A recent study commissioned by the American Insurance Association asserts that asbestos lawsuits have cost U.S. businesses $275 billion and between 52,000 and 60,000 citizens their jobs, according to the Bloomberg News.
Suits involving asbestos have forced over 60 companies to seek bankruptcy protection, including 20 since the year 2000. Companies such as Federal-Mogul Corp. and W.R. Grace and Co. are among those that have sought Chapter 11 protection because of asbestos liability. Those companies that are already in Bankruptcy Court will incur astronomical legal and accounting costs, sometimes as high as $650 million, according to the study.
“This is something that is significant for firms in bankruptcy and for the economy as a whole,” said Joseph Stiglitz, chairman of President Clinton’s Council of Economic Advisors, Nobel laureate, and economics professor at Columbia University. “Today the impacts are being felt by workers.”
The study found that when individuals claim asbestos-related illnesses and sue companies, workers and shareholders are hurt. Each worker will lose between $25,000 to $50,000 in earnings when forced into unemployment or a lower-paying job. Others are harmed as well: the employees that are vested in retirement plans and smaller companies that do business with the company being sued.
Jonathan Orszag, co-author of the report, and Stiglitz urged Congress to pass legislation to protect companies against asbestos liability litigation. Plaintiffs’ attorneys argued that companies should not get special treatment from Congress, however, but pay asbestos victims fair compensation for their illnesses. Patrick Malouf, a lawyer who won a $150 million verdict in an asbestos product-liability case, said that “trying to nationally legislate who is sick and who is not sick is reprehensible.”
Asbestos is a carcinogen used as insulation and in fireproofing.
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