TY  - JOUR
AU  - White,Michelle J.
TI  - Explaining the Flood of Asbestos Litigation: Consolidation, Bifurcation, and Bouquet Trials
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9362
PY  - 2002
Y2  - December 2002
UR  - http://www.nber.org/papers/w9362
L1  - http://www.nber.org/papers/w9362.pdf
N1  - Author contact info:
Michelle J. White
Department of Economics
University of California, San Diego
La Jolla, CA  92093-0508
Tel: 858/534-2783
Fax: 858/534-7040
E-Mail: miwhite@ucsd.edu
AB  - The number of asbestos personal injury claims filed each year is in the hundreds of thousands and has been increasing rather than decreasing over time, even though asbestos stopped being used in the early 1970's.  Eighty firms have filed for bankruptcy due to asbestos liabilities including 30 filings since the beginning of 2000. This paper examines why asbestos claims are increasing over time.  Because large numbers of asbestos claims are filed in particular courts, judges in these courts have adopted procedural innovations intended to clear their dockets by encouraging mass settlements.  These innovations cause trial outcomes to change in plaintiffs' favor.  As a result, the innovations make the asbestos crisis worse by giving plaintiffs' lawyers an incentive to file large numbers of additional claims in the same courts. The paper uses a new dataset of asbestos trials to test the hypothesis that three important procedural innovations--consolidated trials, bifurcation, and bouquet trials--favor plaintiffs and therefore encourage the filing of additional claims.  I find that bifurcation and bouquet trials nearly triple plaintiffs' expected return from trial, while consolidations of up to seven lawsuits raise plaintiffs' expected return from trial by one- third to one-half.
ER  -