Photos and Story of Old Asbestos Theater Curtain in Prescott, Arizona

Google caught a story and photos of an old, intricately painted asbestos theater curtain in Prescott, Arizona.
The article is here. A short video is here.

Insurers Appeal Pleural Plaques Ruling in Scotland

Insurers have filed an appeal of their loss on the pleural  plaques case in Scotland. See this BBC article , which essentially repeats this press release from the Association of British Insurers.

Seminar on European Class Actions

Who was the last person to assure you that Europe would never entertain class actions ?  Perhaps you should send them an email and invite them to attend this upcoming seminar in Frankfurt on March 12 and 13.

The summary below is from an email circulated by Mark Hilgard, chair of the program.

"Topics of the seminar will be, inter alia,

Class Actions in Canada

How Foreign Parties become involved in US Class Actions:

International Human Rights Class Actions

The Status of Class Actions, Mass Litigation and Collective Redress in Europe and the Pirate Bay Case

The European Initiative / Green Paper

Class Actions in Germany

• The Plaintiff's Perspective

• The Perspective of a Defence Lawyer

• Handling of Class Actions: The Perspective of a Judge

Class Actions in Austria

Class Actions in Mexico

Class Actions in Switzerland

Class Actions in Ireland

Class Actions in France

Class Actions in Italy - under new and old Law

Class Actions in Spain

Antitrust Class Actions

Securities Litigation

Collective Product Liability Claims

Panel Discussion

• Opt In or Opt Out - Are we heading into the Right Direction?

Funding of Class Actions

D&O and the Role of Liability"

Wide Ranging 2009 Article on Pleural Plaques in Europe

The UK is not alone in considering issues related to asbestos claiming and pleural plaques. Instead, the topic already is being addressed in various countries and no doubt will arrive on the table soon for other countries. The issue is unavoidable because asbestos use in the EU and elsewhere actually far exceeded asbestos use in North America  (for data go here to see Munich Re's charts summarizing data beginning at page 98 in the appendix). Moreover, the use of amphibole fibers appears to have been more extreme. Various national approaches to pleural plaques are reviewed  in a fall 2009 n article that includes papers on the UK decisions, and the law in France, Italy, The Netherlands, Norway, Slovakia, and Spain.  The article is here.

Thanks to Albert Azagra to alerting me to the article last fall - he is one of the authors.

Scottish Trial Court Upholds Legislation Reinstating Pleural Plaques Claiming for Scotland (Statute Also Applies to Asbestosis and Pleural Thickening)

A hat tip to Business Insurance for an email alert on Friday advising that a Scottish trial court had just issued an opinion rejecting insurer challenges to Scottish legislation reinstating claiming for pleural plaques. The article is here; it mainly says the insurers are not happy and may appeal. The opinion is online here at the court's website.

For those interested only in outcome, this is a potentially huge loss for both insurers and, in my view, for society. Set out below are some detailed comments on the opinion, and arguments apparently not made by the insurers. The short story is that the trial judge predictably upheld the law as a rational exercise of legislative judgment despite claims that the legislation violates Scottish law and EU law. Also bear in mind that the statute applies beyond pleural plaques and thus explicitly allows claiming compensation for "pleural thickening" and "asbestosis."

For more specifics on the opinion and some commentary see below. My personal view is that the legislation is misguided because societies have so many more pressing needs that we cannot afford to pay compensation for all biomarkers/conditions. Specifically, it seems to me lines must be drawn, and that societies and companies should not pay compensation for biomarkers/conditions that mark past "exposure" but do not impair day to day life, do not impair ordinary bodily function in general, and do not involve changes to the cellular mechanisms that actively regulate cells and, thus, regulate cancers and the endocrine system. Compensation instead should be reserved for the approaching waves of claims arising from new science and medical monitoring claims related to genetic alterations that really do matter.
On the topic of future claims and science, see Gary Marchant’s many papers, which are for the most part collected here. Mr. Marchant is a lawyer, scientist, and former Kirkland litigator. He is now a professor of law at Arizona State University. His roles there include: Executive Director & Faculty Fellow, Center for the Study of Law, Science, & Technology, and Lincoln Professor of Emerging Technologies, Law and Ethics. See especially Marchant, Personalized Medicine and the Law, 44 Ariz. Att'y 12 (2007). See also Gary Marchant See Gary E Marchant, Robert J Milligan, & Brian Wilhelmi, Legal Pressures and Incentives for Personalized Medicine, 3 Personalized Medicine 391 (2006)(related topics in terms of litigation pressures)(the article is available here).

Overview

The opinion by Lord Emslie is long -- it runs about 116 pages and consists of 248 numbered paragraphs. The first 70 pages are devoted to some procedural history, and a significant amount of analysis regarding standing, with the latter encompassing analysis under applicable EU directives and UK law. The opinion also includes some interesting history and analysis regarding the role of the Scottish Parliament as a result of changes in the structure between the UK countries and the advent of EU law. For a US lawyer, the discussion was educational.

The scope of the legislation needs to be understood. To that end, here are key excerpts from the opinion.

“I. Introduction

General background

“[1] In these proceedings for judicial review the petitioners are major insurance companies. Together they challenge the lawfulness of a recent Act of the Scottish Parliament which came into force on 17 June 2009. Both prospectively and retrospectively the Damages (Asbestos-related Conditions) (Scotland) Act 2009 bears to make pleural plaques and certain other asbestos-related conditions actionable for the purposes of claims of damages for personal injuries. According to the petitioners, this unfairly burdens them with additional liabilities under indemnity insurance policies to the extent of hundreds of millions - perhaps billions - of pounds, and they now seek declaratory and reductive orders from the court in that connection. This is resisted by the compearing respondents who are (first) the Lord Advocate as representing the Scottish Ministers, and (third to tenth) a number of individuals with diagnosed pleural plaques who seek, or at least intend to seek, damages on that account from their former employers. A First Hearing on the parties' competing contentions has now taken place before me over periods totalling 22 days.”

[11] So far as relevant for present purposes, the Damages (Asbestos-related Conditions) (Scotland) Act 2009 provides as follows:

"1. Pleural Plaques

(1) Asbestos-related pleural plaques are a personal injury which is not negligible.

(2) Accordingly, they constitute actionable harm for the purposes of an action of damages for personal injuries.

(3) Any rule of law the effect of which is that asbestos-related pleural plaques do not constitute actionable harm ceases to apply to the extent it has that effect.

(4) But nothing in this section otherwise affects any enactment or rule of law which determines whether and in what circumstances a person may be liable in damages in respect of personal injuries.



2. Pleural Thickening and Asbestosis

(1) For the avoidance of doubt, a condition mentioned in sub-section (2) which has not caused and is not causing impairment of a person's physical condition is a personal injury which is not negligible.

(2) Those conditions are -

(a) asbestos-related pleural thickening; and
(b) asbestosis.


(3) Accordingly, such a condition constitutes actionable harm for the purposes of an action of damages for personal injuries.

.....

3. Limitation of Actions

(1) This section applies to an action of damages for personal injuries -

(a) in which the damages claimed consist of or include damages in respect of -

(i) asbestos-related pleural plaques; or

(ii) a condition to which section 2 applies; and

(b) which, in the case of an action commenced before the date this section comes into force, has not been determined by that date.

(2) For the purposes of sections 17 and 18 of the Prescription and Limitation (Scotland) Act 1973 ... (limitation in respect of actions for personal injuries), the period beginning with 17 October 2007 and ending with the day on which this section comes into force is to be left out of account.

4. Commencement and Retrospective Effect

....

(2) Sections 1 and 2 are to be treated for all purposes as having always had effect.

(3) But those sections have no effect in relation to -

(a) a claim which is settled before the date on which subsection (2) comes into force (whether or not legal proceedings in relation to the claim have been commenced); or (b) legal proceedings which are determined before that date.”

[12] As regards Scotland only, therefore, the Act confers on pleural plaques and on two other asymptomatic asbestos-related associated conditions the status of non-negligible and thus actionable injury. It is true that this mirrors the position de facto conceded in many claims over the previous twenty years or more but, given the asymptomatic, non-disabling, non-disfiguring and non-causative nature of these conditions, the petitioners now challenge this development as an unwarranted contravention of the established need for real or material "damage" in order to complete a cause of action in negligence. In this respect, according to the petitioners, the Scottish Parliament in passing the Act has contrived to do the opposite of many foreign legislatures which, faced with an intolerable escalation of claims by "... the worried well", have brought in measures to negate the actionability of pleural plaques. And, it is said, the Parliament has done so by means of a blatant controversion of established (and indeed agreed) medical fact.”

Commentary

Insurers Held Back on Specifics

The opinion indicates the insurers held back on providing specifics on their policies, and on their estimates of the future amounts that will be paid as a result of this legislation. Thus, Lord Emslie explained as follows:

78] Another contention forcefully advanced by the respondents was to the effect that issues of locus standi could not be determined where the petitioners' position as insurers had not been the subject of detailed and precise averment, submission or vouching. Deficiencies in this area had, it was said, been flagged up months ago; calls for further specification had been made in the respondents' Answers; yet the petitioners had stubbornly declined to reveal their true hand. Even now only specimen policies had been produced (productions 6/65-68); there was no way of telling what policy terms would actually apply in any individual case; for the future, the petitioners had sought to reserve their position on the construction and application of policies; and, significantly, the proper law of relevant insurance contracts could not be ascertained. If such contracts were not subject to Scots law, so the argument ran, they might not even be engaged by the 2009 Act which had effect only in Scotland.

***
[218] Massive unresolved uncertainties as to cost levels: In the debate before me it was, I think, acknowledged on all sides that estimation of the overall costs associated with this legislation was far from straightforward. Given the long latency period for asbestos-related conditions including pleural plaques, it was hard to estimate the number of individuals who might have been exposed in past decades. Moreover no-one could predict what proportion would develop asbestos-related conditions, nor what percentage of asymptomatic conditions would actually come to light. Judging the number of pleural plaques claims which might emerge in future years was thus an inexact science with many uncertain variables. Even the approximate cost per claim was hard to pin down - understandable, perhaps, now that claims are apparently being intimated at levels several times higher than the pre-Rothwell average. Against that background, the Scottish Government's approach was largely based on evidence of the current situation as modified by actuarial and demographic considerations. The insurance industry, on the other hand, sought to rely on UK Government estimates (which were themselves uncertain) before taking a percentage which was said to represent Scotland. The latter approach may have allowed individual insurers to withhold commercially sensitive data which might be of value to competitors. In these circumstances, overall estimates ranged from perhaps £100 million, on the Government side, to the insurers' potential maximum of £8.6 billion. If the Scottish percentage were to be reduced, the figure of £8.6 billion would come down as well, but that would still leave an "order of magnitude" difference between the competing estimates. (emphasis added)

The Insurers Standard Approach Produced a Predictable Result

The opinion is a disappointment in the sense that there is really very little that is "new" in the opinion for persons familiar with the debate regarding whether compensation should be paid for pleural plaques, and so the legislation was not struck down. The trial judge, Lord Emslie, of course is not responsible for whether the parties present anything new or instead simply present the usual arguments. The absence of anything new in the opinion gives one the impression the insurers simply presented the usual arguments without attempting to present NEW evidence or argument on science and pleural plaques as it relates to the number of pleural plaques cases waiting to be identified, and the potential costs. Plainly, the insurers made a conscious decision not to present a comprehensive analysis of the potential loss, a decision one assumes is driven by concerns regarding public disclosures, financial statements, and general reticence to commit to a particular position on a particular topic.

I certainly will not claim expertise on Scottish law or EU law, and so my comments are worth the price you are paying for the analysis. That said, the opinion presents in essence a question that is familiar to US lawyers -- when will a court strike down a legislative act? The opinion uses some words and phrases different than we might use in the use in arguing that issue here, but makes plain the reality that deference is owed to the judgments of the elected legislative branch. Indeed, from the words and analysis, I took away the impression that UL law calls for even more deference than is shown under US law. I also was left with the opinion that the insurers merely put forth a pro forma challenge to delay a probably inevitable affirmance of the legislation, and so are managing the process so that litigation expenses are far less than the savings obtained from delaying or inhibiting the future onslaught of pleural plaques claiming.

What else might have been done by the insurers? From the perspective of this armchair quarterback, the insurers might have had a real chance to win – and might have done some societal good - if they presented a compelling case on the science to show that society cannot afford to pay for the presence of biomarkers (plaques) that are biologically inactive and instead are mere markers of a past exposure, much like a scar marks a past physical insult. On that basis, one could (I think) rightly distinguish pleural plaques from biomarkers that show actual cellular level changes that actually disrupt ordinary bodily functioning (e.g. genomic changes caused by chemical). One might also try to help the Court see that thousands of biomarkers out there, and to understand the differences between pure markers of past exposure, and genomic changes that disrupt cell function. A small part of that potential argument is laid out at section X (pages 31-33) of this paper I submitted in opposition to the pleural plaques Consultation in England.

The argument I would have pressed also would have shown that there are ample reasons to expect that pleural plaques claiming in the UK actually may be far worse than it is has been in the US. Why? In short, because the UK has had such a large shipbuilding industry that used so much asbestos, because amphiboles were widely used in the UK thanks to Cape Industries and T & N (among others), because EU use of asbestos vastly exceeded use in North America, because new CT scanners find 60% plaques far better than do x-rays, and because pleural plaques claiming is driven by lawyers and entrepreneurial behavior instead of science. Id at sections 2.2, 3.1-3.3, 7.10.1, 9.8.

Finally, the opinion (and thus, apparently, the insurers’ arguments) do not address the availability of payments from asbestos trusts (chapter 11 trusts, the T & N trust in the UK, or private trusts). Id. at sections 5.1-5.3.

$ 3.6 Billion of Global Government Antitrust Claims/Fines

Global antitrust claiming/fining by governments continues to increase, which probably is not a surprise when government expenses are up and tax revenues are down. Go here for the story summarizing $ 3.6 billion of fines last year.

While you are at it, consider also Professor Yeazell's wonderful article 2002 article explaining the economic forces and econonics that drive and create propensity to claim. Among other factors he explains, two are government's facing increasing expenses and shrinking revenues.

See:

SYMPOSIUM ARTICLE: THE CHANGING LANDSCAPE OF THE PRACTICE, FINANCING AND ETHICS OF CIVIL LITIGATION IN THE WAKE OF THE TOBACCO WARS: Seventh Annual Clifford Symposium on Tort Law and Social Policy: RE-FINANCING CIVIL LITIGATION , 51 DePaul L. Rev. 183 (2002). The paper can be downloaded here.

Conflict of Interests and International Tort Claims for Persons from Many Countries - The Libyan Terrorism Example

Here is an unexpected but interesting non-asbestos example of conflict of interest issues arising from efforts to resolve "mass torts" for various persons around the world. The example arises from the airplane crash and airplane hijacking blamed on Libyan terrorists. The article describes a recently filed lawsuit in which two victims of the crash object to the terms of the settlement with Libya. In brief, the two plaintiffs argue that the lawyers who represented the crash victims, Crowell & Moring, operated under conflicts of interest and that the agreement improperly commingles the interests of the various different categories of claimants, including US and non US claimants. The article includes a link to the complaint itself. The complaint, however, does not attach a copy of a "joint prosecution" agreement apparently signed by the plaintiffs and many others.

Here are excerpts from the article by Roger Alford:

"The facts as alleged in the complaint of Davé v. Crowell & Moring are complex. In brief, Libya has been implicated in terrorist activities on numerous occasions, most notably the hijacking of Pan Am Flight 73 in Karachi, Pakistan on September 5, 1986 and the bombing of Pan Am Flight 103 over Lockerbie, Scotland on December 21, 1988. In 2005, victims of these terrorist attacks and their heirs—including American and non-American victims—retained the law firm of Crowell & Moring—known for representing victims of terrorism—to pursue litigation against Libya. The Davés were among those who signed the Crowell & Moring retainer agreement. As part of retaining Crowell & Moring, every client was also required to sign a joint prosecution agreement (“JPA”), a provision of which provided that the proceeds recovered by any signatory to the JPA shall be shared on a sliding scale based on type of injury with all signatories to the JPA, without distinction as to nationality. Only 23% of the victims who signed the JPA were American. A Liaison Group consisting of one American and four non-Americans was established as agents for the victims in their dealings with litigation counsel. The Liaison Group was represented by Latham & Watkins. In 2008, the United States government entered into a bilateral treaty with Libya for an award of compensation for all U.S. nationals harmed by Libyan terrorism, including the victims of the Pam Am Flight 73 hijacking, which included plaintiffs Gargi and Giatri Davé. The treaty provided for distribution of these funds through the Treasury Department’s Foreign Claims Settlement Commission (“FCSC”). After the Davés successfully received notice of their entitlement to millions under the FCSC process, Crowell & Moring issued a demand letter to the Davés contending that under the retainer agreement and the JPA the funds secured by the United States government pursuant to the U.S.-Libya treaty on behalf of American victims are to be shared among all of the victims of Libyan terrorism, American and non-American alike. In other words, the vast majority of the funds secured by American nationals under the U.S.-Libya treaty are—approximately 90% according to Crowell & Moring—required to be paid to non-Americans pursuant to these private agreements."