Vested Interest - Trends - October 2001 Issue

Rand predicts all major asbestos makers bankrupt in 2 years

All the former major U.S. asbestos makers are likely to be bankrupt within the next two years because of liability for injuries related to the mineral, the RAND Institute for Civil Justice predicted. Generally, companies say they want to reserve available money for those most seriously injured; unions and plaintiffs’ lawyers say they want to protect those who may become sick in the future. Meanwhile, the advantage of Chapter 11 bankruptcy reorganization for an asbestos defendant is that it allows the establishment of a limited fund from which claims can be paid. Once that is approved by a court and set up, the company can emerge and go on with its other business. (Liability & Insurance Week – August 20, 2001)

Employers curbing employee cell phone use in cars

An increasing number of employers are establishing new company policy: no cell phone use while driving and conducting company business. A New York attorney was so busy talking on her cell phone while driving that she thought the teenager she struck was a deer. It wasn’t until the next morning, when she heard a hit-and-run driver had killed a 15-year old girl, that the attorney realized what she did. Now her firm faces a $30 million lawsuit. Chemical companies have long restricted what drivers can do behind the wheel. “Companies get a lot of benefit from employees’ productivity while talking on the phone from their car. It’s still a question if they should be responsible for any accidents that result,” said Tom Harrison, publisher of Lawyers Weekly USA. (AP – August 27, 2001)

Health care premiums up 11%; Prescription drug costs up 15.5%

A Kaiser Family Foundation national survey of health insurance costs shows the average cost of employer-sponsored health-care premiums increased 11 percent between May 2000 and May 2001 – the biggest jump since 1992. Sixty-four percent of the employers cited a rise in prescription drug prices as the biggest reason for the increase, with firms covering prescription drugs in a separate plan seeing costs rise 15.5 percent. (Liability & Insurance Week – September 10, 2001)

GAO finds pilot error biggest cause of small plane accidents

The GAO has found pilot error caused more than two-thirds of small plane accidents in 1999. The main errors were running out of fuel, misjudging altitude and flying without proper training in challenging conditions. The GAO found 559 persons were killed as the result of small plane accidents in 1999, with 15 being bystanders on the ground close to where the accident occurred. Although it found the number of small plane accidents had decreased 41 percent since the early 1980s, it said the accident rate for small planes is still about 24 times higher than the rate for commercial planes. (Liability & Insurance Week – September 10, 2001)