The Shifting Liability Landscape: 4 Factors Contributing To Rising Claim Costs

Large jury awards continue to increase in frequency and size, with many reaching tens or even hundreds of millions of dollars. This has attracted outside investors who fund lawsuits to earn a profit – creating financial incentives to pursue more cases and push for larger settlements.

When combined with other legal system changes, the strategy appears to be working:

• Nuclear verdict awards (over $10M) increased 20.6% annually in the first 5 years of this decade while mega-nuclear verdict awards (over $100M) increased 61%.¹
• Third-party litigation funding commitments grew to $2.8B in 2025, an increase of 23% from 2024.²
• Average claims costs doubled in the past decade, growing at a 7% compound annual rate.³

Frequent media coverage of these high-dollar awards has desensitized jurors to large verdicts, expanding their definition of what constitutes a reasonable award.

Juries today are more likely to hold views on society and corporations that lead to higher verdicts. In fact, public trust in corporations has declined to historic lows, with 41% of respondents reporting very little confidence in organizations.⁴

This lack of trust has helped create a modern legal environment where:

• 80% of jurors favor the use of punitive damages against corporations.⁵
• 72% believe it’s a juror’s job to send a message to corporations to improve their behavior.⁶
• 77% of Americans say the country’s economic system unfairly favors powerful interests.⁷

Attorneys have capitalized on these attitudes. Through sophisticated emotional framing tactics – including “reptile theory” – that appeal to people’s sense of justice over strict legal compliance, juries are encouraged to deliver ever-higher verdict awards.

Greater adoption of digital advertising and AI is reshaping how law firms approach plaintiff outreach and case strategy. Digital ads enable attorneys to recruit claimants at a scale that was not possible before. As a result, legal ad spending has reached $2.64B nationwide.⁸ Social media amplifies the effect by shaping public perception of corporations and influencing jury attitudes before a case ever reaches a courtroom.

The way potential lawsuits are planned and conducted has evolved as well. Plaintiff firms increasingly use AI-powered litigation tools to assess jury demographics, evaluate historical verdict patterns by jurisdiction (venue shopping) and build highly sophisticated, data-driven case strategies. These capabilities allow law firms to take on bigger caseloads, file more lawsuits and be better prepared in significantly less time and at lower cost.

Today, 70% of general liability claims involve attorney representation,⁹ including many cases that historically would’ve been resolved without legal action. Attorneys are also getting involved earlier – often before businesses have notified their insurance carrier.

When incidents are reported within the first few days, attorney representation is at 39%, but climbs to 73% when reporting lags more than 25 days.¹⁰ On average, attorneys are notified 60 - 90 days before the carrier is, narrowing the window for organizations to gather facts, preserve evidence and build their own case.

For businesses, this means that even when liability is limited, they may face higher settlement demands, increased pressure to resolve claims quickly and greater risk of expensive, time-consuming lawsuits.