Only You Can Protect Your Company

Only You Can Protect Your Company

Despite legislative progress, nuclear verdicts remain a present threat. The good news? You can defend your company before a single claim is filed.

This article by Art Kirkner originally appeared in the October 2021 issue of American Cranes & Transport.

As most of us know, the battle to protect trucking companies from unfair legal targeting and vilification is ongoing. The Texas legislature recently passed HB19, which went into law effective September 1, 2021. HB19 permits a defendant trucking company to request a two-phase trial. The first phase would serve to determine liability as to the involved parties and the amount of compensatory damages. The second phase would be used to determine any negligence on the part of the trucking company and award exemplary damages against the company based upon negligent entrustment, negligent hiring of a driver with a poor driving history, or failure to train and so forth. Exemplary damages are usually capped, depending upon the state, and require an unanimous jury decision based upon clear and convincing evidence. We view the passing of this bill by the Texas legislature as a cautious but hopeful improvement for the industry.

However, while legislative advancements like HB19 offer a potential window into a changed legal landscape, high-profile cases continue to indicate that the work is far from over. A Florida jury recently made headlines when it handed down a $1 billion verdict last month and likely set a record among verdicts brought against trucking companies. 

The September 2017 crash in question occurred in Yulee, FL on I-95 and tragically took the life of Florida teenager Connor Dzion, 18. It involved a first semi driver crashing into an RV, which subsequently overturned and stopped traffic. A second semi driver then struck the line of stopped vehicles after failing to brake until just one second prior to impact, and ultimately caused the death of the teenager. 

According to FreightWaves, the billion-dollar verdict was split as a $100 million payment to Dzion’s parents, who brought the suit, and a $900 million punitive damages verdict against AJD. AJD is the company that employed the first driver and has been absent from all recent court proceedings. Their insurance was canceled two years ago and their DOT number is inactive—so, the damages brought against them are essentially uncollectible. 

In order to understand why a jury would award a sum of that size to a company that seems to have ceased to exist, we must understand the concept of exemplary damages. Exemplary damages, often called punitive damages, are damages requested and/or awarded in a lawsuit when the defendant’s willful acts were malicious, violent, oppressive, fraudulent, wanton, or grossly reckless.

In the past, I’ve written and spoken at length on the boom in nuclear verdicts, the rise of the supercharged plaintiff’s bar, and how tenuous the legal landscape truly is. The crash in Florida, however, marks a more rare occurrence: not just an enormous dollar amount, but a huge chunk of that billion-dollar verdict comprising exemplary damages. 

I firmly believe that the American jury system remains the best in the world. Our jurors are responsible and do the best they can to assess evidence and facts and determine a fair and just verdict. But companies can’t ignore that jurors will punish those that show a total disregard for safety. You, the business owner, have the desire, the means, and the ability to develop a culture of care towards the community and a discipline for training and safety in the furtherance of your operations.

Risk management will keep you from scrambling in the event of an incident:

Telematics and dash camera systems can provide real-time incident data and evidence so you can quickly assess fault and act accordingly.

NBIS preferred contract language is a proven tool in your risk-management kit that increases your protection by successfully getting the responsible party to indemnify and defend you when an accident occurs.

• Keeping up-to-date records—from drivers’ logs, to contracts, to training completion, it’s all potential evidence. Take ownership over your documentation so you have full control over your company’s narrative. 

• A supportive insurance partner with an excellent claims team willing to use these risk management tools for your best possible protection within the respective state laws. 

At the end of the day, legislative advancements like HB19 are helpful, but companies cannot and should not rely on them to protect their companies. Instead, the surest way to keep your operation healthy, profitable, and less at risk of succumbing to a nuclear verdict is to take charge of your risk management and safety programs.

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