February 18, 2019

Plaintiff Lawyer Offers Inside Look At `Institutionalized Fraud' At Asbestos Trusts

The trusts lawyers set up to pay the asbestos claims of bankrupt companies are platforms for “institutionalized fraud,” a former plaintiff lawyer says, thanks to lax rules that allow claimants and their relatives to obtain money without firm evidence they were ever actually exposed to asbestos. With lists of work sites and asbestos product names conveniently provided online and no process for verifying most reports of exposure, attorney Thomas M. Wilson says, the trusts are virtual factories for processing claims that wouldn’t pass muster in court.

“When you’re the one drafting the trust documents, you draft it so you and anyone else are able to take advantage of the trust process,” Wilson told me.

There’s nothing in Wilson’s May 7 article in Mealey’s Litigation Report (available online for $25) that would surprise a lawyer involved on either side of asbestos litigation. What’s surprising is the author, a former partner with the Cleveland plaintiff firm of Kelley & Ferraro who represented asbestos plaintiffs from 1999 to 2013 and helped set up some of the trusts he now accuses of facilitating fraud.

Wilson is now with Wargo & Wargo, a Berea, Ohio firm that does no asbestos work. “I have no dog in this fight any more,” the Cleveland-Marshall College of Law graduate told me.

And despite the use of the inflammatory `F’ word, Wilson says he isn’t accusing anybody of breaking the law.

“That’s the basis of the article — there’s nothing improper being done, from any point of view,” he said. “The people who are ultimately profiting from the bankruptcy trusts, properly, are the people who made them.”

Asbestos fibres - a single fibre is believed t... Asbestos: The $15 billion substance. (Photo credit: Wikipedia)

Readers might disagree about the “proper” part after reading how easily the trusts are gamed. In details Wilson said are entirely from public materials, the former asbestos plaintiff lawyer explains how the trusts are designed to be tapped by claimants with little evidence of exposure. That they’ve done, to the tune of more than $15 billion so far, as lawyers drive manufacturers into bankruptcy with asbestos lawsuits and then draft the documents governing the trusts that will pay their claims. From the article:

Plaintiff asbestos lawyers then use the millions of dollars of fees obtained from the system they were instrumental in building, to run countless advertisements designed to obtain more clients so that they can submit more claims and obtain more fees. Thus, institutionalized fraud, as built into the system, allows the system to perpetuate itself.

Here’s how the fraud is perpetuated:

  • Job site/exposure lists. The USG Asbestos Trust, set up to pay U.S. Gypsum claims, provides a helpful “Approved Site List” identifying job sites where workers may have been exposed to asbestos. The website also provides a “Significant Occupational Exposure Rating,” listing jobs like Insulator, Laborer and Boilermaker Helper, that are presumed to have led to asbestos exposure. Combine the two, Wilson says, and no further evidence is needed. Claimants don’t have to prove they touched any specific products, worked with them, or even worked inside a building where they were present.
  • Easy claim forms. While the plaintiff lawyers guarding the trusts require their clients to file a form specifically claiming they were exposed to that company’s products, it’s not a terribly demanding task. The claim forms must be signed, but they aren’t affidavits and don’t meet state or federal evidence standards. In fact, if the information matches what’s in an attorney’s file then it is “accurate,” even if incorrect. The whole process resembles the robosigning scandal at mortgage companies: Once lawyers sign an electronic filing form, Wilson says, information can be automatically merged into the claim forms “which can then be bulk uploaded, by the thousands.”
  • No cross-checking. While many states allow courts to consider the relative liability of a company if the plaintiff was exposed to other, more dangerous asbestos products, lawyers have dropped that from trust documents. Some trusts specifically advise claimants that they don’t want information about exposure to other products, meaning plaintiffs can tap multiple trusts with conflicting stories about how they think they got sick without worrying about getting caught.
  • Lax exposure affidavits. Family members can file these on behalf of a deceased claimant, without any personal knowledge of the facts. The Plibrico trust, for example, allows family members to make “factual assertions” about someone else’s work history and exposure that wouldn’t be admitted in any court.
  • Product lists. A claimant theoretically should be able to identify the product he says made him sick. The trusts make this easier by providing lists of asbest0s-containing products on their websits, including the years they were manufactured. That makes it easy to provide accurate documentation of exposure without actually remembering anything.

These articles typically generate outraged comments from plaintiff lawyers who accuse me of being an “industry stooge” or worse. In this case, the material comes from one of their own. And the effect of all this gamesmanship is to deplete the trusts of assets that could be used to pay future claimants. As with most large settlements, the asbestos trusts were set up to compensate lawyers and their clients in the here and now, with less concern for future claimants and their lawyers. The companies, of course, also get a benefit by capping their liability and moving on. By putting their assets in the hands of plaintiff lawyers with an inherent conflict of interest with future claimants, they set the stage for fraud.


Plaintiff Lawyer Offers Inside Look At `Institutionalized Fraud' At Asbestos Trusts

Anti-Asbestos Champion Gilbert L. Purcell to Deliver Commencement Address for Pepperdine University School of Law


Gilbert L. Purcell, a champion for asbestos victims, has been selected
to deliver the commencement address for the Pepperdine University School
of Law. Purcell has obtained more verdicts in favor of asbestos disease
victims than any other attorney.

“The sense of purpose Gilbert Purcell brings to achieving justice for
asbestos victims moves beyond the courtroom into the communities with
which he works,” notes Deanell
Reece Tacha
, dean and professor of law, School of Law, Pepperdine
University. “We are honored to have a commencement speaker, and alumnus,
who has achieved so much with an ethic of service.”

Admitted to practice before the U.S. Supreme Court, Purcell has earned
many “firsts” and hundreds of millions of dollars in jury verdicts for
asbestos victims. Purcell brought the first successful property damage
action in California, also the first of many multimillion-dollar
verdicts. He tried the first asbestos-related non-Hodgkin’s lymphoma
cases in Washington State and Oregon, as well as the first colorectal
cancer case in California.

In addition to his work with asbestos victims, Purcell secured a
separate California statute of limitations trigger for latent diseases.
This victory ensured significant numbers of Californians access to trial
for determination of potential tobacco-related causes of their cancer

Purcell has received numerous legal accolades and awards. The American
Trial Lawyers Association recognized Purcell with the Trial Lawyers Care
Hero Award for his pro bono representation of the families of 9/11
victims before Special Master Kenneth Feinberg. In 2011, The Recorder named
Purcell Attorney of the Year. The National Trial Lawyers Association has
named Purcell one of the Top 100 trial lawyers in California each of the
past six years, and he has been selected as a Northern California Super
Lawyer annually since 2004. He holds the designation of diplomat from
the American Board of Trial Advocates and was named to Lawdragon’s
Top 500 Attorneys for 2012.

Dedicated to representing people injured by corporations, Purcell
cofounded Brayton
Purcell, LLC
with partner Alan Brayton in 1984, never straying from
his mission. Since that time, the firm has emerged as a premier
mesothelioma and asbestos injury firm in the United States and the
largest plaintiff law firm in California.

Mr. Purcell earned his bachelor’s degree with alumni scholar honors from
UCLA, graduating from its Pembroke College oversees program at Cambridge
University. He completed his juris doctor in 1983 at Pepperdine
University School of Law where he was a member of the Law Review.

The Pepperdine
University School of Law
commencement ceremony will take place at 10
a.m. Friday, May 17, 2013, at the Alumni Park on Pepperdine University’s
Malibu, California, campus. Pepperdine University commencements
are hosted outdoors with the Pacific Ocean as a backdrop. They are open
to the public.


Pepperdine University School of Law

Danielle Killian, 310.427.7889


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Anti-Asbestos Champion Gilbert L. Purcell to Deliver Commencement Address for Pepperdine University School of Law