North Carolina’s legal system is susceptible to egregious abuses in bankruptcy trust claims. Unfortunately, some plaintiff attorneys have made it their practice to exploit the system, employing unethical legal practices to manipulate damages payed. From hiding evidence of exposure – like the practices revealed in the Garlock bankruptcy case – to “double dipping” – an occurrence where a plaintiff receives the necessary damages from a tort system defendant to make them whole but subsequently files another claim and obtains additional damages – it’s clear that plaintiff attorneys have attempted to game the system in asbestos trust claims for far too long. It is for that reason, our state’s leaders must take action to stop these abuses of our legal system and establish transparency in bankruptcy trust filings. Tomorrow, members of the North Carolina House Judiciary II Committee will take up Senate Bill 470: Personal Injury Bankruptcy Trust Claims – a bill seeking to establish transparency and fairness in North Carolina’s costly civil liability and bankruptcy trust system.

Senate Bill 470 would amend Rule 26 of North Carolina Rules of Civil Procedures regarding civil discovery in asbestos personal injury cases, requiring that trust claims be filed prior to trial instead of after. This type of disclosure is critical to conducting a fair trial, as claims would become admissible evidence. It is important to note that Senate Bill 470 does not take away from a plaintiff’s ability to file claims or recover damages. Instead, it will expedite the receipt of trust payments by accelerating claim filings and allow North Carolina juries to consider all evidence of claimed asbestos exposures in suit proceedings – a necessary measure in order to strengthen North Carolina’s legal climate.

Through the enactment of commonsense reforms, North Carolina’s legal climate has climbed the competitive leaderboards in just a few short years, becoming one of the best in the nation. However, in order to continue on that trajectory, we must capitalize on our momentum and take the necessary steps to solidify certainty and clarity in legal affairs. North Carolina’s overall competitiveness depends on a strong legal climate that fosters predictability and transparency. Senate Bill 470 is one pivotal measure that will fortify both. As states like Ohio experience success in instituting such practices, North Carolina’s leaders should take notice. We are thankful that Senator Michael Lee has led the charge on this issue and it is our hope, that the members of the House Judiciary II Committee will support this legislation.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber