October 9, 2011

A Benchmark Year for Asbestos Litigation

Many asbestos manufactures and other companies that used asbestos in their products have known about the dangers associated with asbestos exposure since the early part of the twentieth century. Nonetheless, because of its unique properties, the demand for products that incorporated asbestos continued to grow for many years. And these companies continued to do whatever they could to satisfy that demand.

Demand for asbestos peaked between World War II and the Korean War.

By then millions of asbestos workers had been exposed to asbestos fibers. And countless millions of people who were not in the industry were exposed to the substance in their offices, schools, homes, and automobiles.
Asbestos companies and insurance companies were well aware of the dangers associated with asbestos inhalation for many years. Yet they chose to hide the evidence and deny any wrong doing on their part. Instead, these companies chose to put their workers health at risk in their pursuit of profit.

Things changed dramatically in 1971 when a Federal court reviewed a product liability case and issued the first verdict against an asbestos manufacturer. The court also decided to award the employee who filed the complaint damages. ubsequently the ruling was appealed. However, the verdict was upheld. This seemed to open a floodgate to asbestos litigation. Even in the face of this decision asbestos companies chose to fight back.

Instead of acknowledging all of the detrimental effects exposure to asbestos had wreaked on their workers lives, manufactures instead decided to defend against the rising flood of complaints. Instead of doing things that could protect their workers, things that could help to alleviate the dangers their employees faced at work every day, the manufacturers "battened down the hatches", denied responsibility, and "dug in".

The courts continued to rule against asbestos manufacturers and continued to award payments to the workers who were losing their health, their livelihood, and their lives. With ever increasing award payments and legal bills, asbestos companies searched for a different approach. Bankruptcy seemed to be a solution.UNARCO and Johns Manville were the first asbestos companies to file for Chapter 11 bankruptcy protection in 1982. Since that time in excess of eighty companies have filed for bankruptcy.

Companies that declare bankruptcy seemingly as an attempt to reorganize their finances and buy some time. Ostensibly this is so they can pay the liability claims for asbestos that the courts have awarded. When a company files for Chapter 11 protection, the filing will suspend any future or pending lawsuits against that company for the duration of the bankruptcy case. The company essentially asks the court to authorize a plan that will include the establishment of a settlement trust fund.

The company's strategy will redirect on any future claims that are filed against company to the trust.The asbestos bankruptcy trust funds that have been established operate under rules that make sure that the funds within them are available for claims in the future. Over $30 billion has been made available within these trusts.
This can actually benefit people who have suffered from an asbestos related disease but who have missed the time frame within which they should have filed a lawsuit. That's because even if the statute of limitations has passed for filing a claim against a company the window still could be open for filing a lawsuit against the trust.
Source : asbestos wiki