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Somewhere around 2016 it all began to change. Insurance industry leaders, reacting to an alarming increase in unprecedented verdicts and outsized settlements, began talking about “social inflation,” resurrecting a concept Warren Buffett coined in 1977 to describe “a broadening definition by societies and juries of what is covered by insurance policies.”
Subsequent events have seemingly amplified that perception, giving rise to terms like “shock verdicts” and, more recently, “legal system abuse,” defined by the Insurance Information Institute as “policyholder or plaintiff attorney practices that increase costs and time to settle insurance claims” and includes fraudulent or unnecessary litigation.1 Headlines and gigs of PowerPoint slides have reinforced those messages home, causing much hand wringing and many furrowed brows.
However, a key question remains largely unanswered: What do we do about it?
It was against this backdrop that I moderated a unique panel discussion entitled “Legal System Abuse and Reform” at the National Association of Mutual Insurance Companies’ Annual Convention in September. Panelists Andrew Kirkner (General Counsel, NAMIC), Clint Cox (Owner & Partner, Cox P.L.L.C.) and David Miceli (Partner, Milberg Coleman Bryson Phillips Grossman) offered perspectives based on extensive experience and, in Miceli’s case, a career that encompasses both defense and plaintiff practices.
Pandemic ramifications have and will continue to reverberate for the rest of our lives, and quite possibly those of our children as well. The period of forced isolation during the Covid pandemic made many of us more inwardly focused and increasingly skeptical of governmental institutions and private sector business. Smart phones and social media served as accelerants in eroding longstanding consensus on which information sources to seek, and which ones to rely upon. In this environment, past assumptions as to juror demographics and attitudes must be recast, with case work up centered on these new realities.
Yesterday’s “$25,000 fender bender” is now being portrayed as having value three and four times that, driven by funders who in some instances back an entire inventory of cases. As a result, TPLF firms are interested parties in the outcome of a particular case. In one capacity or another, TPLF extends to multiple casualty lines and occurs in all parts of the country. Given that, assumptions like “TPLF doesn’t occur where we do business” are wrongheaded, and defense attorneys should press through discovery as to a funder’s involvement, including disclosure of the contract between the TPLF entity and the involved plaintiff firm.
It’s been estimated that there are 158 million podcast consumers in the U.S., with 66% of Americans between ages 12‑34 being avid listeners or viewers. Further, podcasts audiences dwarf that of cable news, which skews much older and shows signs of further decline. Much of the content podcasts listeners devour contains “experts” opining on a variety of subjects, and at least in some instances with limited expertise or credibility. Moreover, podcast consumption could be fostering the Dunning-Kruger effect, defined as a cognitive bias where people with low competence in a given area overestimate their own ability, while those who are highly competent underestimate theirs. In this environment, defense experts must effectively counteract tidbits and/or perceptions taken from a podcast and instead educate as to the issues in play at trial. Now more than ever, experts serve to “make or break” cases.
Regardless of third-party litigation financing involvement, plaintiff firms are investing heavily in their cases. Anecdotal evidence suggests carriers have not done likewise, tying their defense counsel to “one size fits all” litigation management guidelines better suited for minor cases, or balking at using tools such as mock trials and focus groups that might serve to identity hot-button issues and help refine defense themes that could help better evaluate exposure and further quantify “shock verdict” risk.
By now, we’re familiar with the emotion-based reptilian arguments that the plaintiffs’ bar uses. But what makes them particularly effective is how they turn the courtroom into classroom by using experts steeped in techniques that enable jurors to feel like they’re solving a problem or unlocking a mystery, similar to what they’ve seen on TV’s CSI: Crime Scene Investigation, True Detective, and the like. We’ve come a long way from the original Hawaii Five‑O with the phrase “Book ‘em, Danno.” Today, defense experts must be succinct, credible, illuminating, and entertaining.
It’s been written that storytelling succeeds by making emotional and logical connections, simplifying complex ideas, and fostering empathy and trust. Plaintiff firms know this and retain experts to tell that story, going all the way back to crafting the original complaint and extending to the use of body-language experts to better convey the message. So, too, must it be with the defense, with a move away from a dry, logic-based presentation that limits itself to liability.
While legislative and regulatory changes through tort reform and third-party litigation financing regulation may provide some relief, those efforts will vary by state or region. These takeaways represent some initial steps in an ongoing and arduous journey to stem legal system abuse. Aim to apply these pointers in any venue and on any case with “shock verdict” potential. Hopefully, more importantly, they represent action.
This article originally appeared in IN Magazine, Winter 2025, by the National Association of Mutual Insurance Companies (NAMIC).
