Abestos - AAA Flashcards
Why does an asbestos claimant file against 60 or more defendants?
• an individual victim’s disease is typically attributed to exposure to
multiple asbestos products over decades of use
• impossible to isolate a specific exposure causing the disease
• so a single claimant typically files suit against 60+ defendants
Where are most claims filed (state or federal)?
- the majority of claims are filed in state rather than federal courts
- the mix of claims by state has varied dramatically over time
Why is it difficult to analyze future claim emergence and costs?
It is difficult to analyze future claim emergence and costs because there is no single registry for asbestos disease incidence and claim
filing information.
What did the RAND report conclude?
The RAND Corporation’s May 2005 report found that:
• # of clms filed annually ↑ sharply starting in the mid to late 90s
• clmants w/ non-malignant injuries accent for most of the growth
• the claim volume has heightened concerns regarding the depletion of funds available to pay future claimants
What changes have occurred since the RAND study?
The RAND study does not include information beyond 2002.
Changes since that time include:
• greater effort to direct scarce resources to the sickest claimants
- changes to the Manville Trust Distribution Process (TDP)
- state reforms imposing medical criteria to bring a claim
• a ↓ in claim filings in 04-05 for less severe medical conditions
• additional bankruptcies, but at a lower annual rate
- pre-packaged bankruptcies are challenged
- other potential solutions pursued
• continued federal and state reform efforts
• heightened scrutiny of potentially fraudulent claims
What conclusions may be drawn from the Manville Trust claim filing data?
The Manville Trust claim filing data shows the following:
• mesothelioma claims have ↑ steadily since 1998
- a spike in 2003 is attributable to the Δ in the TDP eff that year
- even setting 2003 aside, there is a clearly increasing trend
• many believe the increase in mesothelioma claims is not due to an increase in the disease incidence, but rather:
- greater medical awareness and diagnosis of mesothelioma
- an increase in claimants’ propensity to sue
• asbestos-related lung and other cancer claims also generally increased from 1998 to 2003
What has influenced claim filing activity?
Claim filing activity has been influenced by:
• medical criteria
• occupational exposure thresholds
• identification of claimants who currently show no signs of impairment
Why are future mesothelioma claims more estimable than asbestos-related claims?
Future mesothelioma claims are more estimable than asbestos
• future mesothelioma claims may be estimated based on epidemiological factors such as:
- the population exposed
- the timing of the exposure
- disease latency
• asbestos-related cancer claims are more difficult to predict since there are several other sources of cancer (tobacco use)
• asbestosis is dose-dependent so serious asbestosis claims might decline in the future
• non-malignant claims are more difficult to predict because they are generally influenced more by factors affecting litigiousness
- recruitment efforts through media advertising
- mass screenings
Why are defense costs projected to increase in the future?
Defense costs could increase at least temporarily since:
• more defendants are now involved in the litigation
→ defense no longer routinely handled on a joint basis
• many defendants have abandoned settlement strategies
• new defendants are incurring significant discovery costs as they
work to understand their exposure and potential defenses
• coverage disputes between defendants and their insurers and between insurers and their reinsurers might increase
Describe the proposed federal legislation
Proposed Federal Legislation S 852 (The FAIR Act)
• would establish a no-fault trust from which claimants meeting asbestos exposure and medical criteria would be compensated
• would be funded with $140 billion of contributions from corporate defendants, insurers and existing bankruptcy trusts
• if this funding is insufficient, claims could return to the courts
What state reforms have been enacted with respect to asbestos litigation?
State Reforms Regarding Asbestos Litigation
• several states have established inactive dockets which preserve the right to sue for those who do not currently meet the specific
medical criteria
• other states have passed legislation requiring asbestos claimants to satisfy medical criteria in order to bring a claim
• as a result of these reforms, asbestos litigation in these states will likely become a much more individualized process, involving single plaintiff claims for the most severely injured
• this will increase expenses for claimants and defendants as well as the average compensation for malignant claims
How prevalent are fraudulent asbestos-related claims?
Fraudulent Asbestos-Related Claims
• plaintiff attorneys in asbestos and silica lawsuits usually combined a large number of claimants in a single lawsuit
• this made it difficult and costly for defendants to assess the validity of each claimant’s case
• in a Johns Hopkins study, independent radiologists reviewed 500
chest x-rays that have been previously entered as evidence in asbestos lawsuits
• they found abnormalities in only 4.5% of the films compared to the 96% declared by physicians hired by the plaintiff’s attorneys
• in the Silica Multi-District Litigation hearings, physician depositions cast considerable doubt on the diagnoses for 10,000 claimants
• although it is highly unlikely for someone to have both silicosis and asbestosis, doctors had diagnosed individual claimants with asbestosis at one time and then silicosis at a later date
• more than 50% of the silica claimants had previously filed asbestos claims with the Manville Trust
