Discussions around civil damage awards currently bring to the fore an intriguing concept behind a trend in growing verdict sizes – “social inflation”. This phrase has increasingly been mentioned in conversations around the persistent trend of escalating “nuclear verdicts”. It refers to a phenomenon where typical award levels have been consistently rising as society becomes more accustomed to the perception of larger figures.
A wave of these “nuclear verdicts”, legal jargon for extraordinarily high damage awards, has seemingly rolled across courtrooms. The concept of social inflation provides a narrative for this growing trend. It reflects a changing societal attitude towards what are considered as ‘acceptable’ sums for damage compensation.
According to Holland & Hart in a recent commentary, the crux of the matter is that as individuals become more comfortable with the concept of massive figures, this sentiment has noticeably trickled into the legal world, resulting in greater compensation expectations and larger jury verdicts over time.
Such trends are significant for corporations, law firms and legal professionals who handle damage awards. These parties must be cognizant about ‘social inflation’ and its implications in order to better prepare for increasing damage award sizes, potential changes in liability rates, and consider appropriate mitigation strategies.
The consideration of “social inflation” in the context of damage awards serves as a reminder that societal attitudes directly influence legal outcomes, further highlighting the importance of contextual understanding in legal proceedings.