Limit legal risks; prepare early

Trucking companies and the trucks they operate are held in low esteem by the public and by juries in particular, because of bad public relations, Joseph Farris told the annual meeting of the Refrigerated Division of the Truckload Carriers Association. He lumped trucking into the same public opinion category with lawyers, used car salesmen, and politicians.

Those other groups deserve their reputation, especially used car salesmen and politicians, unlike lawyers and truckers, he said. Farris is managing partner of the Tulsa, Oklahoma, law firm of Feldman, Franden, Woodard, Farris & Boudreau. The Refrigerated Division met at Dana Point, California, on July 13 to 15, 2005. Farris said he could prove his practice makes him a glutton for punishment. “I represent trucking firms, and I defend lawyers against legal malpractice suits,” he said.

Plaintiff's lawyers who advertise so aggressively for the opportunity to sue trucking companies do so for a simple reason. “Big trucks equal big bucks,” Farris said.

Joking aside, trucking companies are easy targets, he said. In fact, trucking may be the best target of all for a plaintiff's attorney's purposes. One reason for this is high minimum liability limits, at least $1 million in all states. Those liability limits tell lawyers that collection of any judgment against a trucking company will be easy to collect. Another reason is that trucking firms are accustomed to being sued. Both trucking owners and the legal professionals who represent them know that trucking is an easy target.

Easy collection targets

“A claim against a trucking company is probably worth one-third to one-half more to a plaintiff just because a truck was involved in an accident,” Farris said. “Those of us who have practiced law for a while know the difference between a judgment and actually collecting money. Today, I've got a $1-million judgment against a guy who shot at one of my clients. I'd sell that judgment to anyone in this room right now for $100.”

Collecting against trucking companies is not a problem for plaintiff's attorneys. They know that trucking companies have at least $1 million and probably a whole lot more than that as a result of excess coverages, Farris said. In addition, trucking company owners may have money of their own. “Finally, plaintiff's lawyers advertise aggressively against trucking companies, because they know that the public doesn't have a high opinion of trucking and that it is fairly easy to take advantage of that opinion,” he said.

Another reason for suits against trucking companies is that trucks are anonymous to the public. They are large and threatening to the public — machines, not people, Farris said. “We've all seen the trucks with the huge teeth set into the radiator grille,” he said. “My nightmare is defending a driver with those teeth on the truck. The driver may be the best in the business with an absolutely spotless record, but Exhibit A for the plaintiff will be a larger-than-life, dead-front image of the truck with those teeth.”

The public has a right to be frightened of trucks, Farris said. In fact, they should be afraid of trucks, not because of malice by trucking companies or unsafe operation by drivers, but because trucks are large, heavy, and difficult to control under extreme conditions. “In spite of that well-founded fear, we all see automobile drivers pull in front of trucks,” he said. “That is totally inconsistent behavior combining fear of trucks without a corresponding level of respect for the potential results of a crash.”

Regulations provide ammunition

In one sense, the trucking industry provides the ammunition personal injury lawyers need to make their cases, Farris said. The industry, in cooperation with government, has extremely conservative rules for operation, including hours of service. In general, truckers try to abide by the regulations, but plaintiff's attorneys use the regulations to nail trucking companies when they can find a violation of the rules.

The same principle applies to driver training and safety programs. Do not assume that training and safety are mere formalities, Farris said. Following an accident, the company safety director will be the first official called in for a deposition when the driver is finished. The only real protection against this is a real safety director with real authority, he said.

Many fleet managers understand that insurance companies provide legal representation when carriers are sued. They do not always understand that they can pick their own lawyer, Farris said. Simply accepting the lawyer supplied by the insurance company is not always a good idea. Carriers should know who the insurance company plans to assign to them, and carriers should establish a relationship with the attorney — hopefully before any suit ever is filed.

Perhaps the most important part of working with a lawyer from an insurance company is remembering that the carrier is the client, not the insurance company, Farris said. The lawyer must act for the client, not for the company paying the bills. When the legal claim involves an accident, early settlement often is in the best interest of the motor carrier, although the insurance company may object to settling. The interests of the trucking company are not always the same as the insurance company providing coverage, he said.

“The ethical duties of a lawyer must be to the client not the customer — the trucking companies in this case, not the insurance company,” Farris said. “To be sure, the insurance company may have picked the lawyer and is writing the checks to pay the bills. The lawyer's dilemma is deciding which party to respond to. That's an easy answer; the lawyer must respond to the primary client — the trucking company. Unfortunately, I have seen instances where lawyers have told insurance companies about facts that seem to implicate the trucking company, causing trouble for the company over its insurance coverage. That's absolutely wrong. To protect against this sort of action, trucking companies must find out which lawyer they have been assigned and meet with that lawyer to ensure a complete understanding of who the client is.”

Use accident reconstruction

One of the first things a motor carrier should do in response to an accident is to send an accident reconstructionist to the scene, Farris said. “I'm part of a national team of lawyers that represent trucking companies,” he said. “Our clients call us in the middle of the night, and we call the accident investigators to go to the scene to try to take control of the investigation. It is amazing how often we can influence law enforcement decisions about how an accident happened. Spending the money upfront for accident investigation can save a great deal more money later when legal papers begin to fly. In fact, a rapid, thorough accident investigation can often prevent lawsuits from being filed.”

Everybody hates the discovery process that goes with legal claims. Do not ignore the discovery process, Farris said. The best solution is to put together a standard discovery package, because the first step in most cases is answering a bunch of written requests. Those are general questions about the company, its size, and other information. Don't stall; as soon as the discovery letter arrives, respond with a detailed, standard package of answers. “Some of the questions don't matter, but answers must be produced anyway,” he said. “Get the package together early and save the time and frustration. Don't fight over early discovery. In fact, fight over only those things that are important to fight about.”

Plaintiff's lawyers are masters of leveraging a small case into a much larger case, Farris said. One tactic for this is to claim the trucking company is hiding records by not cooperating with discovery. Worse for the trucking company is not knowing exactly what is contained in the records contained in discovery. “From time to time, pretend to be a personal injury lawyer,” he said. “Go through the records looking for things that can make the company look bad. Perform an internal audit and know what the records say before some opposing lawyer gets to characterize that information before a jury.”

Settle early

No matter how careful a company may be, it will still get sued from time to time. When a suit if filed, get in touch with the lawyers and try to find a way to get out of the problem, Farris said. Settlement is the best way to approach a suit.

“For example, I recently represented a client whose equipment had been involved in a catastrophic accident, leaving a victim in a persistent vegetative state,” Farris said. “The trucking company had $5 million in primary insurance coverage and an additional $5 million in excess coverage. That suit could have been settled early for about $5 million, but the primary insurance carrier balked at settlement. I represented the trucking company for the excess coverage insurer. We demanded that the primary carrier settle. In the end, the case was settled for $10.5 million, costing the primary insurance carrier $5 million and the excess coverage carrier $5.5, half a million more than the coverage. The same case has some issues that go beyond insurance coverage, but we believe the primary insurance carrier is liable for those.”

Lawyers like to look at court claims in terms of liability, Farris said. However, trucking executives need to look at claims in terms of exposure. The facts are clear; a truck crash is more likely to be catastrophic than a bicycle crash. The greater the extent of injuries in a crash become, the greater the exposure to risk becomes in relation to liability, he said.

In the end, trucking executives need to remember that their companies are natural targets for lawsuits. The first step in limiting the costs from legal action is to hire a lawyer that understands the trucking industry, Farris said.

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