NU Online News Service, May 10, 12:20 p.m. EDT–Over the past three decades insurers and businesses have spent $70 billion to cover legal expenses and pay claims related to asbestos-related injuries, a new study has found.
The research by the Santa Monica, Calif.-based RAND Institute for Civil Justice also found that more than 730,000 people in the United States have filed compensation claims for asbestos-related injuries from the early 1970s through the end of 2002.
Claimants, the study found, have received about 42 cents of every dollar spent on asbestos litigation, with another 31 cents going to defense costs, and 27 cents to plaintiffs' attorneys and other related costs. The research notes that there is no published research comparing the compensation received by asbestos plaintiffs with their economic losses.
RAND noted that the silicate minerals composing asbestos are used in many industrial processes for their fire-retardant properties and the fibers, when inhaled, can cause lung damage and sometimes mesothelioma, a fatal cancer.
Researchers said the number of asbestos claims has increased sharply through the 1990s and into 2002, driven primarily by people who claim non-cancerous injuries. These cases now account for 90 percent of all new claims, according to the study.
Stephen J. Carroll, a RAND senior economist and lead author of the study said, said the cost of asbestos claims is continuing to increase at a steady pace.
Restrictions placed on asbestos suits in some states may not retard the growth of such litigation, he said. "If you change the rules in one state, claimants might simply go to a different state," he said.
Claims made by people with mesothelioma, the study found, have increased sharply in recent years==doubling during the period from 1994 to 2002. However, cases based upon mesothelioma remain a small proportion of all asbestos claims.
The researchers said an increasing share of the claims are being brought by workers exposed in industries such as textiles, paper, glass and food==where workers did not routinely handle asbestos, but asbestos was present in the workplace. Previously, they said, most claims were from workers exposed through activities such as asbestos mining and manufacturing.
While the lawsuit activity was found to be concentrated in eight industries, dozens of other businesses have been targeted, RAND found. Researchers said a defendant company can be found in 75 of the 83 industries listed in the U.S. Department of Commerce's Standard Industrial Classification system.
According to RAND, there is some evidence suggesting that most of the non-cancerous claimants have not suffered an injury affecting their ability to perform daily activities, although they may show symptoms such as lung abnormalities that suggest an asbestos injury has occurred.
The study also found at least 8,400 entities had been named as defendants in asbestos claims through 2002. At least 73 companies named in a substantial number of asbestos claims filed for bankruptcy through mid-2004, researchers determined.
RAND said the trust funds created following the bankruptcies of asbestos manufacturers and other major asbestos defendants pay only a small fraction of the agreed-upon value of individual's claims against those defendants.
RAND researchers summarized several proposals that have been put forth as alternatives to the current system, including one that would allow claims to remain in the legal system, but limit compensation only to those people whose injuries meet certain medical criteria.
Several states have adopted this system, which RAND said requires the fewest changes, but prevents many asbestos-exposed workers from seeking compensation.
Another proposal would create a universal trust fund to make payments to injured workers who meet certain criteria, including medical criteria, by pooling payments from defendant corporations and insurers. But such a proposal must address difficult issues such as how much is needed to pay future claims and how much each contributor should pay, according to researchers.
One such measure being considered by Congress would set up a $140 billion fund. Mr. Carroll said whether this amount would be enough to cover all claims would depend on the size of awards it permitted and what was allowed for attorneys' fees. "If you had a rule that anyone with a claim gets $1 million, you would be flooded with claims."
RAND Institute for Civil Justice said it has studied asbestos litigation since 1983, publishing a series of reports that have documented the growing cost and number of asbestos injury cases.
For the latest report, RAND said the researchers gained access to confidential data gathered by a large number of individual defendants, insurers, and plaintiff and defense attorneys.
RAND said the study group also reviewed court records and interviewed more than 60 key participants, including plaintiffs' attorneys, corporate counsel, outside defense attorneys, insurance companies, investment analysts and court-appointed neutral participants.
Mr. Carroll said as long as he has been doing the study, "I continue to be impressed that less than half [of the money involved] ends up in the pockets of injured parties."
Printed copies of "Asbestos Litigation" (ISBN: 0-8330-3078-7) can be ordered from RAND's Distribution Services (order@rand.org or by calling a U.S. toll-free number 1-877-584-8642.
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