The ultimate verdict shouldn’t be essentially the top 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 towards the insurers within the JW Aluminum case. The insurers have filed post-trial motions asking the courtroom to put aside the decision, order a brand new trial, or considerably scale back the judgment. 1
This isn’t uncommon. In actual fact, it’s nearly computerized after a big policyholder win.
The insurers’ major argument is straightforward: the jury acquired it incorrect. They declare that no affordable jury might have reached this verdict primarily based on the proof. In accordance with 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 ascertain that it might legally function its tools through the claimed loss interval and didn’t show misplaced earnings with the extent of certainty the legislation 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 choose ought to now step in and repair it.
The insurers additionally assault the authorized framework the jury was given. They argue that the courtroom utilized the incorrect authorized requirements, significantly regarding substitute price protection and the so-called prevention doctrine. In accordance with the insurers, the jury was requested the incorrect questions and allowed to search out legal responsibility with out the required findings, similar 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 via the motions: the decision was too large to be proper. The insurers level to the dimensions of the award as proof that keenness, prejudice, or sympathy influenced the jury. That theme reveals up ceaselessly in post-trial motions after a policyholder wins a big case. Juries are accused of punishing insurers quite than making use of the legislation, 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 folks fail to say that post-trial motions after which appeals happen most of the time when the result’s a big fee.
Put up-trial motions like these are customary working process. Insurers could be criticized internally if they didn’t file them. Any individual has to elucidate why the loss occurred. Even when the possibilities of success are slim, these motions protect points for enchantment and typically persuade trial judges to trim verdicts or order new trials.
What occurs subsequent can be predictable. The trial choose will rule on the motions. If the decision survives intact or largely intact, an enchantment is sort of sure. Appeals are widespread after giant verdicts. Insurers typically imagine appellate courts will likely be extra receptive to technical arguments about proof, jury directions, and damages methodology.
For policyholders, this section requires persistence. A jury verdict is a significant milestone, however it’s not often the top of the highway. Put up-trial motions and appeals are a part of the terrain, significantly when enterprise interruption losses attain 9 figures.
The true lesson shouldn’t be that the decision is fragile, however that insurers struggle hardest when the stakes are highest. Massive verdicts invite large authorized battles. That’s not 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’t 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 introduced on this fire-related enterprise interruption lawsuit.
Thought For The Day
“The arc of the ethical universe is lengthy, but it surely 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 Concerning the Prevention Doctrine and Award of Substitute Price Worth, and Defendants’ Movement for Judgment However the Verdict on Plaintiff’s Solid Coil Declare).