In this episode of the Private Client Risk and Resilience podcast, host Kurt Thoennessen discusses social inflation, nuclear verdicts, and their impact on the private client space. He is joined by special guest Chris Schon, a partner at the law firm Tyson and Mendes in San Diego, California.

Chris explains that social inflation refers to factors outside of traditional economic inflation that are causing the costs of insurance to rise. He emphasizes that the number one driver of nuclear verdicts is anger, which often results from anti-corporate sentiment and the perception that big corporations should be held accountable. Factors contributing to social inflation include:

1. Litigation Funding: Private equity firms and investors are funding personal injury cases, allowing them to drag on and increase costs. These funding companies take significant risks, but they receive substantial payouts when cases win.
2. Increased Medical Costs: Some doctors and medical providers treat patients on a lien and charge significantly higher rates for their services when treating personal injury cases compared to regular health insurance rates.
3. Attorney Advertising: Plaintiff attorneys are skilled at publicizing their settlements and verdicts, sharing their strategies and techniques within the plaintiff bar, which creates a more unified approaches to securing higher settlements.

The discussion also covers strategies for mitigating nuclear verdicts, including accepting responsibility, personalizing corporate clients or individuals, arguing pain and suffering, and demonstrating empathy to jurors.

Towards the end of the episode, they highlight the importance of considering higher policy limits, especially in states and regions with a greater risk of nuclear verdicts.

The episode provides valuable insights into the complex factors contributing to social inflation and nuclear verdicts in the private client space and offers practical advice for risk mitigation.

Resources:
https://www.tysonmendes.com/
https://www.tysonmendes.com/attorneys/christopher-schon/
https://www.tysonmendes.com/nuclear-verdicts/