When issued, the shockwaves from “nuclear verdicts” often ripple through the insurance industry, gaining mentions in earnings calls and panels at industry conferences.
But what often gets much less attention is what happens after those verdicts are handed down. Frequently, the cases end up in prolonged appeals processes that result in settlements, reductions in the total or even an outright overturning of the judgment.
To try to understand the impact of that process, Insurance Insider US reviewed the top nuclear verdicts awarded in all of 2024. In many cases, the review process has moved fairly quickly and in virtually every case the massive award has already been reduced or thrown out on appeal, while in other instances an appeal is still pending.
What that appears to show, according to legal experts, is that the legal system is much more deliberative than it might seem on first blush when juries hand down massive verdicts that critics see as more a product of sentiment than anything else.
The process takes time and legal expenses do add up, but headline-grabbing verdicts may not always be the looming existential threat insurers fear and that needs immediate reform.
“I think what we’re seeing is not that the system is broken, but that, on occasion, there may be an application that needs to be reviewed by a higher court,” Liz Fraley, a professor at Baylor Law who has served as defense counsel in dozens of trials.
The NFL, water bottles and RoundUp
Nuclear verdicts are typically defined as jury awards that exceed $10mn, and are often seen in personal injury or wrongful death lawsuits where a liability insurer is on the other end.
The business community, including insurers, have long been worried about what they perceive as an increased frequency and severity of such awards. The US Chamber of Commerce’s Institute for Legal Reform has claimed that the number of nuclear verdicts rose between 2013 and 2022, not including years in which courts were shut down due to Covid-19.
The Chamber has also said that the median nuclear verdict in product liability cases peaked at $36mn in 2022, marking a 50% rise compared to ten years earlier.
Claims data from TransRe meanwhile has suggested that medmal jury verdicts have doubled in size from pre-pandemic years, with the average price for the top 50 verdicts in 2024 reaching $56mn – compared to just $27mn just before the Covid-19 pandemic started.
In 2024, the largest nuclear verdicts were issued by juries in Nevada, California, Pennsylvania, New York, Texas, California, Illinois and Missouri, according to a list compiled by the consulting firm Marathon Strategies.
The largest of those was a $5.2bn verdict against the beverage company Affinitylifestyles.com Inc, whose Real Water brand bottled water was found responsible for causing liver damage in customers before it was recalled from store shelves in 2021.
The second biggest was an anti-trust case against the NFL in which a jury awarded $4.7bn to individuals and corporate subscribers to NFL “Sunday Ticket”, the third was also against Affinitylifestyles.com Inc and the fourth a $2.25bn verdict against Bayer after its Roundup weedkiller was found to have caused a man’s non-Hodgkins lymphoma.
But an analysis of the top verdicts shows that many do not get paid, at least not in full. The NFL verdict, for instance, was set aside by a district court judge in August 2024, while the $2.25bn Roundup verdict was slashed to $400mn by a judge in June 2024.
Other major verdicts from 2024 have followed a similar path.
“If you look at these big verdicts, they always get appealed, and they are either reduced by court decisions after in the appeal, or they are settled,” said John Jennings, a professor at St John’s University in New York.
Legal experts told Insurance Insider US that it is not surprising that these major verdicts were appealed or set aside, in part because that’s exactly the point of the appeals process. If an unfair decision is made at the trial court level, there are levers to challenge those if need be.
But experts also noted that many verdicts also end up getting settled privately on appeal as well, and that the balance of power isn’t as skewed away from the corporations facing major verdicts as one might think.
In those instances, the risk of going before an appeals court may appear too high, meaning both sides are aware of the risk they face from proceeding. That uncertainty typically pushes the parties to agree on a sum and conditions that are potentially well below the original verdict.
“A lot of the time, the large verdicts get resolved that way. They’ll settle the case,” one head of claims for a major broker told Insurance Insider US. “You win a $100mn verdict and the insurance company will say, look, we’ll give you $30mn to go away. Because the appeals process is lengthy, and interest can start accruing.”
Settlement and verdict creep
Appeals attorneys that work with corporations and businesses said that nuclear verdicts that get appealed or reduced in some way or another still have a long-term impact, since the major verdicts can be used to slowly normalize ever-increasing awards beyond what might be seen with typical inflation.
Sofya Uvaydov, a partner with appellate firm Kahana Feld, said that it is unlikely that the biggest verdicts of $100mn or more will survive without significant cuts. But the resulting settlement or reduced verdict may well be much higher than carriers originally expected and reserved for the case.
With each subsequent case pushing that threshold, it makes it easier and easier for nuclear verdicts to increase loss costs for insurers, even if they are heavily modified.
“When you get relief, it’s usually supposed to be the highest amount sustainable,” Uvaydov said. “That amount is getting incrementally higher. So, tomorrow, a $15mn verdict for a brain injury case may be sustainable, when it was $10mn before.”
Fraley suggested that it is myopic to focus only on the total sums. Doing so strips complicated cases involving complicated damages of nuance, she said.
She said that large verdicts don’t exist in vacuums. The plaintiffs in those cases have suffered major injuries from things like chemical exposure or trucking crashes where better care or corporate best practices may have avoided the need for long-term care for paraplegics or long-term care for cancer.
“I don’t ever hear in the assessment of quote-unquote ‘nuclear verdicts’ an honest conversation around the underlying conduct and the business interests,” she said.
But regardless, the rush on either side of the courtroom to change the rules to appease a certain set of priorities is dangerous and puts a working legal system at risk.
“I hate to see people tinker with it to achieve a given outcome instead of letting it work the way it has worked so beautifully for 250 years,” she said. “It is the best system in the world, and we don’t need to break it.”
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