The use of the “reptile theory” by plaintiff’s attorneys to sway a jury to reach so-called nuclear verdicts has grown considerably over the last decade. The insurance industry and defense attorneys are now working together to help trucking companies be proactive to protect themselves from catastrophic litigation in the event of a crash.
This video and transcript were originally featured on Commercial Carrier Journal's 10-44 series and on their website, ccjdigital.com. The content is not owned by PCF Insurance or any affiliates.
Joining Jason and Matt this week are Tim Good, president and managing partner of PCF Insurance Group member Good’s Insurance Agency, and Doug Marcello, a transportation attorney with Saxton & Stump. Good talks about how the insurance industry has been affected by nuclear verdicts, and Marcello talks about his Bluewire.ai carrier risk assessment business and how defense attorneys need to change their approach.
Jason Cannon: This week's 10-44 is brought to you by Chevron Delo 600 ADF ultra low ash diesel engine oil. It's time to kick some ash.
Matt Cole: With nuclear verdicts becoming more common, there are some emerging solutions to help carriers be proactive to protect themselves.
Jason Cannon: You're watching CCJ's 10-44, a weekly episode that brings you the latest trucking industry news and updates from the editors of CCJ. Don't forget to subscribe and hit the bell for notifications so you'll never miss an installment of 10-44.
Hey everybody, welcome back. I'm Jason Cannon and my co-host on the other side, as always is Matt Cole. The use of reptile theory by plaintiff's attorneys to sway a jury to reach a so-called nuclear verdict has grown considerably over the last decade. The insurance industry and defense attorneys are now working together to help trucking companies be proactive to protect themselves from catastrophic litigation in the event of a crash.
Matt Cole: Nuclear verdicts have not only impacted carriers in the courtroom, but they've also changed how insurers assess risk. Tim Good president and managing partner of PCF Insurance Group, member Good's insurance agency joins us this week to talk about the insurance implications of nuclear verdicts while Doug Marcello, a transportation attorney with Saxton and Stump talks about how fleets can protect themselves.
Tim Good: Good afternoon. I'm Tim Good. President and managing partner of Good's Insurance Agency. We're a member of PCF Insurance Transportation Group and I've been in the trucking industry for 40 years on the insurance side and actually drove truck five years back in the late '70s when there was a lot less regulation and you could get away with a lot more. So you can't really fool the four because I knew all the tricks of the trade and probably did most of them being in the insurance. That as time evolved, these nuclear verdicts started popping up probably around 10 years ago. The Werner case is probably the best known in Texas and that really started a dilemma in our industry because we are all about safety and educating our customers about safety and they can try and keep their CSA and our FMCSA as good as possible, but there's so many different angles that they're coming from now.
Doug Marcelo: I'm Doug Marcelo. I am chief legal officer of Bluewire LLC, and we analyze data to look for potential vulnerabilities of trucking companies towards attack from plaintiff attorneys and do this ahead of time proactively so they can be remedied. I'm also a practicing attorney. Saxton and Stump LLC, continue to try cases, just try the last one of this year. What we're looking at now is the people who are on the billboards are looking at the trucking companies as a profit center. They live by the mantra of hit a truck, get a check, and they look at these units as 18 wheel ATM machines. And what they do is to prey upon and look for vulnerabilities in the trucking companies because one of the key things they're looking for is leverage. In today's world, and Tim knows better than I with the insurance market that we have out there, it is the nuclear verdicts.
It's one thing, but also because of the rates, a lot of the companies have taken on risk themselves in the form of retention or deductible and so it's money out of their pocket. So not just on the far end of it, but even down in the lower levels, they try to find this leverage so they can take and make either a no liability case, a no damage case to leverage that into a 2550 or $100,000 dollars case. And that's money most of the time, many times I think right out of the pockets of the trucking company.
Jason Cannon: Doug's Bluewire AI company looks at a trucking company's generally available public data or GAP data to create a GAP score in various metrics to see where a fleet is vulnerable to a potential verdict.
Tim Good: He got together with a couple of his colleagues and started Bluewire AI. And what Bluewire AI is, is it's pulling information from numerous databases and it's actually scoring these trucking companies based on what's their vulnerabilities subject to a nuclear verdict. It's been a great tool for us. It's amazing to be able to go into a trucking company and say, "Hey, do you realize you are vulnerable?" And I'll let Doug explain it a little bit more, but that is really huge in the industry today on these companies who they think they're doing everything right and it's the little things could be hiring practices, could be firing practices, could be multiple different things that set them up as a target. And once they're a target, they just put the theory into place and they go after them big time.
Doug Marcelo: One of the things that we're doing now is called the GAP score, generally available public data, and we go through and look at between nine and 10 different data sources in particular to see how the trucking company is doing in those areas. It's from such things as the accident rating to we have utilized the listing from ATRA, the American Tort Reform Association of Judicial Hellholes. What is your exposure there? Because companies that run in those areas are going to have a greater exposure than other areas. Look at those scores, blend all those together, and based upon that we come up with what we call a GAP score. And the GAP score then is how this trucking company overall across the gamut does, but then it can look down and dive into the individual scores to see where the weakness exists. So for example, we've seen companies that have had a deficient accident score but are doing very well in citations.
And the general read there is, well, they're accidents, but they're not necessarily their fault. Things along those lines. So that's what we look for and to identify so the trucking company can get ahead of it because rarely if ever does a nuclear verdict arise from the facts of the accident itself. You know what detonates it is a systemic failure and as Tim said earlier, yeah, the plaintiff attorneys are out there, they're giving seminars, workshops on what data trucking companies have, how to get it and how to make it admissible in court. Yeah. One of the things we run into, Tim is there are companies out there who say, "Gee, our attorney says we don't want to know this information because if we're in a lawsuit it'd be discoverable." Well, intentional ignorance is isn't a strategy.
Matt Cole: Tim says that on the insurance side of the business, insurers are starting to use Bluewire's GAP score to assess a fleet's risk. We'll hear more on that after a word from 10-44 sponsor Chevron lubricants
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Tim Good: Bluewire's growing. A lot of trucking PCF is involved in a lot of other insurance companies and now the insurance companies themselves are getting into the GAP score as an underwriting tool because it really is, and we try to keep everybody's rates in line, but we also have to realize, and I think the public really needs to realize, as much as they don't like that truck passing them on the highway, they need to be able to learn how to drive with a truck or trailer and understand how they work, that they can't climb a hill, that if there are passing on a hill, you got to be patient. And I think that's just COVID has brought out some of the stress on the road for sure, because some of the things I could tell you would blow your mind that have happened that I would never would've thought in my mind in my career of 40 years.
So trying to add value to trucking companies and then implement it and of course everybody's on a cost basis any way. I guess the long story short of where I'm trying to get to is if the rates go up in trucking, the end consumer is going to wind up paying more money and that's just the bottom line. And so we are doing what we can and Doug's tools make it so much easier for us to at least inform the customer. To make them do it as another thing. But I think, you throw enough mud on the wall and they start seeing all these things happening in your magazine on others, it's a reality and they need to wake up.
Jason Cannon: Now, carriers can work with Bluewire to determine where their individual weaknesses are and determine what they need to do to focus and improve.
Doug Marcelo: Started off, our first product was our motor carrier product, and that was to take a look at an individual carrier in terms of specifics of what they do and what their data looks like. Since then and after that we have gone to what we now call the GAP score, where we score all 760,000 DOT numbers and come up with a score along that way. So what you can do, and the best thing to do is for a carrier, individual motor carrier to take a look at, get their score, sign up, get the motor carrier product, and then what they can do is monitor from month to month how they're doing, progressing, what do they have to do to get those numbers higher? It is almost like a gamification type of thing, but in a very serious way.
What do we have to do on inspections with regard to hours of service, with regard to where we run to get that up, to get that other level. The GAP scores, Tim was saying, where we score the entire industry, that has been exceptionally well received by insurance brokers and agents, by insurers, as Tim said, now jumping on board of it, as well as freight brokers. Because one of the things out there, Matt, is they give a load to somebody and now in the absence of excess insurance, for some folks like Tim was referring to, the plaintiff attorneys are looking towards the brokers now as the next level of insurance.
"You shouldn't have given this load to these folks. Well, what did you do?" "Well, oh, we ran a credit check." Well wait a minute. What does that have to do with safety? So this gives them at least a vetting system to see does this carrier have difficulties or is it somebody that basically looks like they've got a good score that we can justify running with them? A number of the insurance agents, what they're doing is building in the motor carrier product of Bluewire right into when they write the policies for them so that the insurance company and the trucking company can monitor them throughout the year, both to give them an improvement rather than... Tim does periodic updates with his insureds but there's a lot of folks out there that Tim, as you're well aware, 30 days before renewal's, the first time they hear from them. And that's not the way to do it. This gives a read throughout the year as to what to do on that.
Tim Good: It kind of keeps in front of them where they need to get better. Having the agent be able to monitor, can kind of push them along down the road and say, "Hey look, what are you doing with this hours of service? Or what are you doing with your vehicle maintenance? Are you updating your trailers? Maybe you should get rid of the older trailers and get some new trailers." How are you going to address it? It opens up a conversation that gets them thinking about safety.
Matt Cole: Doug says that to really fight back against the reptile theory utilized by plaintiff's attorneys, trucking needs to take a new approach.
Doug Marcelo: Defense seminars have kind of been like needing a fiddle to play in a band in Texas. You couldn't have a trucking defense seminar unless you talk about reptile theory. The problem is it almost exclusively focused on depositions and discovery. "Here's what they're going to try to do to you." And it misses the point. And what the point is this, is the reptile theory in the book itself. I bought it when it came out and I've got a dogeared copy. In fact, I had it with me to do a webinar last week as a prop to show that. But it tells you in there, in fact, they tell the plaintiff attorneys, there's three times, three circumstances that our reptile theory's not going to work. Number one, if you don't have a legitimate claim. If this is just something you're going to throw against the wall, it's not going to work. Now that's incumbent upon us to be aggressive post-accident in what I call the dark period when the plaintiff's running up damages and we're not seeing what's happening and in litigation to get in there to undermine the legitimacy of it.
The second thing is if it's just an accident, because as they say in the book, people can relate to the fact of human frailty, of that we make errors. And the third is it doesn't work if there's nothing there to correct. And that's what gets back to the systemic failure. So if you can be proactive and do these reviews, identify it, use the data such we have a Bluewire to get ahead of this, even if you can't correct it before the accident. But if you say, "Look, we know we're we got it in progress, we don't need a verdict against us on this." Big steps to do that. I feel like I am one of the few, if not lone voice out here saying "We need a strategic response to a strategic attack." Whereas virtually all the other commentary we have on the defense side is about tactical responses and missing the big picture on it.
Jason Cannon: That's it for this week's 10-44. You can read more on ccjdigital.com. While you're there, sign up for our newsletter and stay up to date on the latest in trucking industry news and trends. If you have any questions or feedback, please let us know in the comments below. Don't forget to subscribe and hit the bell for notifications so you can catch us again next week.
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