Defendants Settle Huge Asbestos Action
Earlier this month, the Chief Justice of the US Supreme Court, William H. Rehnquist, rejected pleas from American and European corporations for intervention in a mega-lawsuit due to commence in West Virginia on September 23, 2002. As many as 10,000 plaintiffs with a range of asbestos-related illnesses and symptoms are bringing claims against 250 US and European defendants including Mobil, Honeywell International Inc., Dow Chemical, Union Carbide, General Electric, 3M, DuPont, Ford Motor, General Motors, DaimlerChrysler, Exxon, Lockheed, Monsanto, Pfizer, ABB, Bayer, Royal Dutch/Shell and Ericsson. Media coverage of this case has reported serious threats to the national economy from the tidal wave of asbestos litigation. An administrator of Johns-Manville, one of the first asbestos giants to fall, said: "The bankruptcies and lost jobs from asbestos far outweigh the effects of Enron or WorldCom but itís happening very slowly and itís difficult to get peopleís attention." It has been estimated that there are now 200,000 asbestos claims proceeding in the US. According to actuaries, compensation could cost US companies and their insurers between $200-$275 billion and European defendants $32-$80 billion.
In light of the Supreme Court decision, many of the defendants must have done some hard thinking. Fears that jurors could award multi-million dollar verdicts concentrated minds and on the eve of the court proceedings, scores of the defendants reached a confidential settlement with claimants. One observer said: "As of Friday evening (September 20), most of the 250 defendants had settled. More were expected to settle this weekend." Honeywell, which had been leading the defendants, announced it was settling out of court on September 23. The press is speculating that the total payout could be as much as $3 billion. If this is so, then theyíve got a bargain as it had been believed that the trial could have resulted in verdicts of $200 billion which would, almost certainly, have bankrupted some major global players.
The case is proceeding this week against the handful of companies remaining. Because of the shrinkage in numbers, the hearings will now be held in one courtroom as opposed to the two which had been made available. Only a few defendants, including Dow Chemical and Union Carbide, will be fighting the claims.
September 25, 2002