‘Nuclear verdicts’ topic of Wisconsin truck insurance bill

Discussion has begun at the Wisconsin statehouse on truck insurance legislation that is touted to counter “nuclear verdicts.”

The Assembly Transportation Committee met recently to discuss a bill that would limit the total amount of non-economic damages, such as pain and suffering, that a person may recover from a trucking company. A $1 million cap on non-economic damages would apply to incidents with a truck that result in injury, death or other loss.

AB647 does not include limits on direct damages, such as medical expenses.

Counter to nuclear verdicts

Nuclear verdicts were described to the committee as when the jury award surpasses what should be a reasonable or rational amount. Rep. Rick Gundrum, R-Slinger, told lawmakers some people consider a jury award that exceeds $10 million to be in this category.

“This has become a rising problem in the transportation industry,” he said.

Gundrum also told the panel about a study by the American Transportation Research Institute that showed the average verdict size for a lawsuit above $1 million involving a truck crash has increased nearly 1,000%.

“While the plaintiff hurt in an accident with a truck certainly has the right to file a lawsuit, the problem with the rise in nuclear verdicts is that they are now seriously beginning to damage the trucking industry,” he said.

He added that nuclear verdicts lead trucking businesses to pay higher insurance rates, to redirect their resources from investing in their workforce and to postpone the purchase of new equipment. These verdicts also worsen supply chain issues, he said.

Sen. Cory Tomczyk, R-Mosinee, is the bill’s Senate sponsor. In written testimony, he told the committee the commercial trucking industry has seen an increase in large-scale litigation.

Tomczyk highlighted a July 2023 report from the U.S. Chamber of Commerce Institute for Legal Reform that showed despite a decline in fatal crashes by more than one-third over the past two decades, “there has been a significant inflation in the valuation of verdicts and settlements, with the average settlement award reaching $27.5 million.”

He said the legislation addresses a rising problem by placing a reasonable cap on non-economic damages.

“The reasonable cap strikes an important balance between delivering justice for plaintiffs and preventing arbitrary and unreasonable damages to small businesses,” he added.

The Wisconsin Motor Carriers Association and the Owner-Operator Independent Drivers Association support the pursuit.

Speaking at the hearing, WMCA President Neal Kedzie told lawmakers non-economic damages are intended to be compensatory and not punitive. He added that plaintiffs’ attorneys choose non-economic damages to circumvent limitations on when and how much punitive damages may be imposed.

“AB647 is about setting reasonable limits to curb the growing abuse of non-economic damages,” Kedzie testified.

The Wisconsin Association for Justice spoke in opposition to the bill.

The organization for trial lawyers said caps on non-economic damages “target the most seriously injured people by reducing the obligation that negligent truckers face for the harm they have caused.”

The committee did not vote on the bill. The Senate version, SB613, awaits consideration in the Senate Judiciary Committee. LL

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