State Supreme Court order favors the sickest patients

A look at the costs:
Claimants get 42 cents of every dollar spent on litigation.
Lawyer fees and other related costs get the remaining 58 cents.
Litigation has cost businesses and insurance companies more than $70 billion.
Opponents of Michigan's new court order say 10 new judges will be needed to cover cases, but it's unknown how many cases will be dropped.
Source: Rand Institute for Civil Justice, Detroit News research

Questionable asbestos cases have plagued the courts in Michigan and across the nation for 40 years. So it was good to see the Michigan Supreme Court issue an administrative order that says all asbestos-related cases in the state must be judged on their own merits.


That should eliminate many of the non-injury cases that clog the courts and it will give precedence to those cases that involve the sickest of claimants. No longer will trial lawyers in Michigan be able to bundle cases, which often is done to leverage larger settlements.

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Sponsors of legislation to compensate U.S. asbestos victims said on Friday they had expanded it to include access to payments for people sickened by the mineral as a result of disasters such as hurricanes or the Sept. 11 attacks.


Pennsylvania Sen. Arlen Specter and Vermont Sen. Patrick Leahy announced they were reviving their efforts to get a Senate vote on the bill, which would create a privately financed $140 billion fund to compensate people made ill by work-related exposure to asbestos.


The legislation was shelved in February after it failed to overcome a procedural hurdle in the Senate. Specter, a Republican, and Leahy, a Democrat, said they hoped to bring the expanded version to the Senate floor in the coming months.

"We specifically provided for access to the trust fund for victims who were exposed to asbestos during the attacks on the World Trade Center and Hurricanes Katrina and Rita,"

Leahy said in a statement issued by his office.


Asbestos fibers were used in building materials, auto parts and other products for decades, but are linked to cancer and other diseases. Hundreds of thousands of injury claims have pushed over 70 companies into bankruptcy.

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What’s fairer for asbestos victims - the 'tort system' or the 'FAIR asbestos act'?


The U.S. government is considering adopting the Fairness in Asbestos Injury Resolution Act of 2005 (S. 852). The beauty of the Act is that it exchanges litigation in the tort system (i.e. lawsuits against companies for damage due to asbestos) for an entitlement: show that you’re a victim of asbestos, and the U.S. government will compensate you.
Where does the money come from?

Companies that have a history of using asbestos. It sounds perfect – the guilty companies pay, and asbestos victims receive, without having to go through the difficult and stressful judicial system.


The theory behind this kind of program is appealing. Most importantly, in the current system, asbestos victims are not getting compensated fully, equitably, or in a timely fashion. Currently operating trust funds for asbestos victims are paying between five and ten cents on the dollar for asbestos claims; they just don’t have the money. Companies that have lost big money in the courts have been forced into bankruptcy. Victims take years to recoup any compensation through the tort system. Only the lawyers are getting their share.


A federal trust could solve the problem, so goes the theory. We could pay out claims quickly. We could save money for the plaintiffs and defendants by cutting out the lawyers. We could reduce administrative costs by categorizing the levels of harm that can be done by asbestos. We can make it equitable by fixing the payout in each category for anyone who can prove harm. Make the companies pay for the program, and everyone goes home happy – well, for the asbestos victims, happier than without the money.


Everyone is happy, that is, except tax payers who think corporations will foot the whole bill. According to the Congressional Budget Office (CBO), payouts over the next 50 years will total about $120 to $150 billion, and revenue from the companies will be about $140 billion. So it seems, it’s a zero-sum game.

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