Train Accidents Disappeared Quickly After Liability Limits

A previous story from Investigative Economics detailed how train accidents had been in steady if slight decline over the past 20 years. But that was for equipment failures.

When including all accidents from the Department of Transportation (DOT) data at the individual accident reporting level, the number of accidents drops off precipitously around 2007.

That year is when Congress passed the Surface Transportation and Rail Security Act of 2007, limiting the liabilities of railroads from accidents to $200 million per event.

Substantial caveats come with the DOT data as it appears to have thousands of duplicate rows.

What was 40,000 accidents a year in 2005, became 25,000 a year in 2016. The total cost of all accidents would go from around $6 billion a year to around $4 billion. Major disasters like the 2013 Lac-Mégantic accident in Quebec, which killed over 40 people and largely destroyed the town of Lac-Mégantic, and the 2015 Philadelphia Amtrak derailment would see spikes in costs for those years, but in generally costs have declined and continued to decline even more since the pandemic.

Besides the repair costs of a derailment, major railroad companies like Union Pacific, BNSF, CSX, Norfolk Southern, and Amtrak pay out hundreds of millions in settlements each year. Many of the railroads can be liable for personal employee injuries under the Federal Employers Liability Act (FELA), which regularly leads to larger payments than if someone was injured and received workmans’ compensation.

According to annual reports, BNSF had casualty claims in 2019 of $115 million for personal injuries, occupational injuries, environmental cleanup, and other causes. For Union Pacific, it was $211 million. For Amtrak it was $119 million in 2018.

Besides the actual paid amount, the railroads regularly keep even more in casualty reserves for future liability payments. CSX regularly has casualty reserves over $300 million. For Amtrak in 2019 it was $235 million.

Railroads are also often in lengthy legal battles to determine the amount of those settlements and who is at fault. In 2007, CSX was successful in bringing a civil fraud and racketeering case under the Racketeer Influenced and Corrupt Organizations Act (RICO) against a group that conspired to manufacture fraudulent asbestos claims against the rail company using phony medical results.

Following the Philadelphia train derailment, the dispute centered on whether the engineer was at fault for not paying attention and going too fast around a sharp curve or whether the train system should have had Positive Train Control (PTC), that would have automatically slowed the train beforehand. Instead, Amtrak implemented cameras in the front car to keep track of engineers as they drove.

In 2005 when a Metrolink train derailed after hitting a car on the tracks by someone who attempted to commit suicide, accusations flared that the person who left the car there did so as an act of terrorism.