Consulting firm Sedgwick stated in a May 31 report that plaintiffs' attorneys use a technique called "anchoring" to secure larger verdicts, which drives up the cost of car insurance for policyholders.
According to the report, anchoring is a "cognitive bias technique" where a plaintiff attorney suggests a large monetary amount that becomes "anchored" in jurors’ minds as a reference point for evaluating damages. The tactic "has proven to be extremely effective in juries returning multi-million-dollar verdicts in cases that otherwise might have been valued at a more reasonable amount." Anchoring is contributing to the prevalence of nuclear and thermonuclear verdicts, or verdicts larger than $10 million and $100 million, respectively. "Unsurprisingly, nuclear and thermonuclear verdicts continue to be significant aspects of social inflation," the report said. Even as general economic inflation rises, the cost of claims continues to outpace overall inflation.
A report from Marathon Strategies found that in 2023, Georgia saw $376,927,587 in nuclear verdicts, marking the ninth largest sum in the nation. According to Marathon Strategies, Georgia also ranked ninth for the largest sum of nuclear verdicts between 2009 and 2023, with 34 verdicts totaling $4.8 billion. The report noted that states implementing tort reform measures, such as Florida, are seeing a decrease in nuclear verdicts. Florida’s recent tort reforms have included eliminating attorney’s fee multipliers, standardizing the calculation of damages in personal injury and wrongful death cases, and shortening the statute of limitations to two years for general negligence cases.
In August, Georgia Governor Brian Kemp called for tort reform to be a priority of his state legislature. WABE reported Kemp saying that excessive lawsuits are driving up insurance costs in Georgia. He stated that rising car insurance rates are one result of these excessive lawsuits. Georgia has some of the highest car insurance costs in the country. "The laws on our books make it too easy to bring frivolous lawsuits against Georgia business owners which drive up the price of insurance and stop new, good-paying jobs from ever coming to communities that need them the most," Kemp said to the Georgia Chamber of Commerce.
Sedgwick utilizes proprietary technology and industry data to provide insights and business solutions, according to the company’s website.