Bankruptcy and Mass Tort
77 Pages Posted: 7 Feb 2015
Date Written: May 1, 1984
An enterprise markets a product that afflicts industrial workers with disease. A pharmaceutical manufacturer sells a drug that causes serious disorders in users and deformities in their children. Liability in tort is clear, we suppose.
Yet the effect of the industrial product or drug may be so pernicious, as it has been for those exposed to asbestos or DES, that the tort system produces - or may in the near future produce - an aggregate liability that may well exceed the value of the responsible firm. The tort system normally creates simple financial liability to an individual or class after a single trial or settlement. But under circumstances of massive enterprise liability after multiple trials and settlements, that financial clarity and simplicity is quickly obliterated. Questions arise that the tort system does not explicitly answer. For example, should a large, immediate cash payout be allowed if it would destroy the responsible firm and leave later plaintiffs uncompensated?
Keywords: Johns-Manville, chapter 11
Suggested Citation: Suggested Citation