Asbestos Litigation Profile - Asbestos Injury
A quick profile of asbestos litigation, comparing the figures that we collected in 1982, just after Johns Manville had petitioned for Chapter 11 reorganization and the status of the litigation today, although these figures on the right hand column are already somewhat dated, they are good through the year 2000 when we collected these data. 600,000 claimants and growing, close to 8,500 defendants and growing, total cost to date that we estimate in nominal dollars of $54 billion. Total bankruptcies attributed to asbestos as of our last count, 67. And estimates of future costs by experts who have tried to these estimates, ranging from $145 to $210 billion.
And an important thing to note as you look at this chart, that is to date no one has ever got the estimates of the scope of asbestos litigation right, everyone, including us, has underestimated the scope.
The data that we used in the briefing that I am about to present to you come from a myriad of sources. Some of it is date that we have collected in previous research including research on other mass torts, we have used publicly available data as well as data that we acquired under confidentiality agreements and we have conducted interviews with many of the leading participants in the litigation on the plaintiff's side as well as on the defense side.
What I want to talk about this morning is what the numbers are behind these profiles, get down a little into the details, speak briefly about why we are in the situation we are today and then end by highlighting some of the consequences that have grabbed the attention of people here in Washington and around the country.
Well, there are a lot of different ways we could talk about the numbers with regard to litigation. We need to think about a lot of different aspects of the litigation, although among the people sitting in this room, you probably focus on one aspect, more than on other aspects, depending on whose interests you represent. So, I want to give you a picture that speaks both about the people who filed claims, who have injuries and about the companies that they filed those claims about. I want to talk about the money that is being spent by the defendants and who that money is going to.
6,000 claimants plus sounds like a huge number of people flowing through the civil justice system, but these numbers in asbestos in asbestos litigation are actually amplified many times over because the typical claimant files against several dozen defendants and courts and those defendants and the plaintiffs' attorney who represented the plaintiffs, are dealing, therefore, with a massive litigation that really in some respects represents something more than the 600,000.
What has grabbed attention in recent years is that the number of claims filed annually has risen sharply which was not consistent with previous estimates and also that the average severity of the diseases claimed by those people who are filing claims has declined sharply.
This chart shows you graphically the pattern of annual claims filings against five major defendants. They are defendants with very different postures in this litigation. You can see that the size of the caseload varies dramatically for the very largest of the defendants and a defendant down at the bottom of the charge that is only seeing several 1,000 claims filed annually, but the important thing to note is without regard to the posture of these defendants in the litigation, the general trend has been upward and there was a particularly sharp surge towards the end of the 1990's and on into the year 2000-2001.
An important aspect about the debate about litigation is that it is non malignant claims, and I am going to speak more in a few moments about the nature of claims in this litigation, but it is the non cancer claims that account for the growth in claims in asbestos litigation and among these non cancerous claims are by virtually everyone's agreement, a large proportion of claims of people who have signs of asbestos injury, they have legally cognizable injuries in most jurisdiction but in ordinary person's parlance, they are not currently functionally impaired, meaning they are not work disabled and their ability to carry out the functions of daily life is not restricted.
In addition, asbestos litigation which was originally seen as a litigation that came out, of course, the asbestos industry and asbestos products has now moved beyond that industry to a set. In fact, a growing number and growing variety of sectors of the economy. And much of the increase in recent years was indeed outside the traditional purview of asbestos defendants.
The number of defendants has increased sharply. We have been keeping track of firms putting together various lists and we are now up, as you can see, to more than 8,000. Perhaps more important than the sheer number of firms is the fact that we have now identified firms in virtually every sector of the economy that is involved in the litigation.
Now, I want to emphasize that some of the firms in the list of 8,400 have only had a few claims filed against them, whereas some of them have had tens of thousands of claims filed against them and some sectors of the economy have been much less affected than other sectors of the economy. But there has been this steady spread across the economy.
Various people have tried to estimate the cost of asbestos litigation over the last now more than 30 years. We have used these variety of estimates and other data that we had available to us to do our estimates and as you can see we come up with an estimate of about $54 billion. That is money coming directly from insurers, directly from defendants in the form of self insurance or if they have maxed out their insurance company, and we note on this chart that there is an involvement of insurers outside the United States as well.