We’ve all seen the commercials and billboards announcing, “Have you been injured by a truck? If so, call us. You could receive thousands in compensation.”
While an accident involving a truck can be tragic, to some, it offers a payday. Each and every lawsuit raises the insurance premiums for drivers.
With the looming driver shortage and the long-reaching effects of CSA scores, carriers will struggle to insure existing and rookie drivers, and the need for tort reform has never been greater.
“Tort Reform seeks to minimize the harm to industry caused by excessive civil judgments, whereby financial liability far exceeds negligence. The trucking industry, along with many other industries, seeks tort liability reform to ensure that punitive damage awards are reasonable and directly related to negligence,” ATRI reported.
Proposed Strategies (in rank order):
a) Advocate for federal legislation to regulate lawsuits and impose new caps on non-economic damages. Nearly six in ten respondents felt that the top strategy for implementing Tort Reform is to seek legislative solutions that cap non- economic damages awarded by juries in civil cases. The goal of these caps is to strengthen the legal nexus between negligence and liability. Furthermore, caps for non-economic damages would likely have a positive impact on rising carrier insurance costs.
b) Encourage a new legal fee structure and caps. Respondents indicated that the industry should proactively advocate for reform of legal fees paid to plaintiff attorneys. The purpose of reforming legal fee structures and compensatory caps is to discourage costly and unreasonable legal actions against trucking firms that are primarily motivated by trial lawyer compensation. This strategy would also likely have positive impacts on carrier insurance rates.
c) Engage in public outreach and education to explain the negative consequences of excessive civil litigation. Many respondents believed in the importance of educating the general public on the overall economic impacts of excessive civil judgments. This strategy was identified as an important component of generating support for the legislative reforms proposed in the first two strategies.
Tort reform does not mean those who have been convicted of gross negligence won’t have to pay punitive damages, it means that those seeking compensation would only be eligible to receive an congruous amount. Caps would be placed on the amount a driver could be sued for.
Why should you care about tort reform? Even if you haven’t ever been in an accident, you’re paying higher premiums (or your carrier is) for insurance for others’ civil judgements.
If you get into an accident in the future, even if the accident was not your fault, your insurance carrier may settle the lawsuit– which would result in a judgement against you– because sometimes it’s less expensive for your insurance carrier to settle the lawsuit than it would be to fight the suit.
Most insurance carriers have a “Consent to Settle” clause written into their policies. A Consent to Settle clause loosely states, if it would cost less to settle a suit than it would cost to fight the suit, your insurance company has the right to settle the case.
Producer with the Lockton Company Trent Stringer said that 99% of insurance companies have a Consent to Settle clause. He said that while insurance companies do all they can to help the carrier, insurance companies are sometimes forced to settle to keep costs down.
What is being done? The American Trucking Association has set-up a task force called the Insurance Task Force (ITF). The purpose of the ITF is to directly address the issue of tort reform.
According to the ATA’s ITF page, “Significant successes have been achieved in many states where the ITF, through the state trucking association, has taken an active role. The ITF has become a major financial contributor to tort reform through state trucking associations and through national reform coalitions and groups, including the American Tort Reform Association and the Institute for Legal Reform. Recent political changes in state legislatures have made reform more difficult to achieve. In 2007 and 2008 the ITF effort has turned defensive against an onslaught of plaintiff-attorney attempts to role back previously won reforms.”
What can you do? Ask your carrier about your current insurance coverage. Ask them if your policy has a Consent to Settle clause. If it does, petition your carrier for more fair coverage.
You can also help by seeking out and supporting candidates from your state who favor tort reform.