The Deep Pocket Effect in Civil Damage Awards

Within the last twenty years, the number of excessively high civil damage awards has grown exponentially. Juries, for a variety of reasons, are entrusted to compensate a victim in civil tort cases. Indeed, a term coined for these type of verdicts is the nuclear verdict,  which describes a vast amount of money that a jury awards the winning party. So why have jury verdicts increased in recent years? Among the various factors, one justification is that juries will award damages because of a growing distrust in larger businesses and corporations. The idea in some of the public's mind is a perception that larger companies should be held more responsible and to a higher standard than an individual defendant. This is certainly one factor that may be contributing to these high damages awarded. 

Billion Dollar Awards

Not only are juries compensating the victim or injured party, but they also seek to send a message to larger companies. One message of high civil damages is that it sends a message to larger companies to stop anti-social and destructive behavior against members in the community. For example, a recent Texas jury awarded a Plaintiff $301 billion dollars in damages against a bar in Corpus Christi. Although the jury awarded the Plaintiff roughly $1 billion in actual damages, the jury awarded also awarded $300 billion in punitive damages. Though it is unclear if the Plaintiff will be fully compensated for the $301 billion award, because the bar is now closed and having insurance coverage to cover that high an amount is incredibly unlikely. Another example of a deadly trucking crash, ended with a $730 million dollar award against the employer of the driver. Because of the potential for high jury awards against companies, there is a real concern for insurance companies and certain industries. Some are lobbying for protections in the legal system. 

HB19 

In the trucking industry, the large jury awards within the industry caught massive attention of trucking companies. After all, such an award could potentially whip out a trucking company. For instance, in Texas, the trucking industry recently lobbied for changes in Plaintiff's lawsuits. The American Trucking Association successfully convinced the Texas Legislature to pass HB19 which requires a Plaintiff to first sue the truck-driver in an automobile accident before filing suit against the operator or owner of the trucking business. Not only that, but the Court must first find the truck-driver liable before a Plaintiff may file suit on the employer. 

One legal article, calls this a bifurcated trial. With the first phase, determining driver liability, and the second part determining the employer's liability. Procedural protections for companies, such as these, might be effective because they will create extra costs and steps in the litigation process for Plaintiffs. Additionally, they create an extra barrier to a lawsuit of an employer who might have deeper pockets. Companies are aware that juries will award excessive damages against companies. For example, a report from the American Transportation Research Institute found that jury verdicts for trucking related awards rose roughly 500% from 2017 to 2018. Because jury verdicts for civil damages against larger companies continue to increase, it is almost certain that more industries will continue to lobby for tort reform and attempt to make a Plaintiff's case more difficult.