Too Many Tort Cases? HOW ‘JUDICIAL HELLHOLES’ MAY CAUSE INSURANCE RATES TO RISE
I nsurance rates are on the rise. There’s no doubt about this. Joseph Peiser, global head of broking at Willis Towers Watson in the United Kingdom, reported that the average insurance budget for a large corporation in 2020 will increase by 20% from just last year. Though the rates can differ by lines, we’re seeing increases across the board. Umbrella insurance has grown from 30–35%, property risk with high catastrophic exposures looks to increase by at least 25%, and directors and officers (D&O) liability insurance will likely increase as much at 30%. What’s causing these massive increases? It could have something to do with what the American Tort Reform Foundation (ATRF) calls “judicial hellholes.” Judicial hellholes are places “filled with widespread civil lawsuits, legislative loopholes that create more ways for lawyers to sue, and judges who allow junk science into evidence in trials,” says the ATRF. These are places where large numbers of massive tort cases overwhelm the court system and high-dollar judgements and settlements tend to occur more frequently. The magazine Leader’s Edge ran a survey to find out why insurance rates were rising so dramatically. Responses cited “litigation trends and nuclear verdicts” among the proposed causes.
7. Illinois’ Cook, Madison, and St. Clair Counties 6. Georgia 5. St. Louis, Missouri 4. Louisiana 3. New York City, New York 2. California 1. Philadelphia Court of Common Pleas
It was surprising to see California come in second. The ATRF typically ranks the state No. 1 in this category. Philadelphia beat out California this year as the top hellhole thanks in part to the court’s handling of a Johnson & Johnson case. In October 2019, the Philadelphia Court of Common Pleas hit Johnson & Johnson with an $8 billion verdict in a case involving the medication Risperdal. This was the largest verdict from the court in 25 years. Though another judge has since reduced that verdict to $6.5 million, it’s important to note that the ATRF report claimed that trial lawyers “spend millions of dollars on the Philadelphia media market to drive up the number of claimants.” Additionally, because the court allows plaintiffs from all over the country, 86% of new pharmaceutical suits in Philadelphia are from out-of-state plaintiffs. How can these places cause insurance rates to rise for everyone? When tort cases increase and the cost of these cases rise, insurance companies must raise their rates in order to offset these costs. This is part of the reason the ATRF advocates for civil justice reforms like limiting the award for noneconomic damages and limiting the contingent fees paid to attorneys.
Each year, the ATRF names the Top 10 Judicial Hellholes. The top judicial hellholes for 2019–2020 are:
10. New Jersey Legislature 9. Minnesota Supreme Court and the Twin Cities 8. Oklahoma
Have a Laugh!
Easy way out on pg. 4
Specialized Insurance Programs for Specialized Industries. • www.insurica.com • 3
Made with FlippingBook - Online catalogs