Nuclear verdicts are reshaping the liability landscape
Physicians may be facing fewer lawsuits, but the price tag on those claims that do occur is climbing fast — and further driving up the price patients pay for care.
In a new analysis, Robert E. White Jr., president of The Doctors Company and TDC Group, breaks down the gap between reported lawsuit frequency and actual claims data. While frequency has fallen from about 17% in the 1990s to roughly 4.6% in 2025, the size of verdicts tells a different story. The average of the top 50 verdicts hit $50 million in 2025, and claims exceeding $2 million reported to the National Practitioner Data Bank have grown more than tenfold since 1990.
White points to social inflation, litigation financing, and “anchoring” — where attorneys present an outsized dollar figure early in a case to shape what jurors or judges see as a reasonable award — as key forces pushing costs upward, along with a rise in nuclear verdicts, including one at an eye-popping $951 million.
This level of claims severity contributes to increased costs for patients. Medical liability costs and the practice of defensive medicine put additional pressure on physician practices, hospitals, and health care systems. The takeaway: lower frequency alone won’t ease pressure on medical liability premiums as long as severity keeps climbing.
Click here to read more about the shifting economics behind medical liability claims.
North Carolina draws the line on outside influence
As nuclear verdicts and drawn-out lawsuits keep pushing up the cost of medical care, one state just cracked down on a big part of the problem: outside investor influence.
North Carolina is now the first state to ban commercial third-party litigation funding, as Governor Josh Stein signed House Bill 315, the Prohibit Litigation Investments Act, into law in late June. The law stops outside investors, including private equity firms and hedge funds, from funding lawsuits in exchange for a portion of the payout intended for a deserving patient. It passed with strong bipartisan support, clearing the state House 112-0 and the Senate 45-1.
When outside investors have money riding on a case, their influence can push towards a trial and away from a settlement that is fair for both patients and providers. As insurance trade outlet Insurance Business reported, Mark Friedlander of the Insurance Information Institute called the practice “an increasingly significant driver of legal system abuse,” adding that the law “sends a clear message that the civil justice system is not an investment vehicle.”
North Carolina’s ban is the boldest move yet in a growing trend, with California, Colorado and Illinois now considering similar rules. Eliminating outside investors is straightforward way to take on medical lawsuit abuse head-on.
For a medical liability system already strained by nuclear verdicts, North Carolina’s law is a rare, bipartisan win — one aimed at easing costs and protecting patient access to care. Click here to read more here about North Carolina’s first-in-the-nation ban on commercial litigation funding.
AI is reading test results before the doctor
Patients are getting lab and imaging results and running them through generative AI before their doctor even sees them. The patient interpretation, prior to physician review, is causing new kind of medical liability risk.
Writing in Inside Medical Liability, Gene Boerger of Preverity points to a shift set off by the 21st Century Cures Act, which forces health systems to release test results to patients as soon as they’re finalized in the record — which can happen before a physician has reviewed them. Many patients now turn to AI tools to make sense of results on their own, sometimes getting interpretations that are misleading, overly reassuring, or needlessly alarming, well before they hear from their own provider.
While more than 80% of physicians already use generative AI professionally, according to the American Medical Association, most health care systems are still catching up on policies regarding releasing results into health care portals and escalating abnormal results. That gap matters in court: if a patient acts on information before a physician can weigh in, that subsequent, possibly misinformed care can become part of the claim.
As patients get faster access to their own data, physicians and health systems are left managing a communication timeline they no longer fully control. Boerger recalls similar past transitional challenges, including adoption of electronic health care records and the rise of telemedicine, with AI and patient communication representing “the next significant shift affecting liability exposure.”
For more information on the rising risks created by real-time patient access to test results and AI, click here.
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