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Here’s how insurers can potentially spot the next “Big Tobacco”

There are legal settlements, and then there’s the Master Settlement Agreement (MSA). This historic deal, entered into by numerous states and tobacco companies (aka “Big Tobacco”), reportedly remains the largest civil litigation settlement in U.S. history.1

A courtroom gavel with a courthouse in the background.

What led to Big Tobacco’s big loss? It’s not a $64,000 question, but potentially a multi-billion dollar one.

Over the past couple of years, Verisk has conducted research into historical risks to help identify key drivers of major liability events. This exercise was recently conducted in a review of Big Tobacco and how the MSA was ultimately reached. From this analysis, we distilled a few critical themes that can serve as a guide to how today's emerging risks could erupt into a systemic liability event or a potential “nuclear verdict”.

The themes we identified include:

Victimizing children

It took decades to generate enough momentum to compel Big Tobacco to settle, but one key tipping point was exposing how Big Tobacco allegedly sought to get children addicted to cigarettes.2

A legal war chest

Lawsuits cost money, particularly those targeting wealthy defendants. For years, many plaintiff’s firms were reluctant to fund a case against Big Tobacco’s formidable defense team.3 While the suits against Big Tobacco didn’t have the benefit of today’s litigation financing infrastructure, they were ultimately supported by some deep pockets.4 Suppose a lack of capital served as an inhibitor for plaintiff's firms in the 20th century. Could the emergence of litigation funding grease the wheels for a surge in lawsuits against well-capitalized defendants today?

Weaponizing science to sow doubt

One of the hallmarks of Big Tobacco’s defense was what one could call the “weaponization” of science to sow doubt upon research that linked cigarette smoking to cancer and other ailments.5 Big Tobacco allegedly marshaled scientists and lobbying organizations to claim, for example, that cancer couldn’t be attributed to the smoking of cigarettes.6

Victim blaming

Aside from shifting the narrative to other products they claimed to be injurious, Big Tobacco's defense strategy sometimes pinned the blame on the victims.7 Would this strategy be effective in today's world, as an expanding “circle of concern” may be creating more societal empathy and sympathetic views of future plaintiffs, such as individuals with obesity? What about increased animosity towards corporations? These questions tie into the broader issue of social inflation, one of the most discussed emerging risks confronting the insurance industry today.

Novel legal theories

Decades of failures in Big Tobacco litigation forced plaintiff's firms to keep trying new strategies to achieve success. Eventually, with the assumption of risk defense largely proving too difficult to pierce, an idea was forged to apply a “public nuisance” theory and sue on behalf of states that were paying millions in Medicaid relief for smokers' healthcare costs.8 This represented a major breakthrough not just in Big Tobacco litigation, but eventually in lead paint9 and opioid cases10, too. This dynamic may be worth keeping in mind as contemporary litigation unfolds. For example, there have reportedly been challenges in efforts to sue potential climate change contributors.11

Could a novel legal theory eventually be applied in these cases, thus creating a precedent that could usher in a fresh wave of lawsuits in different industries that previously may not have been considered?

Andrew Blancher, CPCU

Andrew Blancher, CPCU, is director of commercial automobile product development and Emerging Issues at Verisk. You can contact him at

David Geller

David Geller, CPCU, SCLA, is product strategy manager, Underwriting Solutions at Verisk. He can be reached at

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  1. “The Master Settlement Agreement: An Overview,” Public Health Law Center, < >, accessed on January 26, 2022.
  2. Dan Zegart, Civil Warriors: The Legal Siege on the Tobacco Industry (First Edition), Delacorte Press, p. 160
  3. Ibid, p. 202
  4. John Schwartz, “Ron Motley, Who Tackled Big Tobacco, Dies at 68, The New York Times, August 23, 2013, < > accessed on January 5, 2022.
  5. David Heath, “How Tobacco Companies Contest the Scientific Consensus on Low-Tar Cigarettes,” The Atlantic, May 5, 2016, < > accessed on January 26, 2022.
  6. Ibid.
  7. Civil Warriors: The Legal Siege on the Tobacco Industry, p. 14
  8. Gregory W. Traylor, “Big Tobacco, Medicaid-Covered Smokers, and the Substance of the Master Settlement Agreement,” Vanderbilt Law Review, 2019.
  9. “Lead paint companies owe $305M under settlement reached with Santa Clara County, nine other counties, cities,” Palo Alto Online, July 17, 2019 < >, accessed on January 26, 2022.
  10. Brandon Winchester, et. al., “Are Public Nuisance Claims the Next Super Torts?” JD Supra, August 16, 2021, < >, accessed on January 26, 2022.
  11. Kimberly M.S. Cartier, “Climate Litigation Has a Big Evidence Gap,” Eos, July 23, 2021, < >, accessed on January 26, 2022.

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