Berkshire Hathaway (Berkshire), Warren Buffett’s multinational conglomerate holding company, is actively distorting the civil justice system by delaying or denying insurance claims for victims of asbestos exposure. Asbestos defendants rely on insurance providers to pay claims made by plaintiffs injured by asbestos-containing products. Many of these providers are taking advantage of Berkshire’s willingness to take over the risk for these asbestos claims. Berkshire subsidiaries that handle its asbestos and pollution policies, including Resolute Management, Inc. (Resolute), are acting in bad faith by delaying payments to victims because the longer the money is invested, the greater the potential return. As a result, it is not uncommon for victims of mesothelioma or lung cancer to pass away before realizing any of the money they are entitled to.
In the late 1990s, Berkshire began to acquire these insurance policies to capitalize on the associated long-term “float,” the money insurance companies hold between the time customers pay premiums and the time the insurance company makes payments on claims. Insurance policies covering asbestos exposure and disease have an extraordinarily long “float,” because of the latency period between the time of exposure and the onset of illness. In a 2011 letter to Berkshire shareholders, Buffett boasted that the long term floats associated with asbestos coverage would allow the company to profit “just as we would if some party deposited $70.6 billion with us, paid us a fee for holding its money and then let us invest its funds for our own benefit.” It is estimated that by 2012, Berkshire’s “float” had grown to $73 billion.
In order to take full advantage of this investment opportunity and maximize profits for Berkshire, Resolute is engaging in calculated delay tactics to ensure that it achieves the highest possible return on its investment, despite being fully aware that deserving claimants are unlikely to live long enough to receive the settlements. In addition, by delaying court proceedings until an injured party dies, Resolute avoids facing juries which often award more money to living victims. Resolute is not acting as a typical insurance company, but instead is consistently betting that those suffering from mesothelioma or lung cancer will die before being able to tell their story in court.
Rarely in litigation do plaintiffs and defendants agree on central issues, but even corporations are angered by Resolute’s cynical strategy. Ford Motor Company and Estee Lauder Companies are among some of the corporations that have filed lawsuits against Berkshire to recover for reimbursement of fines, legal fees and payments of injury claims caused by Resolute’s misconduct. These fines, fees and payments are the result of Resolute’s policy of placing profits before justice through the use of unreasonable delay tactics.
Despite Resolute’s attempts to frustrate plaintiffs’ journeys through the civil justice system, the attorneys at Lipsitz & Ponterio continue to push even harder to obtain accelerated trial dates for their clients suffering from asbestos-related illnesses.