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February 10, 2022

Transportation Year in Review

2022 Transportation Annual Year in Review

In his latest book Noise (written with Olivier Sibony and Cass Sunstein), Daniel Kahneman, the Professor of Psychology who won the Nobel Prize in Economics (!) describes two different categories of errors in judgment:  bias and noise.Bias errors are  systematic:  examples would include an enthusiastic manager routinely predicting that projects will take half the time they end up taking or a timid executive unduly pessimistic about sales year after year. Noise refers to errors that are more random. The authors describe a real life example of error that displayed both varieties : the campaign by Judge Marvin Frankel to reform criminal sentencing in the 1970’s since judges ordered a remarkably diverse range of jail times for what were essentially the same offenses. If a judge sentences African Americans more harshly than white Americans then we have bias; if the variability in sentencing is more random we are dealing with “noise.” Frankel showed examples of incomprehensible variability-embezzlement resulting in a sentence of 117 days in one case and 20 years in another.

Kahneman and team briefly discuss noise in  the insurance industry, in both the underwriting and claims sides of the house,  and find significant noise in the form of inconsistent premium quotes on the one side and inconsistent offers to settle on the other. A good management system should reduce the problem. But claims folks and attorneys know that there is no shortage of noise in the form of inconsistent decisions from courts around the country. One way to reduce legal noise of this kind is to have the  U.S. Supreme Court agree to hear appeals from lower courts . And, as 2021 ebbed, the High Court asked the Solicitor General to explain why the Court should or should not accept  two cases  that have made their way through the system, one involving the employment status of drivers under  what is called the ABC test, and one questioning whether transportation brokers  should face exposure for the tort of negligently hiring a motor carrier whose driver was involved in an accident. We discuss those two cases in detail in  this year’s summary along with the legal theory that many in the industry are touting, federal preemption of state law.

Our team, as always, has summarized many of the leading cases decided during the previous year. We also feature several special articles this year including Gillian Woolf’s look at a  new Texas statute which some think may reduce nuclear verdicts in the  Lone Star state. We are also delighted to present an original analysis by Judith Branham, managing director of Stroz Friedberg, on the targeting of the trucking industry by cyber criminals.

As always we look forward to hearing your responses and reactions to our report.

Read more here.

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