When the Wall Street Journal worries about fraud, you know something is up. In a recent article, they are worried about fraud related to asbestos bankruptcy trusts, the trusts that were formed after the collapse of the businesses that profited for decades on the production of asbestos materials.
The article worries that "fraud" may deplete the trusts, because of the high rate of asbestos-related claims that are being made against them. This is couched in terms of "concern that the trusts will run out of money before America runs out of asbestos victims."
In reality, like any large system, there will be errors, mistake and occasional examples of fraud. Insurance, workers' compensation and Social Security disability all have to deal with administrative issues resulting from processing tens of thousands of claims.
In discussing one claim, they note a daughter, whose father died at age 51 of stomach cancer, received a payout from the trust. He had died in 1967, and the medical records were minimal, because at that time, few victims even understood what was killing them. The trust noted the claim "deserves extraordinary consideration." Yet, the payout may have only been $75,000 at most or as little as $37,500.
For all the concern raised by the WSJ, they still only provide one bona fide example of a fraudulently filed claim out of the 850,000 the state they review. The reasons the trusts may have difficulty paying all the claims is that there were so many workers exposed to the deadly asbestos dust.
Given the difficulty of showing cause and effect with environmental torts, it is far more likely that many companies have avoided liability from the people they have injured.
Source: Wall Street Journal, "As Asbestos Claims Rise, So Do Worries About Fraud," Dionne Searcey and Rob Barry, March 11, 2013