Dec 31, 1995
Jury verdicts lie at the heart of the current controversy surrounding the civil justice system. Critics of that system cite high-profile jury verdicts as proof that the system is out of control, and reform efforts at both the state and federal levels seek to limit what juries can do. Support for these reforms is far from unanimous; indeed, some argue that the proposed reforms will discourage legitimate claims from being pursued, thus denying individuals redress for harms when other mechanisms have failed.
We know that despite the emphasis on jury verdicts in the policy debate, most civil cases never reach juries. However, even though they are rare, jury verdicts are important. Juries decide cases totaling billions of dollars annually, and jury decisions set standards that influence social behavior. Equally important, jury verdicts influence the behavior of users of the civil justice system by helping to value future disputes and creating legal precedents. This valuation, in turn, affects party claiming and settlement behavior, ultimately affecting the mix of cases that future juries will see and, coming full circle, the outcomes and precedents that will guide system participants in the future.
Trends in Civil Jury Verdicts Since 1985, by Erik Moller, makes an empirical contribution to the policy debate over tort reform. It describes all civil jury verdicts reached from 1985 to 1994 in the state courts of general jurisdiction in 15 jurisdictions across the nation. Table 1 lists these jurisdictions and some of their key characteristics. The jurisdictions constitute a diverse sample of geographical location, population, growth over the past ten years, race, and household income.
To identify trends in jury verdicts from these jurisdictions, Moller uses several descriptive measures: the number of verdicts; case type mix; the percentage of cases in which the plaintiff is successful; award amounts, including typical, maximum, and expected awards; variation in awards; and—because of the special attention being paid to them—trends in the occurrence and size of punitive damage awards.
In the 15 study jurisdictions, trial rates, as measured by the number of verdicts per capita, are generally flat or decreasing. This could reflect stable or decreasing filing rates; it could also reflect an increased tendency to settle rather than try cases. In either event, the number of civil cases reaching verdict is not climbing dramatically. However, urban jurisdictions show higher per capita verdict rates than rural areas.
The same case-mix pattern appears across time in all 15 jurisdictions: Automobile personal injury and landowner liability dominate, followed by medical malpractice, business, and product liability. Although the ordering of case types by frequency is remarkably consistent across the sampled jurisdictions, the relative proportions of cases vary by type among jurisdictions.
Across all cases, plaintiffs win slightly more than half the cases. They are most successful in automobile personal injury and business cases, winning approximately 66 percent of both types of cases. They win least often in medical malpractice and product liability cases, winning only 33 percent of the former and 44 percent of the latter. These patterns do not vary materially across time or jurisdiction.
The study uses several descriptive measures of award amounts, each of which provides different information. The median award—the midpoint of the distribution, where half of the values lie above it and half lie below it—describes the typical award in a given action. The maximum award provides information regarding the potential worst-case scenario for the defendant. The expected award—the average award multiplied by the probability of winning—indicates the statistically likely value of a given class of cases. Variation in awards suggests the amount of uncertainty regarding the outcome of a particular type of case.
The discussion of award amounts focuses on the four numerically dominant case types: automobile personal injury, business, medical malpractice, and landowner liability. Product liability is also included, because of the prominence of product liability awards in the tort reform debate. All award amounts have been adjusted for inflation to 1992 dollars.
The median award varies considerably between jurisdictions, but in most of the jurisdictions examined in this study, it increased between the two time periods, and the increase was often statistically significant. In two jurisdictions—King County (Washington) and St. Charles County (Missouri)—median awards have decreased over time.
Figure 1 illustrates the dominant pattern, showing the median awards across the five case types in Los Angeles County, the largest jurisdiction in the sample. The horizontal lines indicate the overall median awards calculated across all civil verdicts.
Within the jurisdictions sampled, median award amounts differ substantially by case type. Product liability and medical malpractice cases have the highest median awards; automobile personal injury verdicts typically yield the lowest median awards. This pattern is consistent across all the jurisdictions in the sample.
The variation in median awards between case types can be quite dramatic. Within the same jurisdiction, median awards can differ by as much as an order of magnitude. Between jurisdictions, median awards for the same case type can differ by as much as a factor of five.
Increases in median awards also vary by case type. In this sample, median awards in medical malpractice and business verdicts increased most, and those in product liability and automobile personal injury cases increased least; some of the latter even decreased.
Over the entire sample, the highest maximum verdicts were returned in business and product liability actions, and the lowest maximum verdicts were returned in landowner liability and other actions. Among the jurisdictions, the largest maximum verdicts occurred in Los Angeles County and Harris County (Texas), and the smallest occurred in St. Charles County. Maximum award amounts increased in some jurisdictions and decreased in others.
Expected award amounts generally increased in the jurisdictions in the sample, although they vary by jurisdiction and case type. The highest expected awards occurred in Los Angeles County and Kings County (Brooklyn); the lowest, in St. Charles County. By case type, the highest expected awards occurred in business and product liability cases; the lowest, in landowner liability and automobile personal injury cases.
Many observers believe that the range of awards is increasing and fear that this greater variation will fuel litigation. They argue that variation increases the uncertainty about the potential outcome of any given action and that if plaintiffs and defendants are very uncertain about the amount that a successful plaintiff is likely to recover for any given case, they will find it more difficult to reach an agreeable settlement before trial.
Moller used several statistical measures to investigate the assertion of increasing variation in jury awards. The data suggest that the assertion is not uniformly true. Across all jurisdictions, the overall interquartile range (the range between the 25th percentile and the 75th percentile) has increased somewhat, from $243,000 to $385,000; however, within some of the jurisdictions, the overall interquartile range has actually decreased.
Different trends appear within the different case types. For example, in Los Angeles County and Harris County, the interquartile range decreased between 1985-1989 and 1990-1994 in automobile personal injury cases but increased in product liability cases. In Cook County and Manhattan, the range increased in automobile personal injury cases but decreased in product liability cases.
To the extent that litigants and potential litigants use information about award amounts to make strategic decisions, the different measures of awards provide conflicting signals:
Despite the attention they have received from policymakers and from the media, punitive damages are rarely awarded. The rate of such awards in all cases tried to verdict in this sample ranges from 1 percent in Kings and Erie Counties to approximately 7 percent in Harris County.
The policy discussion about punitive damages focuses primarily on product liability, but in the jurisdictions examined, most punitive damages were awarded in intentional tort and business cases. As shown in Figure 2, these two case types accounted for more than 80 percent of all the punitive damage awards in this sample. In contrast, product liability was the underlying cause of action in only 5 percent of the punitive damage awards.
Punitive damages play an important role in business and intentional tort cases. Across all 15 jurisdictions in the sample, from 1985 to 1994, punitive damages were awarded in nearly 20 percent of the verdicts for these case types. Punitive damages were awarded in 2 percent of the product liability verdicts.
Punitive damage award amounts generally increased between 1985-1989 and 1990-1994, although not uniformly across all jurisdictions. Maximum punitive awards, which perhaps have a greater influence on both users of the civil justice system and business decisionmakers, were extremely high in both periods and increased somewhat in the early 1990s, again not uniformly. The largest awards were very large indeed—almost $4 billion in Harris County and over $375 million in Los Angeles County.
Because some punitive damage awards are very large, they represent a large proportion of the total damages awarded—up to half in some jurisdictions. Figure 3 shows punitive damages as a percentage of overall total awards in the four largest jurisdictions in the sample; the figure also illustrates the increase in that proportion over time in three of the jurisdictions.
By describing trends in jury verdicts in 15 diverse jurisdictions, this analysis sheds some empirical light on the policy debate about the civil justice system. However, caution must be used in interpreting these data, for several reasons:
Thus, jury verdict data can provide useful information about the signals that attorneys and potential claimants receive from the civil justice system, but they reveal little of the underlying dynamics of jury behavior.