Texas Curtails Runaway Asbestos Litigation

Published July 1, 2005

The state of Texas stands to lose its status as the asbestos litigation capital of the country, thanks to newly enacted legislation setting strict medical criteria for claims of asbestos-related personal injury.

Speculative Claims Barred

The new law, signed by Gov. Rick Perry (R) on May 19, will allow compensation only for people who have been diagnosed with asbestos-related illnesses. The measure prevents people who have shown no signs of injury from suing for speculative future health effects.

In exchange, the bill extends the preexisting two-year time limit between asbestos exposure and the initiation of litigation that fueled many of the speculative future-injury claims.

Florida, Georgia, and Ohio enacted similar bills earlier this year.

State Was Lawsuit Magnet

Texas had become a magnet for speculative health claims. As noted in the May 23 Insurance Journal, “Texas has become the national haven for questionable and frivolous asbestos lawsuits. An estimated 40 percent of all of the nation’s asbestos claims are filed in Texas courts, although a vast number of these lawsuits have little, if any, connection to Texas. In many cases workers from all over the country have been encouraged to file in Texas rather than in their home states with the hope that Texas courts would give bigger awards.”

The new law “will have a dramatic impact” on spurious legal claims, Dick Trabulsi of Texans for Lawsuit Reform told the April 25 Dallas Morning News. “Between two-thirds and 95 percent of claims in asbestos litigation are on behalf of people showing no impairment,” he noted.

Kristin Armshaw, director of the Civil Justice Task Force at the American Legislative Exchange Council, said, “For years, profiteering trial lawyers have paraded before the courts completely healthy individuals who have merely been exposed to asbestos at one point in their lives. The result is that more than 70 companies have gone out of business and those who are suffering from real ailments are at risk of never receiving compensation.”

Support Was Broad

Joe Woods, assistant vice president and regional manager for Property Casualty Insurers Association of America (PCI), told the May 23 Insurance Journal, “PCI supported the bill because it provides the proper balance in the civil justice system. Senate Bill 15 will ensure that individuals who are impaired from asbestos or silica exposure receive first priority in the Texas courts, by requiring that persons first be diagnosed with asbestos or silica-related impairments.

“A person must prove that they have an asbestos or silica-related injury before they file a civil action to get compensated,” the Insurance Journal article continued, “thus removing the majority of claims that are clogging up the system and allowing the true asbestos victims to obtain quick and fair compensation.”

“State legislators in Ohio, Texas, Florida, and Georgia have enacted legislation, based on ALEC’s Asbestos and Silica Claims Priorities Act, creating a system that will unclog court dockets and place priority on those who most need it,” Armshaw said.

“The political reality is this is probably what’s best for our clients,” Guy Choate of the Texas Trial Lawyers Association conceded in the April 26 Greenwire.

“This measure will quickly, fairly, and efficiently compensate people who are truly sick from asbestos and silica illnesses, and also provide more certainty and stability for defendants and insurers,” John Marlow, assistant vice president of the American Insurance Association’s southwest region, told the Insurance Journal.

Fighting Ambulance Chasers

Business owner Greg Scofelia of Galveston illustrated the problems with the old system, according to the May 19 Houston Chronicle. According to the Chronicle, Scofelia’s auto parts company has been sued more than 30 times for selling auto parts manufactured with asbestos. All of the lawsuits were determined to be without merit, but the legal costs were daunting, even though Scofelia prevailed in each one.

“Most of the lawsuits were from people just chasing money,” Scofelia told the Chronicle. “I was scared because once my liability insurance ran out, they could go after me and my business.”

“Asbestos reform must be about victims first and a system based on medical criteria, instead of an arbitrarily determined piggy bank of cash. That is the only way to ensure that the truly sick receive their day in court,” Armshaw said.

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.