The Garlock Sealing Technologies, LLC [1] decision has been a hot topic among asbestos defendants since it was released on January 10, 2014.
In essence, the judge ruling over the case stated that the withholding practices of plaintiffs and their lawyers was so widespread that it justified excluding the defendant’s past settlement history as unreliable when calculating the expected liability for the bankruptcy trust’s current and future claim values [2].
This decision has raised the question about how the tort system will be impacted, both in trial situations and settlement negotiations. Recently, however, this decision has caught the attention of the Federal Government, due to how the “withholding practices” have impacted the Medicare/Medicaid recovery. A blog post by my colleague, Chris Monahan, discussed Medicare reporting based on the claimant’s exposure date. It stands to reason that if plaintiff counsels have withheld certain exposure information, then Medicare/Medicaid may not be aware that it is entitled to a reimbursement.
A recent article in the Huffington Post also raises the question that some plaintiffs are “coached” by their attorneys to “not recall” certain exposures at certain times. That practice may not have received much attention when it was only impacting businesses involved in asbestos suits. However, now that it is infiltrating the public sector, the issue is getting more media attention, and the U.S. House of Representative Judiciary Committee is conducting hearings regarding the transparency of the bankruptcy trusts and related plaintiff exposure information submitted to those trusts.
Since the Garlock case has uncovered what seems to be fraud in the asbestos tort system, it makes it difficult for the government not to take notice, given that large sums of money are at stake and potentially due to Medicare/Medicaid.
How does the Federal Government involvement or increased media attention change the asbestos litigation landscape? What do you think? Please share your comments.
[1] 504 B.R. 71 (Bankr.W.D.N.C. 2014)
[2] Id. At 87
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Having spent much of her career serving clients who are asbestos defendants, Michelle Potter is an authority on the current state of the asbestos litigation industry. At KCIC, her day-to-day role is to manage client relationships and lead projects to develop and implement claims processing procedures and systems, as well as to perform complex analyses of different types of claims and insurance.
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