New Sedgwick report explores liability litigation landscape

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Sedgwick Claims Management Services, Inc.

May 31, 2024, 11:31 ET

Top issues of 2024 linger from prior years

MEMPHIS, Tenn., May 31, 2024 /PRNewswire/ -- Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, has issued a new report analyzing the latest trends and practices in liability claims litigation. As the report notes, the challenging legal landscape continues to evolve but many of the complexities from the past few years remain areas of concern in 2024.

"From a litigation management perspective, the best avoidance and mitigation strategies start on day one of a claim assignment with the completion of a high-quality investigation," said Steve Ellis, VP, Liability Practice at Sedgwick. "The first two weeks after a claim is initiated represent a window of opportunity to impact the outcome by making timely contacts, taking detailed statements, and assessing damage and injuries as quickly as possible."

Liability litigation report highlights

Florida tort reform revisited: It has been a year since the passage of HB 837 in Florida, and Sedgwick's experts expect continued impacts through 2024. There was a rush to the courthouse to avoid the impact of HB 837 in March 2023, which shattered the previous monthly record for lawsuits set in May 2021. Statewide, 280,122 new cases were filed in March 2023, representing a 127% increase over the prior record.
Litigation conditions: The attorney representation rate has been increasing over the last five years. Industry data also indicates a continued rise in liability litigation. At the same time, the average cost of new litigated auto bodily injury claims has grown by 64% since 2019, significantly outpacing the rate of inflation.
Third-party litigation funding (TPLF): According to a U.S. Government Accountability Office report, the current practice of TPLF gained a stronger foothold in 2010 and has grown quickly due to lack of regulation. However, this is likely to change as TPLF is coming under more scrutiny by the judicial system and state legislatures due to concerns surrounding national security threats and ethical implications.
Plaintiff bar tactics: The well-organized plaintiff's bar is evolving its strategies aimed at inflaming juries to maximize results. They have created podcasts, webinars, seminars and even developed university-like training institutes — going so far as to refer to undergraduate and graduate content.
The tort tax: The significant financial impact of litigation can be challenging for the average person to grasp. One attempt to make it easier to understand is the concept of the "tort tax," which is purported to be the increased costs that excessive litigation has added to everyday purchases, such as gas and groceries.
Data science and artificial intelligence (AI): The plaintiff's bar is now heavily utilizing data in their evaluation of lawsuits, jurisdictional tendencies and outcomes. As an industry leader in data-driven claims solutions, Sedgwick uses a proprietary, complex AI-powered algorithm to extensively search litigation histories and determine, based on litigated claim outcomes, the effectiveness of the outside counsel charged with managing litigation on behalf of the company and our clients. Its attorney scorecard identifies firm performance based on previous lawsuits. Sedgwick's data analytics team designed the program to offer an apples-to-apples comparison of litigation outcomes when sorted by severity of injury, jurisdiction and head-to-head matchups of defense and plaintiff counsel.

"To stay ahead in the fast-changing world of litigation, sophisticated defendants need to leverage data and predictive analytics. Attorney scorecards are particularly useful for providing insight into performance within a jurisdiction and head-to-head matchups of plaintiff versus defense attorneys," said Max Koonce, Chief Claims Officer at Sedgwick. "This type of data can also help identify which cases are likely to turn into large jury verdicts and should be targeted for settlement. As data volume grows, companies that implement solutions to better understand and manage their litigation have an opportunity to outpace their competition."

To download the "Liability litigation observations and trends 2024" report, visit the Sedgwick website.

About Sedgwick
Sedgwick is a leading global provider of claims management, loss adjusting and technology-enabled business solutions. The company provides a broad range of resources tailored to clients' specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick's majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.

SOURCE Sedgwick Claims Management Services, Inc.