The headlines above are a common occurrence in today’s society. The media is reporting on these large monetary verdicts and how the verdicts affect insurance premiums. So, what can a truck or bus company do to prevent these types of verdicts? The answer is a lot; however, it takes dedication and hard work. This article will identify some of the problems of nuclear verdicts and provide strategies to assist transportation companies with improving their operations.
Let me provide a little background about myself to give you a better understanding of my experience with litigation and nuclear verdicts. I have been in claims and risk management for over 30 years. I’ve been deposed over 100 times and testified in State and Federal courts. In other words, I have been in the proverbial “hot seat” on numerous occasions and have seen how juries work.
My transportation experience has included handling litigation claims, risk management, safety, and a transportation auditor for major insurance companies. My career has taught me how to review, analyze, and create programs that improve safety. Although I cannot predict whether or not your company will ever face litigation, hopefully, the tips in this article will help your company improve its overall safety program and not become subject to a nuclear verdict.
Billboards like this one exist in cities across the country. Transportation companies are up against a well-organized plaintiff bar.
The attorneys that sue transportation companies have great resources to attract clients and pursue litigation. They have experience, have plenty of advertising (billboards and television commercials), use a network of doctors, and have access to litigation finance companies. For these reasons, there are few barriers that plaintiffs face when it comes to suing a transportation company. Therefore, transportation companies need to be proactive and need to go above and beyond when implementing, documenting, monitoring, and enforcing their safety and training programs.
You need to understand the root cause of nuclear verdicts. Trials can be emotional. If your company is defending against a serious injury or a fatality case, then emotions are going to be high. The jury will listen closely to defense witnesses and try to understand if the company and/or drivers did what they could to prevent the accident. A defense witness’s body language, attitude, and knowledge of facts are taken into consideration and can add to the emotional side of delivering a verdict.
I have served on numerous juries, and the conversations in the jury rooms were based on two questions: Who or what caused the accident? and How much should the company pay? So, if the jury determines that your transportation company was the cause of the accident, they will mark that on a Jury Verdict Form. Then, the jury determines how much they believe the transportation company should pay in damages. That’s where the nuclear verdicts come into the picture. If the jury hears/sees evidence that a transportation company had poor FMCSA compliance, that the company didn’t have a comprehensive training or a safety program, or that a defense witness testified with a bad attitude may cause them to award a much larger verdict or a nuclear verdict to the plaintiff.
Strategy #1: Always Operate Your Company in Anticipation of Litigation.
I realize it may seem crazy to think this way, but it’s the harsh reality. Transportation companies need to think about their compliance, safety, and training programs and build those programs in anticipation of litigation. These strategies are designed to help transportation companies do just that.
Strategy #2: Keep Violations to a Minimum.
A transportation company’s CSA SMS BASIC scores are essentially their compliance credit score. Higher scores and poor safety ratings can lead to higher insurance premiums and higher verdicts. Think about it – if a jury is presented evidence that a transportation company has a high Unsafe Driving BASIC Score (speeding, cell phone violations, etc) and a high Crash Indicator BASIC Score (preventable and non-preventable accidents), then the jury may determine that the company had an overall poor safety and training program. In essence, any high BASIC Score can lead to verdict problems. Therefore, make every effort to keep these scores below the intervention threshold.
So, what can a transportation company do? The obvious answer is don’t incur the violation or accident in the first place. However, we don’t live in a perfect world, and violations and accidents do happen. The first thing a transportation company should do is document what happens after a violation or accident occurs, including any disciplinary action, training, etc. Next, the company should use the FMCSA DataQ system to fix any incorrect information about company violations or accidents. Documentation is essential to build evidence to defend any potential case. Remember strategy number one: Operate your company in anticipation of litigation.
Strategy #3: Your Company Must Have a Safety Program.
If you want to minimize nuclear verdicts, then your company MUST have a structured, documented safety program. This includes regular safety training, up-to-date written safety policies, and monthly safety meetings. The safety program should be a living, breathing program. Meaning, if there is a violation or accident, there should be a documented action showing what was done to make sure it never happens again.
Strategy #4: Document Everything.
This is one of the most challenging things to accomplish. I get it; you’re trying to run a transportation company and make the cash register ring. We all wish we had more hours in a day to get everything done! However, if you want to minimize nuclear verdicts, then you need to document your safety and training program. My experience in depositions and trials showed that when a witness says “I don’t know,” “Not my job”, “That employee no longer works here”, and other vague answers, juries generally react harshly.
That’s why documentation is so important. There are numerous ways to document things, so you need to find a method that works for you. Document disciplinary actions, what the company did when it received a violation, what it did after an accident, etc. Employee turnover happens and litigation can be years from now. So, the documentation should be somewhere that any future employee can answer questions in a deposition about what the company did to correct a previous problem.
Strategy #5: You Must Have Written Policies and Procedures.
Your company should have written policies and procedures, which should be reviewed periodically and kept up-to-date. One of the main problems I saw during insurance audits of transportation companies was an outdated policy and procedure manual (also known as the Driver’s Handbook) with a single receipt page at the end of the book. That is not acceptable. Each policy should have a description of the policy, mandatory policy criteria, a disciplinary action, and a driver signature/driver printed name/date signed. This is important documentation should litigation occur. It eliminates the issue of the driver testifying that he or she never saw the policy or procedure in question.
Strategy #6: You Must Have a Driver Training Program.
Just like having a structured and documented safety program, your company must also have a structured, documented driver training program. Company safety is every employee’s responsibility! You should have training for your drivers, dispatchers, managers, maintenance personnel, and other employees. Your training program should also be constantly changing to address any violations or accidents.
Strategy #7: You Must Have a Written Disciplinary Program.
As mentioned above, disciplinary language should be included on each individual written policy and procedure. The hard part is managing a disciplinary program. Given the current driver shortage, it can be a delicate matter to enforce disciplinary actions. However, if you want to minimize nuclear verdicts, then your company must document disciplinary actions. I strongly recommend that you use written discussion forms. Be sure to document verbal warnings the same way as written formal warnings. Remember document everything!
Now with that being said, you should also recognize positive actions, too. If a driver or an employee does something that improves safety, you need to document it. If a driver gets a clean inspection, write him or her up using praise and then reward the driver! The rationale for doing this is two-fold. First, it boosts personnel morale and makes drivers want to continue working there. Second, positive documentation provides additional information to present at a potential trial. You don’t want all the information on a driver to be bad. That’s why I recommend that a documentation form be titled “Employee Discussion” instead of “Disciplinary Action.” This allows for you to record good actions of a driver, too! Hypothetically, at a trial, there may be one disciplinary action on the driver, but twenty good reports on the same driver; that documentation could go a long way to improving the outcome of the trial. Remember, document everything!
Strategy #8: You Have to Report Accidents the Same Day.
This is a real problem in claims. Every day a claim is delayed in reporting, the higher the cost to resolve the case. I handled thousands of litigation claims in my career, and those claims that were reported late generally cost much more to resolve. The reason for that is the loss of information and delayed opportunity to try and resolve the claim. Meaning, memories fade and settlement opportunities are lost.
To minimize potential nuclear verdicts, your company must report accidents to its insurance claim office the same day, even if it doesn’t have all the information. Delayed reporting can cause injured people to become angry and obtain a lawyer, even if they didn’t want to initially hire one.
The claim office only needs the who, what, when, where, and how of the accident. Consider this scenario: A driver is on Interstate 90 in Montana at 2:00 AM trying to fill out a bunch of forms and reports immediately following an accident. It’s just too much! The driver should be trained to simply open a free recording app on his/her smartphone and describe what happened.
For example, “This is driver Sally Smith and I was in an accident on I-90 at 2:04 AM. I was in the westbound lane traveling at 68 mph and the weather was clear. There was one other vehicle involved with one occupant named Jim Driver, who said he had minor injuries.” Sally could add other details in her recording and simply hit the share button to send it directly to the company manager(s). Then, Sally can take photos on the same smartphone and send those, too. Reports and written statements can be filled out by managers back at the terminal.
The great thing about the option I describe above is that Sally’s statement and photos can be emailed to the claim office by 8:00 AM on the same day as the accident. That’s a claim reported within six hours! This procedure eliminates the delay. Later on management can obtain police reports and other items to forward to the claim office. The accident reporting process can be easy and timely. In my 30+ years of risk management, claims, and auditing, I have seen an array of accident reporting kits and procedures, many of which were too complex, confusing, and not user-friendly for drivers. The accident reporting process for drivers should be straightforward and easy to complete.
Strategy #9: Your Company Should Install Cameras in Every Vehicle.
Something else that leads to nuclear verdicts is unclear facts. Good or bad, cameras can help in litigation. Cameras can eliminate confusing and unknown facts for juries. There may be readers of this article that disagree with me; however, in my experience handling thousands of litigation claims, I have seen firsthand how cameras helped juries get a “real time” sense of how accidents occurred. If the camera shows that a driver is not at-fault, great! But, if a camera shows the driver made a mistake, that is good, too. You may be thinking, how is that good? Well, this information helps the claim office know when they have a claim that needs to be settled ASAP. Believe it or not, not everyone wants to hire an attorney. So, if the claim representative can talk to the other party, they may be able to settle the claim without litigation, hence, avoiding a nuclear verdict.
Be sure to save all video footage of accidents to prevent spoliation of evidence claims.
Strategy #10: Your Company Should Hire an Attorney to Protect Itself.
If a driver is involved in an accident involving serious injuries or a fatality, your company should hire its own defense attorney to protect its interests. For example, if your trucking company has a $750,000 liability limit, that may not be enough money to settle the claim. Therefore, your company could possibly be responsible for additional monies beyond the limit. Hiring an attorney at the beginning of a claim is far more advantageous than hiring one after your insurance company tenders its limits four years later. The insurance company should cover the cost of defense for the attorney it hires, but generally, they will not pay the costs of an attorney your company hires to protect its own interests. Keep this in mind should a serious accident occurs.
Strategy #11: Your Company Should Police Social Media Accounts.
Almost everyone today has at least one social media account. Commercial drivers and the employees that work for transportation companies need to be very careful of what they post on social media. The reason for this is that social media accounts are discoverable in many jurisdictions. A judge may order a driver or employee to produce all of their posts from their personal social media accounts and have those published to the jury. So, if a driver or employee posts racial slurs, political views, religious views, relationship problems, drug/alcohol use, or anything else that a jury might disagree with, this can lead to a nuclear verdict.
Yes, it’s a free country and people have freedoms of speech; however, your free speech may make a jury member(s) become very angry with you and cause the jury to award a very large verdict. Whatever you post on your social media accounts, be prepared to defend it in a court of law.
Strategy #12: Contact Your Insurance Agent About Coverage.
You should have regular discussions with your insurance agent about your company safety program and what you are doing to improve your operation. You should also talk to your agent about coverage. Do you have a high enough liability limit? Are there other risk transference possibilities? I have seen so many transportation companies get insurance, but never have regular discussions with their insurance agents. Having better or more insurance coverage can lesson the bite of a nuclear verdict.
Tort reform has been talked about for decades. State governments have tried to place recovery caps for accidents, but this type of legislation tends to get overturned. I agree that there should be some type of tort reform, but this is a political issue and planning on this reform really is not an effective strategy for a transportation company. You can certainly write your state and federal government leaders and state your case for tort reform.
You made it! I know that was a whole bunch of information, but I wanted to let you know we are here to help. We can help you in a number of ways listed above. Maybe you just need a reality check on your program or someone to handle your safety and compliance program.
Contact us today!