Trucking's Deep Pockets
Industry can no longer afford excessive settlements and jury awards.
DEBORAH WHISTLER
EDITOR
Our cover story in October explored one of the biggest problems facing trucking companies today -- the inability to get affordable insurance. It has caused many trucking failures in the past couple of years. On page 19 is a story about how the Morgan Group Inc. was forced to file bankruptcy because it couldn't obtain insurance. Morgan isn't the first to go down because of this, and it won't be the last.
In the October Outlook story, Senior Editor Pat Smith discussed how our litigation-happy society is impacting trucking's insurance costs.
A grievous example is the case where a CFI truck parked on the side of the road was struck from behind by a car carrying two women. Sadly, the automobile passenger was killed. Whose fault? The driver of the car admitted that she and the passenger had been drinking, had been up for an extended period of time and that she had fallen asleep at the wheel. She also admitted she had seen the truck and thought it posed no danger.
Regardless, the passenger's family sued and won an $18 million judgment against CFI.
This accident was in no way the result of any wrongdoing on the part of CFI. But that didn't stop the family from suing, or the jury from awarding this judgment.
Even in the event of accidents where the trucking company shares responsibility, the monetary amounts of jury awards and settlements are questionable.
An example is a recent settlement in California. A motorist suffered major injuries when a loose wheel came off a truck and collided with his pickup truck. The carrier, Allied Systems Ltd., and a tire servicing firm accepted equal responsibility for the accident, which severely impaired 39-year-old Philip Dohrman's vision, caused brain damage and left him unable to work or drive. The two companies settled the suit for $13 million.
Some of the elements in this case that focused blame on the trucking company leave me puzzled. The trucking company was said to be culpable because it failed to properly train the truck driver to inspect the rig's tires and wheels.
All Commercial Drivers License holders are trained and tested to do extensive pre-trip inspections. They are also required by law to perform those inspections before taking a rig on the road.
Another interesting point: It was found that an employee of the tire service company had over-tightened the lug nuts on the wheel and weakened them.
Of course, lawyers didn't go after the truck driver who should have checked the wheels as a matter of course, or the service technician who did a poor job and was ultimately responsible for the wheel coming off. How much money could those two have? Instead, lawyers went for the deep pockets: the trucking company and the tire service company.
Don't get me wrong. I'm not uncaring or unsympathetic to the plight of this victim. It's horrible when someone is killed or injured in any accident, especially one involving a truck. And I believe that companies with poor maintenance and safety practices that lead to an accident must be held accountable.
But I also think the compensation is out of line with the true losses. It has apparently become the unwritten rule that if you are injured in an accident with a commercial vehicle -- no matter who was at fault -- you are entitled to become independently wealthy.
True truck accident victims should be compensated for their losses, but not at levels that exceed their previous earnings by as much as 20 times. And drunks who ram their cars into parked trucks should be the tort lawyers' target.
Public education is an important component in any move toward tort reform. Media coverage of corporate excesses has persuaded Joe-Blow Public that most businesses are rolling in dough. Juries don't realize that their multimillion-dollar judgments could force a company to close its doors, putting hundreds -- sometimes thousands -- of people out of work.
They need to recognize the true price of these excessive awards and settlements. Freight rates will have to skyrocket to keep trucks on the road. Everything will cost more.
It's in all our best interest to push for reforms that will reduce accident awards to a reasonable level. It should be at the top of the truck lobby agenda.
