News articles here (best one), here and here are out with news from Italy that the criminal and civil trial for the Eternit asbestos defendants is to start December 10, 2009. The date was set after the trial court denied objections by the defendants, including objections to the location of the trial. The trial will not end quickly - Italian trials in some ways move slowly and include a variety of procedures not directly comparable to American trials.
The criminal and civil claims arise from something around 2,500 injuries and deaths alleged to arise from Italian manufacturing operations of the global Eternit businesses. For more background, a prior post here described the criminal and civil claims being pursued in Italy against former officers of Eternit, and includes links to background articles. There are myriad Eternit entities around the world, and they are not all part of one corporate family. However, most have some roots in manufacturing asbestos-cement products.
The claims and attendant publicity are noteworthy for a variety of reasons. One is that the US media now has company with other global media that devote articles, blogs and websites to "asbestos exposure" and "the dangers of asbestos. " To test the point, try Google searches on "eternit," "schmidheiny" (the last name of one of the defendants) or "amiante" (asbestos). Publicity and fear tend to lead to increased tort litigation.
Another point is that it is increasingly easy for claimant's group to disseminate information that may damage corporate reputation in general and reduce the overall enterprise value. Consider, for example, this website that provides a basic account of the Eternit proceedings and seeks to heap shame on Eternit. Considered in the light of the events of the past year, and this type of an event, one can readily grasp why the SEC has made statements to the media and proposed new rules (go here) regarding public disclosure of the board's role in risk management and the overall corporate risk management strategy.
Thursday, July 23, 2009
Wednesday, July 22, 2009
Asbestos - London Delays (Again) On Providing a Formal Position on Pleural Plaques Compensation But Offers Some Hints as to What's Ahead
Contrary to prior statements, Lord Chancellor Jack Straw of the Ministry of Justice said yesterday in Parliament that the government's formal follow up on the pleural plaques consultation will be provided "after" the summer recess. He indicated the response will include steps aimed at improving tracking of records that will assist plaintiffs, which are records regarding employment locations and employer insurance. He also intimated plans to have the UK lead the way on asbestos-related medical research. Specifically, he said:
"Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
On 30 June, the Government published to the House two reports on the medical aspects of pleural plaques, one from the chief medical officer's expert adviser and a second from the Industrial Injuries Advisory Council. The Government will give further consideration to the issue of compensation for people diagnosed with pleural plaques before publishing a final response after the recess.
In addition, we are actively considering measures to make the United Kingdom a global leader in research on the alleviation, prevention and cure of asbestos-related diseases, and to help speed up compensation claims for those who develop serious asbestos-related diseases such as mesothelioma. The latter includes examination of the process for tracking and tracing employment and insurance records, as well as looking into the support given to individuals who are unable to trace such records." (emphasis added)
Further discussion was as follows, or read it online here at the website of "They Work for You."
Stephen Hepburn (Jarrow, Labour)
Will the Secretary of State assure us today that pleural plaques sufferers will not be treated any differently in terms of compensation regardless of whether they lodged their claim prior to the 2007 Law Lords judgment or after it and of whether live in Scotland, England, Wales or Northern Ireland?
Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
As I said, we are giving active consideration to that. I understand my hon. Friend's concern, but we have to make our own decisions in this jurisdiction. I am sure that, in turn, my hon. Friend will wish to pay very careful attention to the conclusions of the expert appointed by the chief medical officer and to IIAC; they came to unanimous conclusions, including those backed by the three trade union representatives.
Nigel Dodds (Belfast North, DUP)
Following on from the Scottish Government's decision to legislate in this area, did the Secretary of State note the recommendation of the relevant Department in the Northern Ireland Assembly that there should be a change in legislation to allow those with pleural plaques to sue in the courts and get compensation? Also, following on from what Mr. Hepburn said, whereas the regions of devolved government will have taken action to redress this terrible injustice to those who suffer from pleural plaques, will it not be perverse if the only area where people cannot claim is England and Wales?
Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
As I said, or implied, in answer to my hon. Friend, it is the essence of devolution that different decisions can be made. It would be very curious indeed if the result of devolution was that each jurisdiction had to follow the decisions of the other. We are seeking to consider the evidence very carefully, and I commend the evidence of the chief medical officer's expert's report and IIAC to all hon. Members, whichever constituency they represent.
"Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
On 30 June, the Government published to the House two reports on the medical aspects of pleural plaques, one from the chief medical officer's expert adviser and a second from the Industrial Injuries Advisory Council. The Government will give further consideration to the issue of compensation for people diagnosed with pleural plaques before publishing a final response after the recess.
In addition, we are actively considering measures to make the United Kingdom a global leader in research on the alleviation, prevention and cure of asbestos-related diseases, and to help speed up compensation claims for those who develop serious asbestos-related diseases such as mesothelioma. The latter includes examination of the process for tracking and tracing employment and insurance records, as well as looking into the support given to individuals who are unable to trace such records." (emphasis added)
Further discussion was as follows, or read it online here at the website of "They Work for You."
Stephen Hepburn (Jarrow, Labour)
Will the Secretary of State assure us today that pleural plaques sufferers will not be treated any differently in terms of compensation regardless of whether they lodged their claim prior to the 2007 Law Lords judgment or after it and of whether live in Scotland, England, Wales or Northern Ireland?
Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
As I said, we are giving active consideration to that. I understand my hon. Friend's concern, but we have to make our own decisions in this jurisdiction. I am sure that, in turn, my hon. Friend will wish to pay very careful attention to the conclusions of the expert appointed by the chief medical officer and to IIAC; they came to unanimous conclusions, including those backed by the three trade union representatives.
Nigel Dodds (Belfast North, DUP)
Following on from the Scottish Government's decision to legislate in this area, did the Secretary of State note the recommendation of the relevant Department in the Northern Ireland Assembly that there should be a change in legislation to allow those with pleural plaques to sue in the courts and get compensation? Also, following on from what Mr. Hepburn said, whereas the regions of devolved government will have taken action to redress this terrible injustice to those who suffer from pleural plaques, will it not be perverse if the only area where people cannot claim is England and Wales?
Jack Straw (Lord Chancellor, Ministry of Justice; Blackburn, Labour)
As I said, or implied, in answer to my hon. Friend, it is the essence of devolution that different decisions can be made. It would be very curious indeed if the result of devolution was that each jurisdiction had to follow the decisions of the other. We are seeking to consider the evidence very carefully, and I commend the evidence of the chief medical officer's expert's report and IIAC to all hon. Members, whichever constituency they represent.
Sunday, July 19, 2009
China Cracking Down on Civil Rights Lawyers
This article reports that China is taking away law licenses from and fining lawyers who have been filing civil rights claims and claims for victims of the "tainted milk" scandal. Reading this type of news certainly provides a moment to pause and reflect on how lucky we are in the US, and the great value of a free press able to report on developments and occurrences in our legal system.
Saturday, July 18, 2009
Corruption Statutes - Are They Bad Policy and Trade Sanctions ?
Are anti-bribery statutes actually trade sanctions that discourage investment, and should such statues be modifed? For more on that topic, see this post at Conglomerate and its link to a scholarly article on the topic.
Friday, July 17, 2009
# 1 - Growing Battles Over Techniques and Rules Used on Wall Street, in Tort Trials, and By Government to Shift Financial Obligations for Tort Losses
The tort litigation industry is seeing new battles emerge at the micro and macro level regarding the techniques and rules used on Wall Street, in tort trials, and by government to shift financial responsibility for payments for expenses arising from legitimate and illegitimate tort claimants. The battles are ongoing at both the micro and macro level, and will take years to resolve. Over time, billions and ultimately trillions of dollars are at stake when one considers direct and indirect payments, plus stock price changes, legal fees, and other associated costs and expenses of tort litigation and ancillary litigation. Posts over the next few weeks will present examples of the battles and their consequences. Throughout, one key is to look for whether, when and how one person/entity (or a group) are allowed to make deals that increase or decrease the risks and financial obligations for others involved in the same tort.
Today's example is a micro battle being fought in Illinois in a case arising from falling scaffolding killing Mr. Ready during a construction project at a power plant. One issue is whether fault can be apportioned at trial against defendants that settled before trial. Why does that matter? Because the plaintiff and one or more defendants can and may agree to a settlement contract because the settlement monies paid 1) will give plaintiff some level of financial certainty and 2) will shift to the remaining defendants the risk and financial obligation for the plaintiff's losses as determined at trial because the settlement, if approved, will by statute block the remaining defendants from suing the settling defendants for "contribution," and may block the trial defendants from asking the jury to apportion a percentage of fault to the settling parties. Further, the settlement also may influence whether the remaining defendants can offer trial proof of the actions of the settled defendant even if even if the jury is not allowed to apportion a percentage of fault to the settled defendants.
So, the most basic macro issue is whether and when this private settlement contract between three private parties will become the operative event that will enable the government (the courts) to take pre-existing claims and legal rights of the other defendants. In this instance, the defendants are Mr. Ready's employer, the general contractor and a subcontractor. In teh case, the employer and the general contractor settled, leaving the subsontractor exposed to a trial, which it lost. And, of course, lurking in the background are the insurers for those entities. But, for the macro level, bear in mind that some companies are self-insured, and some companies were insured but that insurance is or may be gone because the insurer actually is insolvent or may be trying to run away from "incurred but not reported" losses (that is, future losses) by ceasing its business operations and/or invoking a dissolution process specific to insurers. And, the issues arise in the context of events during a trial held during a period of time for which a "tort reform statute was said to be applicable.
In short, the Illinois Supreme Court held, under the statute, that the jury could not apportion fault against the settled defendants. Thus, the private settlement was converted into a government enforced agreement with legal consequences for the remaining defendant, which had not objected to the settlement. Left open by the Supreme Court was whether the jury should have been allowed to hear evidence about the actions (or inaction) of the settled parties. On remand, the appellate court held that the trial court should have allowed the jury to hear evidence of the actions of the settled defendants. The case may now be headed back to the Supreme Court of Illinois.
The Illinois Supreme Court's opinion from late 2008 is here (for now, but will move later when the opinion is archived.) Here is the June 30, 2009 opinion of the appellate court on remand. Here is a press article updating the case history, and explaining that the case is perhaps headed back to the Illinois Supreme Court. Here prior commentary by a large law law firm that represents corporate defendants.
Today's example is a micro battle being fought in Illinois in a case arising from falling scaffolding killing Mr. Ready during a construction project at a power plant. One issue is whether fault can be apportioned at trial against defendants that settled before trial. Why does that matter? Because the plaintiff and one or more defendants can and may agree to a settlement contract because the settlement monies paid 1) will give plaintiff some level of financial certainty and 2) will shift to the remaining defendants the risk and financial obligation for the plaintiff's losses as determined at trial because the settlement, if approved, will by statute block the remaining defendants from suing the settling defendants for "contribution," and may block the trial defendants from asking the jury to apportion a percentage of fault to the settling parties. Further, the settlement also may influence whether the remaining defendants can offer trial proof of the actions of the settled defendant even if even if the jury is not allowed to apportion a percentage of fault to the settled defendants.
So, the most basic macro issue is whether and when this private settlement contract between three private parties will become the operative event that will enable the government (the courts) to take pre-existing claims and legal rights of the other defendants. In this instance, the defendants are Mr. Ready's employer, the general contractor and a subcontractor. In teh case, the employer and the general contractor settled, leaving the subsontractor exposed to a trial, which it lost. And, of course, lurking in the background are the insurers for those entities. But, for the macro level, bear in mind that some companies are self-insured, and some companies were insured but that insurance is or may be gone because the insurer actually is insolvent or may be trying to run away from "incurred but not reported" losses (that is, future losses) by ceasing its business operations and/or invoking a dissolution process specific to insurers. And, the issues arise in the context of events during a trial held during a period of time for which a "tort reform statute was said to be applicable.
In short, the Illinois Supreme Court held, under the statute, that the jury could not apportion fault against the settled defendants. Thus, the private settlement was converted into a government enforced agreement with legal consequences for the remaining defendant, which had not objected to the settlement. Left open by the Supreme Court was whether the jury should have been allowed to hear evidence about the actions (or inaction) of the settled parties. On remand, the appellate court held that the trial court should have allowed the jury to hear evidence of the actions of the settled defendants. The case may now be headed back to the Supreme Court of Illinois.
The Illinois Supreme Court's opinion from late 2008 is here (for now, but will move later when the opinion is archived.) Here is the June 30, 2009 opinion of the appellate court on remand. Here is a press article updating the case history, and explaining that the case is perhaps headed back to the Illinois Supreme Court. Here prior commentary by a large law law firm that represents corporate defendants.
Thursday, July 16, 2009
Investment Losses Claims by Calpers and Others Against Ratings Agencies
Susan Beck has a great AmLaw summary article today with links to underlying complaints, and to a Wall Street Journal article on the same topic by Nathan Koppel. The articles explain that ratings agencies are defending claims by Calpers and others based in part on the notion that their pronouncements are constitutionally protected opinions that invoke First Amendment standards. The articles, however, do not address whether that argument will fly against, for example, investors not based in the United States. Claims by non-US investors plainly will create choice of law issues.
In Illinois, there are fairly well-settled rules regarding claims for negligent misrepresentation of information. Inquiry will focus on, among other things, the scope of the duty related to the information supplied. A 2006 Illinois Supreme Court opinion (here) states the rules as follows:
"To state a claim for negligent misrepresentation, a plaintiff must allege: (1) a false statement of material fact; (2) carelessness or negligence in ascertaining the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) a duty on the party making the statement to communicate accurate information. Board of Education of the City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 452 (1989). See also Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 94 (2002); Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 295 Ill. App. 3d 567, 572-74 (1998). Where, as here, purely economic damages are sought, this court has imposed a duty on a party to avoid negligently conveying false information only if the party is in the business of supplying information for the guidance of others in their business transactions. Brogan v. Mitchell International, Inc., 181 Ill. 2d 178, 183-84 (1998); Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 89 (1982)." (emphasis added).
In Illinois, there are fairly well-settled rules regarding claims for negligent misrepresentation of information. Inquiry will focus on, among other things, the scope of the duty related to the information supplied. A 2006 Illinois Supreme Court opinion (here) states the rules as follows:
"To state a claim for negligent misrepresentation, a plaintiff must allege: (1) a false statement of material fact; (2) carelessness or negligence in ascertaining the truth of the statement by the party making it; (3) an intention to induce the other party to act; (4) action by the other party in reliance on the truth of the statement; (5) damage to the other party resulting from such reliance; and (6) a duty on the party making the statement to communicate accurate information. Board of Education of the City of Chicago v. A, C & S, Inc., 131 Ill. 2d 428, 452 (1989). See also Fox Associates, Inc. v. Robert Half International, Inc., 334 Ill. App. 3d 90, 94 (2002); Neptuno Treuhand-Und Verwaltungsgesellschaft Mbh v. Arbor, 295 Ill. App. 3d 567, 572-74 (1998). Where, as here, purely economic damages are sought, this court has imposed a duty on a party to avoid negligently conveying false information only if the party is in the business of supplying information for the guidance of others in their business transactions. Brogan v. Mitchell International, Inc., 181 Ill. 2d 178, 183-84 (1998); Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 89 (1982)." (emphasis added).
The James Hardie Saga - Tax Regulator Will Gain Access to Asbestos Papers
James Hardie's asbestos trust continues to create issues. Here is an article regarding the Australian tax regulator seeking and gaining access to asbestos-related papers, apparently including papers exchanged with its accountants. Trusts are plainly an excellent concept for resolving asbestos and other toxic tort claims without massive litigation waste, but they are indeed complex undertakings.
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