Bankruptcy Trusts Complicate the Outcomes of Asbestos Lawsuits
May 21, 2015
This report investigates whether bankruptcy reduces the likelihood that exposure to the asbestos-containing products of bankrupt parties will be identified in interrogatories and depositions. It also presents plaintiff and defense perspectives on whether the findings are a cause for concern and what, if anything, should be done in response.
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One of the most significant developments in asbestos litigation in the past 15 years is the rising rate of bankruptcy among asbestos defendants. More than 100 companies have filed for bankruptcy at least in part because of asbestos lawsuits. As a result, contemporary asbestos ligation now involves both tort suits against solvent defendants and claims for compensation filed with the specially created asbestos bankruptcy trusts. The outcome of an asbestos lawsuit crucially depends on whether litigants in the tort case introduce evidence of exposure to the products of bankrupt parties. If some of these exposures are not identified, more fault can be assigned to the remaining solvent defendants. These defendants are thus likely to end up paying more when such evidence is not developed than when it is. Plaintiffs might also receive more in compensation from the courts and trusts combined if fault is not allocated to the bankrupt parties. This analysis provides empirical evidence that bankruptcy reduces the likelihood that interrogatories and depositions will identify exposure to the asbestos-containing products of the bankrupt parties. It also presents plaintiff and defense perspectives on whether the findings are a cause for concern and what, if anything, should be done in response.
Introduction and Background on Asbestos Bankruptcies
Data Used to Assess Bankruptcy's Impact on Product Identification
Firms Whose Product Identification We Analyzed
Alternative Approaches for Estimating Bankruptcy's Effect on Product Identification
This research was supported by the RAND Institute for Civil Justice (ICJ) and by contributions from the following asbestos defendants and organizations: Ampco-Pittsburgh Corporation; CertainTeed Corporation; Coalition for Litigation Justice; Crane Company; Dow Chemical Company; E. I. du Pont de Nemours and Company; EnPro Industries; General Electric Company; Georgia-Pacific Corporation; Owens-Illinois, Inc.; and the U.S. Chamber Institute for Legal Reform.
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