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Trucking accidents and insurance – longer term implications of the current credit crisis

As a truck accident trial lawyer, I’m neither an economist nor an investment guru. However, I have ridden through a few economic cycles during my career.

Earlier I wrote about some of the short term implications of the current Wall Street debacles on trucking and insurance. I expect to see more corner cutting on trucking safety as companies deal with high fuel costs, more truckers failing to renew insurance policies above the minimum required by law, more small trucking companies failing, more consolidation in the trucking industry, and more insurance companies blaming trial lawyers and claimants for premium increases that really result from their investment losses.

As a result, we will probably see more bad truck accidents, more liability claims, more lawsuits, and as insurers try to avoid paying claims that they should settle, more substantial jury verdicts.

Some marginal insurers and self-insured trucking companies may go under, leaving claimants without recourse, as happened in the notorious Builders Transport bankruptcy a number in the early nineties. We lawyers who handle trucking cases will need to evaluate solvency of insurers more closely, as well as liability and damages, in screening cases.

That’s the short term — the next 3 to 5 years. But what will be the long-term effect over the next 8 to 10 years?

Consolidation of the trucking industry may result in more systematic safety management. While there are exceptions, larger trucking companies are able to have more professional management, screen their drivers, and supervise their fleets more competently with trained safety and risk managers, better technology, and satellite communications systems to monitor and manage drivers. That’s not to say they are angels. They also have greater capacity for sophisticated mischief. Smaller trucking companies often lack sophisticated management, are more likely to hire marginal drivers, and are more prone to purchase minimum limits of insurance from shadier than average insurance companies.

Insurance coverage amounts may go up. Larger trucking companies have more to lose, and therefore typically carry more insurance than smaller trucking companies. Maybe it’s mere wishful thinking, but perhaps there could even be an increase in the required minimum amounts of coverage to keep up with inflation and a tightening of criteria for self-insurance in the trucking industry.

Consolidation of inter-modal freight companies, combining rail and truck transport of containerized freight, will expand. They may maintain the appearance of separate entities to shield against liability.

There will be increased use of tandem trailers. Longer and heavier tractor-trailer combinations will almost certainly have adverse effects on highway safety.

The shortage of qualified truck drivers as Boomers reach retirement age will lead to hiring of more immigrant truck drivers and further relaxing of English language competency requirements. That has negative safety implications. Also look for revival of the proposal to open the US to Mexican trucking companies.

The defense of trucking accident cases will become even tougher. All large trucking companies deploy “rapid response teams” immediately after serious accidents, often arriving before the debris is cleared. Their skill in securing favorable evidence and “losing” bad evidence is amazing. With consolidation of the industry, I expect their ability to control evidence while victims are still in the emergency room will become even more pronounced.

Ken Shigley has served as chair of the Southeastern Motor Carrier Litigation Institute, co-sponsored by the Georgia, Alabama, Tennessee and North Carolina Trial Lawyers Associations. He is on the National Advisory Board for the Association of Interstate Trucking Lawyers of America, and is actively involved in the Interstate Trucking Litigation Group of the American Association for Justice. A member of the Million Dollar Advocates Forum, he has successfully tried trucking accident cases to multimillion dollar verdict. He has lectured on trucking litigation topics at continuing legal education programs both at home in Georgia and in Nashville, New Orleans and St. Louis, and is scheduled to do so in Chicago this fall. A Certified Civil Trial Advocate of the National Board of Trial Advocacy, he is also a Master of the Lamar Inn of Court at Emory Law School, a faculty member for ten years at the Emory University Law School Trial Techniques Program, and was recently elected Secretary of the 39,000 member State Bar of Georgia.