Peter J. Biging explores the rising threat of nuclear verdicts in his latest article, “Nuclear Verdicts in Management and Professional Liability: Identifying and Managing the Risk,” published in the Professional Liability Defense Quarterly (PLDQ), the flagship publication of the Professional Liability Defense Federation (PLDF).

Co-chair of the firm’s nationwide Management and Professional Liability practice group and President of the PLDF, Peter voices a common fear among insurance defense professionals regarding nuclear verdicts, which are characterized as exceptionally large jury awards that exceed what is typically considered reasonable compensation for damages – often $10 million or more.

“In the past 5 years, concerns have risen dramatically in the insurance industry regarding the growing incidence of so-called ‘nuclear verdicts,’ and with good reason,” he says. “Moreover, verdicts referred to as being ‘thermonuclear’ – in excess of $100 million – were issued on 27 separate occasions (in 2023).”

Peter lists a variety of possible reasons for the significant uptick in nuclear verdicts, ranging from human biology to increased use of third-party litigation funding, which he explains in great detail.

“The fact is that with substantial financial support, plaintiffs are better prepared than ever to not only win, but wring every last dollar of value out of the cases providing home run potential,” he says of third-party litigation funding. “The big value cases are identified at the outset, and they are funded to support a high leverage litigation strategy that will do the most to bring out the full value the cases offer.”

But have nuclear verdicts moved into the professional liability sphere?

“Probably not across the board at this point. But it’s a problem. And it’s going to become a bigger one as time moves on.”

Fortunately, Peter argues there are numerous ways to mitigate the risk of nuclear verdicts. First, he suggests insurers and claims administrators should not overreact to the threat of nuclear verdicts by overpaying every claim, saying the “best response is to double down on the basics, rather than waive the white flag.”

“This presents a true challenge, and it is a challenge that is facing management and professional liability as much as it is facing other insurance lines. It may not feel like it should be seen as posing such a risk, but this kind of thinking is both outdated and dangerous,” he says. “This said, it is a challenge that can be met and successfully grappled with. The first step is acknowledging the risk. The next step is taking intelligent, informed, affirmative steps to meet this emerging risk.”

READ THE FULL ARTICLE HERE

MORE ABOUT PETER J. BIGING:

Peter is an accomplished trial and appellate attorney with more than 30 years of experience as a litigator in the state and federal courts of New York. As co-chair of the firm’s nationwide Management and Professional Liability practice group, Peter counsels and defends directors and officers against claims alleging fraud, negligence, and breach of fiduciary duties, and a variety of professionals against claims based on alleged errors and omissions (E&O) in the performance of their professional services. He also regularly litigates labor and employment practices liability claims, commercial disputes, and municipal liability claims premised on alleged civil rights and constitutional violations.