Over the past forty years, asbestos-related litigation has forced over 100 companies into bankruptcy – devastating workers, retirees, shareholders and affected communities. Some estimates project the total cost of asbestos litigation (including future claims) at more than $260 billion. Unfortunately, asbestos litigation has long been plagued by fraud. Reform is needed to protect job-creating businesses from lawsuit abuse and to ensure that legitimate victims receive the compensation they deserve. Read More...
Significant litigation over asbestos-related ailments began in the 1970s and has continued unabated ever since. Indeed, asbestos litigation has developed into a billion-dollar enterprise for plaintiffs’ lawyers – as evidenced by the endless TV and online advertising targeted at potential plaintiffs.
While asbestos lawsuits originally focused on companies that mined asbestos or manufactured asbestos-based insulation products, the collapse of these early asbestos defendants forced plaintiffs’ attorneys to begin targeting new companies, including many that had little, if anything, to do with the manufacture or supply of asbestos-containing products. Many of these lawsuits are filed in plaintiff-friendly “magnet” jurisdictions such as Madison County, Illinois – even if neither the plaintiff nor the defendant has any real connection to the jurisdiction.
The bankruptcies of major asbestos companies also gave rise to trust funds intended to compensate future asbestos victims. Today, these trusts control assets with an estimated value of more than $30 billion. But the existence of the asbestos trusts has not slowed the wave of lawsuits against American businesses. In fact, one prominent plaintiffs' lawyer described asbestos litigation as an "endless search for a solvent bystander."
The asbestos trusts operate in parallel to the traditional tort system and offer only rudimentary reports on the claims they receive and pay. As a result, plaintiffs’ attorneys are sometimes able to hide the fact that a single individual is making multiple claims, citing different and contradictory exposure facts, against multiple trusts and solvent companies. This “double dipping” exposes innocent businesses to abusive lawsuits and deprives the trusts of funds intended for legitimate victims.
Federal and state legislation is needed to discourage questionable claims against asbestos trusts, protect businesses from abusive lawsuits and ensure that asbestos trusts are able to compensate legitimate victims.
The Furthering Asbestos Claim Transparency (FACT) Act is federal legislation that would require asbestos personal injury settlement trusts to disclose information on their claims on a quarterly basis (H.R. 906, H.R. 985). This would allow trusts and businesses to identify and contest questionable claims.
The PROTECT Asbestos Victims Act, S. 2564, would authorize independent audits and oversight of asbestos bankruptcy trusts to discourage fraud and protect future victims’ access to compensation. The legislation would also ensure that future victims’ interests are adequately represented as courts consider approving new asbestos trust funds and discourage abusive “double dip” claims against solvent companies.
In addition, several states have proposed legislation or changes to court rules that would mandate greater transparency for trust claims. In 2012, Ohio became the first state in the nation to enact a law that requires plaintiffs to file and disclose trust claims before proceeding to trial. Arizona, Iowa, Oklahoma, Mississippi, North Dakota, South Dakota, Tennessee, Texas, Utah, West Virginia, and Wisconsin have since enacted similar laws.