Fighting back: if insurers and corporations act now, they may stem the plague of silica and mixed-dust claims.

A plague threatens insurers, but it is a plague of lawsuits, not disease. At least 49 corporations have been named as defendants in silica personal-injury cases. Together, two of those defendants face more than 70,000 claims. The silica claims against one insurer rose 12-fold in one year to 30,000, said the American Tort Reform Association and the Coalition for Litigation Justice. But the number of silica-related deaths in the United States fell 84% from 1,157 in 1968 to just 187 in 1999.

This surge in lawsuits seemingly reflects trial attorneys' search for the next asbestos, as pressures mount for reforms that will turn off the asbestos spigot. If passed, the Fairness in Asbestos Injury Resolution Act, now before Congress, will usher in a healthy era in the handling of hundreds of thousands of asbestos claims that have pushed more than 60 corporations into bankruptcy, ensnarled 8,400 in litigation, and cost as many as 138,000 jobs. Tort reforms in some states also suggest there may be light at the end of the asbestos tunnel.

Unfortunately, the light may be the lamp from an oncoming train full of silicosis and mixed-dust claims. Whether insurers and U.S. industry emerge into the light of a sunny day of get run over again will be determined by how they, our elected representatives and the judiciary respond to these tests of our tort system.

Silica and mixed-dust claims are strikingly similar to the roughly 700,000 asbestos claims already filed. Silica is used in dozens of industries, like asbestos in its heyday. Potentially fatal silicosis is caused by inhaling tiny particles of silica or quartz dust, but may take as long as 40 years to develop. Similarly, asbestosis and mesothelioma are caused by inhaling tiny asbestos fibers, but appear only after long latency periods. Even experts can have difficulty determining whether lung damage was caused by silica, asbestos or other contaminants in the mixed dust of factories and other workplaces.

There is danger the tort system will handle silica and mixed-dust cases much like it has handled asbestos cases. To win a tort judgment, one normally has to prove causation and injury. But, for asbestos cases, standards of proof have been lowered. Much of the money awarded in asbestos eases has gone to plaintiffs providing thin evidence of exposure to asbestos from any number of manufacturers at any number of jobs. Much of the money has gone to plaintiffs showing no signs of ill health. In one Mississippi trial, six plaintiffs won $150 million in compensatory damages despite testimony by four doctors that none suffered any asbestos-related condition. Courts have even awarded money based on fear of disease at some future point.

Asbestos claims have clogged the courts, and the billions of dollars that have gone to legal expenses have cut deeply into the funds available to compensate those truly in need. These are just some of the reasons insurers and manufacturers look forward to enactment of the FAIR Act, with its medical criteria for compensation and caps on insurers' and defendants' ultimate liability for asbestos claims.

But the FAIR Act applies only to asbestos claims. Even if it becomes law, silica and mixed-dust cases will remain firmly in the tort system.

The incentives that led to hundreds of thousands of asbestos claims are leading plaintiffs and their lawyers to seek new deep pockets. As reported in Best's Review, many asbestos attorneys are involved in silica cases, and they are using the same mass screening techniques used in asbestos cases to identify huge numbers of potential claimants. And asbestos plaintiffs are resurfacing as silica and mixed-dust plaintiffs, some even after collecting asbestos settlements.

If insurers and industry act now, they may stem the plague of silica and mixed-dust claims before it develops into the next asbestos. Together, they should first press for enactment of the FAIR Act. Then they should press for reforms that help the tort system deal sensibly with silica and mixed-dust claims.

But reforms alone are not enough. Insurers and industry must rethink their approach to settling claims and, in particular, whether paying meritless claims cuts costs or instead encourages more claims by plaintiffs in good health.

Lastly, to avoid being blindsided again, insurers need to examine their exposure to silica and mixed-dust claims. Insurers need to make sure they're really underwriting and pricing for the risks they face, and they need to double check policy language to make sure they won't be held responsible for losses they never intended to cover and never priced.

Frank J. Coyne, a Best's Review columnist, is chairman, president and chief executive officer of Insurance Services Office Inc. He can be reached at [e-mail].