When Paul Gill worked as a mechanic for an oil company in the 1970s, he would use gasoline as a cleaning material and came into contact with it a lot.
Unfortunately, as a result of his exposure to the benzene in the gasoline, as well as from other sources, he developed a blood cancer, according to one of his attorneys, Patrick Wigle.
Gill had to get a stem cell transplant and go on immunosuppressant drugs. “He developed a secondary colon cancer as a result of the immunosuppressive treatment, and he’s currently undergoing chemotherapy,” Wigle said.
Gill sued the oil company — now known as Exxon — and won. The jury awarded him $725 million, which Exxon is appealing.
Verdicts of this magnitude often fall on insurers, who have a term to describe them: “nuclear.”
“Nuclear verdicts are typically defined by those in the insurance industry as verdicts which exceed $10 million,” said Chad Marzen, a professor of business law at Penn State’s Smeal College of Business. “There’s also a related term known as a thermonuclear verdict, which involves jury verdicts in excess of $100 million.”
The frequency of large verdicts has arguably been increasing over the past decade or so, though it depends on how you slice the data. Different analyses give different results.
Their size, however, has clearly been growing. The average personal injury compensation awarded by juries increased around 250% between 2009 and 2019, according to the Swiss Re Institute. In 2023, there were 89 verdicts of more than $10 million in the United States, 27 of them over $100 million — a record, according to Marathon Strategies. By Marzen and his colleagues’ count, nuclear verdicts between 2012 and 2021 totaled $431 billion.
This is making insurers increasingly nervous.
“Our civil justice system should be predictable, stable, efficient. And these verdicts are not predictable,” said Rhonda Hurwitz, senior director of the American Property Casualty Insurance Association.
While many of the verdicts at the $1 billion-plus end of the spectrum are punitive, designed to punish bad behavior, according to the Swiss Re Institute, most verdicts that qualify as “nuclear” are not. Rather, said Hurwitz, they’re driven by compensation for pain and suffering — experiences that are very hard to quantify.
“We’re not saying that if there is a legitimate injury that they shouldn’t have their ability to receive compensation,” said Matt Webb, senior vice president for legal reform policy at the U.S. Chamber of Commerce’s Institute for Legal Reform. “What the concern is, though, is when you look at verdicts in the nuclear category, there’s not any rational basis for where those numbers are coming from. I mean, literally numbers are being picked out of thin air.”
Webb and insurers argue that the rise in nuclear verdicts tracks with lawyers’ ad spending and an increase in outside groups funding lawsuits as a form of investment. Others point to rising anti-corporate sentiment.
Lawyers counter that the high amounts reflect the value juries place on pain, suffering and life.
“When they talk about the size of awards, they compare it to what’s happened in the past,” said Andrew DuPont, an attorney who worked on the Exxon case. “Well, people’s lives and people’s life experiences change over time. We’ve just come through a pandemic where people were quarantined and saw death kind of on a massive scale. I can’t help but think that doesn’t influence people’s view of life and the value of life and what it means to be isolated and sick and scared of something that you can’t see, causing a tremendous impact on your life and that of your family.”
Juries’ decisions aren’t capricious, said Florida attorney Curry Pajcic, who has won multiple jury awards of well over $100 million. “Our Founding Fathers guaranteed the right to trial by jury of peers because the rich and powerful can’t control a jury,” he said. “It is an expression of the will of the people.”
Wigle called insurers’ concerns a public relations campaign. “Obviously the insurance industry has an interest in trying to do whatever they can to denigrate significant jury verdicts,” he said.
Appropriate or not, the growth in massive jury awards has had consequences. Insurers are covering less, and premiums have gone up. Dan Murray, a senior vice president with the American Transportation Research Institute, said trucking has borne the brunt of this.
“We sort of have crosshairs on our back when it comes to trucking,” he said.
Trucks are required to be heavily insured, and civil law allows plaintiffs to recover 100% of damages in a collision even if the truck was only minimally responsible for the outcome, he said. That has fed into rising costs on the insurance end.
“A good, safe carrier in 2022, for instance, would be probably happy to discover their insurance rates only went up 15%,” he said. Others saw increases of 35 or even 40%, Murray added. “Total disconnection between insurance costs and safety data. It’s sort of the Wild West out there.”
Numerous trucking bankruptcies, he said, have cited increasing insurance costs.
