What Recent “Nuclear” Verdicts May Mean for Medical Liability in New York

In several states and across various sectors, we’re seeing a worrisome rise in “nuclear” verdicts. These verdicts — most often defined as jury awards over $10 million — are increasing in both frequency and severity.

In fact, according to data cited by Verisk, the average size of verdicts over $1 million jumped by nearly 1,000 percent from 2010-2018, and 2019 saw a “300 percent increase in verdicts of $20 million or more when compared to the average from 2001 to 2010.” Even median verdicts, as detailed in an analysis by the U.S. Chamber of Commerce Institute for Legal Reform (ILR), have risen by nearly 28% nationwide from $19.3 million in 2010 to $24.6 million in 2019.

During this same period, ILR data shows the following:

• Nationwide, nuclear verdicts most frequently occurred in a few types of cases: product liability (23.6% of the total), auto accident (22.8%) and medical liability (20.6%).
• 63% of the nuclear verdicts occurred in Florida, California, New York and Texas.
• New York ranks #3 for highest number of nuclear verdicts from 2010-2019 and #2 for nuclear verdicts per capita.
• Nuclear verdicts were most common in New York City, Kings County and Bronx County.
• Nuclear verdicts in New York resulted in plaintiff awards totaling $5 billion.

These awards, along with the rate at which they are ballooning, reflect “an unsustainable trend,” as noted by AM Best. And while the Medical Professional Liability Association says nuclear verdicts themselves aren’t new, it warns, “What is different are the heights that verdicts are reaching with record-breaking awards.”

Recent Nuclear Verdicts in Medical Liability

MLMIC is actively monitoring nuclear verdicts here in New York and across the country and has found the following to be noteworthy:

• $10M (Georgia) for a plaintiff alleging nerve injury following a root canal;
• $28.5M (New York State) for an NFL player claiming a game injury (leg/ankle fracture) was not fixed correctly by the orthopedist;
• $30M (Georgia) in a catastrophic birth injury case following an amniotic fluid embolus;
• $49M (Illinois) for a 39-year-old man with irreversible brain damage from loss of oxygen following EMT removal of an intubation tube;
• $77M (Georgia) involving the death of a 27-year-old single man with bipolar disorder and substance abuse issues who committed suicide after walking away from an out-patient supervised facility;
• $80M (New York State) in a case involving premature birth and developmental abilities due to alleged negligent pre-natal care;
• $85M verdict (California) in the death of a 32-year-old man who suffered cardiac arrest in the ambulance following law enforcement use of a stun gun; and
• $111M verdict (Minnesota) for a 19-year-old soccer player who, following several surgeries, was left with permanent nerve damage and disability to the leg.

Aside from hefty payouts, why are these verdicts notable? They reflect risk of nuclear verdicts across clinical settings and across specialties, including dentistry. 

In addition, they may be indicative of heightened sympathy from juries. For example, in the New York case involving the premature birth, the plaintiff’s attorney asked the jury to award $38M in damages. Instead, the jury came back with a verdict of $80M. According to MPLA, plaintiff’s attorneys have skillfully used jury sympathy to fuel verdicts and awards for years, but recently they’ve also been able to manipulate another juror emotion – anger – as a strategic “accelerant.”

The Impact of Nuclear Verdicts on Healthcare and Other Sectors

The impacts of nuclear verdicts are significant. Overall, states ILR, “Because of their massive size and unpredictability, nuclear verdicts can threaten the existence of a defendant business, raise costs for consumers and prolong litigation by virtually guaranteeing an extensive cycle of appeals.” With regard to medical professional liability (MPL) insurance, the trend toward nuclear verdicts is particularly consequential.

The trends related to litigation, claims and awards are foundational in ratemaking, which must take into account estimates of future costs. For this, we tend to break trends into two pieces: severity (how claims costs are changing) and frequency (how the number of claims is changing). These MPL trends are particularly difficult to determine in New York due to the “long tail” from incident to resolution (6—7 years on average), high average costs (among the highest in the nation) and a constantly changing regulatory/legislative environment.

Here are a few of the factors currently of concern:

• In addition to overall increases in claim payments, we are seeing greater than expected payments in Upstate New York and in non-physician (NP, PA, etc.) segments.
• MPL loss severity trends in New York have averaged 3-5% over the past 20 years but tend to “stair-step.” (Flat to low severity movements are followed by large, sudden increases.)
• Nuclear verdicts continue to take their toll.
• Due to court closings from COVID-19, severity dipped slightly in 2020-2021, as smaller cases were resolved, while larger cases were put on-hold.
• Increases in the severity of claims (claim payouts) tends to increase the frequency, as well, because it becomes more attractive (and lucrative) to bring claims.

The nuclear verdicts trend and other factors influencing MPL in New York mean physicians, providers and organizations must prioritize efforts to mitigate risk and control costs. MLMIC works proactively to assist policyholders in these areas through:

• robust risk management services to help policyholders prevent adverse outcomes and improve care;
• significant discount programs, like the Preferred Savings Program, reduced rates for medical professionals without any open or closed claims and more; plus
• partnerships with MSSNY and other organizations to advocate for laws and policies that support quality healthcare in New York.

For more information about this concerning trend and its potential impacts, we encourage our policyholders to contact us by calling (844) 667-5291 or emailing hotline@tmglawny.com.