Vioxx (Photo: David Jordan)
One of the main problems with mass torts over asbestos, drugs and others is their mass, some critics say.
When a global settlement like Vioxx was reached, plaintiffs’ counsel had agreed to withdraw from representing their clients if plaintiffs would not agree to settle their claims over the painkiller. The U.S. Supreme Court and other appellate courts have rejected the efficiencies of the class-action vehicle to resolve mass-tort actions for personal injuries involving individual issues of medical causation. There’s the question of how the claims of a multitude of plaintiffs can be tried or resolved justly and efficiently.
Byron G. Stier, a law professor at Southwestern Law School, wrote in an article published in the Widener Law Journal, that one solution to problems with the mass torts would be to allow the sale of mass-tort claims to financial entities and to permit legal loans to plaintiffs and their counsel on a more widespread basis.
“In addition to providing quick and certain compensation to claimants, financiers’ purchase of mass tort claims would also greatly ameliorate the problem of adequate representation and conflicts of interest in mass tort settlement, as the likely emergence of one, or a few, financiers with large numbers of claims would enable lawyers who directly represent them to negotiate far-reaching mass settlements that would bring closure to a defendant in a mass tort,” Stier suggests.
Market efficiency is one reason that involving lawsuit financing would improve the mass-tort arena, the professor said. He argues that the values of claims would develop accurately through bidders in the market for mass-tort claims, especially when using lawyers specializing in that area.
Another possible improvement is that plaintiffs firms could be paid by financiers through flat fees or billable hours, avoiding the “distraction and potential bias that comes from bearing final responsibility and risk exposure” from the winner-takes-all, loser-loses-all model of contingency fees, Stier further argued.
While transferring cases from plaintiffs lawyers to financiers would raise conflicts of interest in mass settlements, Stier argues it would improve upon the Vioxx settlement process because that accord was negotiated by plaintiffs lawyers to apply to all claimants, not just those they represented.
Amaris Elliott-Engel is a contributing writer for The National Law Journal.