KANSAS CITY, Mo.--(BUSINESS WIRE)--March 28, 2006--Lessons learned in the insurance industry's decades-long struggle with asbestos claims may be inspiring significant changes in the way they evaluate and defend their policyholders in mass tort litigation.
In a new white paper from GE Insurance Solutions, claims expert Bill Brauer said in some notable instances insurers are changing their approach to claims involving injuries alleged to have been caused by workplace exposures to silica dusts and welding fumes.
In both instances, insurers are defending dozens of policyholders identified as litigation targets by thousands of plaintiffs in dozens of actions across the country. Brauer contends that the same type of evidence that led a federal judge to dismiss massive silica litigation in Texas is likely to threaten a similar action on behalf of welding fumes claimants in Cleveland.
"We're seeing some striking similarities in the Cleveland welding fumes cases," said Brauer. "For example, one doctor diagnosed some 2,000 of the litigants. And a trial was cancelled after video surveillance conducted by the defense revealed a plaintiff was apparently functioning normally though he was portrayed in depositions as having a great deal of motor damage."
The multi-district silica litigation in Texas seems to be a turning point in the way the industry responds to mass tort claims.
"In the past, insurers would tend to settle these cases individually," said Brauer, who is a claims consultant at GE Insurance Solutions. "But this time hundreds of silica cases were consolidated from multiple jurisdictions into one, making it more practical for the insurance industry to invest heavily in discovery, where they found the plaintiffs were manufacturing evidence."
Brauer maintains that Judge Janice Jack's ruling on the consolidated silica litigation has all but ensured that silica will not be another asbestos in terms of liability and payouts.
He continued: "It's hard to see how many of those claims could be salvaged or resurrected. What's alarming is that had there not been the consolidation, many of those claims would have been paid because the rush to settle and walk away had become common."
In the welding litigation, plaintiffs allege that fumes from the welding process contain manganese, which, when inhaled to excess, can cause neurological injury and symptoms similar to Parkinson's disease. Brauer said the plaintiffs' bar is attracted to such cases because someone with serious manganese-induced injury, or manganism, would potentially evoke a dramatic response and award from a jury.
Brauer says the problem is that just as death rates from silica-related diseases had been declining for decades prior to the big spike in silica litigation, medical literature documents relatively few manganese-related cases of any nature in the United States.
"There doesn't seem to be a large group of prediagnosed injured welders looking for help as much as a group of litigators looking for clients," he said.
He notes, however, that the plaintiffs' bar is displaying a stern resolve.
"I attended a conference and heard notable plaintiffs' attorneys who said they've invested heavily in it (welding fumes)," Brauer said. "They appear to believe in their prospects, and most likely will not be deterred by the recent findings in Cleveland."
Brauer notes that as a reinsurer, GE Insurance Solutions has a privileged view of developing claims patterns, as its client insurance companies report their claims up to the reinsurer and the reinsurer benefits from an expansive body of data and analytical capability.
"It's kind of an early warning system, where you can see trends emerging. And we can translate that expertise into practical knowledge that our clients can use to underwrite more intelligently and manage their exposures," he said.
To read "Welding Fume Litigation: The Next Asbestos?" go to http://www.geinsurancesolutions.com/erccorporate/inst/ic/lc/060401_fume.htm. (Due to its length, this URL may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)
GE Insurance Solutions (NYSE: GE) is a group of companies that protects people, property and reputations. With more than $50 billion in combined assets, GE Insurance Solutions is one of the world's leading providers of commercial insurance, reinsurance and risk management services. More information is available at www.geinsurancesolutions.com.
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