Someone dropped a dime to Hillary Chabot at the Herald, who duly ran with it. This is (or should be) a non-story, but try telling that to the folks at One Herald Square (unless they’ve already moved out).
President Obama’s consumer protection adviser Elizabeth Warren — widely touted as the Democrats’ best hope against U.S. Sen. Scott Brown — was paid $168,000 by a powerful insurance company seeking to avoid future lawsuits from asbestos victims, a move that critics say taints her pro-consumer credibility.
The one noteworthy thing about this story is that Warren actually bothered to respond to the criticism:
In a statement to the Herald, Warren argued that she actually protected consumers because allowing future lawsuits would have eroded confidence in the asbestos trust.
“At stake is how to get payments to the largest number of asbestos victims, and that means getting insurance companies to put all the insurance proceeds into a trust rather than fighting lawsuit-by-lawsuit until the money runs out,” Warren said. “All the victims deserve a fair shake, and that means they should all have an equal chance for compensation.”
Good for her for trying to explain what was actually at stake in the case. These cases are complicated, and I wouldn’t expect the rocket scientists at the Herald to understand how they work. They’re more interested in the drive-by hit. Well, fine – that’s how the game is played.
It is interesting, though, that the GOP is worried enough about her to launch stuff like this before she has given any sort of indication that she’s actually interested in running.
JimC says
I thought the game was called journalism, and that’s not how it’s played.
David Whelan says
A “drive-by hit?” A Dem would never lower him/herself to such activities.
johnk says
but nice deflection (not).
David Whelan says
The sandbox is yours.
johnk says
I’m hear to help.
David Whelan says
How is my response a deflection? Its certainly a fair response in the sense that I was expressing an opinion that both sides play dirty occassionally. That being said I don’t know the facts about the Warren case and have no idea if David’s post is factually correct.
stomv says
Your post was deflection 101. Completely disregard the facts and issue at hand, instead expanding the issue to a “look! look over here! somebody over here did it too! oggity boogity!”
Yawn.
David Whelan says
You may have made an error. It happens to the best of us.
johnk says
; )
Charley on the MTA says
yawn.
http://en.wikipedia.org/wiki/Tu_quoque
David Whelan says
I’ll slither on back to RMG. Enjoyed the chat!
johnk says
Republicans trying to smear a potential Democratic candidate and the herald willing to oblige. People see it for what it is.
dave-from-hvad says
Warren had accepted a $186,000 bribe from the insurance company. You have to read quite a ways in to realize she was paid as an attorney for defending the company in litigation.
JimC says
Just saying. In general I have no problem with her position, because it’s consistent — enforcing the settlement. But her logic eludes me.
dcsohl says
What I get from the article is that Travellers Insurance insured an asbestos mining company against general malfeasance suits. When Manville went bankrupt in 1982 a trust was created, essentially, for the purpose of settling these suits filed by miners who developed lung cancer (allegedly) due to their mining.
But suits were being filed against the insurance company directly nonetheless, instead of getting paid out of the trust.
So Warren was arguing that allowing suits against Travellers would, in general, undermine the use of such trusts. Future insurance companies in similar situations would elect to not use such trusts if they were going to be attacked by lawsuits anyway. And individuals being harmed by these companies would have to do things the hard way – file suit – instead of the easy way – file against a settlement trust.
There’s another argument posed in the Herald article to the effect that these sorts of settlement trusts tend to give people very low payouts. This is probably why they were filing suit against Travellers’ instead of filing for a settlement payout from the trust.
And it may well be true that these trusts don’t pay very well, so it’s hard to really judge Warren’s actions, since I’m no lawyer, am not familiar with these trusts, and can’t really argue as to whether this is true or not. It sounds good to me, but who can really say?
JimC says
I’m just not convinced that that adds up to immunity from future lawsuits. Encourage people to use the trust, sure, but immunizing the corp doesn’t sound right (to my untrained ear).
centralmassdad says
And really nowhere else.
For asbestos, there were a very large number of plaintiffs. There was massive liability, far exceeding the value of the companies themselves– that is why Mansville went kablooey in the first place. There was insurance, but the available insurance was not infinite.
So, you had a situation where the value of the assets to satisfy claims was far exceeded by the claims. The theory is that it is better for everyone if you encourage the establishment of the settlement pool. The companies contribute some amount, over time, that is more than would be available if they were liquidated presently. Same for insurance, up to policy limits if applicable but without driving the insurance under (Insurance money paid to defense lawyers is a payout under the policy, and if the defense uses up the policy limit, then there is no more insurance money). A statistical estimate of the number of claimants and the likely value of their claims is made, and then each claim is entitled to its share of the pool.
If the companies don’t get shielded, then why on earth would they participate in the pool? Better to fight each claim then, or try to settle them all one by one. In the asbestos cases, eventually the cost of the litigation would have exhausted the value of the insured companies AND the policy limits of the insurance. That means that the guy whose mesothelioma showed up a little earlier would have gotten a big payout, while the guy whose disease took awhile gets zero.
Warren (of whom I am generally no fan at all) made the point that the use of the settlement trusts was more fair than having a small minority of the injured people–and some defense lawyers– collect all of the funds, leaving the majority uncompensated. She’s 100% right.