The NHL concussion litigation – a second-class settlement?Henry Goldschmidt
On 12 November 2018, it was announced that the National Hockey League (NHL or League) had agreed a tentative settlement with several hundred former players who had sued the League on the basis that it had not done enough to protect them from the dangers of head trauma. In short, the lawsuit alleged that the NHL had negligently:
- failed to warn its players of the short/long-term consequences of repeated concussions and head trauma,
- failed to sufficiently care for its players after such injuries, and
- promoted gratuitous violence, precipitating those very head injuries.
Although the terms of the settlement are subject to a 75-day “opt-in” period for the individual claimants (and would also need to receive judicial approval), comparisons are already being made with the National Football League (NFL) litigation settlement.
Despite the apparent similarities, however, there are key differences between the NHL and NFL cases that have ultimately meant that – in raw economic terms – the corresponding settlements are chalk and cheese. In this article, the author will consider:
- the terms of the NHL settlement (including how and why they differ from the NFL settlement);
- who might be considered the winners and losers in the NHL settlement;
- the significance of “class-action” status in US proceedings; and
- the relevance of the NHL and NFL lawsuits should similar proceedings arise in the courts of England and Wales.
Background to the NHL Litigation
The NHL proceedings began with ten ex-players filing a lawsuit in November 2013 at the US District Court for the District of Columbia, alleging that the NHL had not done enough to protect players from brain injury and had concealed information about the damaging effects of concussion. Further, and perhaps most significantly, the lawsuit claimed that the NHL “concealed material facts and information and delayed revealing material medical information with the intent to deceive and defraud, which caused Plaintiffs to become exposed to the harm.” According to the ex-player litigants – who would subsequently grow to several hundred – such actions (or inactions) by the NHL resulted in players suffering from, or increased the risk of contracting, serious neurological diseases (e.g. Alzheimer’s, dementia, Parkinson’s, etc).
- On one side, the former players spoke of a league that actively marketed big hits and physical play in selling its product, while downplaying/ignoring the damage inflicted on the brains of its players. On the other, the League, retorted that the players knew that ice hockey was an intrinsically dangerous sport and were afforded reasonable care given the state of medical knowledge at the time (regarding the effect of concussions in the short/long term).
- Unlike the NFL, the NHL had not acknowledged any link between concussion and Chronic Traumatic Encephalopathy (CTE) – a neurodegenerative brain disease typically found in people who have suffered repeated blows to the head – and criticised the media for fearmongering (on the basis that the underlying science remained unsettled).
In what has become a particularly fractious proceeding, the lead attorney for the players, Charles Zimmerman, recently described the NHL’s approach as “scorched earth and deny every issue”, whilst NHL Commissioner Gary Bettman said that the litigation “doesn’t have merit” and accused the claimants’ counsel of “highly inappropriate” tactics (namely, sensationalising the scientific understanding and litigating through the media).
Terms of the NHL Settlement
Notwithstanding the public acrimony that the case had engendered between the parties, a 56-page tentative settlement agreement was agreed on 5 November 2018, following months of court-ordered mediation. The terms of the settlement potentially apply to 318 former players – 146 who formally filed as claimants and 172 others who retained counsel – but participation is voluntary (i.e. “opt-in”), which leaves the door open to some of those players, instead, pursuing their own, separate, personal injury claims against the NHL.
If the settlement terms receive judicial approval (such that they become legally binding), those former players that choose to accept them will be entitled to:
- Free neuropsychological assessment (funded by the NHL), including transportation to medical facilities.
- Cash payments of US22,000 per player (up to US$6.996 million in total, if all 318 players agreed to the settlement terms).
- Up to US$75,000 per player for medical treatment for those who test positive on two or more tests (out of a total of 13 cognitive/behavioural assessment exams) conducted by members of the Sports Neuropsychological Society.
- Payment of the players’ attorneys’ fees and costs that are/become payable under their respective retainers (totalling US$6.95 million).
- Access to a "Common Good Fund" of US$2.5 million for all retired players in need (including those who did not participate in the litigation), to be paid out incrementally over the next five years. The fund will be put towards various programmes – for instance, senior player pensions, emergency assistance, substance abuse support, etc.).
Notably, the NHL’s total payment cannot exceed US$18.922 million and the NHL retains “walkaway rights” if not enough former players accept the settlement terms. Perhaps most significantly – in terms of any future liability – was the NHL’s public statement as to its non-acceptance of liability (re-affirming its entrenched position on the matter):
“The NHL does not acknowledge any liability for any of Plaintiffs' claims in these cases. However, the parties agree that the settlement is a fair and reasonable resolution and that it is in the parties' respective best interests to receive the benefits of the settlement and to avoid the burden, risk and expense of further litigation.”
How does this compare to the NFL Settlement?
“The NHL case makes the NFL settlement look like a grand slam times ten. But the facts in the NFL case were far more egregious, the total number of players at the NFL level was larger, and there was nonstop media reporting about it.” (Paul D. Anderson, Kansas-based sports injury lawyer and founder of https://nflconcussionlitigation.com/)
At first glance, it would seem that the NHL concussion settlement provides retired players with markedly less than the agreement reached between the NFL and its former players in relation to the same issue of head injuries. The NFL pledged to pay out approximately $1 billion to former players – which breaks down, on average, to around US$190,000 per player (and up to US$5 million depending on a player’s age, injuries and NFL experience). With the NHL agreeing to pay less than 2% of that amount, when looked at in isolation, the financials differ drastically. Further, the NFL settlement is more inclusive than the NHL deal – as the former covers all former players (regardless of whether the players had joined the lawsuit against the NFL).
For all the commonalities shared, comparing the NHL and NFL settlements by reference to raw financials is far too simplistic. First, the NFL pledge to pay out US$1 billion needs to be put in proper context – namely, that it is expected to be paid over a period of 65 years (rather than five years in the case of the NHL settlement) and contemplates payment to circa 20,000 recipients (rather than several hundred). Likewise, the Leagues are different economic beasts – the NFL generates approximately US$14 billion a year in revenue, while the NHL generates US$4-5 billion a year.
The NHL settlement may even have certain advantages compared to the NFL settlement. The smaller number of recipients should make it far less complex to administer, and therefore avoid the administrative problems endemic in the NFL settlement (e.g. delays and accusations of fraud).
Win, lose or draw for the NHL former players?
“You can make the argument that a big cheque is more exciting, but I think this is better for the long-term health and welfare of the players and their families.” (Charles Zimmerman, lead counsel for the former players)
Notwithstanding the, at times, crude comparisons that have (unsurprisingly) been made between the NHL and NFL settlements, the general consensus is that the League – rather than the former players – has got the better of the deal in the recent NHL settlement.
Depending on which camp you are in, a “settlement” can always be talked up. Unsurprisingly, counsel for the former players have been keen to publicly highlight the positives – for instance,
- the “favourable” early reactions of ex-players to the settlement terms,
- that they “achieved their goal” in respect of the long-term welfare of players and general betterment of the game, and
- the “greater good” that will ensue as the result of a rigorous and properly enforced concussion protocol.
For PR reasons, it is always going to be difficult for the NHL to openly trumpet the settlement as a “victory” but – as set out above – the terms do not require the League to admit any fault or responsibility for the medical woes of the former players. NHL Commissioner Bettman has insisted that the League’s position on player safety is not at odds with the reality of the science, telling the Associated Press in May 2018 that, “when it comes to focusing on concussions and trying to understand them and how to treat them, the [NHL have] been leaders in the field.”
As well as saving on continued legal fees and expensive expert witnesses (should the lawsuits have gone all the way to trial), the League will no doubt hope that the settlement brings to an end the public relations battering it received throughout the litigation – particularly in light of embarrassing emails unearthed during the discovery process (portraying League officials as insensitive and uncaring).
Retired player Daniel Carcillo, one of the claimants, has urged players not to accept the settlement – believing it to be “insulting” and a direct result of former high-profile players (like Wayne Gretzky) failing to put public pressure on the League. Nevertheless, whilst the scope and value of the NHL settlement may initially appear underwhelming, there are reasonable arguments as to why former players should/might actually not feel too aggrieved.
- The collective litigation of the former players had proved unsuccessful in gaining classification as a “class action”, unlike the NFL lawsuit. This effectively rendered the case against the NHL smaller and less threatening – see below.
- The former players have the certainty of receiving damages – and much sooner than if the litigation had gone the distance (full trial, subsequent appeals, etc).
- If the NHL had ultimately prevailed, the players would have got nothing. Indeed, to succeed at trial the players would have had to overcome the NHL’s three core defences:
- “Pre-emption” (or jurisdiction) – before an ex-player can file a lawsuit against the NHL relating to their health, they are contractually obliged (under a collective bargaining agreement) to arbitrate the claim out of court;
- “Voluntary assumption of risk” (volenti non fit injuria) – each player voluntarily agrees to participate in the NHL – where fighting, checking and similar physical contact is commonplace – with full knowledge and awareness that head injuries are a by-product of the game;
- “Causation” – difficulty in linking a player’s current neurological condition to their previous career in the NHL (e.g. the argument being that an offending head trauma could have occurred before or after they played in the NHL, or that an ailment could have been unrelated to the sport).
The significance of “class-action” status
As set out above, the first lawsuit was filed against the NHL in November 2013 – however, by the summer of 2018, 26 individual cases had been brought against the League, spanning courts in Minnesota, California, Illinois and New York. In July 2018, US District Judge Susan Richard Nelson denied a class-action motion that would otherwise have allowed every living ex-NHL player (more than 5,000 individuals) to join the suit.
Under Rule 23 of the Federal Rules of Civil Procedure, a judge can only certify a proposed class when certain criteria are met – for instance, “numerosity” (of claimants) and “commonality” (as to questions of law and fact). It was with respect to the latter criteria that the players fell short. Although Judge Nelson acknowledged “the significant cost and the likelihood of duplicative proof in trying this case many times, for each individual player”, in issuing her order, she cited widespread disparities in state laws about the subject and standard of medical monitoring that would "present significant case management difficulties.”
Players’ attorney Stuart Davidson believed that the failure to secure class-action status was a “watershed moment” for the case and that the players lost leverage as a result. Meanwhile, John Vrooman, a Sports Economics Professor at Vanderbilt University, believes that “[Nelson’s] decision essentially forced the 140 [plus] players involved in the suit to settle… and [resulted in a] really lopsided victory for the owners.”
Class-action status may not be advantageous to claimants in all cases but, where liability is fiercely contested (such as in this scenario), the threat of bankruptcy or financial ruin on the back of a single jury trial can force defendants to settle on terms they may not otherwise have entertained. Had the former NHL players achieved class-action status, it would have certainly increased their bargaining power at the negotiating table.
It remains to be seen how many, of the 318 former NHL players, will now “opt-in” to the settlement – with some (who feel short-changed) perhaps willing to take their chances by pursuing their own lawsuits against the League in various jurisdictions, across the US and Canada. In percentage terms, the uptake is unlikely to be as resounding as the NFL class action settlement, where less than one percent of the circa 34,000 players notified “opted-out”.
The respective NFL and NHL settlements have shown the significance of attaining (or not attaining) class-action status when it comes to large-scale negligence or personal injury claims against a governing body or league. But what of jurisdictions, such as England and Wales, where class actions are not permitted – is this likely to be a major barrier to entry for actions being brought by athletes who believe that they have wrongfully suffered brain injury during their sporting careers?
The closest thing English litigators have to a class action is a Group Litigation Order (GLO) under Civil Procedure Rule 19.11 – which allows individuals who have claims (whether issued or not) that give rise to common or related issues of fact or law, to join forces. One of the most high-profile GLOs in recent times is The Hillsborough Victims Litigation – where, amongst other things, officers of the South Yorkshire Police and/or the West Midlands Police have been accused of:
- deliberately concealing the true circumstances (and setting out false narratives) of the 1989 Hillsborough tragedy to avoid criminal/civil liability and public censure, and,
- knowingly/recklessly acting beyond their powers such that they caused the damage that ultimately ensued (i.e. the death of 96 Liverpool fans).
As with class actions in the US, GLOs have the advantage of splitting legal/expert costs between the group of (often disparate) claimants, sharing knowledge and mitigating litigation risk. However, there are challenges of conducting GLO litigation – for instance:
- It can be difficult to locate those who may have claims giving rise to common or related issues of fact or law.
- Claimants must “opt-in” – in other words, agree to be a party to the litigation and make an application to be included. This administrative burden is more onerous than in US class actions, whereby those falling under the banner of the prescribed “class” are presumed to be included in the lawsuit (and must “opt-out” if they do not wish to be bound by the court rulings).
- The issue of who will bear adverse costs can prevent or delay GLOs (compared to US litigation, where there is no “loser pays” principle). That said, more often than not GLOs provide that each claimant is severally liable for an equal (or pro rata) share of adverse costs only. That state of affairs is pro-claimant and promotes the commencement of group actions.
Although GLOs are the principal means for bringing collective actions in England and Wales, other mechanisms exist. There are informal ways – also falling within the “opt-in” regime – such as
- by naming multiple claimants on a claim form,
- the court ordering the consolidation of multiple claims into a single set of proceedings (or directing two or more claims to be tried concurrently), or
- the proceedings being treated as “test cases” (either within or outside the GLO regime).
There are also mechanisms that proceed on an “opt-out” basis, such as (a) representative actions under Civil Procedure Rule 19.6 (where there is a “same interest”) or (b) collective actions before the Competition Appeal Tribunal, introduced under the 2015 Consumer Rights Act (CRA). While the CRA relates to competition law breaches (and not to personal injury claims), the fact that English courts are entertaining US-style class actions may be a sign of increased flexibility and a clue as to where things might head in the future.
A personal injury claimant in the English courts may not have the prospect of a jury trial or the carrot of punitive class-action damages (meaning super-sized awards are perhaps more likely in the US), but GLO applications have been successful in recent personal injury cases – so potential claimants should not feel disheartened. Whether or not group litigations akin to the NFL and NHL proceedings wash up on this side of the Atlantic remains to be seen, but the increased availability of litigation funding and flexible fee arrangements (such as the possibility for damages-based agreements, whereby lawyers can receive a percentage of the compensation received) will assist athletes – and conversely, keep sports governing bodies, federations and clubs very much on their toes.
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- Tags: Athlete Welfare | Civil Procedure Rules | Concussion | Consumer Rights Act 2015 | Dispute Resolution | Employment | Federal Rules of Civil Procedure | Ice Hockey | National Football League (NFL) | National Hockey League (NHL) | USA
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About the Author
Henry Goldschmidt is an associate at Morgan Sports Law, specialising in arbitration and litigation. He trained at Lawrence Graham (now Gowling WLG), qualifying into their dispute resolution team. After four years doing commercial litigation and international arbitration, he joined MSL in September 2016. Henry has particular interests in anti-doping, concussion and match-fixing.