Boxing Day is my favorite post-holiday holiday, similar in many ways but better than the day after Thanksgiving, because the latter has, over the years, been overtaken by pressure to either shop or get started on end of the year rushes for work. Boxing Day, at least for me, suffers from none of that.

Boxing Day this year falls on the very last Friday of the year, making it also the last scheduled date for publication in 2025 of my Five Favorites for Friday series, in which I typically discuss five topics, articles, issues, podcasts or videos that I didn’t previously get a chance to blog about or discuss in a LinkedIn post.

In honor of Boxing Day falling on the last Friday of the year, I am changing the rules for this weekly post and publishing a slightly revised version of my weekly Five Favorites for Friday post. This one consists of five of my favorite items covered in this series over the past year. Think of it as Five Favorites from Past Five Favorites for Friday, or something like that.

Here goes:

1. Nuclear verdicts are, in my opinion (which is based on decades of studying them for purposes of resolving and, where necessary, trying the insurance bad faith and coverage claims that arise from them), driven by a number of identifiable factors, including changing views of jurors of the world around them. Employers and insurers need to think carefully about what a recent nuclear verdict, including an award of $10 million in punitive damages, in an employment discrimination action, tells us about how jurors are viewing workplace dynamics. For what it’s worth, I predicted the expansion of nuclear verdicts from the personal injury environment to the employment context years before it happened, in this post. This is the next big frontier for nuclear verdicts.
2. UBS economists do not like the looks of the labor market. This is your periodic reminder from those of us who litigated ERISA breach of fiduciary duty and other claims during and after the Great Recession that, when job prospects weaken, employees and former employees start to look very carefully and very skeptically at the performance of retirement, 401(k) and other plans. We have already, in my own practice, been seeing the smarter money, which holds deferred comp benefits, looking carefully at those types of plans, as I discussed here.
3. Stephen Embry’s article on advanced AI weaponry for plaintiffs’ personal injury lawyers points out that the development could be a game changer for both the plaintiffs’ bar and the defense bar. I have written before, however, on my concern in the ERISA space with regard to what an AI powered plaintiffs’ class action bar suggests for ERISA plan sponsors, fiduciaries and their insurers – namely, the ability of more such shops to litigate more such cases, including against smaller plans that previously wouldn’t have justified the expense of suit, with the same or less investment and staffing. Other than the class action defense bar, more class action ERISA suits is the last thing that anyone on the defense side of the “v”or their insurers need. Whether it’s number of suits, settlement amounts, defense costs, or any other rubric, the trendlines in this area are already worrisome for plan sponsors and their insurers. The continued rollout of AI isn’t going to help.
4. You know what I think is particularly scary if you are an insured or an insurer? The need and interest of insurers to write exclusions for AI to include in coverages. As this article points out, there is a significant issue of how to word the exclusions to exclude what is meant to be excluded, and no more or less. This isn’t going to be as easy as it sounds. When policy language is well drafted, there is limited dispute later over whether certain types of claims are covered. We saw this, for example, in the business interruption coverage cases arising out of the pandemic, where most denials of coverage were upheld based on language that was well drafted to handle the risk, even though the ability to foresee the scope of the pandemic and the resulting business losses at the time the policies were issued or when the language was drafted was limited. On the other hand, for those old enough to recall it (and, if you aren’t, you may find it valuable to read up on the history of it), there were decades of massive coverage litigation concerning exactly what types and extent of asbestos related exposure was precluded by the wording of different exclusions. For me personally, I spent a good amount of time in 1987, as a paralegal fresh out of college, reading insurance industry periodicals in the Library of Congress seeking extrinsic evidence for use in arguing what meaning should be attributed to certain wording in the exclusions at issue. How underwriters and coverage lawyers define AI and choose language for use in capturing this latest exposure in policies and their exclusions is going to decide whether coverage for AI liabilities ends up over time playing out more like coverage for business interruption after the pandemic, or instead more like coverage for asbestos losses, or perhaps more likely, somewhere in between those two polar extremes.
5. $90 million is a lot of money. Even the judge who awarded it as bad faith and Chapter 93A damages against Liberty Mutual because she found unreasonable claims handling and believed the case law to leave her with no discretion in this regard, thought it was a disproportionate award. On the flip side for Liberty Mutual and other insurers who are presumably looking at the ruling in horror, if there was ever a decision perfectly written to allow an appeals court to revisit various aspects of bad faith law in the Commonwealth and rein in some of its most debatable aspects, this is the one. And I don’t mean that in a negative way with regard to the opinion itself – the decision is an excellent analysis and presentation of the totality of a complex area of law and of decades of case law (the judge actually goes so far back that she cites a decision from the first Chapter 93A case I ever tried, back in 1995). Instead, I mean that the Court’s scholarly treatment of the issues presents the perfect trial court decision for testing the appropriate scope of recovery in such cases. I discussed the opinion here.