Amazing how many people are dumb enough to react to a story they don’t even understand!
Everyone who has commented on this article does not even understand that the suit that was settled was a DIRECT ACTION SUIT against TRAVELERS by claimants that had ALREADY REACHED SETTLEMENTS PREVIOUSLY WITH JOHNS MANVILLE. The suits were filed directly against Travelers because the attorneys found that when document became a matter of public record that Travelers had discovered evidence that the defendant had known the harmful affects of asbestos and the lack of adequate precautions being taken when the claimants were exposed. The suit filed alleging Travelers settled the original claims in “BAD FAITH” and aided in settling the claims without bringing this information to the attention of the defense attorneys during discovery period for the original asbestos claims. The suit alleges that Travelers had an obligation to operate under good faith claim settlement practices (which by the way are laws intended to protect insureds in the settlement of property losses not claimants in third party losses) and had to advise of the public of this info. Therefore the Trial Lawyers took it upon themselves to attempt this new type of direct action against many insurers – not Travelers – probably without having any costs incurred to the original claimants. The claimant attorneys allege that if they had known this info the claimants would not have settled for the original amounts. These monies proposed in the settlement mentioned above are IN ADDITION to the money the claimants agreed to back when their original cases were settled in the late 70’s and early 80’s.
The reason the case was mediated and settled through the bankruptcy court is because the asbestos manufacturer had already filed for bankruptcy to get the class suit into a settlement proceeding in bankruptcy court (which if anyone missed reading the article the comapny was subsequently pruchased by none other thatn Warren Buffet’s Berkshire Hathaway) – thereby sticking the asbestos obligations to the carriers and the bankruptcy court to settle. As part of the bankruptcy settlement proceedings a trust and a maximum settlement agreement was entered into which would bar future claims. How does the system allow companies to escape by filing bankruptcy and leaving insurance carriers and the public holding the bag while they still get to operate or sell the company to a Berkshire Hathaway. Also Travelers had to pony up additional moneys never intended in the original suit. Many other companies will be doing the very same thing soon – there are other carriers named in the very same suit for the Johns Manville claimants – so don’t assume the claimants will only be getting less than the $800.
All you insurance carrier conspiracy theorists and Trial Lawyer abolitionists should get your facts straight before trying to comment like you understand something you have no clue about.
If you divide the huge sum of money by the number of claimants we arrive at a startling fact: each claimant will receive a whopping $741.67.
What has been accomplished? A manufacturer has been forced into bankruptcy and now an insurance company will take a huge hit, all so that someone who might get sick can get a very small sum of money. How many jobs were lost along the way?
Read “The King of Torts” by Grisham for an interesting insight into the class action lottery.
Note also that these claimants give up all future claims against Johns-Manville and Travelers. How far is the $741.67 going to go when they get really sick?
We are way past the time to make changes to our legal system. Remember, this is how Edwards made his money – do you want someone like this as second in command in the Executive branch?
That’s a brilliant response. If you really understood how terrible the investment environment is and how low the interest and investment yields are right now you wouldn’t make comments about reserves being used other than for the primary purpose of paying claims. There are a lot better ways all carriers can make money right now than in interest accounts or the bond yields. The industry actually has a terrible problem being under-reserved and there may be more Reliance National out there. Let’s see what happens with Kemper’s claims obligations.
A very interesting insight from the perspective of afflicted individual claimants and their families is apparent in another book, “Fatal Deception” by author Michael Bowker. It is abhorrent that these asbestos producers factored in the the wastage of human lives and misery as a cost of doing business. A good read for anyone in the insurance industry.
What I want to know is how much in reserves were set aside prior to this settlement of $500 million. What happens now to the excess reserved amounts? Does St.Paul Travelers return the excess and declare it as income/profit for the year?
Does St.Paul Travlers restate their financials to account for the excess in reserves for this case?
Does anyone know how many billions in total reserves for asbestos all of the insurance carriers have set aside in interest bearing accounts?
Matt, thanks for your informative reply. You appear to have this case accurately summed up.
However, I’ll stand by my original comment: what good is this doing now? The plaintiffs get a pittance, Travelers takes a huge hit & their stockholders lose money. Don’t forget the jobs lost at Travelers/St. Paul to help pay for this.
Tell me that the lawyers had the plaintiffs best interests at heart when they vigorously pursued the $741.67 for each & then their firm gets a check for $57,500,000 for their work.
Admit it: the lawyers won the lottery, the plaintiffs get the shaft, you & I pay the final cost.
This has got to end sometime, Matt. We can’t have eternal liability for asbestos.
You keep harping on this point about the plaintiffs getting a pittance – that is not accurate. First off how do you know the manner in which this money is being distributed – maybe it is being distributed by severity of illness? Also this settlement money is in ADDITION TO the money the plaintiffs received in the original settlements negotiated by the Bankruptcy court back in the 80’s. If the lawyers did not try to attack this new angle (the first time this type of lawsuit has ever been filed against an insurance company)then the plaintiffs would not have gotten any additional money and it would not have cost them anything.
I agree that this type of specific lawsuit is ridiculous because an insurance carrier should NOT be directly responsible (above the insurance policy obligations) for the known misdeeds of the insureds. BUT how can you criticize the Trial Lawyers when companies like Johns Manville, Combustion Engineering, Grace and Brown Root knowningly break safety regulations endangering their employees and the public and they escape by filing for bankruptcy! One would have to be an immoral, of low character and unprinicipled individual if one thinks that this country should let these businesses get away with MURDER literally by filing for bankruptcy.
How you blame the Trial Lawyers when there has been documented evidence as to the hazardous nature of asbesots as far back as 1920 (known by the federal government and insurers who would not issue Life policies to workers in industries that had asbestos products)? How is it that this case is settled and part of the settlement puts the burden of public notification on the hazardous nature of a product on the insurance companies? What happened to the EPA, OSHA and US Consumer Products Safety Commission? It is very republican of you to think that we have established government agencies whose express duties are to make sure the public is safeguarded against such things as asbestos but they are not responsible for notifying or enforcing government standards? Is this your republican idea of smaller Federal governemnt?
Just wait for all the lawsuits from the parents of small children poisoned by arsenic that is found in a compound used to treat lumber that is used to construct playground equipment and backyard swings and slides. The EPA has issued notifications about the toxicity years ago but the manufacturers are still allowed to use the compound and sell this equipment to the public STILL TODAY! Not until the Trial Lawyers get enough plaintiffs together to sue these manufacturers will the compound be discontinued because they will probably file for bankruptcy protection while they sell off their assets and retire and leave the plaintiffs to deal with the bankruptcy court and the insurers in a settlement! Hows that for justice. By the way I hope you don’t have small children or nieces or nephews, or grandchildren that are poisoned by such playground equipment because then by your standards no one would be punished because you wouldn’t morally allow them to be part of class action lawsuit to get the manufacturers to pay for their neglience – RIGHT?
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Amazing how many people are dumb enough to react to a story they don’t even understand!
Everyone who has commented on this article does not even understand that the suit that was settled was a DIRECT ACTION SUIT against TRAVELERS by claimants that had ALREADY REACHED SETTLEMENTS PREVIOUSLY WITH JOHNS MANVILLE. The suits were filed directly against Travelers because the attorneys found that when document became a matter of public record that Travelers had discovered evidence that the defendant had known the harmful affects of asbestos and the lack of adequate precautions being taken when the claimants were exposed. The suit filed alleging Travelers settled the original claims in “BAD FAITH” and aided in settling the claims without bringing this information to the attention of the defense attorneys during discovery period for the original asbestos claims. The suit alleges that Travelers had an obligation to operate under good faith claim settlement practices (which by the way are laws intended to protect insureds in the settlement of property losses not claimants in third party losses) and had to advise of the public of this info. Therefore the Trial Lawyers took it upon themselves to attempt this new type of direct action against many insurers – not Travelers – probably without having any costs incurred to the original claimants. The claimant attorneys allege that if they had known this info the claimants would not have settled for the original amounts. These monies proposed in the settlement mentioned above are IN ADDITION to the money the claimants agreed to back when their original cases were settled in the late 70’s and early 80’s.
The reason the case was mediated and settled through the bankruptcy court is because the asbestos manufacturer had already filed for bankruptcy to get the class suit into a settlement proceeding in bankruptcy court (which if anyone missed reading the article the comapny was subsequently pruchased by none other thatn Warren Buffet’s Berkshire Hathaway) – thereby sticking the asbestos obligations to the carriers and the bankruptcy court to settle. As part of the bankruptcy settlement proceedings a trust and a maximum settlement agreement was entered into which would bar future claims. How does the system allow companies to escape by filing bankruptcy and leaving insurance carriers and the public holding the bag while they still get to operate or sell the company to a Berkshire Hathaway. Also Travelers had to pony up additional moneys never intended in the original suit. Many other companies will be doing the very same thing soon – there are other carriers named in the very same suit for the Johns Manville claimants – so don’t assume the claimants will only be getting less than the $800.
All you insurance carrier conspiracy theorists and Trial Lawyer abolitionists should get your facts straight before trying to comment like you understand something you have no clue about.
Hey Matt,
What payroll are you on?
If you divide the huge sum of money by the number of claimants we arrive at a startling fact: each claimant will receive a whopping $741.67.
What has been accomplished? A manufacturer has been forced into bankruptcy and now an insurance company will take a huge hit, all so that someone who might get sick can get a very small sum of money. How many jobs were lost along the way?
Read “The King of Torts” by Grisham for an interesting insight into the class action lottery.
Note also that these claimants give up all future claims against Johns-Manville and Travelers. How far is the $741.67 going to go when they get really sick?
We are way past the time to make changes to our legal system. Remember, this is how Edwards made his money – do you want someone like this as second in command in the Executive branch?
That’s a brilliant response. If you really understood how terrible the investment environment is and how low the interest and investment yields are right now you wouldn’t make comments about reserves being used other than for the primary purpose of paying claims. There are a lot better ways all carriers can make money right now than in interest accounts or the bond yields. The industry actually has a terrible problem being under-reserved and there may be more Reliance National out there. Let’s see what happens with Kemper’s claims obligations.
A very interesting insight from the perspective of afflicted individual claimants and their families is apparent in another book, “Fatal Deception” by author Michael Bowker. It is abhorrent that these asbestos producers factored in the the wastage of human lives and misery as a cost of doing business. A good read for anyone in the insurance industry.
$57.5 million in legal fees gets split how many ways I wonder hummmmmm…
-Jay
What I want to know is how much in reserves were set aside prior to this settlement of $500 million. What happens now to the excess reserved amounts? Does St.Paul Travelers return the excess and declare it as income/profit for the year?
Does St.Paul Travlers restate their financials to account for the excess in reserves for this case?
Does anyone know how many billions in total reserves for asbestos all of the insurance carriers have set aside in interest bearing accounts?
see previous comment
Matt, thanks for your informative reply. You appear to have this case accurately summed up.
However, I’ll stand by my original comment: what good is this doing now? The plaintiffs get a pittance, Travelers takes a huge hit & their stockholders lose money. Don’t forget the jobs lost at Travelers/St. Paul to help pay for this.
Tell me that the lawyers had the plaintiffs best interests at heart when they vigorously pursued the $741.67 for each & then their firm gets a check for $57,500,000 for their work.
Admit it: the lawyers won the lottery, the plaintiffs get the shaft, you & I pay the final cost.
This has got to end sometime, Matt. We can’t have eternal liability for asbestos.
Kevin:
You keep harping on this point about the plaintiffs getting a pittance – that is not accurate. First off how do you know the manner in which this money is being distributed – maybe it is being distributed by severity of illness? Also this settlement money is in ADDITION TO the money the plaintiffs received in the original settlements negotiated by the Bankruptcy court back in the 80’s. If the lawyers did not try to attack this new angle (the first time this type of lawsuit has ever been filed against an insurance company)then the plaintiffs would not have gotten any additional money and it would not have cost them anything.
I agree that this type of specific lawsuit is ridiculous because an insurance carrier should NOT be directly responsible (above the insurance policy obligations) for the known misdeeds of the insureds. BUT how can you criticize the Trial Lawyers when companies like Johns Manville, Combustion Engineering, Grace and Brown Root knowningly break safety regulations endangering their employees and the public and they escape by filing for bankruptcy! One would have to be an immoral, of low character and unprinicipled individual if one thinks that this country should let these businesses get away with MURDER literally by filing for bankruptcy.
How you blame the Trial Lawyers when there has been documented evidence as to the hazardous nature of asbesots as far back as 1920 (known by the federal government and insurers who would not issue Life policies to workers in industries that had asbestos products)? How is it that this case is settled and part of the settlement puts the burden of public notification on the hazardous nature of a product on the insurance companies? What happened to the EPA, OSHA and US Consumer Products Safety Commission? It is very republican of you to think that we have established government agencies whose express duties are to make sure the public is safeguarded against such things as asbestos but they are not responsible for notifying or enforcing government standards? Is this your republican idea of smaller Federal governemnt?
Just wait for all the lawsuits from the parents of small children poisoned by arsenic that is found in a compound used to treat lumber that is used to construct playground equipment and backyard swings and slides. The EPA has issued notifications about the toxicity years ago but the manufacturers are still allowed to use the compound and sell this equipment to the public STILL TODAY! Not until the Trial Lawyers get enough plaintiffs together to sue these manufacturers will the compound be discontinued because they will probably file for bankruptcy protection while they sell off their assets and retire and leave the plaintiffs to deal with the bankruptcy court and the insurers in a settlement! Hows that for justice. By the way I hope you don’t have small children or nieces or nephews, or grandchildren that are poisoned by such playground equipment because then by your standards no one would be punished because you wouldn’t morally allow them to be part of class action lawsuit to get the manufacturers to pay for their neglience – RIGHT?