The ultimate verdict just isn’t essentially the tip of an insurance coverage dispute. That’s precisely what we’re seeing now after the jury returned a really giant enterprise interruption verdict in extra of $80 million in opposition to the insurers within the JW Aluminum case. The insurers have filed post-trial motions asking the court docket to put aside the decision, order a brand new trial, or considerably cut back the judgment. 1
This isn’t uncommon. In truth, it’s virtually computerized after a big policyholder win.
The insurers’ major argument is easy: the jury acquired it improper. They declare that no cheap jury may have reached this verdict based mostly on the proof. Based on the insurers, the enterprise interruption damages had been speculative, untethered from actuality, and pushed extra by emotion than proof. They argue that the policyholder failed to determine that it may legally function its tools in the course of the claimed loss interval and did not show misplaced earnings with the extent of certainty the regulation requires.
In different phrases, the insurers are saying the jury ought to by no means have been allowed to award what it did, and the decide ought to now step in and repair it.
The insurers additionally assault the authorized framework the jury was given. They argue that the court docket utilized the improper authorized requirements, significantly regarding alternative price protection and the so-called prevention doctrine. Based on the insurers, the jury was requested the improper questions and allowed to search out legal responsibility with out the required findings, equivalent to intent. They are saying these errors alone justify a brand new trial or an amended judgment.
There may be additionally a well-known subtext operating by the motions: the decision was too massive to be proper. The insurers level to the dimensions of the award as proof that keenness, prejudice, or sympathy influenced the jury. That theme exhibits up often in post-trial motions after a policyholder wins a big case. Juries are accused of punishing insurers slightly than making use of the regulation, and judges are urged to step in because the final line of protection.
None of this could shock anybody who has tried giant insurance coverage circumstances. Nonetheless, I typically assume individuals fail to say that post-trial motions after which appeals happen most of the time when the result’s a big fee.
Publish-trial motions like these are normal working process. Insurers can be criticized internally if they didn’t file them. Someone has to clarify why the loss occurred. Even when the probabilities of success are slim, these motions protect points for attraction and typically persuade trial judges to trim verdicts or order new trials.
What occurs subsequent can also be predictable. The trial decide will rule on the motions. If the decision survives intact or largely intact, an attraction is nearly sure. Appeals are widespread after giant verdicts. Insurers typically consider appellate courts will probably be extra receptive to technical arguments about proof, jury directions, and damages methodology.
For policyholders, this part requires endurance. A jury verdict is a serious milestone, however it’s hardly ever the tip of the highway. Publish-trial motions and appeals are a part of the terrain, significantly when enterprise interruption losses attain 9 figures.
The actual lesson just isn’t that the decision is fragile, however that insurers battle hardest when the stakes are highest. Large verdicts invite massive authorized battles. That isn’t a flaw within the system. It’s merely how insurance coverage litigation works.
I beforehand wrote about a big verdict being overturned earlier this 12 months in When the Jury’s Phrase Doesn’t Stand: Trial Courtroom Overturns Brotherhood Mutual Dangerous Religion Verdict. So, one can not simply say that insurance coverage firms at all times lose these motions and are submitting them for delay.
I’ll maintain readers abreast of developments on this case and supply a extra detailed dialogue of the problems offered on this fire-related enterprise interruption lawsuit.
Thought For The Day
“The arc of the ethical universe is lengthy, however it bends towards justice.”
— Martin Luther King Jr.
1 JW Aluminum Co. v. ACE American Ins. Co.No. 2:21-CV-1034 (D. S.C.) (See, Defendants’ Rule 59 Movement for a New Trial or to Amend the Judgment Relating to the Prevention Doctrine and Award of Alternative Value Worthand Defendants’ Movement for Judgment However the Verdict on Plaintiff’s Solid Coil Declare).
