The National Law Journal reported that the total amount awarded by juries last year in the nation’s largest cases declined for the third consecutive year.
Based on analysis of the VerdictSearch Top 100, a ranking of the largest jury verdicts in 2005, the NLJ reveals that juries awarded just $8.2 billion in compensatory and punitive damages in these cases last year, the lowest total since the newspaper began tracking these verdicts in 2001 and a decline of 28 percent from last year’s total.
Punitive damages also continued to decline significantly, in part due to caps that have now been implemented in more than half of the nation’s states.
The total for 2005 contrasted sharply with the $41.4 billion in total verdicts, adjusted for inflation, reported for 2002, the peak total for the past five years.
Punitive awards continued to decrease at a much faster rate than compensatory awards–which, by comparison, have remained relatively constant. In 2005, punitive damages totaled just $3.5 billion, down from the five-year period’s high of $36.0 billion in 2002. The punitive damages portion of total awards over the past five years has also dropped markedly. In 2005, punitives made up 43 percent of the total awards, down from the five-year period average of 59.2 percent and 2002 peak of 87 percent of that year’s total.
“Judicial and legislative efforts to rein in out-of-scale punitive awards appear to be gaining traction, as more states impose caps and plaintiffs lawyers move away from arguing for large punitive damages which they know will be reduced or thrown out,” said Rex Bossert, editor in chief of the NLJ. “In this year’s second-largest case, for example, the trial judge reduced the punitive award by the jury from $700 million to nothing.”
Last year’s largest jury award came in the securities fraud case brought by Coleman, the camping gear company owned by Revlon Chairman Ron Perelman, against Morgan Stanley. In May, a Florida jury awarded Coleman more than $1.44 billion in total damages, including $850 million in punitives. An appeal is pending.
The types of cases that made the Top 100 Verdicts of 2005 varied greatly, from accounting malpractice to workplace safety.
Product liability was the most common cause of action, with 14 cases. Thirteen trials involved motor vehicle cases, 11 involved medical malpractice, nine were breach of contract and seven were intellectual property cases.