Resolving the "Elephantine Mass": Is There a Fair Way for Policymakers to Free the American Economy from the Specter of Never-Ending Asbestos Litigation? (Liability)
White, Michelle J., Regulation
SUPREME COURT JUSTICE DAVID SOUTER has called asbestos litigation "an elephantine mass" --600,000 plaintiffs have sued for damages, 6,000 companies have been sued, 80 companies have filed for bankruptcy because of asbestos liabilities, $54 billion has already been paid in compensation, and estimates of total compensation costs range as high as $250 billion.
An important feature of asbestos litigation is that the volume of claims keeps rising, even though most uses of asbestos ended in the 1970s and cancer deaths attributable to asbestos exposure have been falling since 1992. The number of claims filed against five large defendants increased from 81,000 in 1991 to 222,000 in 1998 (see Table 1) and claims filed against the largest of the asbestos compensation trusts rose by 68 percent per year between 1999 and 2001.
The rapidly rising number of claims means that new defendants are being drawn into asbestos litigation to replace old defendants that have gone bankrupt. While the earliest defendants were producers of asbestos insulation and asbestos-containing building materials, newer defendants include firms that sold or installed asbestos products, manufacturers whose products incorporated an asbestos-containing component, or owners of production facilities that had asbestos insulation. Unlike other mass torts, asbestos litigation has no natural ending point because the number of potential plaintiffs and potential defendants is virtually unlimited.
As early as the 1930s, asbestos has been known to cause harm to those who work with it. Nonetheless, it was widely used until the early 1970s for its insulating and fireproofing properties. About 27 million workers were exposed to asbestos in high-risk industries and occupations. Exposure can cause a variety of diseases, ranging from mesothelioma (a cancer that is usually fatal soon after diagnosis) to pleural disease (thickening of the pleural membrane around the lungs that is non-disabling). The probability of developing a severe asbestos disease rises with the length and intensity of asbestos exposure.
Most plaintiffs who file asbestos claims have been exposed to asbestos but do not have any asbestos-related impairment. Because asbestos diseases have very long latency periods, most people who were exposed will die of some other cause first. Most claimants file claims as soon as they learn that they have been exposed because, if they wait, statutes of limitations in some states will prevent them from filing later on and defendants may have gone bankrupt in the meantime.
Enter the lawyers Asbestos litigation started slowly and, like tobacco litigation, only became successful when lawyers obtained documents showing that producers of asbestos-containing products knew that exposure to asbestos was harmful. Asbestos litigation is dominated by a small number of plaintiffs' law firms, most of which represent thousands of claimants.
Law firms locate plaintiffs both by advertising widely and by offering free X-rays. One example of a large screening campaign involves textile workers at factories in the south. Textile factories have ventilation systems that used to be lined with asbestos insulation and, as a result, many textile workers have scarring of the lungs that could be due to inhaling asbestos fibers. But few have any asbestos-related impairment.
Law firms work on a contingency fee basis and typically file claims against many defendants for each plaintiff. For a factory worker, defendants would include all producers of the types of asbestos products that could have been used in the plaintiffs workplace -- often as many as 50 defendants.
Because the number of asbestos claims has risen rapidly but the number of claims involving asbestos-related cancers has remained constant, the proportion of claimants who have cancer fell from about 20 percent in the 1980s to less than 10 percent in the 1990s. …