Vol. 15 No.12 (December 2005), pp.1057-1059

 

ASBESTOS LITIGATION, by Stephen J. Carroll, Deborah R. Hensler, Jennifer Gross, Elizabeth M. Sloss, Matthias Schonlau, Allan Abrahamse, J. Scott Ashwood.  Santa Monica, CA: RAND Corporation, 2005. 206pp.  Paper. $20.00.  ISBN 0-8330-3078-7.

 

Reviewed by Michael P. Allen, Associate Professor, Stetson University College of Law.  Email:  allen [at] law.stetson.edu.

 

It is impossible to overemphasize the impact that asbestos litigation has had on the American civil litigation system.  Cases concerning asbestos have clogged both the state and federal courts for decades.  The litigation has driven some companies into bankruptcy, while others have cautioned that it could do the same for them in the future.  In addition, the costs (and feared costs) of asbestos liability have had a significant impact on the insurance industry.  All of these factors have contributed to efforts on the national level to craft a legislative solution to the problem.  But such a solution has been elusive, as the various interest groups involved dispute what should be done.  The gridlock continues today.

 

Somewhat paradoxically given its impact on the civil justice system, the business community and the insurance industry, much hard data about asbestos litigation are lacking.  Answers to such basic questions as the financial cost the of litigation and the number of claimants and defendants has been extraordinarily difficult to capture.  And this difficulty is not merely frustrating for the researcher; it has significant practical implications, including its significance to the policy debate over the appropriate legislative response.

 

ASBESTOS LITIGATION from the RAND Corporation’s Institute for Civil Justice seeks to fill at least part of the information void.  The work, an update of a previous RAND Corporation effort from 2002, is an extraordinarily valuable resource for anyone interested in asbestos litigation.  There are things that I wish were addressed in the study (such as more emphasis on the role of insurance), but, by and large, the omissions are a function of the environment in which the authors were working.  As is clear in the study and as I summarize at points below, that environment is one in which data are often hard to come by.  In the balance of this review I summarize and comment upon the content of the study.

 

ASBESTOS LITIGATION has seven principal chapters that, taken together, cover much of the relevant landscape.  In addition, there are four appendices providing additional data on several issues discussed in the main text.  The authors first provide an introduction and overview of the report, including the terminology used, the scope of the effort, and the research methodology (Chapter One).  One of the main strengths of the book comes through in this initial chapter.  The authors strive mightily, including through the selection of terminology, to remain neutral in a world in which there are many “sides.” [*1058]  Such neutrality is important to make the data more useful in the ongoing legal and policy debates.  The authors should be commended for this effort.

 

Chapter Two provides an overview of the injuries caused by asbestos, information that is useful to understand some of the problems associated with predicting costs associated with litigation.  As the authors explain, costs depend heavily on the types of injuries at issue in litigation, as well as in unfiled claims.  It is also critical to understanding the debate concerning current efforts to develop a federal legislative solution.  The injury-related information is augmented in two of the appendices dealing with projected rates of certain asbestos-related diseases.

 

Chapter Three focuses on what the authors refer to as “asbestos litigation dynamics.”  This chapter would be interesting if all it did was discuss the evolution of asbestos litigation over the past several decades.  The authors’ discussion about this evolution deals with a range of issues, such as the growth of judicial techniques to handle the explosion of asbestos cases and the interaction between and among state and federal courts.  But the Chapter is significant because it also provides some quite interesting statistics concerning trends in jury verdicts and forum selection.  The conclusions concerning the impact of factors such as consolidation on jury verdicts are particularly interesting.

 

Chapter Four separately considers claimants and defendants.  The authors’ mission in this part of the book is to estimate the total number of claimants, as well as the universe of defendants.  It is here that one begins to encounter seriously the frustrating reality of a lack of readily accessible information in the “asbestos world.”  For example, one might think that determining the number of claimants and defendants would be a relatively easy (if time-consuming) task.  As the authors make clear, however, that is not the case.  In great detail, they explain the approaches they took in an effort to gather and extrapolate relevant information.  Their work in this regard should be quite helpful in making policy.  Simply put, without knowing the scope of the problem it seems inconceivable to discuss solutions.

 

Chapter Five continues the authors’ search for illusive hard data.  This time the focus is on “costs and compensation” of the asbestos problem. If nothing else, the authors’ work on this project makes clear that for asbestos, as well as for other mass torts matters, courts and policymakers should devote greater resources to comprehensive data collection, especially for matters pending in state courts.  Without such an effort, rational policymaking, while not impossible, is certainly more difficult.  In any event, Chapter Five provides the authors’ best estimates of the total spending on asbestos claims through 2004 ($70 billion), broken down by defense transaction costs ($21 billion), claimants’ transaction costs ($19 billion), and net compensation to victims ($30 billion).  It is possible to take some issue with the methodology used to estimate certain costs, such as settlement amounts.  But at the end of the day, one is left with the feeling that the conclusions the authors reach are, if not precisely correct, certainly in the ballpark. [*1059]

 

Chapter Six addresses bankruptcies.  As with the earlier sections, one is struck by the amount of effort required simply to provide an accurate picture of the scope of bankruptcies based on incurred and projected asbestos liabilities.  This effort should be greatly appreciated by those working in the field.  In addition to this empirical work, the chapter also usefully summarizes the various insolvency approaches taken concerning liability and canvases the broader economic impact of asbestos-related bankruptcies.  The final appendix provides additional information concerning “major asbestos bankruptcies.”

 

In Chapter Seven the authors take a brief look into the future of litigation and resolution of the asbestos crisis more broadly.  Prominent among the considerations is a potential federal legislative solution.  However, the authors recognize that political realities may make such a solution impossible to reach or perhaps sub-optimal in result. 

 

In sum, ASBESTOS LITIGATION is a welcome contribution to the literature concerning a significant mass tort phenomenon in the United States.  While it has some shortcomings discussed above, it is well worth study by academics.  And it should be required reading for policymakers and litigation players alike.

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© Copyright 2005 by the author, Michael P. Allen.