If you are unfamiliar with the term SOCIAL INFATION, it is an industry term that is used to explain the correlation between insurers claims costs and the general economic inflation of the economy. It is usually used to describe the excess amounts that are paid out in claims due to societal indifferences on who absorbs the cost of the claim. SOCIAL INFLATION is one of the leading causes of excessive verdicts across the country, which in turn leads to increased premiums for consumers. From 2015 – 2020, the cost of a jury award over $10 million, increased by 35%, from $20 million to $27 million. From attorney tactics to corporate accountability, there are four major trends that are impacting bodily injury cases in the foreseeable future.
- Advertising — Attorneys are spending about $1 billion for 15 million advertisements per year in both digital and offline channels.8 In addition to bringing in more plaintiffs, these ads also have the potential to influence jury pools.
- “Venue shopping” — Using analytics to determine the locations and judges with a track record favoring more generous awards.
- Emotional appeals — Attorneys have moved beyond appeals for sympathy to stoking anger at corporate defendants by appealing to the part of the brain that prioritizes safety and survival.
- Repositioning medical results — Emphasizing results such as diagnostic imaging to focus on the worst-case scenario, often with the intent to demonstrate a need for additional procedures or even lifelong care.
Fueling even more of this activity is the growing litigation funding investment market, in which a third-party invests in specific cases, even plaintiff attorneys find too tenuous to take on, for a contingency fee. In return, the investors receive a cut of any award. This industry was valued at around $12.2 billion in 2021 and is projected to reach $25.8 billion by 2030.