COVID-19 claims are here, and they will multiply exponentially. Less than two weeks into the first state-wide quarantines, we began to see ads for plaintiff counsel declaring themselves coronavirus infection attorneys. Aging services have been an early target for both direct and indirect COVID-19 claims, and now healthcare facilities of all varieties are being targeted. Thousands of claims for business interruption are being filed and denied, and the coverage wars are underway. But the broader and deeper challenge is that the resulting economic, social and political ramifications could well alter the risk profile of nearly every lawsuit, even those without direct (or indirect) COVID-19 related claims or defenses.
Macro crises change a society’s understanding of what threats exist to the collective safety of its members. As mentioned above, this results in cultural changes which can radically alter the risk profile of any lawsuit that goes before a jury because jurors look for stories emerging from the crisis in the fact patterns they are asked to consider. It is the job of litigation risk managers, trial counsel and claims professionals to understand and predict the impact of crises on juror decisions. That has always been a tall order but predicting the COVID-19 impact on litigation is an altogether different challenge. No one has seen anything like this, but history can be a guide.
From the Anti-Litigation Era to the Anti-Corporate Era
Twenty years ago, the tort reform political movement was at its peak; and it was common to hear mock jurors express anti-litigation sentiments. Many jurors openly shared concerns that the country was being overwhelmed with frivolous lawsuits and that out-of-control damages awards were harming the economy and raising insurance premiums. In the last ten years, however, these juror sentiments have not only waned, they have been displaced by strong anti-corporate beliefs.
It is true that anti-corporate feelings have always existed; but in the first decade of this century, our research revealed only temporary spikes in anti-executive sentiments on the heels of major corporate scandals, such as Waste Management, Enron, Tyco and Bernie Madoff. With each scandal, we would hear jurors voice complaints such as “corrupt executives are out to steal America blind.” But then these sentiments would die down, and we would see a return to baseline.
The 2008 Financial Crisis: The Underlying Cause of Social Inflation and Nuclear Verdicts
In the fall of 2008, the largest economic crisis since the Great Depression hit. By 2009, the flood of stories of billion-dollar corporate bailouts stood in stark contrast to the lack of safety nets being provided to working-class America. For many Americans, the story of the 2008 financial crisis was simple – Wall Street had been bailed out and Main Street had been abandoned.
In the years that followed, the market bounced back and progressed through its longest expansion in history. Meanwhile, employment rates and hourly wages remained stagnant. As the middle class shrank, we heard jurors talk more and more about the “Two Americas…one for the elite and one for the rest of us.” We continued to observe the trend away from juror concerns over the harm of frivolous lawsuits and toward the threats of corrupt executives and unbridled corporate influence and power. The culture eventually shifted so strongly that large corporations were being demonized as a group with each being treated as “guilty unless proven innocent.” Verdicts became nuclear because anti-corporate beliefs had become the norm, and the pervasive loss of trust was being reflected in the deliberation room.
Then and Now
Prior to the current Coronavirus pandemic, the hottest topic at litigation and risk management conferences was the concept of social inflation – a sociological term used to describe a multifaceted trend toward the deterioration of tort reform, increased litigation, more plaintiff-favorable judicial rulings, “nuclear” verdicts and the onset of the once unthinkable phenomenon of litigation financing. In many ways, social inflation and the resulting tide of outsized verdicts have been the result of a decade of pervasive anti-corporate attitudes, general pessimism and tribal politics activated and accelerated by the 2008 financial collapse. Which way will the tide turn post COVID-19?
Story is at the heart of every jury decision because story is essential to how humans receive, store, recall and process information. If you’ve ever found your mind wandering while someone is speaking at length without an identifiable point, you understand the importance of story to the art of persuasion. Perhaps most importantly, story is how we all come to evaluate the choices and conduct of others. Are a person’s choices being driven by selfishness or sacrifice? Are their plans clever or crooked? Were their behaviors understandable or careless? Jurors don’t always understand all the facts, demonstratives, experts, etc., so they construct the answers to these questions in the context of a narrative.
Villains are shown no mercy. Victims must be rescued. Heroes get the key to the city.
Jurors’ pre-formed assumptions regarding any party’s moral character are what actually determine who must carry the burden of proof. New crises can alter old assumptions. During the last century, the American CEO was cast as the hero. Since 2008, executives are first treated with suspicion by jurors and must prove that they are “one of the good ones.” The impact of the COVID-19 pandemic on any particular area of litigation will be a function of which groups emerge from the crisis as heroes and which emerge as villains.
The narratives that will determine juror attitudes for the next decade are already emerging.
The first responders, medical professionals and essential workers are the heroes of today’s crisis. Parties to a lawsuit who are essential workers will more likely be given the benefit of the doubt in a lawsuit than they were just a few months ago. Stories of essential workers being unable to quarantine while the elite experience the pandemic as a “staycation” are being published daily. There will be both a short- and long-term impact on any matter involving wealthy individuals.
As of the writing of this piece, 14.7 percent of the workforce is unemployed. Verdicts in employment litigation hinge on whether jurors can best see themselves in the shoes of the employee or the employer. The impact of having one in every seven employable people having experienced the stress, trauma and struggles of unwanted unemployment cannot be underestimated.
Social and traditional media are being flooded with stories of employers who have taken extraordinary measures to protect their employees. However, we are also seeing stories of employers who threaten workers with firing if they don’t work longer hours and in the absence of personal protection equipment (PPE). How the owners of small and mid-sized companies as a group will be cast remains to be seen.
Stories of healthcare workers risking their lives as they continue to serve despite lacking adequate PPE also abound. The gratitude of the nation is so strong that doctors and nurses in medical malpractice suits are more likely to be viewed favorably even in non-COVID-19 related cases. Meanwhile, stories of incompetence, corruption and fraud underlying the lack of medical supplies and infectious disease readiness could result in the broad demonizing of healthcare administrators.
Historically, in nursing home litigation, it has been common for jurors to express a belief that the wage-and-hour staff were likely undertrained, under skilled and perhaps even morally suspect. We expect that the current stories of the sacrifice and heroism of aging services staff and medical professionals could change these assumptions radically, and thus change the risk profile for aging services claims, even if no COVID-19 relevant facts or claims are present. At the same time, any aging services facility that can be painted as having been unprepared for even a normal flu season may become a flashpoint for juror outrage.
The failure of both scientific experts and political leaders to either see this coming or agree what should be done has caused national fury. Even the most basic questions, such as whether or not it is helpful or harmful to wear masks, seem to be beyond anyone in authority’s ability to answer with any certainty. These experiences could take a devastating toll on jurors’ trust in the opinions of expert witnesses in general. Any litigation that is relying heavily upon the testimony of a scientific expert or government agency standards to “win the day” must be reassessed.
As the country shifts from quarantine to rebuilding, our attention will increasingly be turned toward finding someone to blame. The real stories of corruption, fraud, incompetence and collusion are coming; and any litigation involving claims reminiscent of these stories could become a target for juror anger and frustration.
Will the 2020 COVID-19 pandemic alter the trajectory of social inflation?
A likely short-term impact of the pandemic will be increased volatility and uncertainty in jury verdicts. We expect more defense verdicts as jurors become more forgiving of those they believe were victims of circumstance (like themselves). We also expect more understanding of those they see as having been part of the heroic efforts to save lives and keep the economy running. With that said, we also foresee larger verdicts as jurors look to punish even more severely anyone who failed in a duty to prepare and protect others.
The challenge for risk managers, litigators and claims professionals is to not wait to begin modifying their traditional approach to assessing risk, but instead to begin to incorporate the new narratives as the crisis unfolds. While it is too early to make concrete predictions as to how this crisis will alter the litigation landscape as a whole, we do know the new narratives that are emerging will play a part in determining the ultimate impact. It took the litigation industry years to fully realize that the litigation landscape had been altered by the 2008 financial crisis. If we react quickly while applying the lessons of the past, it doesn’t have to take as long this time.
ABOUT THE AUTHORS
Adam Boesen and Dr. Julie Boesen are founding partners and litigation strategists at Boesen Litigation Consulting, a national trial consulting firm providing a complete menu of litigation and jury consulting services including case assessment, theme development, targeted messaging, witness preparedness, research trials and focus groups, jury selection and trial monitoring.
Mr. Boesen has been a senior advisor on over a thousand cases covering the range of civil and white-collar criminal claims in venues across the United States. Adam specializes in the “story model” of jury persuasion which focuses on how jurors construct narrative frameworks to help them receive and process large amounts of information, evaluate the credibility of witnesses, and determine which evidence will be most central to their ultimate verdict. His unique ability to understand a case from the jury’s perspective makes him an invaluable part of a trial team, especially when dealing with very complex or highly emotional subject matter. Mr. Boesen applies this specialty toward communication training for deposition and trial testimony as well as for negotiations and mediation. His ability to prepare individuals to fulfill their role in communicating themes and issues has allowed Adam to consistently transform even the most challenging witnesses and corporate representatives.
Dr. Boesen is both a litigation consultant and licensed psychologist. She has advised on hundreds of cases covering the range of civil claims in venues across the United States. She has spent the last 10+ years consulting on legal matters while also evaluating individuals for brain injury, neurodegenerative disorders and major mental illness. Her clinical experience and heightened behavioral observational skills make her uniquely qualified for jury selection and witness preparedness training, both her specialty areas. Dr. Boesen also specializes in working on cases with highly emotional components.