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It is estimated that at least 600 thousand people have brought asbestos-related personal injury suits so far, and the number of new claims each year appears to be still increasing. Typically, each plaintiff sues dozens of defendants, so the total volume of litigation is quite substantial. The total amount spent on asbestos litigation (awards and expenses) has been on the order of $54 billion, most of this expenditure being financed by defendant companies and their insurers. The total ultimate bill may be on the order of $200 billion. The amounts awarded in individual cases are difficult to estimate, as most are resolved confidentially by settlements. Among cases that have gone to trial and succeeded,' the average award has been about $1.8 million. Negotiated settlements tend to be considerably less, however. Minus the legal expenses of both plaintiffs and defendants, about 43% of total spending has been reaching the claimants as their net recovery.

The resulting liabilities have forced some 60 companies into bankruptcy in the last 20 years, 22 of them since January 1, 2000. Among the most prominent of these firms are Armstrong World Industries, Babcock & Wilcox, Federal Mogul, Johns Manville, Owens-Corning, U.S. Gypsum and W. R. Grace. Bankruptcy is not a desirable outcome for either the defendant firms or the claimants. Claims can be put on hold for five years or more, and in some cases the trusts established to take care of victims have been able to pay only 5% to 10% of what was expected. A subsidiary question is the extent to which defendants can rely on their insurance companies to cover their liabilities, an issue that is occasioning substantial litigation of its own.'

Procedural Improvisation

The unprecedented scale of litigation has induced courts and the parties to develop new structures for resolution of cases. Whereas, at first, defendants vigorously contested such issues as whether a worker was "injured," whether the cause was asbestos exposure, and which manufacturer's asbestos was the particular asbestos at fault, by the 1980s new court procedures and decisions were establishing clearer bases for liability. Some judges encouraged consolidation of cases, for example, by selecting a few individual cases to go to trial as representative of the whole. Defendants found that their best opportunity was to negotiate settlements through attorneys representing thousands of claims at a time, with the amounts for each individual to be determined by schedules of factors such as disease type. By the 1990s, the leading law firms representing claimants had standing agreements with the

2 Quantitative data cited here are from Stephen Carroll et al., Asbestos Litigation Costs and Compensation, An Interim Report (Santa Monica, CA: RAND Institute for Civil Justice, 2002), p. 99. Available at [http://www.rand.org/publications/DB/DB397]. (Hereafter cited as RAND report.)

3 About two-thirds of plaintiffs going to trial win and receive awards.

4 Randy Maniloff, "Asbestos: Insurance Coverage Issues on a Changing Landscape," Mealey's Litigation Report: Insurance, July 9, 2002.

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