Failure to disclose “double dipping” in 92% of cases sampled
A new report released today by the Illinois Civil Justice League - Illinois Asbestos Trust Transparency - reveals systemic manipulation of the timing of asbestos personal injury lawsuits that subject small businesses and other defendants to artificially high legal costs, further eroding the state’s business environment.
Illinois, especially Madison County, has long been “ground zero” for asbestos-related personal injury lawsuits, while only a small percentage of these plaintiffs are residents of the state. “Madison County received almost one-third of all new asbestos cases filed nationwide in 2016, and almost one-half of the highest value cases involving a type of cancer called mesothelioma. Cook and St. Clair Counties also receive significant numbers of asbestos cases,” said John Pastuovic, president of the Illinois Civil Justice League.
In addition to filing asbestos-related lawsuits against increasingly remote defendants, claimants typically file multiple claims against trusts that were created when the major asbestos producers declared bankruptcy years ago. These trusts exist to compensate individuals harmed by exposure to asbestos-containing thermal insulation and other products manufactured or sold by the historically most culpable companies. Through bankruptcy, the companies are now exempt from asbestos-related lawsuits.
“Plaintiffs’ lawyers have learned to exploit a disconnect that exists between the asbestos trust and personal injury lawsuit systems. At the core of this disconnect is the longer time period in which a claimant has to file a claim with an asbestos trust as compared to filing a tort lawsuit.
By intentionally delaying the filing of asbestos trust claims until after a personal injury case is resolved, plaintiffs can withhold information that, if disclosed, could lead a jury to conclude that a bankrupt entity was the sole proximate cause of the plaintiff’s alleged harm and not the small business that was, at most, a peripheral player in the litigation,” Pastuovic said.
Further, “protections created to avoid the double payment of plaintiffs are being avoided, resulting in overpayment of current plaintiffs to the detriment of future claimants,” he added. Additionally, the “lack of transparency between the asbestos trust and tort systems makes it hard to police inconsistent and potentially fraudulent claiming,” Pastuovic continued.
These issues were at the core of a landmark case involving gasket and packing manufacturer Garlock Sealing Technologies, LLC. After extensive discovery, the bankruptcy judge determined that Garlock’s payments in the tort system were infected by the manipulation of exposure evidence by plaintiffs and their lawyers. “The findings in Garlock prove that the lack of consistent and timely trust disclosures by plaintiff law firms is not only systemic but impactful in terms of inequitable tort outcomes,” said Marc Scarcella, MA, one of the new report’s authors and Lead of the Economic & Complex Analytics Practice of Roux Associates, Inc.
Editorial: Legal Reform Requires Careful Negotiations
From the Bloomington Pantagraph and Decatur Herald & Review
The state of Illinois either has one of the nation’s worst judicial climates, or is a state where the ordinary plaintiff has a fair chance to win against corporate giants.
It just depends on who you ask. More importantly, it depends on where the money is located.
That’s the result of the news last week that the U.S. Chamber of Commerce was proclaiming the Illinois lawsuit climate was one of the worst in the nation.
According to a survey conducted for the Chamber’s Institute for Legal Reform by Harris Poll, the chamber said only Louisiana and West Virginia have worse lawsuit climates.
The results are based on questionnaires asked of senior company attorneys about how a state’s lawsuit environment is likely to affect important business decisions. So, at best, the results of the survey were pretty predictable.
However, Gov. Bruce Rauner lent his support to the issue, saying the lawsuit environment in the state is hampering economic growth.
“You come here, you open yourself up to attack and excessive judgment against your company,” the governor said.
Rauner has proposed legislation that he says will put the system more into balance. Those reforms include medical awards based on charges rather than actual payments, changing overly inclusive liability standards and limiting venue shopping by plaintiffs.
Illinois Will Delay Pension Payment, Citing Cash Shortage
From Crain’s Chicago Business
Illinois will delay payments to its pension fund as a prolonged budget impasse causes a cash shortage, Comptroller Leslie Geissler Munger said.
The spending standoff between Republican Governor Bruce Rauner and Democratic legislative leaders has extended into its fourth month with no signs of ending. Munger said her office will postpone a $560 million retirement-fund payment next month, and may make the December contribution late.
“This decision is choosing the least of a number of bad options,” Munger told reporters in Chicago on Wednesday. “For all intents and purposes, we are out of money now.”
Munger said the pension systems will be paid in full by the end of the fiscal year in June. The state still is making bond payments, and retirees are receiving checks, she said.
“We prioritize the bond payments above everything else,” Munger told reporters.
The pension payment delay was inevitable, said some who have been watching the budget gridlock.
“This is just the tip of the iceberg,” said Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, which monitors Illinois finances.
“Every month they go without resolving the impasse on the budget means it’ll cost more to ultimately resolve it,” Martire said. “This is a natural, predictable consequence if you do something called math.”
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