One of the most explosive areas of business ligitation -- toxic tort suits -- may become such a large social problem that they are taken out of the courts.
That's the prediction delivered to a group of insurance executives in a private meeting in Washington last week. What's significant about the forecast is that it comes from a conservative policy analyst who thinks the development would be unfortunate. Peter Huber, a lawyer and engineer and the chief designer of the new Justice Department plan to give the regional Bell telephone companies more operating freedom, was asked by the Insurance Information Institute to sketch what may be lurking for industry officials in the next decade. What he found is that "in coming years, the mushrooming demand for environmentally related compensation will end up being funded outside the traditional markets for private insurance. Indeed, it seems likely that in this field, we are now committed to march steadily toward the complete socialization of the liability-insurance complex."
As Huber outlined it, the United States is embarking on the third generation of toxic tort suits. After a wave of product liability suits (mostly involving drugs with serious side-effects that showed up long after initial use) and worker suits involving on-the-job exposure to carcinogenic chemicals, the most recent surge is from groups of plaintiffs who allege health injuries from contaminants spread to the general population through pollution of water, air or the land itself.
Huber is dubious about the connections these plaintiffs see between real or perceived ills and the pollution they are blaming. But he admits that "rarely can this question be answered with any precision in cases involving diffuse, mass-exposure, long-latency risks." And companies accused of realeasing the toxics are "horrified at the prospect of taking matters to a jury," which may let personal sympathy find connections even where the medical experts say there are none.
Because a jury's attitude is equally uncertain for the plaintiffs, the two sides often settle before trial. "Hundreds of millions of dollars have now changed hands in toxic-chemical liability settlements," Huber said. He sees companies moving out of product lines that contain such risks, and insurance companies continuing to make environmental liability coverage virtually unattainable. "With demands for payments growing, and supply of insurance declining, environmental liability law is on an unstable course that cannot long be sustained without intervention," he told the industry representatives.
His suggestion is a return to tough standards of liability, under which plaintiffs cannot win damages without showing an unequivocal link between reckless actions and their injuries. But he acknowledges that this solution "appears to be socially unacceptable to both the public and the courts." The reason: along with making sure that those without valid claims do not collect damages, such strict rules would inevitably keep some victims from getting compensation from the companies that did cause them grievous harm.
Congress already has made a step towards taking over compensation for environmental damage by creating, from industry taxes, the Superfund, which will pay for cleaning up toxics in cases in which the individual company responsible cannot be stuck with the bill. So far, it covers only property damage, but the lobbying to expand it to include personal injury has been intense. Three recent studies of the problem of toxic injuries have all concluded that the government should take over the compensation scheme.
Huber sees no alternative, but warns that the federal government is "notoriously incapable of containing costs." He said, "Any government-administered program for injury of allegedly 'environmental' origin will, in actual practice, end up covering very much more."
Huber's personal animosity to the future he foresees made insurance executives take his projections more seriously. But liberals working for more generous interpretations of business liability for toxic torts came to similar conclusions. Donald Elisburg, an assistant secretary of Labor in the Carter administration and now administrator of the Occupational Health Legal Rights Foundation, says he expects, by the end of this century, just the kind of public compensation scheme for toxic injuries that Huber envisions. The difference is that he thinks it is a healthy development.
As Elisburg sees it, the injurious pollution is a component of the progress in science and industry that created the modern world, and "it's good for society to take care of those injured by what's happening in society."
Now, when a person sues, much cost and effort goes into trying to prove which company is responsible for the exposure that led to the alleged injury; for a worker who may have had a number of employers in the same industry and have been exposed to a chemical at a near-the-factory home as well as on the job, that's a huge job. Ultimately, everyone involved may decide that it's better for the money that goes into such a search for causation go instead to help those who are suffering, irrespective of which company caused part of their injury. Moskowitz covers legal affairs for McGraw-Hill World News.