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The US Supreme Court will decide where companies could be sued in 2021

  • Market Insight 30 December 2020 30 December 2020
  • Global

  • Insurance 2021 - the year ahead

There is much anticipation for the US Supreme Court’s decision in two product liability cases against Ford Motor Co. that may fundamentally change where companies can be sued. Personal jurisdiction is a major issue for manufacturers with billions of dollars at stake, especially if plaintiffs are able to unfairly sue in the state of their choice that may have no connection to where they claim to have been injured or where the product was made or sold.

It is well understood that certain states and venues are more “claimant friendly” than others. States like Pennsylvania and Illinois still do not allow defendants to tell juries that injured plaintiffs were not wearing their seat belts. Other states like Maryland and North Carolina still follow the outdated doctrine of “joint and several liability” where each defendant is on the hook for the full amount of damages regardless of the amount of their responsibility. On the other end of the spectrum, states like Michigan (damage caps) and Texas (if a plaintiff is more than 50% negligent, there is no recovery) are more “business friendly.” The jurisdiction of a particular case can alter the value of that case by millions of dollars – and the US Supreme Court is set to clarify the rules of where suit can be filed within the next few months.    

In addition to lawyers and manufacturers, insurers will be watching this highly anticipated decision closely as the result will dramatically impact the value of product liability claims. If a jurisdictional free-for-all is permitted, it will be extremely challenging to predict potential losses.

View all our Insurance 2021 predictions here

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