Avoiding Nuclear Verdicts
Number of Reported Nuclear Verdicts, 2013-2022
Percentage of Nuclear Verdicts Including a Punitive Damage Award, 2013-2022
The higher the settlement award, the more money the plaintiff, their lawyers and the investors pocket.
Reptilian theory tactics and TPLF are driving the nuclear verdicts that are making it difficult or impossible for parties to negotiate a reasonable settlement.
Both have dramatically driven up insurance carrier costs, which in turn drives up the cost for insurance buyers.
A Perfect Storm
The combination of traditional crane insurance claims handling, plaintiff counsel’ s reptilian theory tactics and TPLF has created a perfect storm for today’ s crane insurance buyers.
We should admit that, for the most part, today’ s crane insurance market is fundamentally broken.
Traditional insurers continuously attempt to cut their operating costs by discounting claims / legal handling expenses, one of their of their highest operating expenses.
That seems to represent prudent business management.
However, the plaintiffs’ attorneys know that those discounted legal and claim-handling resources are no match for them.
The highly skilled, highly motivated and now very-well-funded plaintiff lawyers are winning outrageously high settlements( nuclear verdicts) more often, so claim costs are skyrocketing, which in turn raises crane owner insurance premiums. It’ s a vicious cycle, and the bad guys are winning.
The value of accident verdicts has grown significantly both in frequency and size over the past 10 years:
• Median verdicts rose from $ 19.3 million to $ 24.6 million.
• This 27.5 % increase outstripped inflation of 17.2 % over the same period.
• Florida, California and New York produced the most collective nuclear verdicts, with a combined 575 verdicts worth more than $ 10 million each.
The combination of reptilian-theory courtroom tactics with litigation funding by third-party investors directly affects crane owner insurance costs and limits insurance availability for crane owners.
To protect the viability of their businesses, crane owners must band together to drive collective risk mitigation solutions and to curb the exploitative plaintiffs’ lawyer tactics that contribute to nuclear verdicts and unaffordable insurance.
The Basics of Third-Party Litigation Funding
This litigation dynamic is driving crane insurance rate increases.
TPLF allows private equity managers and other financiers to invest in lawsuits in exchange for a percentage of any settlement or judgement.
This despicable practice started in Australia a few years ago and rapidly expanded to Europe, the U. S. and elsewhere. This litigation dynamic is driving insurance rate increases for crane owners and other high-hazard industries.
Without disclosure requirements and other commonsense safeguards, these funders are in process of taking over litigation that drives unmeritorious lawsuits.
This relatively new litigation dynamic is creating turbulence with insurance companies across the globe.
Litigation funders are actual financial entities that advance money to plaintiff law firms to cover litigation costs on a non-recourse basis contingent on the outcome of the case.
According to the Government Accountability Office, many are private finance institutions, some are publicly traded, some are hedge funds and many receive capital from various sources such as sovereign wealth funds, pension funds and endowments.
They are not actual parties to the lawsuits that they are investing in.
The Litigation Funding Agreement is a formal legal contract that sets the terms and conditions of the funding agreement.
Generally, these documents are not required to be disclosed.
Some courts and states are beginning to require disclosure either through a court rule or by legislation, for example The Federal District of New Jersey, Northern District of California( for class actions) and the Federal Districts of Delaware and Wisconsin.
The funding agreement is typically disclosed in one of two ways: only to the judge, or to the opposing party.
Disclosure allows the court and both parties to know the identity of the litigation funder, and that knowledge may help determine whether the funders are exercising undue influence that might violate ethical rules, or whether conflicts of interest exist.
Lastly, TPLF agreements typically say that if the lawsuit doesn’ t garner any money for the plaintiff, the plaintiff’ s lawyers don’ t have to repay the litigation funder.
www. cranehotline. com • September 2025 33