Several million U.S. workers were exposed to asbestos, which causes a variety of diseases that range from non-disabling to fatal. At least 500,000 individuals have filed tort claims related to asbestos exposure and, because a typical claimant files claims against 20 defendants, as many as 10 million claims may have been filed. Liability costs have caused about 75 large firms to file for bankruptcy. The eventual cost of asbestos liability is estimated to be as high as $200 billion.
Because the large volume of asbestos lawsuits has clogged the dockets of many courts, judges have tried new legal procedures to encourage quick resolution of claims-including consolidation of multiple lawsuits for trial, bifurcation of trials into multiple phases, and "bouquet" trials. Part of the project involves collecting a dataset of asbestos trials and using regression analysis to examine how these new legal procedures affect trial outcomes and incentives for additional plaintiffs to file lawsuits. Also, a large fraction of asbestos trials result in punitive damages compared to other types of trials. The project will estimate the frequency of punitive damage awards in asbestos trials, the degree of concentration of punitive damage awards on a few firms and whether punitive damage awards have been a significant factor in asbestos firms' bankruptcies. Other parts of the project will examine how asbestos settlements are influenced by trial outcomes, how firms with large asbestos liabilities decide whether to file for bankruptcy, and how insurers affect asbestos firms' litigation strategies. A final part of the research involves comparing compensation of asbestos victims to compensation of victims of a different mass tort. The comparison will show whether the asbestos mass tort is qualitatively different from other mass torts or merely larger.
The project will advance scientific knowledge of mass torts and how the court system and the bankruptcy system deal with them. In particular it will determine the extent to which asbestos liabilities and bankruptcies have increased as a result of procedural innovations that were developed to deal with congested court dockets. The research will provide information and analysis to inform the policy debate concerning how asbestos and other mass torts should be handled and whether a new approach, such as an administrative compensation scheme, is needed.
