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If there has been one constant during the two decades of asbestos litigation, it’s that the light at the end of the tunnel keeps moving further and further away. Now a study by the RAND Institute for Civil Justice projects that asbestos defendants may have seen fewer than half of the more than one million injury claims that eventually could be filed. The study predicts that all of the remaining asbestos manufacturers will be driven into bankruptcy within the next two years. It also foresees asbestos claims against a broad array of new targets, including oil refining, retail, auto parts, textile manufacturing and other businesses. Some lawyers think the end of asbestos litigation may be in sight, but history favors the pessimists, according to Stanford Law School Professor Deborah Hensler, one of the authors of the RAND study. “All the past efforts to project the scope of this litigation have proved inaccurate,” she says. According to the institute, part of the Santa Monica, Calif.-based RAND Corp., some 27 million people were exposed to asbestos on the job from the 1940s through the 1970s, when the government halted the widespread use of asbestos for insulation and fireproofing. Asbestos exposure can cause mesothelioma and other cancers, as well as asbestosis, a scarring of the lungs that can lead to disability and death. Because a person exposed to asbestos may not develop a disease for 40 years, claims can be expected to keep rolling in for years. And asbestos claims appear to have gone up in recent years, according to the report. Claims for mesothelioma started to climb in the mid-1990s, after drifting downward for several years. Because of the seriousness of the disease and its close link to asbestos exposure, Hensler says, these claims are the most expensive to settle. Claims for less serious conditions have shot up as well. According to Hensler, the cost of settling asbestos claims has also been driven up. Part of the reason, she says, is increased competition among the asbestos plaintiffs’ bar. Lawyers trained at prominent plaintiffs’ firms have left to form their own firms in recent years. Because the litigation has been going on for so long, she says, plaintiffs’ lawyers have a much easier time pressing claims than they would have had years ago. “The risks are much lower,” says Hensler. “It’s clear that, if you represent a mesothelioma victim, unless there are some very unusual facts, that is a slam-dunk case. I think the barriers to entry have dropped dramatically.” Many of the new firms concentrate on high-value mesothelioma and lung cancer cases and aggressively seek higher settlements than the established firms, which typically have a range of cases. David B. Siegel, general counsel of W.R. Grace & Co., a former maker of asbestos products, says he thinks there has been an increase on the low end of the injury scale as well. Mass settlements, often comprising hundreds or thousands of individual claims, have been the norm, encouraging claims for less serious injuries or for injuries that may have a cause other than asbestos exposure, defense lawyers say. “The standard for getting paid got lower and lower, encouraging people to bring claims that we believe were of questionable merit,” Siegel says. Grace filed for bankruptcy protection under Chapter 11 in April. At least 41 asbestos defendants have been driven into bankruptcy, including eight in the last year and a half. The bankruptcies, which generally result in claims being paid at pennies on the dollar, have resulted in plaintiffs’ lawyers stepping up their financial demands on the remaining handful of solvent companies, according to Hensler. Absent a fundamental change in the asbestos compensation system, she says, those companies will all likely be bankrupt in two years. The bankruptcies raise the possibility that people who develop asbestos-related diseases in years to come will have a hard time getting compensation. It has been suggested that Congress overhaul the asbestos compensation system, but it seems unlikely to act anytime soon. “I think the chances of that are modest,” Hensler says. Asbestos litigation has already begun to move beyond so-called traditional asbestos defendants — those defendants that participated in the mining, manufacture, distribution and installation of asbestos insulation. The report predicts this trend will accelerate as bankruptcy claims more traditional defendants. RAND has identified more than 1,000 corporations that have been sued on asbestos claims to date, a number that the report says will, in time, grow several times over. The cost and uncertainty of litigating against these new defendants should also increase, she says. “Each group of new litigants has to go through the same learning process,” says Hensler. Many lawyers and commentators have recognized the importance of asbestos litigation in training and enriching many of America’s top trial lawyers. The assault on Big Tobacco, among other powerful industries, was funded largely with asbestos fees and staffed by trial lawyers schooled in complex, industrywide litigation against asbestos manufacturers. In addition, many of the techniques for managing mass torts were developed by judges trying to deal with the sprawling asbestos problem. The RAND study isn’t expected to be completed until next spring. A 55-page briefing on the interim findings was presented to House and Senate judiciary committee staffers in mid-August. RAND began tracking asbestos litigation in the early 1980s, when it began to take shape as a mass tort. RAND’s findings have been widely cited by litigants and courts.

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