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Flagrant Abuses in Asbestos Litigation are Driving Frivolous Lawsuits

| Tort Reform & Legal Climate

It’s been nearly 50 years since the first asbestos lawsuit was filed. Since that time, asbestos litigation has become riddled with unethical legal practices employed by bad acting personal injury attorneys looking to pad their wallets. From double-dipping damages to hiding evidence of exposure to over-naming defendants, personal injury attorneys have made taking advantage of vulnerabilities in our legal system an art form. James Lowery, partner in Gordon & Rees’ Dallas office, recently examined the practice of over-naming and the steep costs that come with it.

As Lowery points out, the number of defendants in asbestos cases has grown from a few dozen to more than 10,000. This is because personal injury attorneys have taken the liberty to name defendants in cases that have no business being included in a suit. Lowery says, “the over-naming problem has become an epidemic, driving up costs for those entities that simply do not belong as defendants,” and he’s right. This, like the other abuses seen in asbestos cases, is a major problem that comes with a high price tag for businesses. To illustrate this problem, Lowery summarizes an asbestos case where 118 entities were sued, yet, the plaintiff could only name eight entities where they may have been exposed to asbestos. Lowery goes on to say, “assuming just 60 of the 118 named companies were over-named and went through the summary judgment stage, this means that at least $1.2 million of defense and transactional costs were unnecessarily incurred to defend one case.” Imagine the costs incurred for a business unfairly named time and time again. Ultimately, it could force them to close their doors.

After spending approximately $2.9 billion fighting more than 430,000 lawsuits, North Carolina’s Bestwall LLC knows this to be true after filing for bankruptcy last year. Despite producing less than 1% of the total asbestos used in more than 3,000 asbestos-containing products manufactured last century, Bestwall LLC was named in 70-80% of mesothelioma lawsuits annually. At the time of the filing, a Bestwall attorney said, the “breadth and magnitude of the asbestos litigation pending against Bestwall are wildly disproportionate to any legal liability Bestwall could possibly have,” and a company press release noted that much of the settlements paid were believed to be products of litigation abuses.

Unfortunately for companies like Bestwall, North Carolina’s legal system remains susceptible to this exploitation. While the state Senate introduced and passed a potential fix last session, the House failed to move the bill. Senate Bill 470: Personal Injury Bankruptcy Trust Claims would require that trust claims be filed prior to trial instead of after, promoting honesty in both trust claiming and civil litigation as claims materials would become admissible evidence in the civil action. Though it may not fully alleviate over-naming, the bill would protect against double-dipping and attempts to conceal exposure evidence by establishing transparency in trust claims. If North Carolina’s competitive business and legal climates are to thrive in the modern global economy, we can no longer allow these abuses to continue. Our team will not stop fighting for reform until it is achieved.

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