation Research Institute (June 2020).
2. Claire Evans & Alex Leslie, The Impact of Small Verdicts and Settlements on the Trucking Industry, American Transportation Research Institute (Nov. 2021).
3. Daniel Blower, The Relative Contribution of Truck Drivers and Passenger Vehicle Drivers to Truck-Passenger Vehicle Traffic Crashes, The University of Michigan Transportation Research Institute (June 1998).
4. Understanding the Impact of Nuclear Verdicts on the Trucking Industry,supra.
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