All Major Asbestos Makers Face Bankruptcy 

Reuters 15aug01

SANTA MONICA, CA - All major U.S. asbestos makers are likely to be bankrupt within the next two years as people with asbestos-related ailments continue to file injury and compensation claims against the companies, a study published on Wednesday said.

Billions of dollars of asbestos-related costs already have forced 41 firms to file for Chapter 11 bankruptcy protection, according to the study by the California-based, independent RAND Institute for Civil Justice. [ http://www.rand.org/publications/DB/DB362.0/ | Download Report in PDF format 628kb from RAND website ]

Given the continuing litigation, the study said, it is time to review the way the United States' deals with asbestos claims.

"The issue is not whether asbestos victims should be able to receive compensation from some entity, but rather what entity should fairly be called upon to shoulder the financial burden," the study said.

Because of its good fire-retardant capabilities, asbestos was widely used in manufacturing, construction and shipbuilding industries until the early 1970s.

Between 1940 and 1979, an estimated 27 million people in the United States are believed to have been exposed to asbestos through their work. The material was identified later as the cause of the deadly cancer mesothelioma, as well as a variety of other cancers, and the lung disease asbestosis.

More than half a million asbestos-related claims have been filed since the early 1980s, and that figure could soon double as more litigants come forward, RAND said.

"All of the major asbestos manufacturers are likely to be in bankruptcy within 24 months," the RAND study predicted.

"The number of asbestos-related bankruptcies has surged in the last 18 months," with eight major asbestos defendants filing for Chapter 11 bankruptcy protection since January 2000, according to the study.

And asbestos manufacturers aren't the only companies facing expensive lawsuits.

"As litigation has continued, the number of companies sued has grown dramatically ... The incomplete list of firms we have accumulated to date includes firms that span more than half the industries in the U.S. economy," RAND said.

Companies being hit by lawsuits have extended beyond asbestos mining companies and shipbuilders, to refineries, textile mills, retailers, insurers and other industries not traditionally associated with asbestos litigation.

Claims for compensation and personal injury have since become the longest-running mass tort litigation in U.S. history, the RAND study said.

There is no national registry of asbestos claims or lawsuits, nor any official calculation of the total amount of money spent to resolve asbestos claims, making future predictions difficult, the study said.

But by using aggregate data and information from lawyers and insurance companies involved with asbestos cases, the study calculates that U.S. insurers had paid out about $21.6 billion to date and that five corporations alone had spent more than $1 billion apiece on asbestos litigation costs.

The study, prepared as a briefing paper for meetings with the staff of the Senate and House of Representatives Judiciary Committees, said there was no agreement among those involved in the litigation as to whether the numbers of lawsuits were coming to an end or would continue to grow.

Although the number of mesothelioma claims had gone down in the early 1990s, they began to climb again in the mid-1990s. Claims for nonmalignant ailments have continued to rise.