Class action lawsuits are a scary thing for a corporation to face, and in many instances insurance companies figure the best way to make the problem go away is to offer small settlements to thousands of claimants.

Take asbestos for instance. According to the RAND Corporation, more than 700,000 claims have been filed over the last 30 years, with settlement costs reaching over $70 billion. RAND says that nearly one-third of that amount has gone to plaintiff's lawyers.

In the Sunday, October 9, 2005 edition of the New York Times, Jonathan D. Glater wrote an eye-opening piece on what appears to be thousands of fraudulent claims against a number of companies that produce silica. According to the Times article, Silica dust, when inhaled, can lodge in the lungs, causing silicosis, a disabling and often fatal lung disease.

The article tells of how claims weren't driven so much by people affected by silica dust, but by lawyers looking to cash in on big money. Suspicions in this case rose after defense lawyers discovered thousands of silica claimants had also been asbestos claimants, and later discovering that a handful of doctors involved in asbestos diagnoses, were also responsible for silica diagnoses.

The space restriction here won't allow me to provide all of the details of Mr. Glater's article, but if you email me I can send you the text of the full story.

This whole thing got rolling when a group of silica producers decided to fight back against looming class-action lawsuits. Lawyers for the defense came up with a basic strategy: force the plaintiffs' lawyers to produce evidence that their clients had silicosis symptoms and deserved compensation.

The plan was to bring the roughly 10,000 silica cases to a federal court and have the claims consolidated, thereby having one judge get information on all of them. This, the defense thought, would allow a judge to get a clearer picture of the situation. And it did.

U.S. District Judge Janis Graham Jack in Corpus Christ, Tex. gave each plaintiff two months to fill out a form indicating his or her employment history, illness and the names of doctors seen. The claimants were also asked to provide their Social Security numbers on the forms. “This information turned out to be crucial,” Glater says in his article.

“Forman Perry Watkins Krutz & Tardy, a 120-lawyer firm in Jackson, Miss., that coordinated the defense of about 30 companies facing silicosis claims, kept a database of people who had filed asbestos claims; the database was built over years of representing companies battling asbestos litigation. As they loaded the information from the silica claimants' forms, lawyers found that some of these claimants had also filed asbestos claims,” Glater writes.

In addition, Forman Perry sought data from Manville Personal Injury Settlement Trust, a trust that had paid out some $3.3 billion to 655,096 asbestos claims against building materials company Johns Manville.

The results from the data were mind-blowing. Over half the claimants in the silica litigation had previously filed asbestos claims with the trust. To heighten suspicion, one doctor was involved with the diagnosis in 53,724 asbestos claims. And, this same doctor, along with one other, accounted for about 90 percent of the silica diagnoses.

In June, in a 249-page decision, Judge Jack wrote, “The medical findings underlying the claims, based on X-ray screenings paid for by lawyers looking for potential clients, were worthless.”

She went on to write, “These diagnoses were driven by neither health nor justice: they were manufactured for money. The record does not reveal who originally devised this scheme, but it is clear that the lawyers, doctors and screening companies were all willing participants.”

There are many people whose lives have been devastated by asbestosis and silicosis, and who rightly deserve compensation. Judge Jack's decision has not ended the silica litigation, but has surely given trial lawyers something to think about.

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