The Milwaukee Journal Sentinel has published an opinion piece by WCJC officers Bill G. Smith and Scott Manley explaining why SB 13/AB 19, which provides transparency and prevents fraud in lawsuits involving personal injury trusts by creating certain discovery requirements during litigation, is good for Wisconsin businesses.

Bill Protects Wisconsin Businesses in Asbestos Lawsuits

As representatives of small, medium and large Wisconsin businesses, we support and encourage industries from Illinois to relocate and do business in this state. However, one industry that is not welcome are asbestos attorneys from Chicago who file frivolous lawsuits against Wisconsin businesses.

Thankfully, there is legislation pending in the Legislature that would protect Wisconsin businesses from unscrupulous asbestos trial attorneys. Specifically, Assembly Bill 19 / Senate Bill 13 force trial attorneys to disclose key evidence that will end their double-dipping and assure that Wisconsin businesses pay only their fair share of any damages caused by their products.

Unfortunately, asbestos law has become a cottage industry for trial attorneys. This is due to the large sums of money in trust funds that were created to pay claims to individuals harmed by bankrupt companies that manufactured, distributed and installed thermal insulation products. According to a Government Accountability Office report, at the end of 2010 over $17.5 billion has been paid from these trust funds. Another $18 billion remains to pay future claims.

In addition to filing claims with trust funds, plaintiff lawyers can seek compensation by filing lawsuits against solvent companies for asbestos-related injuries. A vast majority of asbestos cases filed against solvent companies are resolved by settlement, and these settlement values are based on how much fault a jury is likely to attribute to a particular defendant.

Trial attorneys, however, are using a legal loophole to sue Wisconsin businesses before filing claims against the trust funds, or they file claims with the trust funds but refuse to disclose this evidence during litigation. In both instances, the trial attorneys get paid twice — once from the solvent Wisconsin business and once from the trust fund — for the same claim without the courts or the trust funds ever having knowledge of the double-dipping.

Most troubling is the vast majority of the solvent Wisconsin businesses sued by the Chicago trial attorneys are not the companies that manufactured the asbestos products and are not even responsible for the asbestos exposure to the plaintiff.

For example, some small businesses are named as defendants just because they may have had insulation on their premises that contained asbestos. Wisconsin manufacturers also are sued because some of their small engines contained asbestos gasket material manufactured by other companies.

Why are Chicago attorneys allowed to prey on Wisconsin businesses in this manner? The answer is that Wisconsin law does not require trial attorneys to disclose whether they’ve received, or could receive, money from the trust funds.

AB 19 / SB 13 is about fairness and transparency. The legislation requires trial attorneys to disclose how much money they’ve received from the trust funds or requires them to file with the trust funds before they can proceed with their case against the much less culpable Wisconsin business.

Most important, the legislation would protect the assets of the trusts for legitimate victims including, and especially, our veterans who suffer from the effects of asbestos-related diseases.

Trial attorneys are fighting hard to keep the loophole in place. Based on the Government Accountability Board‘s latest lobbying reports, the trial attorneys have spent considerable amounts of money on lobbying from March through June 2013. Trial attorneys from the Chicago law firm Cascino Vaughan traveled to the Wisconsin Capitol to testify against the bill so they could continue preying on Wisconsin businesses.

The good news is that the Wisconsin Assembly has passed the bill, which has cleared the Senate Judiciary Committee. The bill now awaits a vote in the full Senate.

Bill G. Smith is state director of the National Federation of Independent Business. Scott Manley is vice president of government relations at Wisconsin Manufacturers & Commerce. Both are officers of the Wisconsin Civil Justice Council.

Additional information about AB 19/SB 13 is available on this WCJC webpage: https://www.wisciviljusticecouncil.org/policy-project/limiting-double-dipping-in-personal-injury-cases/