Asbestos Litigation
By Flora “Grandma” Green,
National Spokeswoman, The Seniors Coalition
Anyone who watches television these days is barraged with
advertisements from lawyers encouraging people who think
they have been harmed by some drug or if they are experiencing,
or think they are experiencing, pain or mental trauma from
some event, then call the number flashing on the screen.
It is the telephone number of your friendly neighborhood
trial lawyer.
These advertisements are extremely controversial both in
the legal community and among legal ethicists who correctly
point out that the goal of the trial lawyer in most cases
is simply to add another potential name to a class action
suit against a deep-pocket defendant. More defendants mean
more pressure on some company to settle with the attorneys
filing the class action suit. At the end of the day, the
claims of individual plaintiffs are settled for pennies,
but the large number of members of the “class”
allow the trail lawyers to typically pocket huge legal fees.
That’s the way the system works, and most of us find
such advertisements a distraction. But others are enticed
into the scheme in the hope they will have a legitimate
claim addressed properly. Sadly, that is the exception rather
than the rule.
But for thousands of seniors presently suffering from asbestos-related
diseases, their legitimate legal claims seeking compensation
for documented medical problems are now effectively blocked
from being heard by any court. The courts are too crowded
to handle the hundreds of thousands of asbestos cases filed
by trial lawyers, so the sickest victims are often forced
to wait years to have their cases heard. The tragedy is
that many of these patients don’t have months left
in their lives, let alone years. Many of the cases clogging
the courts have been brought on behalf of people who aren’t
even sick yet. Many of those may never experience any adverse
health consequences from any past exposure to asbestos,
real or imagined.
The word “crisis” may be a bit overused these
days, but there is no other way to describe the situation
today with asbestos litigation. There aren’t too many
things that Democrats and Republicans in Washington agree
on these days, but both parties agree the current system
for asbestos compensation is broken.
The Senate Judiciary Committee is currently working on
legislation to solve the crisis by creating a victims’
compensation trust fund that would compensate victims fairly
and when they became sick, not whenever their case is called
from the endless lines of suits. Victims would be compensated
for their asbestos-related illnesses immediately. And if
they get sicker down the road, they would qualify for additional
compensation.
This solution would not be a burden on taxpayers either.
The fund of up to $140 billion would be paid for entirely
by businesses and insurance companies. It is not perfect
legislation, but then most compromises struck between fiercely
competitive forces rarely are perfect. In this case, Senate
Judiciary Committee Chairman Arlen Spector and Ranking Minority
Partick Leahy hammered out an agreement that drastically
overhauls the present court procedures for dealing with
asbestos claims, and offers real hope for those truly sick
to receive compensation during their lifetime. The trust
fund solution works for seniors, and that’s why the
Seniors Coalition, representing more than 4 million seniors,
is wholeheartedly supporting this approach.
Seniors suffer disproportionately today from asbestos-related
illnesses for two reasons. First asbestos-related illnesses
usually have a long latency periods and it can take years
for illnesses to appear. Secondly, seniors made up the nation’s
work force during the era when asbestos was most commonly
used.
More seniors also served in the military than the generations
that have followed and asbestos was once widely used in
shipbuilding and other military construction into the mid-1970s,
well after civilian builders began to curb their use of
the material.
The asbestos litigation crisis is a horrible situation
that is a disservice to every American and a tragedy for
many. It is a situation that must be remedied for many reasons,
not the least of which is the thousands of seniors who will
succumb to their asbestos-related illnesses before they
are ever compensated because of the litigation gridlock
that presently exists.
The asbestos litigation is the longest running legal battle
for tort relief in the history of the United States. The
only thing that has clearly emerged from this battle to
date is that no one really knows if compensation for victims
is being administered equitably, and whether the compensation
is getting to those who are truly sick and need the financial
assistance to deal with their illness. It is equally unclear
if the burden for paying this compensation is being divided
equitably among defendant companies, and in proportion to
the responsibility they bear for the asbestos exposure to
employees.
According to Rand Institute for Civil Justice in their
interim report on “Asbestos Litigation Costs and
Compensation,” more than 850,000 people have filed
claims, typically against dozens of defendants, for asbestos-related
personal injuries through the end of 2003. More important,
90% of these claims are from individuals who are functionally
unimpaired (which means that their asbestos exposure has
not thus far impacted their ability to perform activities
of daily life). By 2002, companies had paid out more than
$70 billion to compensate for asbestos exposure.
Here is the hard part: On average, claimants only receive
43 cents of every dollar; the rest goes to the trial lawyers
for legal fees and other “transaction costs.”
More than 65% of the payments are being made to those functionally
unimpaired. This asbestos-related litigation has forced
at least 70 companies into bankruptcy; more than 60,000
jobs have been lost from these asbestos-related bankruptcies;
workers at these bankrupt firms have seen the value of their
401(k) retirement accounts drop by an average of 25%; and
all displaced workers in this asbestos-related bankrupt
firms lose an average of $25,000 to $50,000 in wages.
The cost to our national economy is equally as devastating.
For every 10 jobs lost in asbestos-related bankruptcies,
another 8 jobs in the community where the company was located
are also lost. If reforms are not enacted by the Congress,
this litigation insanity will continue for another 27 years
as the number of potential litigants moves through the system.
Over that 27-year period, economic growth in America will
decrease by $2.4 billion per year, accounting for 30,000
jobs every year that would have been created but for this
asbestos litigation.
To see the future, you just have to look at what has happened
today. Six functionally unimpaired former railroad workers,
who have not exhibited any form of asbestos-related disease,
were awarded $25 million each by a Lexington, Mississippi
jury in October 2001. If that’s not shocking enough,
consider a tiny insulation contractor, called AC&S,
that got into the cross-hairs of the trial lawyers litigation
cannon. This Lancaster, Pennsylvania company was sued in
a rural, plaintiff-friendly county in Mississippi by six
defendants who worked in facilities where AC&S never
actually performed any work, but where a few products sold
by them that contained asbestos had been used. The facts
apparently meant nothing to the jury, and they returned
a judgment against the company for nearly $84 million. AC&S
was forced into bankruptcy.
This lunacy gets worse. Just look at the case against 3M.
3M has never made or sold asbestos or any product containing
asbestos. Yet, 3M has been sued by some enterprising trial
lawyers for failing to warn users that its masks would not
filter out asbestos dust if they were not used properly.
Companies are forced to settle such frivolous claims because
the trial lawyers coach the litigants on what they need
to say to leverage their threats against the defendant companies.
Baron and Budd, one of the lawsuit industry’s largest
asbestos litigation firms, urged plaintiffs in a memo uncovered
by defense attorneys in one case “to maintain that
you NEVER saw any labels on asbestos products that said
WARNING or DANGER.”
President Bush, recognizing the scope of this disaster,
has made legal reforms, including asbestos reform, a key
part of his second-term agenda. He called on Congress to
eliminate the “frivolous asbestos claims” that
have an economic stranglehold on our economy in his January
2005 State of the Union address.
The United States Senate is currently working on legislation
that will hopefully restore some common sense to this problem,
and every senior suffering from asbestos related illnesses
have a huge stake in seeing the Senate Judiciary Committee
enact a Asbestos Victim’s Compensation Fund that will
truly protect those who are legitimate claimants and who
are sick or become sick. Doing so will strip the questionable
legal tactics of trial lawyers and their predatory legal
fees from the process, and restore some sanity to a legal
process that should be protecting legitimate claimants.
This solution, however, is a difficult pill for the trial
lawyer lobbyists to swallow, and they are fighting hard
to undermine the legislation that has won bi-partisan support
in the Senate Judiciary Committee. Leading the charge for
the trial lawyers is Senator Harry Reid, the erstwhile Senate
Minority Leader who is himself a trial lawyer. While not
surprising that Senator Reid would pick up the battle ensign
for his fellow trial lawyers, it is odd that he would do
so when he represents a largely conservative constituency
in Nevada.
Senator Reid has adopted a favorite Washington tactic of
accusing the senior advocacy groups and other consumer groups
of being “puppets” for special interest groups.
He ignores the transparent hypocrisy of such allegations
when it is he, and his fellow trial lawyers, who are the
consummate special interest group on the asbestos issue.
It is they who will get less out of the pockets of those
who have legitimate claims for asbestos illnesses.
That friendly trial lawyer seen on television beseeching
consumers to pick up the phone and call them to launch a
legal attack against one defendant or another has no place
in the asbestos litigation reform that needs to be enacted.
It is time for truly sick patients to be compensated, and
trial lawyers fees should be limited to the actual value
of the assistance they provide in assuring compensation
is paid to those entitled to it.
It is a concept that is certain to turn that friendly trial
lawyer into a vicious pit bull trying to protect its turf.
It’s high time a muzzle was put on them.
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