AAI Disappointed with U.S. Supreme Court Ruling on Asbestos Liability Claims

January 14, 2003

The Alliance of American Insurers (AAI) says it is disappointed with Monday’s decision by the U.S. Supreme Court to reject an appeal that would have consolidated tens of thousands of asbestos liability claims into federal court (In re Federal-Mogul Global, Inc.). A hearing would then have determined whether asbestos claims based on alleged exposure to automotive friction products satisfied the threshold standard of scientific validity established in a 1993 Court decision.

“We believe moving asbestos cases to federal court would prevent an overzealous plaintiff’s bar from shopping around for favorable venues to hear their cases,” Kenneth Schloman, Alliance Washington counsel, said. “It would also help establish proof of causation and injury. This is yet another example of why asbestos reform is critical.”

“Federal legislation is needed to address the most serious abuses in the current system, including inappropriate forums for the litigation, and a lack of uniform medical standards,” Schloman remarked.

“However, the business and insurance communities cannot afford to limit themselves to one particular effort to reform the asbestos litigation system. We have to look not only at a federal solution, but also at opportunities in problem states and the courts,” he added.
“Too many people who are truly sick as a result of asbestos exposure are not receiving any compensation, while non-impaired persons are clogging the courts. Clearly, this is a system that is not meeting the needs of the deserving,” Schloman said.

The volume of asbestos-related litigation is on the rise and the cost of such claims has forced about 30 U.S. companies into bankruptcy. Several prominent actuarial firms have pegged ultimate asbestos costs for the U.S. insurance industry at a range of $55-$70 billion. Total costs for the U.S. economy, including costs borne by non-U.S. reinsurers and uninsured amounts, are estimated at $200-$275 billion.

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