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I first saw the asbestos issue back in 1984, more than 20 years ago, when then-Senator Gary Hart of colorado brought in Johns-Manville. And this very tough issue has been very elusive for more than two decades, and it has mounted in problems, reaching a situation where we now have some 74 companies which have gone into bankruptcy, thousands of individuals who have been exposed to asbestos, with deadly diseases--mesothelioma and cancer--and who are not being compensated. And about two-thirds of the claims, oddly enough, are being filed by people who are unimpaired. The number of asbestos defendants has risen sharply from about 300 in the 1980s to more than 8,400 today, and most are users of the product. It spans some 85 percent of the U.S. economy. Some 60,000 workers have lost their jobs. Employees' retirement funds are said to have shrunken by some 25 percent. And beyond any question, the issue is one of catastrophic proportions.--Chairman Arlen Specter, at a January 11, 2005, Senate Judiciary Committee Hearing.
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Asbestos is a fibrous mineral used in many products due to its resistance to fire, corrosion, and acid. In the early part of the 20th Century, asbestos was regarded as a miracle fiber because it was versatile enough to weave into textiles, integrate into insulation, line the brakes of automobiles, and construct flame-retardant hulls for naval and merchant ships. Annual asbestos production climaxed approximately thirty years ago, and was incorporated into thousands of products by that time.
The Senate received testimony from a number of witnesses regarding the scope and effects of asbestos exposure. Asbestos is ubiquitous in the environment. Although practically all Americans are exposed to asbestos to some degree, such everyday exposures do not usually result in health problems. However, substantial occupational exposure to asbestos can lead to a variety of medical conditions. The diseases caused by asbestos can have long latency periods, sometimes up to thirty or forty years.
The first wave of lawsuits began in the late 1960s, when victims brought actions against asbestos manufacturers and suppliers. These lawsuits increased significantly in 1973 when the 5th Circuit Court of Appeals decided the Borel case, which applied strict liability in asbestos lawsuits. Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076 (5th Cir. 1973).
By the early 1980s, the principal asbestos defendant, Johns-Manville filed for chapter 11 bankruptcy in 1982. Six years later, the Manville bankruptcy resulted in the formation of a trust to pay asbestos claims, but after a rush of claims on the trust in 1988-89, the trust was forced to reorganize and reduce benefits to claimants to ten cents on the dollar in 1995 and then was forced to reduce the amount again in 2001 to five cents on the dollar. Today, the Manville Trust has had to pay claims on a sliding scale--with payments to less seriously injured claimants reduced more than payments to more seriously injured claimants.
Experts estimate that over seventy more companies have followed Manville into bankruptcy in the last twenty years--with more than a third of them filing in the last three years alone. Some of these bankruptcies have resulted in trusts for the payment of victims, and some have not. None of the existing trusts pay claims at their full value. By now, practically all of the former asbestos industry is bankrupt. As a result, asbestos litigation today affects companies that never made asbestos.
The heaviest asbestos exposures occurred decades ago. After the federal government began regulating the use of asbestos in the early 1970s, and with the sharp decline in asbestos use towards the end of that decade, occupational exposure to asbestos has been drastically reduced in recent years. This has greatly reduced the incidence of significant non-malignant disease, especially asbestosis. A leading pathologist of asbestos diseases stated that the "progressive lowering of standards for permitted occupational exposure to asbestos has markedly decreased the incidence and severity of asbestosis.'' Although serious asbestosis cases, which still occurred in the early 1990s, have now become exceedingly rare, because of the long latency period, there will be significant numbers of mesothelioma and lung cancer claims for many years to come.
Asbestos claims steadily increased during the 1990s, and then exploded during the end of the decade. The vast majority of those claims, however, were filed by people who claimed non-malignant diseases such as asbestosis--the very diseases that had become less and less common during the 1990s. Many of these non-cancer claims were brought by people with no impairment. Such a trend threatens to deplete the amount of funds available to compensate future, legitimately impaired asbestos victims. This is exacerbated by the fact that parties involved and the courts have yet to reach a comprehensive agreement regarding the settlement and treatment of asbestos claims. Rather, “litigation has not only persisted over a long period of time but also continually reshaped itself, in the process presenting new challenges to parties and courts.”
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