Asbestos Roundup: Overview of the Current Landscape

Summarized by Teresa Snider

Current trends in asbestos litigation and future risks relating to asbestos exposures were highlighted in a panel discussion during AIRROC’s Education Day on July 10, 2013. Bradley Drew, Managing Director of PACE Claims Services (a subsidiary of Navigant), Maysem Elmaet, Legal Counsel at QBE Group, Michelle George of Chadbourne & Parke, and Richard Murch, Supervisor in the Claims Department of RiverStone Resources LLC, provided their perspectives on legal issues relating to asbestos in the United States, the United Kingdom, and Australia.

Bradley Drew provided statistics regarding the number, type, and geographic distribution of asbestos complaints filed over the past few years. Using information gathered through Pace Claims Services’ tracking of every asbestos complaint filed in the United States, Drew explained that of the approximately 6,000 to 8,000 new complaints that were filed each year, between 2,000 and 2,500 allege mesothelioma claims. During 2012, the majority of complaints alleging mesothelioma were filed in Madison County, Illinois. There has been an increase in the number of cases brought based on secondary exposure to asbestos, with 25% of the mesothelioma cases alleged to be the result of secondary exposure. In addition, it appears that some of the mesothelioma cases result from the misdiagnosis of lung cancer as mesothelioma. Drew also explained that advertising has been effective in concentrating plaintiffs’ asbestos work in a core group of law firms, including one which has focused on attracting clients with lung cancer.

The legal landscape in the United Kingdom and Australia differs significantly in that the majority of cases in those jurisdictions are against employers. However, as Michelle George explained, employer’s liability insurance was not compulsory in the United Kingdom until 1972, and many insurers that issued employer’s liability policies are now insolvent. Legislation is pending in the United Kingdom that would permit a mesothelioma claimant who cannot trace an insurer to recover 70% of the average pay-out for claimants in his or her age range. The money to fund these payments would come from the live insurance market. Where insurance policies covering an asbestos claim can be identified, the market practice is that the insurer with the deepest pocket handles the claim and then informally seeks recovery from other insurers based on time on the risk. Michelle also noted that the English courts have bent over backward to allow asbestos claims. One aspect of this deference is the implementation of a modified test for causation with respect to mesothelioma that only requires a claimant to show that asbestos exposure resulted in a material increase in risk.

Maysem Elmaet addressed asbestos claims in Australia. She explained that Australia has experienced three waves of claimants for asbestos-related bodily injury claims, the first comprised of miners, the second of construction workers, and the third of do-it-yourself home renovators. This last wave of claimants is not altogether surprising since houses in Australia that were built before the mid-1980s are highly likely to have some asbestos-containing materials. Indeed, it is unlikely that this third wave will be the last due to the extensive use of asbestos-containing construction materials in Australia. It was discovered earlier in 2013 that efforts to install a National Broadband Network in Australia exposed residents and contractors to asbestos from old telecommunication pits where work was not performed in compliance with asbestos handling guidelines. The long latency period for some asbestos-related diseases means that the impact of this exposure will not be certain for decades. However, the Australian government recently created a National Asbestos Exposure Register to record the personal information of people who think they may have been exposed to asbestos-containing materials. Elmaet also pointed out that, as in the United Kingdom, the standard for proving causation in mesothelioma cases has been relaxed, with only proof of exposure to asbestos required. A recent case found that performing six hours of repair work in a James Hardie Industries factory was sufficient to establish exposure to asbestos. For lung cancer claims, however, the claimant needs to prove that asbestos exposure materially contributed to or caused the lung cancer.

Richard Murch focused his comments on developments at the front line of asbestos litigation in the United States. Because there has been an overall decrease in the volume of asbestos claims, courts have been able to engage in a more focused review of the merits of claims. As a result, defendants have been able to advance viable defenses, such as lack of causation and the absence of a duty owed by a premises owner to a plaintiff whose disease is the result of second hand exposure. In addition to challenging the claimants with respect to the dose and duration of exposure necessary to prove causation, defendants are also pursuing new medical information. For example, one study showing that individuals with exposure to radiation have a higher incidence of mesothelioma than the general population suggests that asbestos may not be the only cause of mesothelioma.

The panel discussion highlighted the potential impact that legal, social, and medical developments, from asbestos exposure registries to advertising to diagnostic tools, may have on the future of asbestos claims and the importance for insurers and reinsurers of monitoring the trends.