The Wall Street Journal has published an overview of the asbestos litigation world as it exists at the end of 2009, from which several interesting facts emerge. A major factor in ongoing asbestos litigation – suits filed by individuals who have suffered health problems from asbestos exposure – has been the trust funds established by asbestos product manufacturers to cover their liabilities.
Over 100 companies have filed Chapter 11 bankruptcies to protect themselves from asbestos liability claims while reorganizing their finances. For about forty of those companies, part of their bankruptcy settlement agreements has been establishment of a trust fund to pay off liability claims. Those trust funds have continued to grow both in assets and in number, with many of them established just since 2005.
Debate has arisen over claim payments by those trusts to plaintiffs who filed asbestos claims with “non-malignant” asbestos health problems. The concern is that most of those funds should flow to people with asbestos cancer. The implication made by this story is that these non-malignant claims are for minor illnesses. They are not. There is no such thing as a minor affliction resulting from asbestos poisoning; asbestosis will ruin your health just as surely as malignant mesothelioma will – asbestosis will just take longer to do it.
What is clear from this article is that asbestos lawsuits – and therefore asbestos related medical diagnoses - have accelerated rather than slowed. In 2008 alone the Owens Corning trust fund paid out about nearly $1 billion, almost half of which went to plaintiffs with non-cancerous afflictions. That ratio conflicts with the distribution of payments related to lawsuits filed by asbestos victims. According to the Journal, nearly 85% of the money awarded in court cases (as opposed to trust fund claims) went to cancer victims.
There are a couple of reasons for this. One is that cancer awards are much larger than those for non-malignant illnesses because asbestos cancer is always fatal. Another reason is that asbestos attorneys representing plaintiffs with non-cancerous asbestos diseases often will opt to work outside the court system to settle claims, principally through the trusts. The cases that are tested in court are disproportionately cancer cases.
Trust funds are overseen by trustees that include bankruptcy judges. While the claim system may need more transparency that should not suggest that people whose health has been ruined by asbestos exposure but aren’t dying of cancer aren’t entitled to recognition as asbestos victims both in the court system and with the asbestos trust funds
