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A SCCIAL PROBLEI.[ ~Cc~erciai Unizn i.._zr-nc_-=~ = = ~c~a..ies~ ~ ZTZ3 TI05390121

A SOCIg~L PROBL=~I-~. "F. Introduction Background: Asbestos and Consequences of its Use A. History of Asbestos Use B. Health Hazards Inherent in Asbestos Use C. Biological Effects of Asbestos Use: Asbestos-Related Diseases 1. Asbestosis 2. Mesotheiioma 3. Bronchoqenic Carcinoma Asbestos-Related Carcinomas and the Synergistic Effects of Asbestos and Other Substances: The Case of Cigarette Tobacco Smoke Scope of the Problem A. The Victims of Asbestos Use i. Workplace Victims 2. Other Victims B. Medical and Personal Costs Associated with Asbestos-Related Diseases C. The Costs to Scciet-y of Asbestos-Related Diseases Ramifications of the Prcb!em: Victims Compensaticn ~= Asbestos A. Workers' Compensation and Other "~on Fault" Programs B. Litigation as a Compensazicn Remedy C. The Nature of Asbestos Product Liability Litigation D. Inadequacies of Litigation as a Compensation Remedy -= .... e ~#= -- 3n the insurance Ramifications of industry and the_.,,~__~- ~. The Insurance [ndustr'y's Fin-..-~='=~___ Distress B. The Expansion of Tcrt Lia~~ ~ ~-"_ anl insurance Con~racZ Law as Yzc~crs in zhe ~iai~ Problem ".':. Cznc iuslcn : A~vend:x A .'-_~7 e ndi:,: : ~, 1 p. 4 D. 6 =. 7 D. 8 o. 9 C._~2 O. 14 ~. 20 " 34 c. ]? c c. ~'- T105390122

I. INTRODUCTION The past decade has witnessed increased attention to the hazardous effects of products and substances considered essential to industrial and technological proqress. This has been particularly true with asbestos, a mineral whose unique characteristics permit its use in over 3,000 indust- rial, commercial and personal products. Despite the useful product applications which have been made of asbestos, a substantial body of medical evidence demonstrates that there are harmful health effects inherent in its use. Exposure to asbestos is known to be a causative cr contributing factor in certain respirator~y and qastro- intestinal diseases. Though the health effects linked to asbestos exposure have been known since early this c~.~t._ failure and unwillinqness tc take necessary measures to ccntrcZ its hazardous tendencies have led to a medical situation in which as many as 5.6 ml_l_on individuals ma~y die from an asbestos-related disease or~=_om~ ,, ccmD!ications_ associated there- with, and in which millions cf others zay be disabled. Current means of compensa~inq the victims of asbestos for their ph-ysica!, economic and emctac..a~ losses ar~ in- effective, =~" have helped create a sccia~ problem of cri-i- ~ropor~ions. ~ecause workers' ccm:ensaZion, and p'~:~.~c =~:~- ance preqrams fail :~ provide adequate benefits, cZalman:s The es~L~a~ed n'-m~__~ :~ __-= cases =::; -~ ~:-: ~=qces_ =:_- .._~.. T!05390123

as 12,000, involving same 25,000 plaintiffs and more than 260 defendants.1 The demands placed on the courts have been substantial. The judicial process has been impeded in many v__t_ms and other litigants jurisdictions, affecting asbestos ~ ~ alike. With the likelihood ~hat many thousands of ~dditionai claims will be filed during the next 25-30 years, it is be- coming increasingly apparent that our judicial system will be incapable of providing an effective means of relief for those injured by asbestos-related diseases. Reliance upon tort litigation as a means of compensa- ting asbestos victims has had serious ramifications that extend beyond the parameters of the judicial system. The complexity of cases and the fact that they often involve a large n~mber of defendants and third-party defendants increases the time and costs of litigation. In an effort to provide compensation ~ deservinc claimants, courts have often fashion- ed new concepts of law. This recent expansion of the Doun~arL_s of insurance and product iiabi!it'y law has confronted defendants with unprecedented levels of !iabi!i~'y. These factors place severe burdens cn those responsible in the first instance for compensa~inc asbestos victims--the me.~ers of the insurance and asbestos industries. Viewed .... p~.one - • _ -- ASBESTOS LETIC-ATECN P~PGRT~R, ":arch i~, 1981 and :.[arch ~ _. " T|05390124

objectively, the proliferation of asbestos claims ~nd the costs associated with their administration, defense and payment jeopardizes the financial stability of many of these com- panies. The consequences of this problem are not, however, confined to these two industries. Rather, continued pursuit o5 these matters through the traditional tort litigation pro- cess may Yell cause a severe contraction of our insurance system, with resulting dislocations in our economy as a whole. This report examines the nature and scope of this pervasive and inlmediate social problem. It indicates the in- ability of traditional methods to appropriately compensate asbestos victims and demonstrates how continued resort to such methods creates problems of a broader dimension. The report concludes that the nature of the prcbiem necessitates federal legislative action to devise and implement a system that adequately and equitably addresses the needs and interests of asbestos victims, the asbestos industry and insurance com- canies. It is the expectation and belief of ~..e authors tha~ this report succeeds in providing a basis for understanding this serious and important problem, and that ~t hei~s to establish a _o~..ca~_o., = "-" ~ ~ upon_ which =- proper scluzicn can be devel~ped. T105390125

Ii. BACI<GROU~D: ASBESTOS .~ND CONSEQUENCES OF ITS USE The substance that has caused the present situation is "asbestos," the generic name for a group of hydrated mineral silicates that can be separated into relatively 2 soft, single fibers. Due to its nonflanlmability at even extreme!~y high temperatures, its ability to inhibit certain types of chemical react±ons, and its flexibility and tensile strength, asbestos is particularl-y suitable for a variety of industrial, commercial and personal uses 3 (See ~D~endix A) A. HISTORY OF ASBESTOS USE Because of its unique characteristics, asbestos has been used by man since antiquity. However, though extant doc~r, ents record its use by the ancient Greeks and Romans, it has only been during the past century--partlcular!y since World War iI--that asbestos has been extensively relied upon for a large number of commercial and industrial purposes. All Asbestos minerals can be classified according to two ma~cr categories: a) the serpentines, which includes chrysotile- _._~ b) the amchibeles_ , which inci~des ~_~c_~c~ ~; .... "~-~, actinclite-tremoiite, a~csite andan~..c~..y~ ~,'~;-= ...... it is possible -_hat as many as _~O00 different prcduct~ in daily_ use thrcuchou~_ the wcri5 ~_c..~_in~ = some asbes.-.cs. These ;nc~uce he= .... ~istant textile=, :='- - :-- indu-tri_i chemlzai_~, =-= -~- = = zi"_es, -?askets, auzomczive br~ke ilnlngs, concrete water ~i~es -.d ";ariDus t-zzes of co---no-_nd ccmccun~s -u~ -_ : the pr=;u-- ~q'- iy desirable for - 4 - TI05390126

told, more than 30 million tons of asbestos have been consumed in the United States since 1890, with perhaps as many as 27 4 million tons having been consumed since 1940. B. HEALTH ~%ZARDS INHERENT IN ASBESTOS USE The fact that asbestos is hazardous to human health was receqnized cuite early. It is reputed that in the first century both Pliny the Elder a~ Strabo wrote of a sickness of the lungs in slaves whose occupation was the weaving of asbestos into cloth. However, the relationship between asbestos and respiratory disease remained largely undiscovered and ,~nknown until this century. Although the period between 1906-24 saw the publication of a n~mber of reports doc'~menting the associa- tion between asbestos and pulmonary disease, the seminal point occurred in 1930 when Dr. E.R.A. Merewether and C.W. Price, respectively, medical and engineering inspectors of factories in Great Britain, presented a report to Par!i~ment establishing Published statistics indicate that 24,827,500 tons of asbestos were consumed in the United States between !890-196g, including 16,607,000 tons between 1940 and the latter date. See Selikoff, Asbestos-Associated Disease, ~UBLIC HEALTH A~D PRE- ~NTI~ MEDICINE l!th ed. (i980), at 595 (Table !3-9). Between !971-7~, apparent ccns-~p:icn cf asbestos fiber in the United States was slightly less than 4 mi!iicn tons, wi~h a similar volume of cons-~mption anticipated for the L9~6-77 period. See U.S. Department of Health, Educa~ien and Welfare, ASBESTOS: ~2~ INFC~ATION RESCURC~ (19~8), at 9-[0. The ~-~ted States B~~= ~ ~ f Mines .... "-.~a'- o has estimated ~h__ nhls zcuntrv'= demand for asbestos in zh_ ~-_a_ between !-~.3~ mi~_i~.~ ~n :cns. U.S. ]e>artnenz -= fnneracr, .. .... =.~_ FACTS A..'~ PROBLEMS (i9, T105390127

~he fact that "inhalation of asbestos dust over a period of years results inthe development of a serious type of fibrosis in the lungs. The early studies were, with the exception of some isolated and largely-ignored reports, concerned primarily with the effects of the inhalation of asbestos fibers among individ- uals exposed to asbestos in large quantizies, such as miners and workers in textile and other manufacturing facilities. In the mid-1960's, publication of epidemioloqical studies by a group at New Ycrk's Mr. Sinai School of Medicine doc,u~..ente~ the relationship between exposure to asbestos by asbestos insulation 6 workers and various respiratory diseases. The latter studies demonstrated not only the widespread occurrence of pulmonary fibrosis a~onq such individuals, but also the relatively high incidence of certain lung cancers. C. BIOLOGICAL EFFECTS OF ASBESTOS USE: ASBESTOS-RE~ATED DISEASES The medical evidence that has accumulated during zhls centur~y ~lea_~y indicates that inhalation c--asbestos fiber= Merewether and Price, Retort ~= ===ect of Asbestos Dust on Lungs and Dust,Suppression, in the Asbestos industry. London, H.>I. Stationery O~fice (2930). Selikoff, C..ur~. and Ha~T.ond, Asbes~os Ex?osure =~ :.;eozlasia 188 JCU~_NAL CF Selikoff, Churg and H~m~ond, Uhe ~ccurrence ef Asbestcsis ~mon~ Insulazion Workers in zhe United Stazes, "-~ ""~'~-- T!05390128

leads to histological changes that can result in various severe and debilitating pulmonary diseases.7 Because the effects of excessive inhalation of asbestos fibers are time and dose-related, certain of these diseases may develop only after the inhala:ion of substantial amounts of asbestos over a substantial pericd ef time. Others require only a comparatively small dose for their occurrence. The long latency periods that are character- istic of the diseases--that is, the period between initial exposure to asbestos and the actual exhibition of the~__ clinical signs or symptoms of disease--indicates that the disabilities presented today are reflective of conditions that might have existed as long as 30, 40, or 45 years earlier. There are three primary diseases known to be associated with the inhalation of asbestos fibers. These are asbestosis, mesothelioma and bronchogenic carcincma. ~.~.~ simi!ar in many respects, each has its unique charicteristics: I. ASBESTOSiS A chronic respiraterv ailment, asbestcsis is the most come, on cf ~he asbestos-re!a~ed diseases. Characterized by a fibrcsis cr scar- ring of the lungs, it has an average latency period of 17 years, its signs or symptcms in- clude breathlessness on exerticn, a dry cough, tightness or pain in the chest area, decrease ~qhen asbestcs fibers are inhaled, a percentage of the fibers smaller than five zicronswl_~_~_~==ch the Dorticn. of ~he __..~_ where cas exchance occurs. ~ -~=r~ c-- the body's defense mechanism, the fibers may heccme =_nca~su!ated scar .-_issue _nd,~ ~ when sufficient scarrinc, has dev='-~=~', -_he capacity ~f the iu_ncs to exchance zases ~___ be dlm'_.-.ished =~ == ~ cause shor-_ness _f ~ = ~ Eee ~reessen, --dwards, ~'_ler and Sayeth, .'-. _~_u-v zf Asheszcsls in .[-c.._i.-_u_-i ~ next = e, T105390129

in lung volume and flow, and eventual clubbing of the fingers. A cumulative disease, asbestosis is generally found among individuals exposed to asbestos fibers on a regular, prolonged basis. Although asbestosis can be disabling, it is neither malignant nor necessarily fat~l. However, the debilitating nature of asbestosis is such as to increase the likelihood of death from other medical complications. MESOTHELIOMA A malignant tumor occurring in the lung cr abdominal cavity lining, mesothelioma is extremely rare in the general population but common among workers exposed to asbestos. The disease is characterized by shortness of breath and pain in the chest wall or abdomen. Its latency period averages between 25 and 40 years. Mesothelioma is thought to be invariably fatal, with death generally occurring ~ithin 2 years of onset. Unlike asbestosis, it is not cumulative, thereby requiring a comparatively small dose of asbestos fibers to produce the maliqnancy. BRONCHOGENIC CARCENOM~ A malignant tumor generally orginatinq in the upper portion of the lungs, bronchogenic carcinoma is characterized by chest pain, a frequent and intense cough, and blood-streaked sputum coughed-up from the lungs. The disease has an average latency period of 15-25 years and, like m.esotheiioma, is usually fatal. Though bronchoqenic carcinoma is ccmr.cniy found among asbestos workers, its primary causative aqent may be cigarette tobacco smc~e rather than asbestos. n addi~ - ..on to the respiratory diseases for which asbestos is a knc~ causative agent, it is also associated with an increased __s:~ ~f cancer ~f the esophagus, larynx, crcDharvnx, --tomach, colon, rect'~-m and kidneys The incidence . f these cancers ix (1938;, Selikcff, Asbe3tcs-Assccia:ed ~isease, Some :ime after breathinc _ ' --m_ fi'-~_- which cause =~=r--- ri..=-~ of the lunq :issue, a :alignan: t-~.7.or may develop. T!05390130