Nuclear verdicts in product liability suits are on the rise. But manufacturers and their insurance companies can take multiple steps to prevent and defend against large jury verdicts, insurance and legal experts said at a recent webinar hosted by Travelers.
“It feels like it’s coming to a boiling-over point right now, really accented by all of these headlines on nuclear verdicts,” said Elise Schreier, vice president for liability claims at Travelers.
Plaintiffs’ lawyers have exploited social, regulatory and legal environments in recent years; attorney advertising has amped-up injured parties’ hope
s and financial goals; claims aggregators find many new plaintiffs, which raises the stakes; and litigation funding is contributing to more and increasingly costly lawsuits, turning the tort system into a massive investment mechanism, Schreier said.
Related: Litigation Financing Hits a Wall
Product makers and insurers, though, can take action before, during and after claims arise, the panelists noted. Here are some of the key measures that can be adopted to help reduce liability and costly verdicts:
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Avoid “bad facts” and incriminating internal communications. Trial lawyers, during the discovery phase of litigation, will demand years of emails and other communications. If corporations appear to disparage customers or blame the
injured parties, juries are more likely to come back with higher damage awards, including punitive damages. Be sensitive in emails, not calloused, said Alexandra Lahav, law professor at Cornell University. Studies have found that juries tend to find against a defendant if it is shown that the culprit was involved in nefarious activity – even if all other circumstances are the same.
When an injury happens, respond and communicate quickly but with empathy for the injured persons. Manufacturers should notify their insurance companies and attorneys promptly. Gather evidence and take steps to prevent further injuries related to the product. When appropriate, take a holistic approach and show how the company has provided help for people and the community.