The Crisis We Can’t Ignore

The numbers speak volumes. As shared by Richard Henderson, Senior Vice President at TransRe, the average severity of MPL verdicts has doubled since 2019. Verdicts of $50 million or more are no longer anomalies—they’re becoming the norm. And it’s not just the headline cases. The median value of $1 million verdicts has climbed from $3.6 million in 2019 to $7.1 million in 2024.

This escalation is more than statistical noise. It’s reshaping how insurers assess risk, how claims are valued, and how settlements are negotiated. Insurers are pulling back capacity, towers are fragmenting, and the ripple effects are being felt across the industry.

But what’s driving this surge? Social inflation is part of the story—but not the whole. The plaintiff’s bar has evolved. They collaborate across jurisdictions, leverage AI, and deploy sophisticated techniques like the “jury ball” strategy. They share data, train aggressively, and celebrate wins publicly. In contrast, the defense side has often operated in silos, constrained by competitive pressures and outdated norms.

MedStar’s Virtual Law Firm: A Blueprint for Change

Enter Larry Smith, Vice President of Risk Management Services at MedStar, who offered a bold and practical response to this crisis: the MedStar Virtual Law Firm.

What began as biannual meetings among MedStar’s defense counsel has grown into a robust, collaborative network of regional and national law firms, litigation professionals, and internal stakeholders. The goal? To harness collective expertise, share intellectual property, and develop consensus-driven defense strategies.

This isn’t just a feel-good initiative. It’s a strategic shift rooted in MedStar’s “One MedStar” culture—where collaboration, transparency, and shared purpose drive performance. Defense counsel are no longer competitors; they’re teammates. And the results are tangible.

Key Components of the Virtual Law Firm Model:

• Defense Counsel Retreats: Since 2016, MedStar has hosted 13 retreats, bringing together legal teams, claims managers, and senior leadership to align on strategy, share insights, and build trust.

• Embedded Resources: From damages counsel and appellate specialists to jury consultants and structured settlement experts, MedStar’s defense guidelines now mandate consideration of these tools for high-exposure cases.

• Information Sharing: A secure listserv and repository—dubbed the “Motions Hall of Fame”—enable real-time access to successful motions, court decisions, and expert recommendations.

• Mentorship and Inclusion: Younger attorneys are given opportunities to present, contribute, and learn from seasoned litigators, fostering a dynamic and inclusive learning environment.

As Janet, a seasoned defense attorney and early adopter of the virtual law firm model, shared during the call: “The people I’m competing against are the plaintiff’s attorneys—not other defense attorneys. This concept has been wonderful and a big change to my practice.”

A National Perspective: Collaboration Is No Longer Optional

Richard Henderson’s national lens reinforced the urgency of MedStar’s approach. The geographic spread of large verdicts is expanding. States like New Mexico and Georgia are emerging as new hotspots. Abuse-related claims—once considered untriable—are now producing some of the largest verdicts.

And while defense verdict rates remain relatively stable, the cost of losing has skyrocketed. In 2024, 56% of $10 million verdicts also reached $25 million. The message is clear: when we lose, we lose big.

Henderson emphasized the need for smarter collaboration across insurers, defense counsel, and coverage towers. He called for:

• Enhanced sharing of mediator evaluations and transcript testimony

• Development of younger experts who can connect with modern juries

• Strategic publicizing of defense wins to counter media bias

• Realistic anchoring during mediation to temper plaintiff expectations

The plaintiff’s bar is already doing this—and doing it well. It’s time for the defense community to catch up.

What’s Next?

The December 2024 Claims Study Group call was more than a presentation—it was a rallying cry. The tools exist. The data is available. The talent is in place. What’s needed now is a commitment to collaboration, innovation, and shared purpose.

MedStar’s virtual law firm offers a compelling model. But it’s just one piece of the puzzle. To truly bridge the gap, we must build a broader coalition—one that spans institutions, geographies, and generations.

And that’s where Candello comes in.

Join the Conversation

Want access to the full report, data insights, and exclusive resources from the December 17, 2024 Claims Study Group? Interested in learning how other institutions are adapting to the new litigation climate?

Join the private Candello community to connect with peers, explore best practices, and contribute to the future of MPL defense.

There’s more to this story—and it’s unfolding inside Candello.