Snapshot of Recent Trends in Asbestos Litigation: 2014 Update

Thu May 22 16:24:38 EDT 2014
By Mary Elizabeth C. Stern and Lucy P. Allen

In their annual review of recent trends in filings and settlements in asbestos litigation, NERA Vice President Mary Elizabeth C. Stern and Senior Vice President Lucy P. Allen use publicly available data to analyze trends in asbestos-related liabilities for more than 150 companies. Analyzing the 2013 data, the authors observed trends favorable to defendants: on average, total indemnity payments, legal costs, and reserves all dropped, while new filings held steady and pending claims fell.

On the other hand, average resolution values did not drop between 2012 and 2013, but instead remained at the higher levels reached in 2011. As noted in prior NERA updates, the authors attribute the recent higher average resolution values to a shifting disease mix, in which malignant claims comprise a larger percent of current resolutions than those resolved in the mid-2000s.

Going forward, there are new sources of uncertainty that may affect asbestos trends. In particular, the biggest uncertainty on the near horizon may be the impact of Judge Hodges' January 2014 decision in the Garlock bankruptcy, which highlighted discrepancies in exposure evidence provided by claimants. Whether this decision will affect filings and settlements -- and if so, how -- is not yet known.