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Asbestos litigation: it’s out of control. And what the heck is mesothelioma?

To answer the question posed by the title, mesothelioma is how greedy plaintiff’s attorneys turn cancer into wealth.

A more scientific answer is that mesothelioma is a cancer of the lining of the chest or abdomen. Asbestos is the only demonstrated cause of mesothelioma. However, some mesothelioma cases are not traceable to an asbestos exposure.

Because I’ve seen advertisements on television advising people to call a certain attorney if they have mesothelioma, I figured that the attorney in question must be making big money if he can afford a national advertising campaign. And sure enough, I did some research and discovered that asbestos litigation is a multi-billion dollar industry. According to the Rand Institute, $54 billion has been spent on asbestos litigation through the year 2000. It makes me wish that I went to law school. (Oops, I forgot, I did go to law school; unfortunately, I’m not seeing any of this mesothelioma money.)

You don’t even need to have mesothelioma or some other type of disease to cash in on the asbestos litigation handout. Approximately 90% of asbestos claims don’t involve any type of cancer, with many of the non-malignant claimants showing no physical impairments from asbestos exposure. Through the end of 2000, more than 600,000 claims have been filed for asbestos injury.

The story of asbestos litigation is the story of what’s wrong with our legal system and how it’s hurting our economy. We have a disease that arouses sympathy in jurors and defendants with deep pockets. Attorneys file the lawsuits in the states where the laws are the most biased in favor of plaintiffs, a tactic known as “forum shopping”. (Texas, Mississippi, New York, Ohio, and Maryland are the states most popular with asbestos lawyers.) As companies go bankrupt from asbestos litigation, attorneys seek out new defendants with deep pockets so the lawsuits can continue. The number of companies named in asbestos lawsuits increased from around 300 in 1982 to more than 6,000 by the end of 2000.

A few plaintiffs and their families get rich. In August 2001, a jury in El Paso, Texas, awarded a single plaintiff $55.5 million. In September 2001, a jury in Orange, Texas, awarded five plaintiffs $130 million. In October 2001, a jury in Mississippi awarded $150 million to six plaintiffs with asbestosis claims, and according to local media reports, none of the plaintiffs actually had asbestosis.

Only 34% of the money spent on asbestos litigation actually goes to plaintiffs. The rest goes to attorneys or is spent on other costs related to litigation. The legal system creates an incredibly inefficient insurance scheme. It’s more like a lottery instead of any sort of rational scheme to help people who have suffered injury.

Attempts to create a legislative solution to the problem have failed. Democrats, who receive a large amount of campaign funds from trial lawyers, have blocked all the legislative proposals. Earlier this month, talks in the U.S. Senate to establish a national asbestos trust fund failed again. Reuters: Asbestos Talks End Without Agreement - Source.

The RAND Institute for Civil Justice does an excellent job advocating for an asbestos trust fund:

I would take an even harder line than the RAND Institute. If someone has mesothelioma or some other asbestos related illness, but it’s not really anyone’s fault, then it’s not clear to me that the victim should receive any compensation at all. This is the traditional rule of tort law; there has to be negligence in order for there to be liability. I suspect that most of the truly negligent companies are already bankrupt. Nevertheless, a trust fund like the one proposed by Republicans, but blocked by Democrats, makes a lot more sense than the current system.

The quote above and most of the information in this essay comes from Asbestos Litigation Costs and Compensation, a report produced by the RAND Institute for Civil Justice. Highly recommended reading.

posted Friday, May 21, 2004