Containment of Mass Litigation

In an attempt to suppress the alarming increase in asbestos litigation two different approaches have been devised by two competing schools of thought: A) the Medical Criteria approach[1] and B) the Trust Fund approach[2].  The Asbestos Claims Criteria and Compensation Act of 2003 presents a viable approach to contain mass asbestos litigation by favoring the “Medical criteria approach” to combat the rampant increase in asbestos claims[3]

The “Medical criteria approach” intends to weed out plaintiffs who do not exhibit any symptoms of asbestos cancer (known as non-malignant patients) by forcing them to establish that they were inflicted with a “physical impairment” as defined by the Act.  A criticism of the principle is that it does not entirely rely on objective evidence thus making its application time consuming.  This may also exclude legitimate victims such as a plaintiff who may not be able to show any “physical impairment” as defined by the Act even though he may have been exposed to asbestos as a result of having engaged in extensive asbestos mining.[4]

The “Trust fund approach” is advocated by another law school of thought.  This approach aims at establishing a global trust fund to pay the medical costs of the victims of asbestos exposure.  However, this theory has not yet been put into practice.  It is believed that the trust fund approach would help to bring down the costs associated with asbestos litigation and would save industries from bankruptcy, owing to the availability of a global fund to compensate asbestos claimants.  However, disputes arise with regard to the amount of money that is to be contributed by each defendant as well as the amount to be allocated among the various plaintiffs.[5] 

Many public policy makers involved in asbestos litigation made efforts to streamline the litigation process and reduce the burdens and costs faced. Courts also devised formal and informal approaches to manage the litigation. A series of court decisions resolved most of the coverage disputes between defendants and insurers. Many defendants opted not to contest the litigation and negotiated settlements of large numbers of cases with leading plaintiff attorney firms.  These agreements typically called for settling hundreds or thousands of cases per year at amounts specified in administrative “schedules” that reflected differences in injury severity and other characteristics deemed to affect the value of cases.[6]   

 

 


[1] Congressional Budget Office Cost Estimate, June 16, 2003.

[2] RAND Corporation Monograph on Asbestos Litigation at p. xxxi; available at www.rand.org/pubs/monographs/MG162. [hereinafter “RAND Asbestos Monograph”]

[3] Congressional Budget Office Cost Estimate, June 16, 2003

[4] Id. at p. xxx.

[5] RAND Asbestos Monograph at p. xxxi.

[6] http://www.rand.org/pubs/documented_briefings/2005/DB397.pdf


Inside Containment of Mass Litigation