NERA’s product liability and mass torts expertise ranges from projects valuing liabilities in multibillion-dollar bankruptcies to assessing potential exposure before products have been marketed. Our experts bring together the required disciplines—including economics, statistics, accounting, epidemiological modeling, computer programming, and insurance modeling—to address complex valuation problems that arise in these matters.
NERA experts provide consulting and expert testimony for defendants, plaintiffs, insurers, and companies engaging in mergers or acquisitions. Our expert reports and economic testimony assist counsel, state and federal courts, Boards of Directors, and risk managers, and we have testified on mass torts issues before Congress. Our real-world experience spans a variety of settings including bankruptcy hearings, fraudulent conveyance actions, forecasts for financial reserves, insurance allocation disputes, M&A due diligence, and consumer class actions.
NERA’s wealth of experience in a range of industries allows our experts to provide best-in-class consulting. Our experts have worked on cases involving asbestos, silica, and mixed dust; automotive vehicles and products’ industrial chemicals such as manganese and beryllium; building products; food additives; pharmaceuticals and medical devices; contaminated groundwater; tobacco; mold; and firearms.
Asbestos and Other Toxic Torts
NERA experts elevate the burden of financial uncertainty related to unquantified toxic tort liability. Our experts have developed claim forecasting models using epidemiological studies of product failure rates and behavioral economics. Our experience includes projecting newly emerging torts and mature torts, monitoring current trends in filing and settlement patterns, and adjusting our forecast assumptions accordingly. We also have expertise in capturing, coding, and organizing claim files. Using rigorous statistical techniques, we can determine whether the coded sample is representative of the population and make observations about its characteristics.
Claim File Coding and Analysis
Our experts have mastered all aspects of capturing, coding, and organizing information from claims files to generate electronic databases. It is often the case in mass tort and product liability cases that relevant data are available in hard copy (paper) files only. Proper analysis of these data may require that the data first be manually coded to convert the information into an electronic database. NERA has extensive experience with coding of this type.
Consumer Class Actions
NERA experts aid at each stage of consumer class actions alleging misrepresentation, fraud, product failure, or diminution of value. We have experience in a wide range of industries including credit cards, automobiles and automotive products, computers, sporting goods, medical products, buildings products, and telecommunication devices. Our experts assess data requirements and assist clients with data management. When data is unavailable, NERA experts conduct surveys to fill the gap.
Our empirical analyses have been used at the class certification stage to provide an evidentiary basis for properly delineating a class consistent with the requirements of Rule 23(b) or rejecting class certification altogether. If the class has already been certified, our experts help by quantifying potential exposure and developing rigorous estimates of any potential damages.
For parties engaged in the development of structured settlements, NERA assists by modeling the expected liability and administrative costs of settlement proposals. This analysis involves predicting participation, approval rates, consideration of alternative means of payment, and estimation of the number of class members expected to opt out of the settlement. We also model cash flows, funding needs, and related insurance recoveries.
Insurance Coverage and Allocation Consulting
NERA experts allocate the historical and projected liabilities of insurance policies, develop computer programs to value insurance assets, and forecast insurance recoveries quickly and efficiently. Our experts use valuation and forecasting to help companies set reserves and plan for the future. NERA experts understand available coverage, the ability to value that coverage, and the expertise to forecast the expected insurance recoveries so litigation can be resolved and can achieve beneficial outcomes in settlements and mediation.
Survey Research and Design
NERA economists use quantitative research, choice models, and other survey techniques to reach conclusions in a range of issues—such as market definition, claiming rates and product defects analysis in mass torts, alleged theft of trade secrets, and Lanham Act claims of alleged trademark infringement or false advertising. Our surveys can help identify how consumers choose among service or product configurations, which attributes sway purchase decisions and whether certain names or designs have achieved meaning in the marketplace. Our expert statisticians and economists combine a deep knowledge of sampling techniques, survey administration, and analyzing complex sets of data with a firm grounding in econometric principles and practice. We help clients in industries including automotive, health care, entertainment, consumer products, software, and food products, among others.
Valuation of Individual and Class Action Damages
NERA experts analyze damage claims for historical and future losses. They use forecasting techniques to estimate the timing and extent of future losses for damage claims filed individually or as a class and to estimate the size of a representative class or predict how many more individual claims will be filed before the statute of limitations ends. We also develop data on the salient attributes of the claims that are likely to affect losses. In cases where losses are associated with marketable assets, such as real estate, NERA can quantify damage claims to estimate diminution in value claims.
Bankruptcy Trust Consulting
Over the past 40 years, companies with large mass tort liabilities have increasingly filed for Chapter 11 protection. NERA experts work with companies that enter bankruptcy reorganization to resolve pending and future mass tort liability claims, as well as for insurers and other parties affected by the bankruptcy. In connection with bankruptcy proceedings, we provide assistance in the design of proof of claim forms and more detailed survey forms intended for a representative sample of claimants. To forecast claims likely to be filed against bankruptcy trusts, NERA experts develop claims forecasting models that rely on epidemiological models or product failure rates, as well as behavioral economics. NERA economists manage proof of claim data and provide analyses that range from simple summaries of the claim population to liability valuations under alternative trust distribution plan structures.
Combining scientific analysis with behavioral economics, NERA experts have developed rigorous models to forecast product liabilities. We estimate the size of exposed populations, predict the levels of those affected, and project the number of claims. To ensure accuracy, we also examine historical claiming rates and assess how those rates may change in the future. For future claims, we use statistical analysis to understand the drivers of the historical settlements and how they might be expected to change going forward.
NERA experts use these forecasts to establish the size of bankruptcy trusts, assess the value of insurance coverage, and help companies establish financial reserves. We have provided analysis as part of the due diligence process for potential mergers and acquisitions—assessing existing liability estimates and providing projections that may include upper and lower bounds in addition to a best estimate.
Legislation Impact Analysis
Claim filing rates in product liability cases are a function of economic and behavioral factors. For example, filing rates increase with higher claim values and decrease when individuals believe they bear some of the blame for the injury. The litigation environment will affect these factors, and hence, a plaintiff’s decision to bring a claim, the jurisdiction within which a claim is filed, and the value of claims filed.
NERA's experts track changes in the mass torts litigation environment both nationally and by state. We have observed that past tort reforms have affected filings rates (e.g., the barring of out-of-state claims in Mississippi led to a drop in in-state filings); and conversely, that high levels of claim filings can lead to tort reforms.
In forecasting claims or liabilities, our experts incorporate information on changes in the litigation environment, such as tort reform, to forecast how such reforms will affect filings rates or settlement dollars.
Quantifying Medicare Section 111 Costs
NERA's statistical and epidemiological analysis can help companies comply with the new Medicare reporting standards under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA). More specifically, we can estimate the portion of aggregate indemnity payments that are paid to claimants who are also eligible for Medicare reimbursement, and the likely amounts of this Medicare reimbursement. Such an analysis incorporates disease progression and mortality. The analysis can be done for payments that have already occurred, as well as for projected future payments. The results of this modeling efforts can allow companies to set aside appropriate reserves.
NERA has designed samples for use in class actions, construction defects, product liability, insurance disputes, asbestos, and other claims. Examples include developing samples of houses to test building products, samples of food products to test for contamination, samples of windows to test for leakage, samples of sales records to estimate total sales, samples of health injury claims to estimate the rate of correct documentation of claims, and samples of potential class members to conduct surveys.