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Bankruptcy and Loss of Jobs
Bankruptcy and the Loss of Jobs – Problems Facing Asbestos Litigation
Asbestos is the hazardous substance that has been used in greatly in a variety of commercial and industrial applications. Because of the dangers it presents, many asbestos liability lawsuits has been filed by people who have been occupationally exposed to the asbestos or asbestos-containing materials. The sheer numbers of asbestos lawsuits filed has created many problems for the judicial system, clogging up and slowing down all civil lawsuit proceedings, all at the expense of the taxpayer.
While it has been proven conclusively that asbestos exposure can lead to asbestos-related problems such as lung cancer, asbestosis, and mesothelioma, the amount of asbestos exposure required to cause damage has not been established. Companies that have been accused of exposing their employees to asbestos without any warning about their hazards have paid dearly in the many lawsuits successfully filed against them. There is no disputing any charges filed by individuals suffering from asbestos-related diseases. However, the vast majority of lawsuits filed are from individuals displaying no signs of asbestos-related suffering. Although asbestos-related diseases are slow to develop, many businesses contend that are the victims of overzealous lawyers looking to capitalize on asbestos lawsuits. In fact, businesses point out that plaintiffs receive only 43 cents to every dollar paid by companies, with the rest going to legal and "transaction" fees.
Because of the significant increases in lawsuits, many of these companies have had to file for bankruptcy. It becomes a no-win situation for all involved – the company can no longer operate; many jobs are lost; plaintiffs with legitimate cases will not receive the amount they duly deserve; civil cases in state and federal courts slow down because of the overwhelming number of asbestos lawsuits; and taxpayers are charged for some of these dubious claims.
According to a study by RAND Institute for Civil Justice, the total cost of asbestos litigation to American businesses has increased from $1 billion in 1982 to a whopping $70 billion in 2002. "We found that over the past decade there has been a rapid increase in both the number of asbestos claims and the cost of the litigation," said Stephen Carroll, a RAND senior economist. RAND predicts no sign of stopping the escalating legal tab, with a forecast of an additional half-a-million to 2.4 million asbestos claims, which will cost businesses up to $210 billion.
The Asbestos Alliance has played a central role in educating the public about the degenerating effect of the rise in asbestos cases. The Asbestos Alliance is a coalition that includes companies, trade associations, and other parties seeking congressional legislation to solve America's asbestos litigation crisis. Much of the information given in this article was derived from the Asbestos Alliance. Some of the most eye-popping data is included:
· In 1982, there had only been 300 asbestos defendants, with almost all of them directly involved in the asbestos industry. Today, over 8,400 defendants have been targeted, representing all types of industries.
· In the 1980s, 16 companies filed for bankruptcy because of the rising number of lawsuits against them; in the 1990's, 18 companies filed for bankruptcy; in 2002-2003 alone, 33 companies had filed for bankruptcy.
· Approximately 60,000 jobs have been lost due to asbestos-related bankruptcies.
· Workers displaced by asbestos bankruptcies lose $25,000 to $50,000 in wages.
· For every 10 jobs lost to an asbestos bankruptcy, a community will lose as many as 8 additional jobs.
· Failure to enact legislation could reduce economic growth by $2.4 billion per year, costing more than 30,000 jobs annually.