The ultimate verdict just isn’t 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 court docket to put aside the decision, order a brand new trial, or considerably scale back the judgment. 1
This isn’t uncommon. In reality, it’s nearly automated after a big policyholder win.
The insurers’ major argument is straightforward: the jury received it unsuitable. They declare that no cheap jury might have reached this verdict based mostly on the proof. In response to the insurers, the enterprise interruption damages have been speculative, untethered from actuality, and pushed extra by emotion than proof. They argue that the policyholder failed to determine that it might legally function its tools in the course of the claimed loss interval and did not show misplaced income 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 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 unsuitable authorized requirements, significantly regarding substitute value protection and the so-called prevention doctrine. In response to the insurers, the jury was requested the unsuitable questions and allowed to search out legal responsibility with out the required findings, reminiscent of intent. They are saying these errors alone justify a brand new trial or an amended judgment.
There’s additionally a well-recognized 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 zeal, prejudice, or sympathy influenced the jury. That theme reveals up steadily in post-trial motions after a policyholder wins a big case. Juries are accused of punishing insurers somewhat 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 generally suppose 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 can be criticized internally if they didn’t file them. Someone has to clarify why the loss occurred. Even when the possibilities of success are slim, these motions protect points for enchantment and generally persuade trial judges to trim verdicts or order new trials.
What occurs subsequent can be predictable. The trial decide 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 usually imagine appellate courts will likely be extra receptive to technical arguments about proof, jury directions, and damages methodology.
For policyholders, this section requires endurance. A jury verdict is a significant milestone, however it’s hardly ever the top of the street. Put up-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. Huge 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 yr in When the Jury’s Phrase Doesn’t Stand: Trial Court docket Overturns Brotherhood Mutual Unhealthy Religion Verdict. So, one can’t simply say that insurance coverage firms all the time lose these motions and are submitting them for delay.
I’ll preserve 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 Substitute Value Worth, and Defendants’ Movement for Judgment However the Verdict on Plaintiff’s Solid Coil Declare).