Important New Study from RAND
August 9, 2010
The RAND Institute for Civil Justice is out with an important new study on the asbestos litigation morass, specifically:
- 54 asbestos bankruptcy trusts have been established through June 2010, “with an considerable acceleration in the number of trusts established in the second half of the 2000s.”
- 9 more trusts are in the pipeline, “with undoubtedly more to come.”
- In 2008, approximately 575,000 claims were paid at a cost of $3.3 billion.
- “As of year-end 2008, the assets of the selected active trusts totaled $18.2 billion, and this total does not include the assets of four recently formed trusts that had not filed financial statements as of 2009.”
- “Estimates of the initial assets at eight of the nine proposed trusts for which information is available total $14.5 billion.”
- In 2007 and 2008, “86 percent of the total number of claims that these trusts paid were for nonmalignant injuries.”
- “From the perspective of trying to understand the role of the trusts in the compensation for asbestos-related injuries, perhaps the most significant limitation of the publicly available data is the inability to link payments across trusts to the same individual. It is not possible to use trust-level data to determine the number of trusts providing payments to the same individual or the amount the trusts together pay to an individual claimant.”
- “The ability to understand the trusts’ effect on overall claimant compensation and the compensation paid by solvent defendants will depend to a large extend on whether solvent defendants, trusts, and plaintiffs’ attorneys are willing to release individual compensation information on a confidential basis for research purposes.”
Lisa Rickard of the U.S. Chamber of Commerce’s Institute for Legal Reform, says bankruptcy trusts “have become a playground for enterprising plaintiffs’ lawyers who have learned how to game the system. The RAND report underscores the level of trial lawyer control over the trusts and the inability to link payments across trusts to the same individual – encouraging some to dip into multiple trusts with impunity.”