Magazine article Risk Management

Litigation Time Bombs: Three Mass Tort Trends to Watch

Magazine article Risk Management

Litigation Time Bombs: Three Mass Tort Trends to Watch

Article excerpt

Enterprising plaintiff lawyers are always looking for the next asbestos case--and who can blame them? A large mass tort case can bankrupt corporate defendants and make millions for plaintiffs' attorneys. Recent examples include not only asbestos, but silicon breast implants, the Dalkon Shield contraceptive and Fen-phen, to name just a few.

Although manufacturers and others in the distribution chain of allegedly harmful products are first on the firing line, it is also the insurance industry, which underwrites the risks and pays the claims, that must be vigilant for potential financial black holes. Of course, correctly assessing the threat--or, more likely, the lack of a threat--may also create profitable opportunities for insurers.

While a variety of concerns could potentially become serious mass tort issues, many insurance and legal experts believe that three particular issues could become the next big thing in mass tort litigation. These three are at different stages of the litigation life cycle: the "worried, but no litigation yet" stage, the nascent pre-trial stage, and the early trial results stage, which allows for a partial assessment of the risks involved.

Nanotechnology

Nanotechnology refers to the use of submicroscopic particles of conventional chemical compounds measuring less than 100 nanometers (or one ten-millionth of a meter) in product design and manufacturing. The most common chemical compounds currently used in nanotechnology engineering are silver, carbon, zinc, silica, titanium and gold. These compounds can be found in thousands of consumer products including cosmetics, shampoos, deodorants and sunscreens, as well as stain-resistant clothing, household appliances, paints, electronics and sporting goods such as bicycles, golf clubs, tennis rackets and ski equipment.

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Many believe that nanotechnology has the power to revolutionize health care, construction and transportation. These advances are sure to benefit all industries, but insurers must be careful to weigh the risks against these possible gains. Uncertainty surrounds nanotechnology because, at the nanoscale, the engineered nanoparticles may have different properties than the same materials do at their normal "bulk" scale. Some scientists question whether chemical compounds not usually considered harmful to humans at the bulk scale may, in fact, carry some risk at the "nano" level.

Specifically, some studies have found that engineered nanoparticles are more easily absorbed through skin and inhaled by humans because their unnaturally small size makes them impervious to some of the human body's normal defense mechanisms. Just because they permeate the body in different ways, however, does not necessarily mean that nanoparticles are harmful. Ultimately, research into this realm is only just beginning.

The possibility that some nanoparticles may be carcinogenic made headlines last year with the results of two studies. The first study (known as the "Poland Study") concluded that certain carbon nanotubes can induce a pathologic response in the cells of mice similar to the initial stages of the development of mesothelioma. (As anyone even tangentially involved in asbestos litigation knows, mesothelioma is a virulent lung cancer almost always associated with asbestos exposure. This strong association and the inevitably fatal nature of the disease made it the signature asbestos claim, usually resulting in large settlements.)

The second study, conducted by the National Institute of Health Sciences in Japan, actually induced mesothelioma tumors in mice exposed to carbon nanotubes. Critics highlighted shortcomings in both studies, however, including the fact that the nanotubes were injected directly into the abdominal cavity of the mice rather than introduced through inhalation, which would more closely simulate the type of exposure humans would be expected to face. …

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