Berlin, 1962—Glienicke Bridge, spanning the Havel River, once served as one demarcation point between East and West Germany. At the height of the Cold War, it also served as a critical exchange point between the U.S. and the Soviet Union and was where one of the most famous prisoner swaps took place. Years earlier, U.S. authorities arrested Rudolf Abel, an Englishman by birth who had been serving as a Soviet spy in New York City. Abel was eventually tried for and convicted of espionage. That, however, was not the end of the story.
His court-appointed lawyer was James B. Donovan, a respected New York City attorney who had previously served as a prosecutor at the Nuremberg War Crimes Tribunal at the end of World War II. Like John Adams before him, who famously defended the British soldiers in the Boston Massacre, Donovan, in the face of ‘Red Hysteria,’ courageously defended Abel to the Supreme Court. Despite the ultimate loss, Donovan’s unwavering commitment to his client’s cause saved Abel’s life, securing a life sentence instead of the death penalty.
If this all sounds familiar, it forms the basis of the mostly true story behind Steven Spielberg’s 2015 film, “Bridge of Spies.” The movie goes on to depict what happens next: After the appeals process is exhausted, Abel gets another chance at freedom. Since the Soviets were not the only side involved in spying during the Cold War, our interests were also at stake. In 1960, U.S. Air Force pilot Francis Gary Powers was shot down over the Soviet Union in his (at the time) state-of-the-art U-2 spy plane. A prisoner exchange followed in 1962.
After some tense back-and-forth between the U.S. and the Soviet Union (and East Germany), Donovan, on the ground in East and West Germany, managed to successfully negotiate the exchange, in which the Soviet Abel was exchanged for U.S. Officer Powers and a fellow American graduate student, Frederick Pryor, whom the communists had also detained.
Actor Tom Hanks plays James Donovan as if Atticus Finch had received U.S. intelligence training: upright, erudite, without a hint of corruption or malice, calm under pressure—the lawyer we all wish we could be should the day or the challenge ever arise. What is truly intriguing about this episode in American history is the unexpected role played by Donovan, who, as it turns out, was not just any lawyer; he was an insurance lawyer. So, the next time you are at a mediation negotiating a soft tissue whiplash rear-ender, remember this: You might just be a phone call away from settling the next diplomatic crisis.
A Crisis of Confidence
Long gone are the days when being an insurance lawyer was looked upon as a qualification to handle top-secret negotiations with the weight of the Cold War at stake. Instead, the litigation world (at least perceptually) appears to be dominated by two extremes: the plaintiffs’ bar racking up verdict after verdict, and the white-collar corporate litigator. It is either “Better Call Saul” or “Suits” with little in between. We all know reality is much different. Insurance defense attorneys and claims professionals are not just bystanders to this cultural milieu, we are also active participants, often straddling the line between the two extremes. Yet, we are not mounting a thoughtful and strategic counterattack to these societal shifts in perception. Instead, we are letting myriad anecdotes, billboard advertisements, and LinkedIn posts of plaintiffs’ attorneys proudly proclaiming the righteous fight for justice wash over us.
Look no further than the Nuclear Verdict landscape: A recent study completed by Marathon Strategies concluded that “[i]n 2024, 135 lawsuits against a corporate defendant resulted in a Nuclear Verdict—those that surpass $10 million—the largest number of such cases Marathon has identified in a single year since 2009, and a 52% increase over 2023. The total sum of these verdicts reached an eye popping $31.3 billion, a 116% increase over 2023.”
As explored in several articles in this magazine, we at least have some understanding of the causes of this national trend: juries are angry at corporations, social inflation, and third-party litigation funding (a practice where a third party provides financial support to a party involved in litigation in exchange for a portion of the settlement or judgment). But, have we implemented enough change at both the macro and micro levels to reverse not only the increasingly worrisome verdict numbers, but also the view that we are helpless bystanders?
Thinking Big and Small
Let’s start with the big picture, because it is not all doom and gloom. States are enacting substantive tort reform— legislation aimed at limiting the loopholes that make cases vulnerable to Nuclear exposure—explicitly designed to even the fight. For example, as explored in the Marathon Strategies study, the Georgia legislature, among other things, tightened up the standard for premises liability, eliminated the ability to anchor pain and suffering arbitrarily (i.e., no more “this is what the Mona Lisa costs…”), and required that third-party litigation funding be more transparent. In 2023, Florida made similar changes, including lowering the statute of limitations for general negligence claims and transitioning from a pure comparative jurisdiction to a modified one where plaintiffs are barred from recovery if found to be more than 50% at fault. The result: Florida’s Nuclear Verdict numbers saw statistically significant reductions the following year.
Legislative changes may seem far removed from our daily litigation lives, but these shifts represent substantive changes with real-world impact. We need to challenge ourselves not only to consider what is, but also what could be. If the rules of the game are not working for us, then we need to ask how we can, in true litigator fashion, change the rules. Pay attention to judicial and legislative trends and, whenever and wherever possible, advocate for systemic change.
Fighting Back, In Practice
Changing the law is one thing, but we do not all have state legislatures at our disposal. Getting small details right on the individual cases is equally as important. Keeping one’s strategic mindset open to how we are perceived on a professional and cultural level is another. It can be overwhelming, but real, substantive change is possible. Consider the following:
CASE NO. 1 involved a transportation company being sued by an individual who tore his rotator cuff, eventually requiring total shoulder replacement. Workers’ compensation was not a bar. Medical bills were deep in the five figures, and lost wages were substantial for an individual who was considered disabled from returning to his prior position. Now add a dash of spoliated evidence (i.e., a discovery that the plaintiff’s attorney had not yet made), which, in all likelihood, would have led to an adverse inference jury instruction and probably an unfavorable verdict. Before the beginning of discovery, the defense team pushed for early mediation and defended its position vigorously. The plaintiff, to the defense’s great surprise, made a “reasonable” demand of approximately $1 million. At the mediation, the case was resolved for under $300,000.
Lesson: In the face of a potentially significant verdict, make sure to put your client in the best situation to try and resolve the case early while taking a hard line of the actual value of the case. How many times have we heard, “Those cases are settling for much more than they did 10 years ago”? Who cares? You can understand and appreciate the social inflation of cases without letting it compromise your strategy. Do not let the current climate be more than what it is—another data point for your consideration.
CASE NO. 2 involved a company in a heavily regulated industry where a 38-year-old employee injured his back and underwent several back surgeries. After a protracted discovery period with motion practice and several depositions, the parties attended mediation. The plaintiff’s medical bills were again significant and he was claiming a permanent partial disability with a substantial work life ahead of him and unable to return to his prior job. The attorney’s demand was just north of $2.5 million (higher, but still within the realm of reason—just barely). The case settled for less than $375,000.
Lesson: The key here was finding a leverage point early on in the case, which turned out to be a powerful corporate witness. The corporate witness performed exceedingly well, which was recognized immediately by the plaintiff’s attorney.
CASE NO. 3 involved a slip and fall incident at a commercial property. The plaintiff, a 40-something professional with no lost wage claim, suffered a broken ankle and received a 10% permanent disability rating. Medical bills exceeded $75,000. The mediation was a hotly contested back-and[1]forth exchange, and the parties resorted to brackets. The defendant presented a bracket range of $250,000 to $550,000, while the plaintiff countered with a bracket of $600,000 to $750,000. Liability was questionable (i.e., there was no prior notice of the alleged dangerous condition), and there is a realistic possibility that the plaintiff may be found to be more than 50% at fault, which would mean no recovery in this jurisdiction. The plaintiff’s attorney spent a fortune on billboards attesting to his trial victories, and that is her primary strategy—highlighting her string of past successes.
Lesson: Be cautious of cases where we find ourselves fighting against societal perceptions that have no bearing on our case. Here, the primary justification for a higher settlement range had nothing to do with the facts of the incident—it was based entirely on the attorney’s reputation and the trend of higher verdict numbers.
As insurance and defense professionals, how do we share these insights and results to remind the litigating public that not every case is worth seven figures, no matter how much the plaintiff’s bar would like us to believe that? Should we rent billboards on I-95 expressing to the world these great results? Would our clients be on board with such a radical idea?
We should initiate this kind of dialogue with our clients and colleagues to help change the conversation talking points. We should not forget that, for every plaintiff’s case that results in a $1 million+ verdict or settlement, thousands of other plaintiffs’ cases are resolved for far less or result in defense verdicts.
We have been content for too long to put our heads down and blindly exclaim, “This is how it is.” We need to stop unquestioningly accepting social inflation for each case. Every case is unique. This is not a license to be reckless with budgets, but it is an invitation to strategize and fight. Push back against the notion that cases are simply becoming more expensive. Maybe they are, but maybe plaintiffs are just cashing in on the “trends.”
Likewise, try cases willingly and accept the losses that come with them. If the volume is significant enough, there may even be a sea change in case value averages. And, as always, negotiate, negotiate, negotiate. You can possess all the skills and ideals in the world, but your value as an insurance professional will be based on your ability to be creative, steady, and thorough in the negotiation phase. Keep your head in the game as if the Cold War depended on it.