Spurred by a struggling local manufacturing sector which blamed its hard times partly on bankruptcies due to asbestos litigation, Ohio became the first state in the country to place strict limits on plaintiffs’ rights to sue in cases related to asbestos and silica dust.
The Ohio General Assembly passed and Republican Gov. Robert Taft signed two similar bills that would require claimants who have been exposed to asbestos or silica dust to meet a minimum set of medical criteria set by the American Medical Association before being allowed to file suit in a court of law.
The asbestos-related measure, House Bill 292, is designed to give priority to those with illnesses caused by asbestos over those who have merely been exposed to the material which was widely used in construction up until the late 1970s before its ill-effects were known.
Taft called the measures “a good start in our tort reform strategy,” which also includes wider-ranging legislation that was slowed by Republican House Speaker Larry Householder.
Federal legislation to create an exclusive national fund to compensate asbestos victims has stalled in the U.S. Senate because the opposing sides—trial lawyers and labor on the one hand, insurers and manufacturers on the other—have been unable to agree on how big the fund should be and how exclusive its remedy should be.
Sean McManamy, the assistant vice president for Midwest for the American Insurance Association (AIA), told Insurance Journal that Ohio had “the perfect confluence of interested parties” to pass the legislation.
“We hope the first domino has fallen and that this will serve as a model for other state legislatures to follow,” McManamy said.
Nationwide, 70 companies in the last 20 years have been bankrupted by asbestos litigation and more than 300,000 asbestos cases are pending, according to AIA.
If HB 292 is a desperate attempt to control asbestos-related insurance losses, HB 342—the silica dust bill—is an effort to get out in front of what some have called the next asbestos. A report released in early June by the ratings agency Standard & Poor’s said its analysts are “keeping a close eye on developments” in the area of silica exposure, as it “could produce the kinds of litigation and insurance problems that asbestos has.”
Silica dust is widely used by many industries and the ill-health effects are latent for a long period of time before appearing. The combination could be deadly for insurers carrying general liability or commercial umbrella policies, according to the S&P report. Trial lawyers have vowed to challenge the new legislation, scheduled to take effect early September, in court.
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