Compensating Victims of Toxic Substances

October 15, 1982

Report Outline
Compensation Systems
Categories of Claims
Proposals for Reform
Special Focus

Compensation Systems

Liability for Hazards to Public Health

Hardly a week passes without news of some new risk associated with drugs, chemicals, food or radiation. And increasingly, those who claim to be victims of harmful substances or radiation are going to court to seek compensation. During the last few years some of the biggest group-claims ever filed against businesses and government have been brought in connection with Agent Orange, a defoliant used in Vietnam; DES, a drug widely prescribed in the 1950s and 1960s to reduce the risks of miscarriage; atomic radiation; and asbestos, a substance widely used until the 1970s as a fireproofing agent and as a moisture and sound barrier in buildings. There has been a tendency to view these suits as isolated and unrelated cases, but they may in fact be the first thunderheads to appear in a gathering storm of similar claims.

Lawsuits connected with toxic substances and radiation generally depend on statistical methods of proof, which courts are not accustomed to dealing with. Often, the claims raise difficult questions about how severely to penalize parties who may have manufactured or used substances and processes that they considered safe. Depending on how such issues are resolved, large numbers of people may or may not be recognized as victims and receive compensation. By the same token, the future of whole industries could depend on how liability is assigned.

Last August, Manville Corp.—the largest asbestos producer in the United States—filed for reorganization under federal bankruptcy laws to try to minimize the impact of litigation against it for damages caused by asbestos. The action essentially froze the more than 16,500 suits against the Denver-based company and disallowed the filing of new ones. Manville representatives say that an average of 500 lawsuits are filed against the company each month, and that at least 32,000 more suits could be filed in the future, costing the company more than $2 billion in damages and legal fees.

ISSUE TRACKER for Related Reports
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