Effect of Asbestos Litigation on Industries

Due to overwhelming asbestos litigation against them, many corporate defendants have become bankrupt, and as a result, “there has been upward pressure on claim settlements demanded from remaining solvent defendants.”[1]  Certain industries have reported huge increases in filing rates.  In 1999-2000, for example, there were increases of 721% in the textile industry, 296% in the pulp and paper industry, and 284% in the food and beverage industry.[2]  The insurance industry also suffered badly since it paid approximately 32 billion dollars in asbestos loss and expense.[3]  Additionally, they have to hold as reserve huge amounts to pay pending and anticipated future claims over the next several decades.  Unfortunately, many times defendant companies bearing no responsibility have been forced to pay large verdicts owing to the extended latency period of asbestos claims.  For example, in 1998, Halliburton, a huge oil and gas services company, acquired its main rival Dresser Industries without inquiring into Dresser’s legal liability from long dormant asbestos suits.[4]  Subsequently, Halliburton was forced to settle many asbestos cases where the asbestos exposure actually occurred at Dresser, much before the acquisition.[5]

Among the traditional defendants, nearly all the eleven defendants in Borel ultimately filed for bankruptcy protection.  At least 60 defendants in the as­bestos injury litigation have already filed for bankruptcy.  The rate of such filings is increasing.   The bankruptcy of traditional defendants has led plaintiffs’ firms to bring suit against additional solvent manufacturers of asbestos containing products. In general, these ”peripheral defendants” marketed products that contained relatively little asbestos and/or contained asbestos in a form that was not nearly as dusty as the products sold by the traditional defendants.  Among the relatively new defendants are Ford Motor Co., Chrysler Corp., Campbell Soup, AT&T Corp., 3M Co., Kelly Moore Paint, and IBM.41 Property owners where asbestos exposure occurred are also named as  Plaintiffs have also begun to name as defendants the owners of property where the asbestos exposure occurred.[6]

 

 


[1] Am. Acad. of Actuaries, Current Issues in Asbestos Litigation. 5  (Feb. 2006)

[2] Roger Parloff, “Asbestos lawyers are pitting plaintiffs who aren’t sick against companies that never made the stuff—and extracting billions for themselves,” Fortune, March 4, 2002 at 155.

[3] Am. Acad. of Actuaries, Current Issues in Asbestos Litigation. 5  (Feb. 2006)

[4] Allan Sloan, “Halliburton Pays Dearly but Finally Escapes Cheney’s Asbestos Mess,” Washington Post, January 11, 2005.

[5] Id.

[6] Toxic Tort Litigation, Alan Rudlin


Inside Effect of Asbestos Litigation on Industries