Nuclear verdicts, tort liability, and legislative responses

The size of punitive damage awards has grown considerably over the years, giving rise to what has been termed “nuclear verdicts.” Such large dollar verdicts can have several adverse effects on companies, such as limited innovation, high out-of-pocket claims-related expenses, increased insurance premiums, and bankruptcy in severe cases. This article reviews the growth of nuclear verdicts, examines the details of some key cases that have resulted in large damage awards, and identifies some reasons for these verdicts. The impact of nuclear verdicts and the actions that are being taken to mitigate such verdicts, with a focus on legal strategies and state legislative activity, are also discussed.