PMA Bulletin -- January 23, 2013

It's About Victims, Jobs, and Fairness

Maybe we need to start swearing in lawyers in court and not just witnesses. In certain tort cases, personal injury lawyers tell one story to jurors and another to trust funds established to compensate those injured through exposure to asbestos – two different stories for the same client. This is hardly the “whole truth and nothing but the truth.”
 
The soon-to-be filed legislation on this issue will surely yield three desired outcomes: victim protection, job creation, and judicial system fairness. But in the current system, it is the fees that really count. The trial lawyers are paid twice for the same case, once through the trust and once through the court process. They get away with it because the trust funds operate like secret societies; the jurors know nothing about potential settlements coming from the trusts. We, the consumers and employers, are shouldering the burden for this blatant double-dipping through higher costs for products and the loss of jobs.
 
Manufacturers began to establish the trusts in the early 1980s to ensure money would be available for all pending and future victims of exposure. Without regard, personal injury lawyers are gaming the system by bringing tort actions on the state level for the same cases. To do this, they are dragging in businesses from the hinterlands; businesses with the thinnest of connections to the injuries, and, in some cases, none at all. Fighting these cases take capital, time, and undue stress from the backbone of our economy – our job creators.
 
Before the trust, the lawyers pointed to the manufacturers as the ones responsible for the injury. Before jurors, lawyers argue[argued] that the companies on the periphery of the action are the bad guys.  They trump-up the awards and, of course, their contingency fees.  Jurors can’t make informed decisions because they don’t have the whole story and the lawyers aren’t telling.
 
Ready for a non-shocker? The personal injury lawyers sit on the trusts’ advisory committees, have a powerful voice in the selection of trustees and effectively control the trusts’ audit and quality control measures.
 
Thankfully, some reform minded state lawmakers plan to introduce legislation to take the mystery out the process. The Pennsylvania Furthering Asbestos Claim Transparency (FACT) Act will save jobs, have those liable pay their fair share, stop the lawyers from double dipping, and most importantly, guarantee money is available for the victims.
 
The double dipping gets even more scandalous as the layers of this issues are revealed. The personal injury lawyers are taking a contingency fee on the trust end, where, one legal expert says, no contingency exists.
 
An attorney with two decades of experience in tort law, said the trusts were set up to operate like a workers’ compensation system. It’s a grid with pre-set payouts depending on the type and severity of the injury.
 
“For them to collect contingency fees is simply taking money from the sick people who need it,” the attorney says. “If you’re sick and you can show that exposure caused it you get compensated. It’s a very simple form to fill out. There is no contingency here.” 
 
Businesses with the most minimal connections to the cases are getting dragged into this scheme and it’s costing them money and killing jobs. State Director of the NFIB of Pennsylvania, Kevin Shivers, said one of his member companies supplies pool products but also operates a plumbing business on the side. The company was named in an injury suit because some valves they installed contained asbestos lining. Not only did they not manufacture the valve, they had no knowledge asbestos was even in the product. The plaintiff in this case worked in an environment where asbestos was commonly used.
 
“The system is supposed to be about those responsible paying their fair share,” Shivers said. “There’s no fairness here.”
 
Since the early 1980s, when the first trusts were established, the swarm of personal injury lawyers has covered an increasingly larger territory. In the 1980s, the actions centered around 30 businesses; by the 1990s over 5,000 businesses were in their sights - now it’s over 10,000.
 
The litigation has bankrupted 70-80 companies and eliminated approximately 60,000 jobs, according to the American Tort Reform Association. If the trust system continues to operate in parallel to the tort system, then distortion, waste, and unfairness will continue to plague the asbestos compensation system as a whole. Some claimants will be overpaid, others will find that their most appropriate funding sources are inadequate or gone altogether, and there will be a continual and unnecessary shift of liability to solvent defendants.
 
In June 2011, Governor Corbett signed the “Fair Share Act,” which places a party’s responsibility for damages more in line with its proportional share of the liability. Prior to the law, any party could be 100 percent responsible for damages even with a minimal connection to the action. FACT legislation is another step to bring fairness to a legal system that is heavily weighted in favor of the personal injury lawyers. 
 
“Victim compensation funds should be preserved so they can help future deserving claimants,” said PMA Executive Director David N. Taylor.  “Hopefully, everyone can agree that victims should be fully compensated – once.”
 

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