By John M. Wylie II
From the Manhattan Institute
Saturday, May 10, 2008 12:00 AM
Asbestos, the flame retardant that literally saved America's Pacific fleet and the free world in World War II, now threatens the free world economy. Blame unscrupulous lawyers.
Tragically, this life-saving material ultimately was proved to cause deadly cancers in the lungs -- and ultimately spawned the nation's largest, longest-running mass tort. As James R. Copland, director of the Manhattan Institute's Center for Legal Policy, puts it: "A flame retardant originally thought to be a 'magic mineral,' asbestos ended up causing the death of thousands of individuals exposed in the workplace; likewise, litigation that sought redress for the truly injured metastasized into a big business that recruited sham victims to beef up plaintiffs' bar's bottom lines."
As I learned from writing a story for the January 2007 issue of Reader's Digest, corruption and fraud involving asbestos and silica litigation is endemic. Now the Manhattan Institute has published a far more detailed analysis, "Trial Lawyers, Inc.: Asbestos." It is the fifth in the institute's series on the litigation industry.
The report shows that the long-running asbestos-lawsuit scam has destroyed 80 companies and the employees and shareholders who depend on them, and created a system so corrupt that judges and advisors were guilty of outright extortion and theft. Companies forced into bankruptcy by questionable claims are now being scammed again by attorneys double-dipping from the trusts these companies created for those who really were injured.
The trial lawyers' strategy has involved collecting hundreds of thousands of workers -- some sick, some healthy, and some whose true condition is unknown; the unscrupulous lawyers even call them "inventory." With the huge case volume, profit-minded lawyers find it easiest and most cost-effective to encourage quick settlements and move on.
Tragically, real victims -- workers who actually face serious future health problems due to asbestos exposure -- are often duped into signing away future rights for a pittance in order to pad current attorney fees, and are then left with no recourse if they actually become sick. And workers falsely diagnosed as sick face a lifetime of worry and problems getting insurance.
This project has been gut-wrenching for me. As a lifelong Democrat, I long have harbored grave doubts about many tort reform measures because I believed they hurt working men and women. In this field of the law, however, the need for reform has become blatantly obvious.
Ultimately we need a national legislative solution, but Congress so far has failed to act. And much could be done without legislative action if judges would root out and reject fraud in their courts, and defense attorneys would give them a reason to do so. But that solution has also proven elusive, as honorable attorneys and judges have far too often failed to hold their less scrupulous colleagues accountable for their conduct.
Accountability makes a difference: when Texas judge Janis Graham Jack first rooted out rampant corruption in silica and asbestos litigation in 2005, and Congress held hearings on the matter, it sent shockwaves through the lawsuit industry. Gone were the asbestos "mass screenings," in which large volumes of workers are herded like cattle for medical diagnoses that find asbestos-related illness over 95 percent of the time. And as our report documents, new asbestos filings plummeted over 90 percent.
But when no prosecutions, disbarments and serious sanctions for the lawyers materialized, new attorneys predictably decided to get into the game. In the past six months, a Texas law firm has conducted two new mass screenings in my native Oklahoma. More are sure to follow.
When a few key doctors are stripped of their medical licenses and jailed, when a few key attorneys are disbarred, when a few overly compliant judges are voted or kicked out of office, it will send a strong message. Until then, lawyers have little incentive not to return to the business model that has earned them billions before.
John M. Wylie II is the principal author of the Manhattan Institute report on asbestos litigation, which is available at www.triallawyersinc.com.