ATRI Report Offers Insights Into Trucking Industry Settlements
A new report from the American Transportation Research Institute stated that while trucking industry court cases that result in verdicts of less than $1 million may not dominate headlines like those that end in multimillion-dollar judgments, the cumulative effect of these smaller verdicts can still inflict significant financial distress on the industry.
The study also found that trials that end in settlements, as well as those that involve injuries or fatalities, tend to result in larger monetary awards.
“While cases of this size are not individually as devastating to motor carriers and thus do not attract the attention of media outlets, in aggregate they have a significant negative impact on the trucking industry,” ATRI said in the study, titled, “The Impact of Small Verdicts and Settlements on the Trucking Industry.” Released Nov. 18, it aims to provide an overview of the smaller award litigation landscape and offer carriers and defense attorneys strategies to assist in preventing costly litigation outcomes, ATRI said.
“This analysis proves a theory that I have always had; there are two markets as to the value of cases – the settlement market and the trial market,” said Doug Marcello, an attorney with the Carlisle, Pa., transportation law firm Marcello & Kivisto LLC. “There should be one market, and that is what a case is objectively worth.” Marcello served as a subject matter expert for ATRI on the report.
In the study, ATRI found that cases that reach settlement result in damages that are approximately 37.7% larger than those decided by a jury. The report also found that in cases involving a severe injury, settlement is 217% more likely than a trial. Cases of this type are also 199% more likely to result in payment to the plaintiffs of more than $600,000. Cases that involved a fatality are 393% more likely to result in a settlement, and also were the strongest predictor of higher payments, the report found.
The report also details the average amounts of award payouts in settlements where an injury or death has occurred; cases involving a fatality had the highest average award at $607,532, while back injuries had the lowest average payout at $368,237. Cases that did not have a fatality had an average payment amount of approximately $428,000. “Crashes that resulted in one or more fatalities yielded an average payment that was 41.9% higher than crashes that did not result in a fatality,” the report noted. “Cases involving back and neck injuries resulted in the smallest average payment amounts.”
The new report follows ATRI’s 2020 study, “Understanding the Impact of Nuclear Verdicts on the Trucking Industry,” which studied so-called “nuclear” verdicts in excess of $10 million. The new report notes differences in how certain injuries are viewed by juries depending on severity.
“Spinal cord injuries command some of the highest average awards in nuclear verdict cases, but back and neck injuries in this report are not necessarily spinal injuries,” ATRI said. “Plaintiff attorneys may be incentivized to exaggerate back and neck injuries in a trial because they know spine injuries generate large awards in high profile cases.”
The report also reviewed payments to plaintiffs based on the type of traffic violation the truck driver may have been charged with, and how that factored into the payouts. “Some alleged infractions, such as driving over the posted speed limit, apply to drivers, while others, such as inadequate training practices, apply to motor carriers,” the report said.
The top five violations and their respective payouts are:
- Poor driving history, $680,333
- Telephone usage, $629,375
- Hours-of-service violations, $564,531
- Asleep at the wheel, $543,343
- Equipment failure, $503,641
“Carriers should make the elimination of these issues a top priority to lower litigation payments,” the report said.
The report also noted a significant difference in award sizes if cases are heard in state court versus federal court.
“According to subject matter experts, state courts are notorious for unpredictable outcomes in court trials,” the report said. “More diverse jury pools and the use of appointed rather than elected judges fuel the perception that federal court is more disinterested in truck crash cases. For this reason, defendants often find federal court a preferable venue.”
The report also pointed out that to pursue a case in federal court, specific prerequisites must be met, and these additional conditions may prevent defendants from pursuing a lawsuit in federal court and instead encourage out-of-court settlements.