Welcome to a legal system that by anyone’s definition will seem to be broken; even if it is not. You need to keep in mind that the judiciary is so overloaded with asbestos lawsuits that most of the courts are just trying to develop and implement systems that give a fair hearing to all sides while keeping the wheels spinning. However, if your company is new to the system, it will be very frustrating and, unfortunately, likely to be expensive. I urge you to expect that you will need to respond to extensive discovery questions.
I also urge you to keep in mind that your primary goal should be to do everything possible to limit the number of new lawsuits filed against your company through the use of your counsel, cooperation with the system, and not paying settlements based on anything other than legitimate exposure. If you are too uncooperative or you are convinced to pay (or have your insurer pay) a cost of defense settlement, the Plaintiff attorney may put you on their general service list which could involve serving you with 70 or so new lawsuits within a month. This, of course, is difficult to explain to your lenders and others with a stake in your company and, equally as important, is impossible to walk back.
If you receive your first asbestos lawsuit, my advice is as follows:
1. Get an experienced attorney involved immediately to help set your strategy in terms of contacting insurance carriers, sorting through potential insurance coverage issues, assisting in identifying, collecting, and preserving documents, and otherwise ensuring that you do not stub your toes at the outset. Although most insurance policies added an Asbestos Exclusion in the mid-1980s, I have been involved in several cases in which insurance policies from the late 1990s into 2000 did not exclude asbestos related claims. As such, locate complete copies of the policies (you will need the Insurance Jacket or standard terms along with the Endorsements listed on the Declarations Page) and have them reviewed by your insurance broker/agent, yourself, and potentially your counsel in that order. If you cannot find the policies and are unable to get them from the insurance carriers, you may need to rely on secondary evidence which is much more difficult but, at times, will carry the day. This investment will cost some money but, from my experience, pays dividends down the road.
2. If you find insurance coverage that will provide counsel and the cost of defense, you will want to work with the insurance carrier or group of insurance carriers to ensure that counsel is experienced in both handling and actually taking the cases to trial in the venue of the lawsuit and with the Plaintiff attorney. There are some exceptions to this in venues which do not actually allow trials for asbestos cases, in which case the experience of trial counsel in other venues should be substituted. This is not the time to get the counsel most likely to be adversarial as, in my opinion, it backfires in asbestos cases given your primary goal discussed above. In summary, swallow the anger but tailor your emotions into a strong litigation position. That is, polite and professional with a strong and aggressive defense, but don’t try to put a stick into the Plaintiff’s attorney eye. My words of advice are (1) defense attorneys are not commodities and some are much better than others, (2) be careful of the defense attorney having a close relationship with the insurance carrier(s), and (3) someone sophisticated in your company or your corporate counsel should stay active in the case management as you cannot assume that the insurance carrier or counsel will otherwise keep you in the loop and treat you as an equal; even more importantly, they could well make a mistake if you do not have someone involved as they don’t know your company and it will cost you in terms of either more lawsuits or higher settlement values. That is just the way it is.
3. Asbestos lawsuits typically have a lot of defendants. Make sure that they sued and served the correctly intended legal entity. Many companies over the years have had similar names, and your best defense is to point out that they sued the wrong legal entity. Most good Plaintiff attorneys will work with you on this issue as they are looking for collectable entities to bring into the case as quickly as possible. They may hold you in the case until they can sort out the correct legal entity or that entity appears in the case, but you just need to be politely patient but persistent.
4. Most Plaintiff attorneys will require formal discovery responses and potentially a corporate representative deposition prior to dismissing your company from the case. Don’t take it personal as the counsel is merely representing his client by trying to develop new sources of revenue. You don’t have to like it, but recognize that you have to convince counsel that suing your company is like a dry hole.
5. My final words of wisdom are (1) make sure that you have the right defense counsel, (2) do not pay cost of defense settlements without proven exposure or potential liability, (3) stay active in your company’s defense, and (4) keep your eyes on the long run big picture.