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Accusations of Fraud in the Asbestos Bankruptcy Courts: Plaintiff’s Deception or Defendant’s Obfuscation

Smoke_Stock_002_by_#1.jpg Accusations of Fraud in the Asbestos bankruptcy courts are being tossed about. But is there really deliberate deception on the part of the Plaintiffs, or is this just another smokescreen created by the defendants to take the focus off their wrong doing and liability and justify diminishing payments?

According to the U.S. Government Accountability Office (GAO) , there are 60 different trusts, created as companies declared bankruptcy because of asbestos-related liabilities to relieve them of future liabilities. Those trusts have paid out $3 billion to settle 461,000 claims in 2010, compared to $3.6 billion in 2009 and $3.3 billion in 2008. In all, $17.5 billion between 1988 and 2000 has been paid out to settle 3.3 million claims. Just because of the sheer volume, the possibility for fraud exists within the system of trusts set up by bankruptcy courts to deal with asbestos personal injury claims. The GAO report said 98% of trust claims go through an “expedited review” process that requires only a claim form with “documented evidence” of exposure such as work history, invoices, or deposition testimony of plaintiff or coworkers plus a medical report
Claims of fraud seem to be based in two parts: One, that the claimants are providing inconsistent exposure history. Two, that the medical profession has seized an opportunity to capitalize on the situation and has provided false information / documentation.

Exposure History: There are claims that conflicting exposure history has been submitted to different trusts. The universe of claimants consists largely of “blue collar” workers; members of unions who filled the work force of industries such as construction, mechanical, railroad, manufacturing and the like. The unions typically sent workers to jobsites for limited amounts of times depending on the work or project to be completed. They worked at multiple jobsites on multiple projects. Working at two different jobsites (or more) during the same time frame is not conflicting information – It is the way it was. The trusts require that exposure and product identification is verified by sworn affidavits, co-worker affidavits, Social Security earnings reports and or actual paycheck stubs. The latency period for an asbestos related disease is between 15 and 50 years which means the documentation must go back commensurately.

Medical Evidence. Prior investigations have shown how a tiny number of physicians have submitted tens of thousands of diagnoses of asbestos-related disease, many of them subsequently found to be incorrect. But the few “bad apples” that we all know will be found in every bunch have been identified, and the information has most definitely been disseminated. CRMC, VERUS LLC, TRUST ONLINE DELAWARE CLAIMS PROCESSING FACILITY are amongst the largest claims processing facilities and currently handle approximately 30 or more of the bankruptcy Trusts open for filing. They each have a similar posting or notice, easily obtained on the internet, listing UNACCEPTABLE DOCTORS AND FACILITIES.*1 Moreover, the consistency or similarities with which they list the doctors supports the fact that not only is there communications within the trusts handled by the same claims processing facility, but there is indeed communication amongst the processing facilities.

The U.S. Chamber of Commerce issued a press release in mid October calling the asbestos trust system “broken” because of this lack of transparency. “It is becoming clear that rather than acting to prevent abusive claims, the asbestos trusts are effectively encouraging fraud by inhibiting claims information sharing between the trusts and the tort system,” said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform.

The GAO said 65% of trusts reviewed treated claims information as confidential under rules that consider information submitted as part of a legal settlement process as privileged. Defendants and insurers say the trusts should be treated as non-adversarial settlement vehicles. They frequently seek information about claims paid so they can set off any court award by the amount the plaintiff has already obtained elsewhere. Clearly the request to make personal medical information publicly available is motivated by the desire to protect the almighty dollar of big business and insurance companies and has a complete disregard for the personal rights of the victims of asbestos exposure.

There is no disputing the fact that there are unscrupulous individuals looking to capitalize on the misfortune of many. But there are strict guidelines and criterion implemented by the trusts to assure the integrity of their system. In short it is the victims of asbestos exposure who suffer the most; adhering to stricter regulations and burdens of proof and being ultimately rewarded with significantly lower dollar amounts.

medical reference books.jpgREFERENCES:

Reading X-Rays in Asbestos Suits Enriched Doctor:
By Jonathon D. Glater – The New York Times 11/29/2005
CRMC MEMORANDUM: Suspension of Acceptance of Medical Records
MANVILLE – Unacceptable PFT Lab Reports

TRUST ONLINE – UNITED STATES GYPSUM – Section 5.7 of the Trust Distribution Procedures: Doctors and Screening Companies

TRUST ONLINE – DII INDUSTRIES, LLC ASBESTOS TRUST: Unacceptable Doctors and Facilities

VERUS LLC – ACandS Trust Policy on Certain Doctors and Screening Facilities

VERUS LLC – PLIBRICO Trust Policy on Certain Doctors and Screening Facilities

NATIONAL GYPSUM ASBESTOS TRUST Deficiency Paragraph