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Companies must fight fire with fire to combat nuclear verdicts: Expert

gavel with money

SAN DIEGO – The best way for companies to defend against the threat of a nuclear verdict is to break away from the idea of not discussing damages in front of jurors, an industry expert said.

Nuclear verdicts are affecting “every industry,” and companies must go on the offensive to counter a tactic known as anchoring, Bill Bower, executive vice president, healthcare leader, at Gallagher Bassett Services Inc., said during a session Monday at Riskworld, the Risk & Insurance Management Society Inc.’s annual conference.

Anchoring is a cognitive bias that occurs when individuals use an initial piece of information to make a subsequent decision. Plaintiffs attorneys routinely use anchoring during trials to persuade juries on how much an individual should be awarded for an injury, Mr. Bower said.

While the theory is not new for companies defending claims, the stakes have gotten much higher due to the “alarming” rise in the rate of nuclear verdicts, Mr. Bower said, noting that general liability losses increased 57.4% last year, compared with a 10.5% rise in the consumer price index.

“When I first started trying cases, suggesting to a jury what a verdict should be was taboo. It was all about liability,” Mr. Bower said.

He said defendant companies can overcome anchoring early by addressing the issue when a case is first filed and introducing theories of value and damages during the discovery process. Companies should continue to address anchoring during the jury selection process and present evidence during the trial on reasonable damages and an alternate award.

“Great vision without execution is hallucination. We in the defense bar have to start executing our plan to establish damages, because the jury wants to hear it and the jury is not going to punish us on liability if we do,” he said.