Number 9, March 2005 » Chrysotile better than PVA » Another product to be banned by France? » Cancer in the kitchen? » Up in the air (by Sophie Stone) » Read for you : Solving the asbestos imbroglio in the United States » The final proof Read for you : Solving the asbestos imbroglio in the United States “Justice is distorted and our economy is held back by frivolous asbestos claims”, declared President George W. Bush in his State of the Union speech on January 20, 2005. Asbestos once was a wonder substance, widely used as a fire retardant. But it turned out to cause various diseases and has generated hundreds of thousands of lawsuits – 600,000 are now pending. Eventually as many as 2.7 million cases might be filed. The US Supreme Court noted “the elephantine mass of asbestos cases.” So far the litigation has cost $70 billion and by some estimates could ultimately reach $275 billion. The lawsuits have driven scores of firms into bankruptcy. So far, more than 75 firms have gone bankrupt as a result of asbestos litigation. As many as 130,000 jobs have been disappeared and even more won’t be created in the future because of money diverted from investment to litigation. Many employees who kept their jobs have lost their employer-provided retirement accounts. As companies which actually produced asbestos products have collapsed, trial attorneys have turned to food and beverage, steel and iron, pulp and paper, metal goods and textile firms. A study by Prudential Financial notes: “Defendants are increasingly ‘peripheral’; asbestos was more or less ‘incidental’ in their products or facilities; if it was in their products, it was enclosed and therefore, only a minimal number of fibres were released into the air.” Attorney Steve Kazan, who represents genuinely sick clients, complained that “we are seeing large numbers of cases from ‘new’ industries where it seems clear that if there is any asbestos exposure at all it is very likely limited in intensity as well as scope, with relatively few workers having real exposure.” As a result, people who aren’t ill are filing an increasing number of cases. Economists Joseph Stiglitz, Jonathan Orszag and Peter Orszag say “the share of total new claimants who are unimpaired has jumped from about four percent to three-quarters over the last two decades.” Ohio has set medical criteria for recovery, while Florida and Mississippi judges have threatened to toss out cases filed by plaintiffs from other jurisdictions. The American Legislative Exchange Council has proposed model legislation to create an “inactive docket” for plaintiffs who have shown no evidence of illness. Federal judges have begun to exercise tighter oversight of bankruptcy cases. Mark Brodsky of Elliot Management Corp. argues that “a wave of recent asbestos bankruptcies has presented the federal judiciary with an unprecedented opportunity to expose and neutralize fraud and abusive practices, facilitate reorganizations and ensure that legitimate asbestos victims are compensated better and earlier.” But federal legislation also is necessary. For reasons of both justice and economics, Congress should join the President in making tort reform a top priority. Source: “Solving the asbestos Imbroglio” by Doug Bandow a Senior Fellow at the Cato Institute.