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August 22, 2018

Insurer Claims Asbestos Fraud Tainted Pittsburgh Corning Bankruptcy

An insurer that was required to help fund the $3 billion bankruptcy of Pittsburgh Corning Corning has filed court papers seeking the case to be reopened, saying “pervasive fraudulent conduct” by asbestos plaintiff lawyers tainted the proceedings.

The filing by Everest Re and its Mt. McKinley Insurance unit follows the opening of millions of pages of documents in the Garlock Sealing Technologies bankruptcy, which revealed how lawyers representing asbestos plaintiffs deliberately delayed filing claims against bankrupt companies until they had completed cases against solvent ones, in order to avoid cluttering the record with potential evidence of exposure to other firms’ products.

Everest is among the insurers ordered to pay $1.7 billion into the bankruptcy trust formed to settle claims against Pittsburgh Corning, a joint venture of PPG Industries PPG Industries and Corning that made asbestos insulation widely used in ships, refineries and other industrial settings. A judge approved the bankruptcy plan in 2013 and last year a federal district court judge rejected Everest’s challenge to the plan.

Everest’s claims mirror the findings of the bankruptcy judge who slashed Garlock’s estimated asbestos liability from $1.3 billion to $125 million last year after a detailed examination of 15 claims by several different law firms revealed every single one had withheld information about alternative exposures in order to mount a stronger case against Garlock. In that case, Judge George R. Hodges said the evidence suggested a process “infected by the manipulation of exposure evidence by plaintiffs and their lawyers.”

In its filing, Everest accuses several law firms by name of manipulating or hiding evidence including Waters Waters & Kraus of Dallas, New York’s Belluck & Fox Fox, and Motley Rice, the South Carolina firm most famous for helping to engineer the $200 billion master tobacco settlement with state attorneys general in 1998. Some of those same firms are being sued by Garlock for civil racketeering for allegedly withholding evidence to drive up settlement values.

The lawyers say the accusations against them are baseless. Under the terms of most bankruptcy trusts, which are set up and overseen by plaintiff lawyers, evidence of asbestos exposure can be as simple as a work history at a site where asbestos was known to be used. They say companies like Garlock made a business decision to settle lawsuits, frequently in bulk, in order to avoid the cost of litigation. It’s not the job of plaintiff lawyers to help them obtain evidence to reduce the value of those claims, those lawyers say; if manufacturers wanted evidence of other exposures, they could have questioned coworkers or used shipping records and other documents to show the presence of insulation, for example, which most independent medical experts say is far more dangerous than other forms of the mineral.

Garlock was able to question some of the lawyers under oath, however, and got revealing admissions about how lawyers delayed filing trust claims until after they’d concluded cases against solvent companies. In its filing, Everest cites a few examples, including that of Robert Treggett, a Waters & Kraus client who won a $24 million jury verdict against Garlock after a trial in which his attorneys repeatedly deflected questions about whether Treggett had been exposed to dangerous Unibestos insulation.

Garlock “didn’t bring proof that there was Unibestos on that ship. They couldn’t. It’s not true,” Treggett’s attorney said in closing arguments, and he was able to keep Unibestos off the jury form. Yet Treggett filed a claim in the PPG bankruptcy, attesting to the same exposure he’d denied at trial.

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Insurer Claims Asbestos Fraud Tainted Pittsburgh Corning Bankruptcy

Asbestos pushed in Asia

The executives mingled over tea and biscuits, and the chatter was upbeat. Their industry, they said at a conference in the Indian capital, saves lives and brings roofs, walls and pipes to some of the world’s poorest people.

Their product? Asbestos.

Outlawed in much of the developed world, it is still going strong in the developing one. In India alone, the world’s biggest asbestos importer, it’s a $US2 billion ($A2.16 billion) industry providing 300,000 jobs.

The International Labour Organisation (ILO), World Health Organisation(WTO), medical researchers and more than 50 countries say the mineral should be banned; asbestos fibres lodge in the lungs and cause disease. The ILO estimates 100,000 people die from workplace exposure every year.

But the industry executives at the asbestos conference, held in a luxury New Delhi hotel, said the risks are overblown.

Instead, they described their business as a form of social welfare for hundreds of thousands of impoverished Indians still living in flimsy, mud-and-thatch huts.

“We’re here not only to run our businesses, but to also serve the nation,” said Abhaya Shankar, a director of India’s Asbestos Cement Products Manufacturers Association.

Yet there are some poor Indians trying to keep asbestos out of their communities.

In the farming village of Vaishali, in the eastern state of Bihar, residents became outraged by the construction of an asbestos factory in their backyard.

They had learned about the dangers of asbestos from a school boy’s science textbooks, and worried asbestos fibres would blow into their tiny thatch homes. Their children, they said, could contract lung diseases most Indian doctors would never test for, let alone treat.

They petitioned for the factory to be halted. But in December 2012, its permit was renewed, inciting thousands to rally on a main road for 11 hours. Amid the chaos, a few dozen villagers demolished the partially built factory.

“It was a moment of desperation,” a teacher said on condition of anonymity for fear of retribution from the company. “There was no other way for us to express our outrage.”

The company later filed lawsuits, still pending, accusing several villagers of vandalism and theft.

Durable and heat-resistant, asbestos was long a favourite insulation material in the West.

Medical experts say inhaling any form of asbestos can lead to deadly diseases 20-40 years later including lung cancer, mesothelioma and asbestosis, or the scarring of the lungs.

Dozens of countries including Australia, Japan, Argentina and all European Union nations have banned it entirely. Others like the US have severely curtailed its use.

The asbestos lobby says the mineral has been unfairly maligned by Western nations that used it irresponsibly. It also says one of the six forms of asbestos is safe: chrysotile, or white asbestos, which accounts for more than 95 per cent of all asbestos used since 1900.

Medical experts reject this.

“All types of asbestos fibre are causally implicated in the development of various diseases and premature death,” the Societies of Epidemiology said in a 2012 position statement.

Russia now provides most asbestos on the world market. Meanwhile, rich nations are suffering health and economic consequences from past use. And, billions have been spent stripping asbestos from buildings.

Umesh Kumar, a roadside vendor in Bihar’s capital, has long known there are health hazards to the three by one metre asbestos cement sheets he sells for 600 rupees ($A10.55) each. But he doesn’t guide customers to the 800 rupee tin or fibreglass alternatives.

“This is a country of poor people, and for less money they can have a roof over their heads,” he said.

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Asbestos pushed in Asia