Chamber Applauds Approval of Bill to Limit Businesses' Exposure in Asbestos Lawsuits

February 13, 2018

By a vote of 58-51, the Michigan House last week approved legislation being pushed by the Michigan Chamber to limit businesses' liability in asbestos lawsuits. Similar legislation has been enacted in 12 states, including Ohio and Wisconsin.

Over the last 40 years, asbestos-related litigation has forced over 100 companies into bankruptcy. And while asbestos lawsuits originally focused on companies that mined asbestos or manufactured asbestos-based insulation products, the collapse of these early asbestos defendants forced plaintiffs’ attorneys to begin targeting new companies, including many that had little, if anything, to do with the manufacture or supply of asbestos products. 

The bankruptcies of these major asbestos companies also gave rise to trust funds intended to compensate future asbestos victims. Today, these trusts control assets with an estimated value of more than $25 billion. But the existence of the asbestos trusts has not slowed the wave of lawsuits against American businesses, including local plumbing supply companies, hardware stores, auto dealers and manufactures of secondary products. In fact, one prominent plaintiffs' lawyer described asbestos litigation as an "endless search for a solvent bystander."

The asbestos trusts operate in parallel with the traditional tort system and offer only rudimentary reports on the claims they receive and pay. As a result, plaintiffs’ attorneys are sometimes able to hide the fact that a single individual is making multiple claims, citing different and contradictory exposure facts, against multiple trusts and solvent companies. This “double dipping” exposes businesses to abusive lawsuits and deprives the trusts of funds intended for legitimate victims.

The legislation we are seeking would provide transparency in asbestos litigation by requiring plaintiffs to file bankruptcy claims at the beginning of the tort process and disclose those claims during any litigation. The problem isn’t necessarily that plaintiffs’ attorneys are filing claims with both the trusts and courts, but rather that in these lawsuits against peripheral defendants, the plaintiff’s lawyers are sometimes hiding the fact from juries that they also blame bankrupt companies for their asbestos-related injury. Why is this a problem? Juries and judges cannot properly apportion fault if they are blindfolded from these other allegations.

The legislation we are seeking would solve this problem by accelerating the timing of asbestos trust claims filings in order to promote fairness and transparency and the proper apportionment of fault. 

Please contact Wendy Block at (517) 371-7638 or wblock@michamber.com if you would like further information or to engage in this issue.