Trust Claims and Tort Suits

If you or a loved one has been diagnosed with an asbestos disease, you may have valid claims in two separate systems at once — and you may not be aware that the manufacturers who went bankrupt still owe something. We plan both together, because coordinating them is where the avoidable mistakes happen.

A person who worked in the trades for thirty years encountered many companies' asbestos: pipe covering from one manufacturer, block insulation from another, gaskets from a third, packing from a fourth, and equipment containing asbestos components from several more — across many jobsites and many years.

Some of those companies went bankrupt and reorganized, channeling their asbestos liabilities into trusts under 11 U.S.C. § 524(g). The GAO counted 60 such trusts holding roughly $37 billion in assets at its 2011 review. Claims against those companies go to their trusts.

However, others never went through bankruptcy and remain solvent — equipment manufacturers, suppliers, and in some cases premises owners. Those are sued in the ordinary way.

As a result, a single exposure history usually generates two parallel sets of claims. Treating them as one project is the point of this page: what is filed on the trust side can be raised by defendants on the tort side, and what is proved on the tort side often supports the trust filings.

The two systems share a subject and very little else, and the differences are what make the sequencing decisions later on real ones.

Decision-maker. A trust claim is reviewed administratively by trust staff applying published criteria. A tort claim is resolved by settlement or by a court and jury.

Standard applied. A trust applies its Trust Distribution Procedures — fixed medical and exposure criteria and scheduled values. A tort claim applies the law of the jurisdiction: duty, breach, causation, damages, and whatever defenses are available.

Valuation. A trust pays a scheduled value multiplied by its payment percentage, which is generally well below the full scheduled amount. A tort claim is valued on the individual facts, with no schedule and no percentage.

Speed and certainty. Trust claims are generally faster and more predictable. Tort claims take longer and carry more variance in both directions.

Evidence. A trust claim is documentary — the file is the case. A tort claim involves discovery, depositions, expert evidence, and potentially trial.

Neither is a substitute for the other. They compensate for different defendants.

Setoff is where the two systems collide, and it is why a solvent defendant cares what you have filed with the trusts.

A defendant sued in tort will generally argue that it should not pay for harm attributable to other parties — including the bankrupt manufacturers whose products also contributed. That argument takes two broad forms.

Setoff or credit. The defendant argues that amounts a claimant has recovered from trusts should reduce what it pays, so the claimant is not compensated twice for the same harm.

Allocation of fault. In jurisdictions applying several liability or comparative allocation, the defendant argues that fault should be apportioned across all responsible parties — including bankrupt entities that are not present in the case — so its own share is proportionally smaller.

Keep in mind that how this works varies substantially by state. Joint and several liability, several liability, whether absent bankrupt entities may be placed on a verdict form, and how trust recoveries are credited are all state-specific and consequential. Two identical exposure histories can produce materially different outcomes depending on which state's rules apply — which is one more reason the venue question matters. See venue and jurisdiction.

A number of states have enacted legislation, commonly described as asbestos trust transparency legislation, governing the relationship between trust claims and tort litigation. These statutes differ in detail but tend to address the same concerns.

Typical provisions require a claimant to disclose trust claims already filed, together with the supporting materials; to file available trust claims before trial or within a set period after filing suit; to produce trust claim materials in discovery, on the basis that statements made to a trust about exposure are relevant to the tort claim; and they may stay proceedings where required trust filings have not been made. Some provide for reopening a judgment if trust claims surface afterwards.

The practical point for you is that trust filings are not private and not separate. What is stated to a trust about where you worked and which products you encountered can be used in the litigation, so consistency between the two matters, and in states with these statutes it is a disclosure obligation.

Note that which statute applies, and what it requires, depends on the jurisdiction. This is an area that has been actively legislated, so it should be checked against current law.

Because the systems interact, the order and timing of filings is a genuine decision.

Filing trusts early produces recoveries sooner, which matters a great deal to a claimant who is seriously ill, and in transparency states may be required in any event. It also fixes statements about exposure that will be visible in the litigation.

Filing trusts later preserves flexibility in how the tort case is developed, but risks non-compliance where a statute requires earlier filing, and delays money to someone who may not have long.

Deadlines run independently. The tort claim runs on a state limitations period, generally from diagnosis; a wrongful death claim generally runs on its own period from death; each trust sets its own filing requirements; and a FELA claim for railroad work runs on a federal period. One history can put several clocks in motion at once. See statute of limitations in asbestos cases.

Overall, none of these is a decision to make casually or in isolation, which is the honest reason this page does not offer a rule. The right sequence depends on the state, the applicable transparency statute, the claimant's health, and how the trust and tort evidence fit together.

Four things follow if you or a loved one has an asbestos diagnosis.

Identify the whole exposure history, including the parts that seem minor. The set of available trusts depends entirely on which manufacturers' products can be connected to the person. A history developed only far enough to identify one or two defendants leaves recoveries unclaimed. This is why the occupational reconstruction described across the exposure and occupation cluster is worth doing thoroughly.

Be consistent. Statements to trusts and statements in litigation should describe the same work history, because in many states the former are discoverable in the latter.

Expect the defendants to raise the trusts. A solvent defendant will argue for setoff or allocation reflecting the bankrupt manufacturers' share. That's normal, and it doesn't mean anything has gone wrong.

Plan both together. The trusts and the lawsuit compensate for different defendants and belong to a single strategy. Handling them separately is how disclosure obligations get missed and how recoveries get left on the table.

The two-system structure is genuinely confusing, and nobody expects a family to arrive understanding it. We carry that part.

What we need from you is the work history, as complete as you can make it, because that's what determines how many trusts are in reach and which companies are still suable. There's no cost to walk through it, and no fee unless we win.

It costs nothing to find out where your family stands.