Asbestos Litigation Costs
By Arnold Kling
That asbestos was so widely used from the 1950’s to the 1980’s suggests that multiple regulatory systems failed, including workers’ compensation, workplace safety regulation, product safety regulation, and liability law.
…Will the asbestos mess at least have the beneficial effect of changing firms’ attitudes toward the risks of using asbestos-like products in the future? Unfortunately, neither liability nor regulation works very well when the harm that results from exposure has a long latency period like that of asbestos. Because managers tend to heavily discount the future, if they can increase profits for 20 or more years by using dangerous substances, they are likely to ignore the high price that their firms and society will eventually pay.
She sees a potential for total legal fees to reach over $100 billion by the time all of the lawsuits are finished. I would note that this could represent $1 million apiece for 100,000 lawyers. As a result, she predicts an increase in the supply of lawyers filing class-action lawsuits, trying to find the “next asbestos.”
For Discussion. White says that one of the reasons that the asbestos lawsuits were so successful is that regulators who might have prevented the problem much sooner instead were captured by asbestos producers. What would you recommend to prevent such a debacle in the future?