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  • Writer's pictureKirk Hartley

Connecting Trust Funds and Tort Systems – Madison County Defendants Ask Illinois Supreme Court

Mass tort law today is badly flawed by the lack of connections between state court tort systems and the parallel but disconnected compensation systems that have arisen through trusts or funds that hold billions of dollars intended to pay tort claims. BP’s oil rig fund is a recent, well-known example that highlights the growing importance of funds as a means for resolving massive tort claims. The new RAND study on asbestos bankruptcy trusts – at long last – highlights the importance of the $ 30 billion or so of asbestos bankruptcy trust funds created from asbestos litigation. A recent mandamus filing in the Supreme Court of Illinois illustrates the importance of forcing connections between trust fund payments and tort law claims.

In short, the defendants’ papers ask the Court to require the Madison County trial court to modify asbestos docket orders to require pretrial and trial procedures that account for claims to asbestos trusts. The papers are on line here.

The gist of the problem is plain, and boils down to plaintiff’s splitting causes of action. At present, asbestos tort claims can proceed ahead to settlement and trial without the claimants having to bring or account for asbestos trust claims they can and will bring. So, the claimants act economically rationally by delaying filing claims against the trusts. The result ? The tort system cases go to settlement and trial without the remaining defendants being able to obtain effective offsets or effective contribution claim rights regarding the monies that inevitably will be paid out by the asbestos trusts.

How much money are we talking about? Hundreds of thousands, or millions. Indeed, in one of the chapter 11 cases, well-known asbestos plaintiff’s lawyer Peter Kraus submitted a declaration swearing to his understanding that all clients of his firm would be paid not less than $ 700,000. – by just one trust – if each could in good faith assert that they worked with a product that included asbestos sold by Thompson-Hayward. Go here to download the Kraus declaration and its exhibits. And, the record in the Illinois Supreme Court proceedings includes expert information from Bates White indicating that an "average" asbestos claimant may obtain $ 600,000 from asbestos trusts, with some obtaining much more.

Should the Supreme Court of Illinois act in order to force rational and timely economic connections between its state court system and the trust fund compensation system ? Absolutely.

Will it act? Time will tell.

Should academics be paying attention to forcing connections between the two parallel and disconnected compensation systems? Absolutely. Are they ? Not in any meaningful way that I can find.

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