Trusts Busted; The seamy underside of asbestos litigation

“Harry Kananian died in the year 2000 of mesothelioma--a cancer almost always caused by asbestos. But the legacy that may survive him is the role he is posthumously playing in exposing evidence of asbestos litigation fraud. In early 2000, the Ohio resident met with the law firm of Early, Ludwick, Sweeney & Strauss to see about collecting compensation from special trusts set up by companies to deal with asbestos liabilities. So the law firm filed a claim to one trust, saying Kananian had worked in a World War II shipyard and was exposed to insulation containing asbestos. It also filed a claim to another trust saying he had been a shipyard welder. A third claim, to another trust, said he'd unloaded asbestos off ships in Japan. And a fourth claim said that he'd worked with "tools of asbestos" before the war. Meanwhile, a second law firm, Brayton Purcell, submitted two more claims to two further trusts, with still different stories. The two firms swept up as much as $700,000 for Kananian and his estate from trusts and settlements. In the legal trade, this is known as "double dipping"--the process by which lawyers file claims at many different bankruptcy trusts on behalf of a single plaintiff.”

Wall Street Journal, December 5, 2006
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False Witness

"Last year, in a shot heard round the mass tort world, U.S. District Court Judge Janis Jack, presiding over 10,000 claims of silicosis -- a lung disease caused by exposure to silica (sand) dusts, issued a report documenting widespread, fraudulent medical diagnoses. The fraud was discovered when Judge Jack permitted the defendants to extensively question the doctors who had diagnosed the alleged injuries. While this sounds like standard operating procedure, most judges would not have permitted such discovery. Indeed, the fraud would never have come to light but for a courageous judge willing to, in effect, put the tort system on trial."

Wall Street Journal, December 2, 2006
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The Stats

$882:Cost of the U.S. tort system to each individual in 2005. Overall, the tort system cost Americans $261 billion in 2005. This represents a $1.1 billion increase from 2004, which is the smallest increase since 1997.
"2006 Update on U.S. Tort Cost Trends," Tillinghast Towers Perrin, December 13, 2006.

70%: Percentage of echocardiograms, reviewed by a panel of independent medical experts, found to be either fraudulently administered or altered in order to show evidence of injury in the fen-phen litigation. As a result, an estimated $6 billion went to uninjured claimants and their lawyers.
Wall Street Journal, December 2, 2006.

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