The One Big Thing
Nuclear verdicts get the headlines. But the real crisis is nuclear settlements, and the data from two major industry sources now makes that impossible to ignore.
Sedgwick’s Summer 2026 liability litigation report, drawn from Sedgwick’s own substantial claims portfolio, found that over the last five years, settlement severity increased at an average annual rate of 12.6%. Verdict severity over the same period? Approximately 3.7%, roughly in line with inflation. Sedgwick’s conclusion: severity escalation “is being driven more by voluntary settlements than by jury verdicts.”
Sedgwick named the phenomenon directly: Nuclear verdicts are “creating what can best be described as ‘nuclear fallout settlements.’” Cases are being priced not by what juries find, but by what carriers and insurers fear juries might do.
Three out of four times the defense took a case to a jury, the jury awarded less than what the carrier had been willing to pay to avoid the trial.
Why It Matters
The trucking industry’s litigation reform efforts have focused almost entirely on nuclear verdicts, and rightly so. But verdicts are the visible tip of the iceberg.
Based on data from the prior Sedgwick report, only 1.8% of trucking cases ever reached a verdict over the prior decade. The 2026 report confirms that decline continued. In calendar year 2025, only 1.25% of bodily injury litigated cases in Sedgwick’s portfolio went to verdict, down from approximately 12% in 2016.
The critical finding from that same prior Sedgwick report was that of the cases which did go to verdict, 75.4% came in below the last settlement offer made before trial. Three out of four times the defense took a case to a jury, the jury awarded less than what the carrier had been willing to pay to avoid the trial.
The ATRI data reinforces this from a different angle. In ATRI’s litigation dataset, approximately 50.3% of cases that settled had awards exceeding $500,000, compared with only 31.5% of cases that went to verdict at that level. Defendants paid at high levels more often in settlement than juries required at trial.
So why are settlements excessive? The market is being priced by fear. And the fear premium is compounding at 12.6% a year.
The Details
The Sedgwick 2026 report identifies four forces creating what it calls a “compressed liability lifecycle,” a system where outcomes are determined before defense strategy is fully formed:
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Earlier attorney representation: 70% of claimants who will ultimately sue have plaintiff counsel within two weeks of first notice of loss, per Sedgwick’s data. Defense evaluation has not begun.
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Third-party litigation funding: Growing 44% annually in auto liability cases since 2022 in Sedgwick’s portfolio. Cases with funding last 9.6 times longer and carry 361% higher total incurred costs than unfunded cases.
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Social inflation: Anchoring strategies previously confined to trial are now embedded in pre-suit demand letters. Non-economic damages are detached from objective injury metrics before discovery opens.
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Procedural pressure: Time-limited demands in auto bodily injury cases have increased from 0.82% of claims in 2021 to 3.5% year-to-date in 2026, a 45% average annual increase in Sedgwick’s data.
The result, in Sedgwick’s own language, “defense decision-making appears to be shaped by fear and distorted perceptions of jury behavior rather than empirical trial outcomes.”
Or, in the words of Meek Mill, “Scared money don’t make no money.”
The Bottom Line
Tort reform is moving, but unevenly. Florida earned an ATRA Judicial Hellhole Point of Light designation. Georgia was removed from the Judicial Hellhole watch list after 2025 reforms. New York enacted sweeping reforms. North Carolina barred litigation funding.
Reform can moderate the environment. But it does not address the settlement decision problem case by case. That requires a different discipline.
