Dubious Distribution: Asbestos Bankruptcy Trust Assets and Compensation, shows that of $40 billion contributed to asbestos trusts between 2004 and 2016, $25 billion remain. In fact, of the 35 asbestos trusts operating as of early 2008, 21 of them are currently paying an average of only 60 percent of what they paid that year. The report also points out that most trusts have no contingency fee caps, and allow plaintiffs’ attorneys to collect 40 percent or more of claims paid out.
This research delves into the details of asbestos trust expenses and claim payment. Among other things, the paper reveals that the asbestos trust system spends an average of only 2.5 cents per dollar on verifying the legitimacy of asbestos claims; that non-malignant claims have received 22 percent of trust claim payments since 2004; and that when attorneys’ fees and payments to other disease categories are taken into account, it is likely that less than 50 percent of all trust assets are paid to mesothelioma claimants.
The paper concludes that the depletion of trust assets will result in the systematic under-compensation of legitimate asbestos victims in the future if left unabated.
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