Actions and insights
So-called “nuclear verdicts” against corporations, defined as awards exceeding $10 million, are growing bigger and more frequent. Often, insurance companies have to pick up the cost. A Marathon Strategies report shows there were 135 nuclear verdicts in 2024 – a 52% increase from 2023. The sum of the verdicts was $31.3 billion, a 116% increase over 2023. Florida, which was the number two state for nuclear verdicts from 2009 to 2022, dropped to number seven in 2023 and down to number 10 in 2024. That’s credited to tort reform passed in early 2023 by the Florida Legislature.
The exponential growth of liability claims costs and social inflation in the United States, in part, is being driven by changing juror sentiment and shifts in societal norms, according to an analysis from Swiss Re.
“Liability claims costs in the United States have entered a self-reinforcing spiral. Traditional economic drivers such as wage inflation, medical-cost trends and CPI growth no longer explain the pace at which liability claims are escalating,” said an article published by Swiss Re, titled “Verdicts on trial: The behavioral science behind America’s skyrocketing legal payouts.”
“This growing gap between economic fundamentals and actual claims experience has been termed ‘social inflation,’ which is in large part driven by legal system abuse,” the article explained.
In its 2025 Behavioral Social Inflation Study, Swiss Re aimed to assess the behavioral reasons behind legal system abuse. “The findings confirm that juror sentiment has shifted decisively toward plaintiffs, and this shift is influencing verdicts in measurable ways,” said the article, which you can read more about in the Insurance Journal.
A new poll shows an overwhelming and bipartisan majority of Floridians pin the problem on trial attorney fees. The Associated Industries of Florida (AIF) survey found 83% of voters support capping personal injury attorneys’ fees at 20% of the money awarded to a plaintiff. Doing so, said AIF, would allow plaintiffs to keep more of the damages and reduce “the incentive for lawyers to file frivolous lawsuits.”
There’s also growing concern about “Third-Party Litigation Funding” (TPLF), where an outside entity helps fund the plaintiff’s case in hopes of a victory with a big award – and a big return on their investment. The South Florida Hospital News and Healthcare Report warns that TPLF has the potential to affect malpractice insurance premiums. SB 1276 made it through all its committees in the Florida Senate last year but never reached a full floor vote. It would have required disclosures of TPLFs, empowered courts to consider conflicts of interest arising from TPLFs, and improve transparency. We’ll keep an eye out for similar bills filed in the 2026 legislative session that begins in January.
At the federal level, several bills have been filed in the U.S. House of Representatives to address legal system abuses:
- The Litigation Transparency Act of 2025 (R. 1109) would require disclosure of any TPLF in federal civil lawsuits.
- The Protecting Our Courts from Foreign Manipulation Act (R. 2675) would prohibit litigation funding by foreign governments and sovereign wealth funds. It would also require disclosure of foreign individuals funding cases.
- The Lawsuit Abuse Reduction Act of 2025 (R. 5258) would mandate sanctions on attorneys who file frivolous lawsuits and remove the “safe harbor” provision that currently allows attorneys to withdraw meritless claims without penalty.
- The Forum Accountability and Integrity in Roadway (FAIR) Trucking Act (R. 5268) addresses forum shopping by plaintiff lawyers and also staged accidents, both of which have contributed to the growth of nuclear verdicts. It would give federal courts original jurisdiction over state venues in cases involving interstate truck accidents.
The bills have broad backing from the insurance industry.
LMA Newsletter of 10-6-25
