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  • Writer's pictureKirk Hartley

Eternit, Etex and Asbestos Cement – Global Scale, Decades Ago – How to Deal with Current

Monday’s post (12/26) pointed out a variety of product liability, corporate law and compensation issues in the context of one nation (India) and a small group of apparently independent asbestos-cement companies. The point of today’s post is to illustrate macro level complexities that arise due to the cross-border issues that arise from multinationals, globalization and immigration, among other factors. A few country-specific points also are noted.

Today’s post focuses on the large number of Eternit, Etex and other related entities that for decades have comprised a literally global network of manufacturers of asbestos-cement. Today, some of these companies are in the news because of the recent start of an Italian trial to resolve combined civil and criminal charges involving over 2,500 injuries and deaths suffered by persons injured by asbestos inhaled at manufacturing facilities operated in Italy by Eternit entities. In the trial, individual officers and managers face Italian law charges that are more or less akin to reckless homicide, with the charges related to Italian laws requiring a safe workplace. Additional media stories exist because one of the defendants is a billionaire, and he is busy with actions that rightly or wrongly seek to portray Mr. Schmidheiny as a person who is both “green” and concerned about other people.

Global Scale, Decades Ago: What are sources for facts discussed in this post ? As to the entities in general, this substantial paper provides an extensive and apparently reasonably credible hundred year history of various Eternit entities sprawled around the globe (but note the paper is prepared by partisans plainly interested in causing Eternit entities to make compensation payments.) The paper can be skimmed in just a few minutes to obtain a basic grasp of the global scale and inter-connected nature of the operations. A basic summary is that the entities operated across Europe, Africa, South America and Asia. The paper also describes extensive transfers of business operations between and among entities. For more background and specifics on the trial in Italy, please look to the left for prior posts indexed under Eternit and/or go to this partisan website operated by persons who support the injured persons. Articles here and here relate to Mr. Schmidheiny and his image/actions.

The bottom line ? Actions of Eternit and Etex entities, and their officers and managers, plainly caused many deaths and injuries among plant workers around the globe, and no doubt more deaths and injuries of plant workers will follow in future years. One also may reasonably assume that so-called “take home” exposures have produced some number of deaths or injuries among spouses of plant workers through fact patterns such as a wife contracting mesothelioma due to having shaken out and washed a husband’s work clothes laden with asbestos fibers. It also seems fair to conclude that injuries and deaths also have occurred and will continue among persons who worked for contractors who performed services at the plants, such as persons who installed, removed, or serviced a factory boiler. In the US, the latter incidents would give rise to “premises liability” claims. In addition, some additional number of current and future product liability claims will arise among persons who sawed, drilled, broke or otherwise worked directly with asbestos-cement or other Eternit products. For all of these groups of current and future victims of disease, one assumes that some significant number of persons and/or their families will have migrated to other nations.

The injuries and deaths arising from decades of global operations and transfers of business operations will provide the factual grist needed for plaintiff’s lawyers, defense lawyers and insurance company lawyers to write and argue a wide range of legal positions on a wide range of liability, compensation and insurance issues. The various positions will be further colored by the years in which relevant action or inaction did or did not occur. The issues for example logically would require parsing which entities and/or officers and directors are directly liable to pay which claims, whether as defendants facing civil claims or via mitigation payments to reduce criminal sanctions ? Also, are those entities or persons financially protected by insurance or other indemnities ? Which entities, persons, insurance policies, or insurers are known, still exist , and are financially viable ? Can funds be obtained from solvent reinsurers who lurk behind insolvent primary insurers?

Other issues may arise regarding which entities or persons are entitled to make claims or decisions regarding insurance or other assets. And, all of these issues will arise under the laws of myriad nations. Moreover, health care costs associated with the injuries will be incurred in myriad nations under myriad legal rules regarding the recoverability of such expenses. To the extents the costs are not recovered from Eternit entities, they will have imposed a burden on the “economic commons” of many nations, and those burdens will be suffered for several future decades due to the 20-50 year latency periods associated with cancers caused by asbestos inhalation.

Also consider the impacts of corporate papers written in myriad languages, and myriad rules on discovery. And bear in mind that most of the paper will not be in digital form. Also think about if and when relevant papers were destroyed or preserved.

County-Specific Topics: To highlight just a few of the legal issues, one may look at the Italian trial to see both differences and similarities when compared, tor example, to the US legal system. One difference between US and Italian law is that Italy allows joinder of both criminal charges and civil claims, an approach that would set off shock waves if used in the US. Second, note that the trial includes claims by Italian government agencies seeking to obtain repayment of expenses incurred for medical care for injured persons. Thus, another example of the reality that diminishing government resources lead to more claiming, and that the US is not unique in being a home for lawsuits seeking government cost recoveries. Note also that the Italian system moves more slowly and in different ways than does the US system. Thus the prosecutors gather and share information and evidence in conjunction with testimony taken at various times before one or more judges. Note finally that the trial coverage highlights yet again the risk related to corporate reputation.

Macro Issues: So, who pays, when and how given a history of inter-related entities spread across the globe, many transfers of entities and assets, and many nations with an apparent interest in asserting jurisdiction and trying to provide due process for both claimants and defendants ? And, how does society cope with the reality that some of the victims probably have moved to other parts of the distant from where they inhaled fibers, and that faux victims will emerge ?

Litigation of course is an option. Consider, however, the incredible amount of wasted resources we saw in US asbestos litigation that took place mainly under one language and with mainly state-based rules of law that vary, but are not so terribly different in their general framework. Now consider the inefficiencies plainly ahead when the Eternit/Etex issues described above will unfold globally in myriad languages under rules of law that in some cases are now fixed but in other cases have yet to be written or decided in developing countries.

For all the above issues, who can or should speak for which future personal injury claimants? Who can or should speak for governments or others who incur health care costs resulting from Eternit-caused injuries ? Who can or should speak for other corporate defendants that will be called on to pay for some or all of the injuries caused by work at Eternit plants or by Eternit products? Who speaks for US and non-US asbestos trusts and/or foundations that will be called on to pay for some or all of the injuries caused by work at Eternit plants or by Eternit products? Who speaks for solvent or insolvent insurers or solvent insurers that are trying to cut off their future payments and risks by participating in “schemes of arrangement” in the UK, the United States or other nations?

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