When Robert Tyson (pictured), founding partner of Tyson & Mendes national defense law firm, looks at the rising tide of nuclear verdicts in the US, he sees one thing clearly: the insurance industry isn’t changing fast enough to stop it.
Insurance executives have spent years sounding the alarm about social inflation. This trend, which refers to insured claims costs rising above the rate of general inflation, is often blamed on nuclear verdicts.
Tyson didn’t just observe this trend from a distance; he wrote a book and registered the term referring to outsized jury awards exceeding $10 million. “By definition, a nuclear verdict is unjust, it’s disproportionate,” he told Insurance Business.
According to the trial lawyer, the plaintiffs' bar has turned the entire US into “one vast judicial hellhole," sharing winning strategies coast to coast, while insurers and defense lawyers have largely failed to evolve. If the insurance industry wants to contain runaway jury awards, it needs to act differently inside the courtroom.
One fundamental shift defense teams must make is learning to accept responsibility in trials, a strategy that can immediately neutralize the anger that plaintiff lawyers so skillfully ignite in juries.
"In every jury trial, find a way to accept responsibility," Tyson said. "That doesn’t necessarily mean admitting liability." Rather, it means showing accountability for employees, for safety procedures, for reasonable efforts, and for being a responsible player.
"If you proactively accept responsibility, you defuse the anger driving nuclear verdicts," said Tyson.
However, accepting responsibility isn’t enough on its own. The next major move for insurers and their defense lawyers is to give juries a number. Tyson explained that defense lawyers should give a number "early and often," because setting an early anchor in jurors' minds can dramatically lower potential awards.
"It works because of psychology,” he said, adding that most defense teams are terrified of putting a number on damages, fearing it signals weakness.
While plaintiffs' attorneys have evolved, adapting their trial tactics to maximize awards, defense lawyers remain stuck in the past, according to Tyson. The insurance industry’s response to litigation risk, i.e. building litigation management departments focused on controlling expenses, has done nothing to address the real enemy. It’s a miscalculation, Tyson believes, that's costing carriers billions.
Another missing piece is personalization, which helps reshape how juries view defendants, especially large corporations. Plaintiffs' lawyers humanize their clients constantly, weaving detailed emotional stories that build powerful personal connections. But defense lawyers don’t do the same for the insured, Tyson claimed.
Humanizing the insured means telling the origin story, talking about employees, highlighting the positive impact companies have on communities. "At least 80% of all nuclear verdicts, you know nothing about the insured, about the defendant," Tyson said. "The company… is made by people. You need to tell that story."
The final critical action insurers need to demand from defense counsel is a real, substantive argument on pain and suffering damages. Too often, Tyson said, defense attorneys simply fall back on citing the law, telling jurors they must be "fair and reasonable."
However, pain and suffering are often the largest component of nuclear verdicts, sometimes eclipsing all economic damages combined. Defense teams must make “meaningful arguments about pain and suffering,” said Tyson.
He outlined four concrete questions that should be added to every pre-trial planning checklist for outside counsel:
A recent injury case involving Starbucks has become a fresh reminder of the rise of nuclear verdicts. Last month, a California jury ordered the global coffee chain to pay $50 million to a delivery driver burned by one of their hot drinks at the drive-through.
The award mirrors an infamous McDonald’s coffee case nearly 30 years ago, which stood at $2.9 million. Even after adjusting for inflation, the leap is staggering. "The similarities are almost eerie between the two cases," Tyson said.
Ultimately, the insurance industry needs to embrace change to stop nuclear verdicts. In Tyson’s view, the industry’s greatest enemy is inertia. Plaintiffs' lawyers changed their playbook 15 years ago, embracing new psychological techniques like the Reptile Theory and aiming for outsized jury awards.
Insurers need to do the same, focusing on what they can change in courtrooms. "You’re not going to get tort reform in all 50 states tomorrow," Tyson said. "Meanwhile, nuclear verdicts are happening in courtrooms every single day."
