How the Asbestos Litigation is Undermining US Competitiveness, Destroying Jobs and Short-Changing Victims.
In 1925, then President Calvin Coolidge famously said that "the business of America is business." Now, over 90 years later, the business of America is increasingly conducted in courthouses among trial lawyers and insurance executives. The asbestos litigation has already caused nearly 80 corporate bankruptcies in the US, and has impacted the earnings and operations of hundreds of other firms. The US tort system has become an anchor dragging down America's economic growth at a time when the competitive challenges from a globalized economy are stronger than ever.
In its current form, the asbestos litigation is no longer about justice; it is no longer about helping injured workers or ensuring that the correct incentives are in place to prevent greedy companies from injuring their customers of employees. Rather, it is about the US legal system shaking down corporate America to pad the paychecks of lawyers on both sides. Indeed, the interests of American workers, consumers and companies are being cast aside as lawyers rush to file new claims before the next major corporation files bankruptcy and the spigot of easy money is closed behind a wall of bankruptcy protection. The lessons of the asbestos litigation should be very clear: the regulatory system failed to protect workers in the first place, and then the tort system compounded that failure by allowing unimpaired victims to file claims, and targeting companies that had little or nothing to do with the underlying injuries caused by asbestos exposure.
The bottom line is simply this. Over the next 25 to 30 years, defendants in asbestos litigation may have to part with an estimated $141.2 billion to settle claims. The simulations in this study, as well as the results of other studies, suggest that the current path of asbestos claims resolution will have very real economic consequences, and that these consequences are likely to fall heavily, though not exclusively, on manufacturers and their workers. Even if the flexible U.S. economy adjusts to these costs to remain at full employment after an adjustment period, the resulting economy will support hundreds of thousands fewer jobs in manufacturing industries than otherwise. A reduction in the level of capital accumulation would also produce slower productivity growth, with adverse consequences for wages and living standards for the United States as a whole. Given the increasingly competitive global economy, these are costs that US industry can ill afford.
Click Here to Download the Full Report in PDF Format