The Excess Liability team continues to advise clients in connection with many US-based risks including opioids, PFAS, phthalates and in general high-value coverage and liability disputes subject to London arbitration. While the theories of liability often originate in the US, the claims are adopted by claimants in jurisdictions including Canada, Australia, and under certain legal frameworks across Europe. DWF's Global Risks team has bolstered its capacity to advise on such claims worldwide with expansion of its Canadian, Australian and European presence in key jurisdictions.
American “Judicial Hellholes” have placed insurers under increased pressure in plaintiff-friendly jurisdictions where insurers might have expected to rely on merits defences. The stakes continue to be raised as jury awards climb higher, as nuclear judgments and thermonuclear judgments reach higher up insurance towers.
In 2026 we anticipate litigation including the following areas to occupy insurers' focus:
Toxic compounds
Following regulatory changes, tort claims in the US have increased surrounding toxic compounds including microplastics and phthalates.
Phthalates are used in a wide range of plastics, such as in plastic packaging and children's toys to make them more flexible and durable, and in hair-straightening treatments. Relying on studies suggesting that phthalates act as endocrine (hormone) disruptors, leading to developmental issues in pre-pubescent children and interfering in kidney and thyroid function in others, phthalate litigation in the US has taken off. By the end of 2025, the consolidated multi-district litigation included 10,723 lawsuits, where issues of causation are expected to be determined by the mid-point of 2026.
Coverage will be resolved along familiar lines, including whether phthalate exposure fits settled pollution exclusion wordings and when producers knew or ought to have known of the risks associated with phthalates and harms became “expected or intended”.
Social media
In 2026, the potential dismissal of a California MDL consolidating more than 2,200 lawsuits against YouTube, TikTok, Meta and Snapchat, claiming in respect of depression, anxiety and body image issues in children, will be before the 9th Circuit Court of Appeal.
Coverage will focus on whether the algorithms of these social media apps were designed to promote addictive engagement and target children, and thus harms were “expected or intended”. Further, many of the claims are advanced on a public nuisance basis by states, municipalities and school districts, calling into question the degree to which they are “on account of” or “because of” bodily injury suffered by individuals.
Other risks
As discussed in our last update, climate change litigation remains ongoing, targeting fossil fuel producers with public nuisance theories of liability. 2025 saw the expansion of claims into Australia, South Africa, Brazil and across Europe. We expect this trend to continue and for coverage to be tested along “expected/intended” and pollution lines.
Lastly, AI risks are on the rise, spawning litigation for defamation (through hallucinated information), copyright infringement, and negligence in its deployment. Coverage for these claims will test cyber exclusions, potentially leaving insurers to seek to rely on liability defences on novel grounds involving untested “experts” in this emerging field in order to avoid indemnifying significant losses.
