Protecting Yourself From Lawsuits
May 2010, TruckingInfo.com - Feature
New safety initiatives under way at the Federal Motor Carrier Safety Administration will reshape the legal landscape for trucking, say industry lawyers.
New safety regs will change accident litigation.
Lawsuits arising from highway crashes are a major cost driver for trucking companies. A jury award for a worst-case scenario - a fatal accident in which the carrier is at fault, for example - can easily run into multiple millions of dollars, not counting the legal fees. And the cost of insurance to manage that risk is equally daunting. The largest fleets, for example, will carry as much as $100 million in insurance protection, far above the $750,000 federal minimum, says attorney Gregory Feary of the transportation law firm Scopelitis, Garvin, Light, Hansen & Feary.
In the long run, new federal programs such as electronic onboard recorders for carriers that violate the hours of service requirements, the CSA 2010 initiative and pre-employment driver screening will improve that risk management picture.Safer drivers ahead
Lee Piovarcy, an attorney with the firm Martin, Tate, Morrow & Marston, says trucking companies will have no choice but to comply with the rules. "Otherwise, in litigation, they will be asked why they didn't meet these particular standards," he explains. "For those cases where you have, say, 10 criteria, and a driver is deficient in eight of them, more likely than not there's going to be a higher award than if they were deficient in one or two.
"So at the end of the day," he says, "I think you're going to have safer drivers out there, because trucking companies are going to make sure they are safer."
Also, he adds, drivers want their jobs. The way he sees it, once CSA 2010 and driver pre-employment screening are fully implemented, regulatory compliance will become more even throughout the industry and drivers will be less likely to change companies. "They won't have the ability to say, 'You know what, I'm going to leave this big fleet and go to this mom-and-pop trucking company that has 10 trucks,' because those small companies are very aware of CSA 2010. The drivers want a job, and in this job market, as tight as it is, they're going to have to meet those standards."
Feary adds another dimension. Trucking is gradually recovering from a downturn that featured one of the most significant workforce reductions in the industry's history. As the pressure to hire more drivers grows, that demand will encounter the stricter regulatory restrictions on drivers. CSA 2010, he said, will provide insurance companies with more measurement scales for carrier safety performance.
"The insurance industry will create another dynamic associated with CSA 2010, which is, far more than ever before, uninsurable drivers," Feary says. "So you've got this shrinking work force and a recovering economy. I think what you're going to see is a lot more pressure on the recruiting and retention departments of motor carriers and, frankly, freight rates going up."Screening and EOBRs
FMCSA's pre-employment screening program, in which trucking employers will have access to a federal safety database that shows five years of a driver applicant's crash history and three years of his inspection history, will "separate the wheat from the chaff," Feary says.
The effect will be to identify drivers who were previously thought to be eligible but are in fact not eligible, he explains. "And that will on one hand create the shrinking workforce, but will also create a higher quality workforce that arguably is a safer workforce. That driver is more likely to receive good safety information, understand it and put it into practice."
It is hard to predict the overall impact of electronic onboard recorders on the litigation scene, according to Feary. The new rule will require serial violators of the hours of service rules to use recorders. That's only a small number of carriers - fewer than 6,000 - but more and more carriers are adopting the devices voluntarily.
The existence of unequivocal electronic records of driver hours can create more liability claims against carriers, Feary says. "But if you're doing things letter perfect, then all this EOBR does is capture it in a relatively infallible way that can then be the proof used to exonerate you."Litigation trends
The industry's improved safety performance in recent years has been reflected in the litigation arena.
The statistics are noteworthy: The number of people killed in large-truck crashes dropped by 12.3 percent to 4,229 in 2008, and the rate of truck and bus fatalities per 100 million miles dropped from .169 to .152. This improvement can be explained in part by the drop in vehicle miles traveled because of the recession, but it also reflects the possibility that FMCSA regulations are raising the bar.
Both Feary and Piovarcy say they have seen a drop in accident litigation as a result. That does not mean, however, that the amount of awards has declined, Feary notes. "It's fair to say that the improvement in safety over the years, and the expectation of improvement under CSA 2010, will continue to affect the frequency of (accidents) - but in the end, litigation will almost always address the more consequential or catastrophic types of events," he says.
Jim Golden, another attorney with Scopelitis, Garvin, Light, Hansen & Feary, believes the regulations are going to cut two ways. They will be helpful to the companies that are doing a good job on safety, he says. However, "for those who have had a less effective approach to safety, it's going to be really very dangerous in terms of their risk exposure."
Golden adds that the regulations will promote a new concept in litigation he is spearheading in the industry. The Negotiation Counsel method Golden uses (and which we'll explore more in-depth later in this series) is based on actively engaging accident victims who have meritorious claims with an empathetic, conciliatory approach. By settling early and on reasonable terms, he says, carriers can save millions.From the May 2010 issue of Heavy Duty Trucking.