ILR: What the Silver conviction reveals about asbestos litigation fraud

Institute for Legal Reform Dec. 17, 2015, 2:47pm


The conviction last week of former New York Assembly Speaker Sheldon Silver reveals more than just the level of corruption in the Empire State capital.

It lays bare the perversion of the asbestos litigation system that has for decades bankrupted American companies, turned true victims of asbestos exposure into pawns, and enriched a select group of opportunistic personal injury lawyers.

The Silver case involved an unholy alliance between a politician-plaintiffs' lawyer and an oncologist (Dr. Robert Taub) — both of whom claimed to be fighting to protect victims of asbestos exposure.

That alliance, however, was revealed to be little more than a quid pro quo: Silver steered taxpayer-funded grants to Dr. Taub's cancer center in return for referrals to a law firm at which Silver served as "of counsel" and received referral fees.

Was this about protecting victims, or protecting profits? The conviction, and underlying evidence, speaks for itself.

Those working in the civil justice arena have seen these types of abuses for far too long. The Silver case simply put it in the national headlines.

The asbestos bankruptcy trust system was set up to provide compensation to true victims of asbestos exposure, in the wake of asbestos litigation driving over 100 companies into bankruptcy. Unfortunately, that system has failed victims and served as a cash cow for plaintiffs' attorneys, such as Silver, who have collectively raked in billions in legal fees from claims submitted to the trusts.

The trust system currently operates in the shadows, allowing some in the plaintiffs' bar to submit and get payment for claims that are dubious at best and fraudulent at worst. If plaintiffs’ lawyers continue these tactics, the finite assets of the trusts will be depleted and the trusts will be pushed further toward insolvency.

What happens when the trust system runs out of money? The plaintiffs’ attorneys will take their money and run, while deserving victims of justice will be left out in the cold.

There is a bill pending in Congress — the Furthering Asbestos Claim Transparency (FACT) Act — that would promote transparency and prevent fraud and abuse within the trust system.

That legislation is, of course, staunchly opposed by the plaintiffs' bar, which could lose billions in legal fees if the truth about their claiming practices comes out.

Try as they might, however, they can't whitewash what the Silver case has cast into broad daylight: The fact that the plaintiffs' bar uses victims as mere commodities in its effort to game the legal system and rake in profits.

During the Silver case, the former CEO of noted Illinois asbestos plaintiffs' firm Simmons, Hanly, Conroy, testified that a foundation set up by the firm had agreed to contribute $3,150,000 to Columbia University — which housed the same cancer center, run by Dr. Taub, who was at the heart of the Silver investigation.

According to federal prosecutors, Taub then referred 29 separate patients back to the Simmons firm — and the firm's former CEO testified that all but three became clients of the firm.

Sound familiar?

He also testified that the Simmons firm’s mesothelioma lawsuit settlements averaged $1 million. As we posted here, that could represent as much as a 300% ROI.

An astounding return on investment made on the backs of unsuspecting victims, some of whom may have been suffering from acute illness.

So, is the Silver conviction an indictment of corruption in Albany? Of course.

But it's also Exhibit A of how some in the plaintiffs' bar are cashing in by gaming the asbestos compensation system and victimizing the very victims they claim to represent.

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