Snapshot of Recent Trends in Asbestos Litigation: 2011 Update

Thu Jul 21 16:24:38 EDT 2011
By Mary Elizabeth C. Stern, Lucy P. Allen, and Adelina Halim

In this third annual review of recent trends in filings and settlements in asbestos litigation, NERA Vice President Mary Elizabeth C. Stern, Senior Vice President Lucy P. Allen, and Senior Analyst Adelina Halim extend their analysis to cover a full decade from 2001 through 2010, using publicly available data to analyze trends in asbestos-related liabilities of more than 150 companies. In the report, the authors find that as the decade drew to a close, aggregate results continued to be generally favorable to asbestos defendants: filings are down; total indemnity payments have stabilized well below the 2004 highs; and pending claims continue to fall. At the same time, dismissal rates have continued to drop and average dollars per resolved claim have increased. While these trends may appear to lead to higher costs, these changes are consistent with the mix of claims shifting toward more malignancies (as non-malignant filings drop).
 
The authors note that the decade had begun with increasing filings, rising total indemnity payments, and mounting pending claims against defendants. However, by mid-decade, all three trends were reversed, with filings, in particular, falling below 2001 levels. With the close of the decade, filings and payments have stabilized for individual defendants below the mid-decade peaks, but the average claim is more expensive to resolve. Going forward, it is yet to be seen whether the pace of the litigation will change as non-malignant claims no longer clog up certain jurisdictions, and what effect, if any, the new asbestos trusts will have on filings and settlements for still-solvent defendants.